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HomeMy WebLinkAboutST. JOSEPH HEALTH SYSTEM 1 - 2016INSURANCIa ON FU A- 2015 -243 WORK MAY PHOCELN UN1'IL INSURANCE EXPIHFQ CLERK OF COUNCIL. DATE a 2'01a rr^^ PURCHASE OPTION AGREEMENT 7—q NRy "J THIS PURCHASE OPTION AGREEMENT (this "Agreement "), made as of Deeenibor- t , 2016 (the "Effective Date "), by and between the City of Santa Ana, a public body, corporate and politic ( "Optionor "), and St. Joseph Health System, a California nonprofit public benefit corporation ( "Optionee "). As used herein, Optionee and Optionor may be referred to collectively as the "Parties ", and each individually as a "Party." RECITALS A. Optionor is the fee simple owner of that certain land consisting of approximately 1.01 acres, located at 205 West Civic Center Drive, Santa Ana, California described in Exhibit A attached to this Agreement and incorporated into this Agreement in its entirety by this reference (the "Land "). B. The Parties entered into that certain Exclusive Right to Negotiate Agreement, dated September 17, 2014, as amended, regarding the Property (as defined below). C. The Property is in need of Remediation Work (as defined below). D. Optionor is commencing the Remediation Work which is anticipated to be completed on or before December 31, 2016. E. Optionee has proposed the development of the Property as multipurpose wellness center, (the "Project "). F. The development of the Project on the Property will be of benefit to Optionor and community by reducing blight, increasing the economic viability of the community, and providing needed health and community services to the residents of Santa Ana, California. G. Optionee desires to acquire and Optionor desires to grant to Optionee the sole and exclusive right to purchase, without being obligated to purchase, the Property (as defined below), subject to the terms of this Agreement. AGREEMENT NOW THEREFORE, in consideration of Ten and no /100 Dollars ($10.00) (the "Option Fee "), the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 1. Incorporation of Recitals. The recitals of fact set forth above are true and correct and are incorporated into this Agreement in their entirety by this reference. 2. Grant of Option. Optionor hereby grants to Optionee the sole and exclusive right to purchase, upon the terms and conditions set forth in this Agreement (the "Option "), the following property (collectively, the "Property"): (a) the Land, together with all improvements ( "Improvements "), as such improvements may be altered in connection with the Remediation Work (as defined below). located thereon (collectively, the "Real Property "); (b) all of Optionor's right, title and interest in all tangible personal property owned by Optionor located upon, attached to, or necessary for the operation of the Real Property (collectively, the "Tangible Personal Property "), to the extent the delivery of such Tangible Personal Property is accepted, in writing by Optionee; and (c) all of Optionor's right, title and interest in all intangible 51528687.9 personal property related to the Real Property and the Improvements (collectively, the "Intangible Personal Property ") to the extent the delivery of such, Intangible Personal Property is accepted, in writing by Optionee. The Option Fee is non - refundable but shall be applied to the Purchase Price (as defined below), if any, on the date of Closing (as defined below), if any. 3. Remediation Work, 11, Within sixty (60) days after the full execution of this Agreement, Optionor will deliver to Optionee, for Optionee's review a Remediation Work plan (as mutually agreed by the Parties as provided in this Agreement, the "Remediation Work Plan "). Within forty -five (45) days after Optionor delivers to Optionee the Remediation Work Plan, Optionee will advise Optionor in writing of Optionee's comments, suggestions and requirements therefor. If applicable, within fifteen (15) clays after Optionee advises Optionor of Optionee's comments, suggestions and requirements for the Remediation Work Plan, Optionor will submit to Optionee, for Optionee's review a revised Remediation Work Plan. The procedures of set forth above shall continue until the Parties mutually agree upon a Remediation Work Plan or until a Party provides notice to the other that a Remediation Work Plan cannot be agreed (a "Remediation Work Plan Termination Notice "). hz the event that either party delivers a Remediation Work Plan Termination Notice, either this Agreement shall terminate and the Parties shall have no further rights or obligations under this Agreement, except for rights and obligations which, by their terms, survive the termination of this Agreement, or the Party receiving the Termination Notice may accept, in writing, the last Remediation Work Plan submitted by the Terminating Party. Upon the mutual agreement of a Remediation Work Plan, neither party shall have the right to deliver a Remediation Work Plan Termination Notice. 3.2. Within fifteen (1.5) days after a Remediation Work Plan has been mutually agreed by the Parties, Optionor shall, at its sole cost and expense, promptly begin and thereafter diligently prosecute to completion all steps required to complete all Remediation Work (defined below) pursuant to the Remediation Work Plan. Optionor shall use its best efforts to Substantially Complete the :Remediation Work not later than December 31, 2416. Upon Substantial Completion of the Remediation Work, Optionor will deliver to Optionee notice that it has substantially performed all of the Remediation Work, other than minor items and adjustments which do not materially interfere with Optionor's use of the ( "Notice of Substantial Completion "). Within fifteen (1.5) days after Optionor delivers to Optionee the Notice of Substantial Completion, Optionor and Optionee will conduct a walk - through inspection of the Property. Within fifteen (15) days after the walk- through inspection of the Premises, Optionee shall provide to Optionor a written punch -list specifying those items which Optionee requires to be completed, are defective, incomplete, or do not conform to the Remediation Work or any applicable laws, which items Optionor will thereafter diligently complete or Optioner shall provide, within seven (7) days, notice to Optionee of Optioner's intent to not complete any or all of Optionee's identified items. If Optionor chooses not to perform the Optionce identified items, Optionee may terminate this Agreement and the Parties shall have not further rights or obligations under this Agreement. Optionor acknowledges and agrees that time is of the essence with respect to the completion of the Remediation Work. 3.3. Subject to the development of the Remediation Work Plan, "Remediation Work" may include, all investigation, sampling, monitoring, testing, reporting, removal (including, excavation, transportation and disposal), response, storage, remediation, treatment and other activities or other remedial action as defined under Section :101(25) of CERCLA (as defined 51528687,9 below), and similar actions with respect to Hazardous Materials (as defined below) as defined under comparable state and local laws, and any other cleanup, removal, containment, abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure, restoration or other mitigation or remediation of Hazardous Materials or releases required by any environmental agency or within the purview of any Environmental Laws. "Hazardous Materials" means any and all substances, materials and wastes which are regulated as hazardous or toxic under applicable local, state or federal law or which are classified as hazardous or toxic under local, state or federal laws or regulations, including, without limitation, (i) those substances included within the definitions of "hazardous substances," "hazardous materials," "toxic substances," "solid waste," "pollutant" or "contaminant" as such terms are defined by or listed in the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.) ( "CERCLA "), as amended by Superfund Amendments and Reauthorization Act of 1986 (Pub. L. 99 -499 100 Stat. 1.613) ( "SARA "), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.) ( "RCRA" ), the Toxic Substance Control Act (15 U.S.C. § 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Control Act (7 U.S.C. § 136 et seq.), the Occupational Safety and Health Act of 1970 (29 U.S.C. § 651 et seq.), the Emergency Planning and Community Right to Know Act of 1986 (42 U.S.C. § 11001 et seq.), the Hazardous and Solid Waste Amendments of 1984 (Public Law 86-616 Nov. 9, 1984), the Federal Clean Air Act (42 U.S.C. § 7401 et seq.), and in the regulations promulgated pursuant to such laws, all as amended, (ii) those substances listed in the United States Department of Transportation Table (49 CFR 172.101) or 40 CFR Part 302, both as amended, and (iii) any material, waste or substance which is (A) oil, gas or any petroleums or petroleum by- product, (B) asbestos, in any forin, (C) polychlorinated biphenyls, (D) designated as a "hazardous substance" pursuant to Section. 311 of the Clean Water Act (33 U.S.C. § 1251 et seq.), as amended, (E) flammable explosives, or (F) radioactive materials (collectively, "Environmental Laws"), "Environmental Conditions" shall mean the presence upon the Property of any Hazardous Materials, or condition on the Property giving rise to any required action to be taken by any governmental body or agency in relation to any Hazardous Materials or Environmental Laws. 3.4. Optionor shall not place, or allow to be placed, on its interests in the Property, Improvements, or any portion thereof, any mortgage or encumbrance of lien. Optionor shall, within thirty (30) calendar days following receipt of notice thereof, cause to be removed or bonded against (such bonding to be by the provision of bonds satisfying California statutory requirements) any and all mechanic's liens, stop notices and/or Bonded stop notices that are recorded and /or served by contractors, subcontractors (of all tiers) and suppliers in connection with the portion of the Property. 4. Optionor Conditions Precedent 4.1. Not later than January 15, 2016, Optionee will deliver to Optionor, for Optionor's review a Project development plan (as mutually agreed by the Parties as provided in this Agreement, the "Development Plan "). Within thirty (30) days after Optionee delivers to Optionor the Development Plan, Optionor will advise Optionee in writing of Optionor's comments, suggestions and requirements therefor. If applicable, within fifteen (15) days after Optionor advises Optionee of Optionor's comments, suggestions and requirements for the Development Work Plan, Optionee will submit to Optionor, for Optionor's review a revised Development Plan. The procedures of set forth above shall continue until the Parties mutually 3 1528687 s agree upon a Development Plan or until a Party provides notice to the other that a Development Plan cannot be agreed (a "Development Plan Termination Notice "). In the event that either party delivers a Development Plan Termination Notice, this Agreement shall terminate and the Parties shall have no further rights or obligations under this Agreement, except for rights and obligations which, by their terms, survive the termination of this Agreement. Upon the mutual agreement of a Development Plan, neither party shall have the right to deliver a Development Plan Termination Notice. 4.2. Begins ing not later than the Effective Date, Optionor shall, at its sole cost and expense, promptly begin and thereafter diligently prosecute to completion all steps required to complete all Conditions Precedent (defined below) to the transfer of the Property not later than December 31, 2016. Optionor acknowledges and agrees that time is of the essence with respect to the satisfaction of the Conditions Precedent of the Optionor to the transfer of the Property to Optionee. Optionor represents and warrants that the only conditions precedent of the Optionor to the transfer of the Property to Optionee are as follows (the "Conditions Precedent "): 4.2.1. Optionor has satisfied all legal requirements for disposition of the Property, including any legally required noticing or hearings, and adoption of a resolution approving the sale. 4.2.2. Optionor has completed all Remediation Work in accordance with all Environmental Laws and to Optionee's reasonable Satisfaction. 4.2.3. The final adoption, approval or certification of all documentation required for the Project under the California Environmental Quality Act, Public Resources Code Sections 21000, et seq. ( "CEQA ") and the period for challenge of such CEQA Approval has passed. 4.2.4. The City planning commission finds, pursuant to Government Code Section 65402, that the Project is consistent with the City's General Plan. 4.2.5. Optionor has taken all steps, at Optionor's sole expense, to remove any encroachments affecting the Property. 4.2.6. Optionor has obtained a mutually agreeable Disposition Agreement (as defined below). 4.2.7. The Parties have mutually agreed upon a Development Plan 4.3. Upon completion of the Conditions Precedent, Optionor shall deliver to Optionee evidence of satisfaction of the same ( "Notice of Satisfaction of Conditions Precedent "). In the event that Optionor does not complete the Conditions Precedent described in Sections 4.2.1 through and including 4.2.4 on or prior to December 31, 2016, the same shall be an Optionor Breach (as defined below) an subjection to the provisions of Section 24 of this Agreement. In the event that Optionor does not complete the Conditions Precedent described in Sections 4.2.5 on or prior to December 31, 2017, the same shall be an Optionor Breach and subject to the provisions of Section 24 of this Agreement. Upon Optionee's receipt of a Notice of Satisfaction of Conditions Precedent, Optionee shall have no have the right to terminate this Agreement pursuant to this Section 4.3. 5. Option Period; Exercise of Option; Conditions Precedent. The Option shall continence on the Effective Date and will remain in effect until 11:59 p.m., Los Angeles time, on the date 4 51528687.9 that is one hundred eighty (180) days following receipt by Optionee of a Notice of Satisfaction of Conditions Precedent (the "Option Period "). Optionee may exercise the Option during the Option Period by delivering to Optionor an executed instrument substantially in the form attached to this Agreement and incorporated herein by reference as Exhibit B ( "Option Exercise Notice "). 6. Purchase Price; Terms of Purchase. The purchase of the Property pursuant to the Option will be consummated pursuant to a commercially reasonable development and disposition agreement in a form reasonably acceptable to Optionee and Optionor (the "Disposition Agreement ") which Disposition Agreement shall contain the Optionee's commitment to develop the Property consistent with the Project, the Development Plan, and those development covenants, operating covenants and associated restrictions agreed to by the Parties therein. The purchase price ( "Purchase Price ") for the Property shall be the fair market value on the date of receipt of the Option Exercise Notice. Sixty (60) days prior to any exercise of the option by Optionee, upon notice by Optionee thereof to Optionor (i) the Parties shall nominate and appoint a single appraiser, or, failing that, (ii) the Optionee and Optionor shall each nominate and appoint one appraiser. If two appraisers are appointed as provided in clause (ii) above, the two appraisers so appointed shall, within fifteen (15) days after the appointment of the second appraiser and before exchanging views as to the questions at issue, appoint a third appraiser and give written notice of such appointment to the Parties. In the event that a Party fails to appoint an appraiser within the twenty two (22) day period specified above, then the appraiser appointed by the other Party shall make the appraisal. If the two appraisers selected by the Parties shall fail to appoint or agree upon the third appraiser within the fifteen (15) day period specified above, then a third appraiser may be selected by the Parties if they can agree upon such third appraiser within a further period of ten (10) additional days; otherwise, any Party may apply to any federal or state court of or sitting in the State of California having jurisdiction for the appointment of any appraiser not appointed or agreed upon within the time periods herein provided. The appraisers selected pursuant hereto shall be sworn faithfully and fairly to determine expeditiously the fair market value. The three appraisers (or the one or two appraisers, if only one or two appraisers are appointed) shall, with all possible speed, make the appraisal contemplated herein, set forth their (or its) results in writing, and give notice of the same to the Parties. If two of the three appraisers shall render a concurring determination, then that concurring determination shall be conclusive and binding on the Parties. If no two of the three appraisers shall render a concurring determination, then the determination of the third appraiser appointed by the two appraisers appointed by the Parties shall be conclusive and binding upon the Parties; except that if the determination of the third appraiser shall be lower than the lowest determination of the other two appraisers, or higher than the highest determination of the other two appraisers, the final determination shall be the median determination of the three appraisers. Each Party shall pay the fees and expenses of the appraiser selected by or on behalf of it and the fees and expenses of the third appraiser, and any general expenses incurred by the appraisers in connection with the appraisal, shall be borne equally between the Parties. Any appraiser appointed hereunder shall be an appraiser with at least five (5) years' experience in appraising property of the same type as the Property. 7. Due Diligence; Inspections. 7.1. Within ten (10) days following the Effective Date, and from time to time thereafter upon receipt of the same, Optionor shall provide or make available to Optionee copies 5 51528687.9 of all existing documents, agreements, contracts, leases, reports, studies, drawings and /or plans relating to the operations and physical condition of the Property in Optionor's possession, including without limitation engineering studies, surveys, energy reports, soils reports, geotechnical reports, traffic studies, leases, governmental correspondence, environmental reports, planning consultant reports, and plans and specifications (the "Due Diligence Materials "). 7.2. Optionor hereby grants Optionee and its agents, consultants, contractors, subcontractors, employees, representatives, and attorneys (collectively, " Optionee's Agents ") a license and permission to enter upon, over, under and/or across the Property in order to conduct visual inspections, physical testing, air samplings, borings, and other samplings, including but not limited to, observing and documenting the Property's as -built conditions, exposing and documenting hidden conditions at the Property, by limited removal of interior non - historic fixtures and finishes, performing certain non - destructive testing of materials at the Property, extracting concrete core samples in interior non - historically sensitive locations, in connection with the proposed rehabilitation and reuse of the Property (the "Inspections "). The Inspections shall be completed at Optionee's sole cost and expense. Optionee or Optionee's Agent shall contact Optionor within one (1) day prior to the time of actual entry onto the Property and provide notice of the date and time when entry will be made. Optionor may refuse access to Optionee if the Remediation Work makes it unsafe or inappropriate, in Optionor's reasonable discretion, for Optionee or Optionee's Agents to be on the Property at the desired time. Optionor shall make the Property available as soon as reasonably practical thereafter. The license and permission to enter upon, over, under and/or across the Property shall continence on the Effective Date and shall expire upon termination of this Agreement. 7.3. Prior to entry onto the Property, Optionee shall secure, and shall require its contractors, if any, to secure an insurance policy or policies, as described below. 7.3.1. Notwithstanding any inconsistent statement in the insurance policy or any subsequent endorsement attached thereto, the protection afforded by these policies shall be written on an occurrence basis in which Optionor, and its respective elected and appointed officials, officers, employees, agents and representatives (together, "Additional Insureds ") are named as additional insureds on all coverage, except for workers' compensation coverage, and shall (on or prior to the Effective Date, Optionee shall provide to Optionee the complete legal names of all Additional hisureds): (a) Name Additional Insureds as additional insureds on a Commercial General Liability policy; (b) Provide a combined single limit of broad form commercial general liability insurance in the amount of Two Million Dollars ($2,000,000) per occurrence, which will be considered equivalent to the required minimum limits, and such insurance shall (i) be written on an occurrence fora, (ii) be written with a primary policy form with limits of not less than $1,000,000 per occurrence; (iii) be written with one or more excess layers to bring the total of primary and excess coverage limits to not less than $2,000,000 per occurrence, (iv) not be written with a deductible greater than $25,000 per occurrence, (v) contain a waiver of subrogation in favor of Optionor; 6 51528687.9 (c) Provide automobile liability insurance for owned, non - owned, and hired vehicles, as applicable to, or for any use related to, the Work, in an amount not less than One Million Dollars ($1,000,000) combined single limit, with excess insurance coverage to bring the total amount of automobile liability insurance coverage to an amount not less than Two Million Dollars ($2,000,000) per accident for bodily injury and property damage; 7.3.2. Optionee shall notify Optionor not less than thirty (30) days before any expiration, cancellation, or non - renewal of such policy or policies; and 7.3.3. Optionee shall furnish certificates of insurance and endorsements to Optionor prior to entry onto the Property pursuant to this Section. 7.3.4. Optionee shall comply with Sections 3700 and 3800 of the Labor Code by securing, paying for and maintaining in full force and effect during the Term, and continuing prior to entry onto the Property pursuant to this Section, with the earlier to occur of expiration of the Term complete workers' compensation insurance, to statutory limits, with employer's liability limits not less than One Million Dollars ($1,000,000) per occurrence, and shall furnish a Certificate of Insurance to Optionor prior to entry onto the Property pursuant to this Section, before the commencement of Work. All Additional Insureds shall not be responsible for any claims in law or equity occasioned by the failure of Optionee to comply with this section. Every workers' compensation insurance policy shall bear an endorsement or shall have attached a rider providing that, in the event of expiration or proposed cancellation of such policy for any reason whatsoever, Optionor shall be notified, giving Optionee a sufficient time to comply with applicable law, but in no event less than thirty (30) days before such expiration, cancellation, or reduction in coverage is effective or in the event of nonpayment of premium. 7.3.5. Should any of the required insurance coverage required be written with an annual aggregate such aggregate shall be disclosed in writing to Optionor. 7.3.6. If Optionee fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish Optionor with required proof that insurance has been procured and is in force and paid for, Optionor shall have the right, at its election, to forthwith terminate this the right of entry provided in this Section. 7.3.7. Notwithstanding any requirements contained in this Section, Optionee shall have the right to satisfy its insurance obligations under this Agreement by means of self- insurance. Self- insurance shall mean that Optionee itself is acting as though it were the third -party insurer providing the insurance required under the provisions of this Agreement, and Optionee shall pay any amounts due in lieu of insurance proceeds because of self- insurance, which arnounts shall be treated as insurance proceeds for all purposes under this Agreement. To the extent Optionee chooses to provide any required insurance by self - insurance, the protection afforded Optionor and the applicable properties shall be the same as if provided by a third -party insurer under the coverages required by this Agreement. In the event that Optionee elects to self-insure and an event or claim occurs for 7 51528687.9 which a defense and/or coverage would have been available from a third -party insurer, Optionee shall undertake the defense of any such claim, including a defense of Optionor, at Optionee's sole cost and expense to pay any claim or replace any property or otherwise provide the funding that would have been available from insurance proceeds. 7.4. Optionee shall not permit any mechanics', materialmen's or other liens of any kind or nature ( "Liens ") to be filed or enforced against the Property. Optionor reserves the right, at its sole cost and expense, at any time and from time to time, to post and maintain on the Property, or any portion thereof, or on the improvements on the Property, any notices of non - responsibility or other notice as may be desirable to protect Optionor against liability. In addition to, and not as a limitation of Optionor's other rights and remedies under this Section, should Optionee fail, within thirty (30) days of written request from Optionor, either to discharge any Lien (to the extent such Lien is prohibited pursuant to this Section) or to bond for any Lien (to the extent such Lien is prohibited pursuant to this Section), or to defend, indemnify, and hold harmless Optionor from and against any loss, damage, injury, liability or claim arising out of a Lien (to the extent such Lien is prohibited pursuant to this Section), then Optionor, at its option, may elect to pay such Lien, or settle or discharge such Lien and any action or judgment related thereto and all costs, expenses and attorneys' fees incurred in doing so shall be paid to Optionor, as applicable, by Optionee upon written demand. 8. Compliance; Property Maintenance and Operation. From the Effective Date, Optionor agrees to act in respect of the Property in the following manner: 8.1. Optionor agrees that it will not enter into any leases, licenses or other occupancy permits for the Property without the prior written consent of Optionee in each instance, which consent shall not be unreasonable withheld, conditioned or delayed. 8.2. Optionor will timely perform its obligations under any service contracts affecting the Property in accordance with the terms and conditions contained therein. Optionor agrees that it will not enter into amend or terminate any service contracts affecting the Property without the prior written consent of Optionee in each instance, which consent shall not be unreasonable withheld, conditioned or delayed. 8.3. Optionor will not enter into any contract or agreement that will be an obligation affecting the Property except for contracts entered into in the ordinary course of business that are terminable without cause and without payment of a fee or penalty on not more than thirty (30) days' notice. 8.4. Optionor will continue to operate and maintain the Property in accordance with past practices and, except as agreed in the Remediation Work Plan, will not make any material alterations or changes thereto. Optionor will not remove any Tangible Personal Property except as may be required for necessary repair or replacement, and replacement shall be of approximately equal quality and quantity as the removed item of Tangible Personal Property. 8.5. Optionor shall not do anything, nor authorize anything to be done, which would adversely affect the condition of title of the Property. 9. Optionor's Representations and Warranties. Optionor hereby represents and warrants to Optionee that, as of the Effective Date: E 51528687.9 9.1. Optionor is a municipal corporation incorporated within and existing pursuant to the laws of the State of Califonria. 9.2. Optionor has (or will have prior to the date by which a particular step is required to be taken or performance of a particular obligation is required to be commenced pursuant to this Agreement) all requisite power and authority required to enter into this Agreement and the instruments referenced in this Agreement, to consummate the transaction contemplated hereby and to take any steps contemplated thereby or hereby, and to perform its obligations hereunder and thereunder. 9.3. Optionor has obtained (or will have obtained prior to the date by which a particular step is required to be taken or performance of a particular obligation is required to be commenced pursuant to this Agreement) all required consents in connection with entering into this Agreement and the instruments and documents referenced in this Agreement to which Optionor is or shall be a party and the consummation of the transactions contemplated hereby. 9.4. The individual executing this Agreement and the individual that will execute the instruments referenced in this Agreement on behalf of Optionor have, or will have upon execution thereof, the legal power, right and actual authority to bind Optionor to the terms and conditions hereof and thereof. 9.5. This Agreement is duly authorized, executed and delivered by Optionor and all documents required in this Agreement to be executed by Optionor pursuant to this Agreement shall be, at such time as they are required to be executed by Optionor, duly authorized, executed and delivered by Optionor and are or shall be, at such time as the same are required to be executed hereunder, valid, legally binding obligations of and enforceable against Optionor in accordance with their terms, except as enforceability may be limited by bankruptcy laws or other similar laws affecting creditors' rights. 9.6. Neither the execution or delivery of this Agreement or the documents referenced in this Agreement, nor the incurring of the obligations set forth in this Agreement, and the certificates, declarations and other documents referenced in this Agreement, nor the consummation of the transactions in this Agreement contemplated, nor compliance with the terms of this Agreement and the documents referenced in this Agreement, will violate any provision of law, any order of any court or governmental authority or conflict with or result in the breach of any terms, conditions, or provisions of, or constitute a default under any bond, note or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreements or instruments to which Optionor is a party or which affect any of the Property or the transactions contemplated by this Agreement. 9.7. Other than as disclosed by Optionor to Optionee in writing, there are no legal proceedings either pending or, to the knowledge of the Optionor Representatives, threatened, to which Optionor is or may be made a party, or to which the Property, is or may become subject or which could reasonably affect the ability of Optionor to carry out its obligations hereunder or which would affect the Property. 9.8. Optionor holds, and can cause the conveyance of, fee title to the Property. The transfer of the Property is not subject to any right of first refusal or similar purchase or other options. E 51528687.9 9.9. There are no brokerage fee, commission, or finders' fee is payable to any person or entity in connection with the transaction contemplated by this Agreement ( "Commissions "). Optionor shall promptly advise Optionee in writing if Optionor becomes aware that any representation or warranty made by Optionor is or becomes untrue in any material respect prior to any Close of Escrow. Optionors' representations and warranties set forth in this Section shall be deemed to be restated at consummation of any purchase contemplated in this Agreement and shall survive any such purchase and shall not be merged with any deed. 10. Optionee's Representations and Warranties. Optionee hereby represents and warrants to Optionor that, as of the Effective Date: 10.1. Optionee has all requisite corporate power and authority to execute and deliver, and to perform all its obligations under, this Agreement. Optionee is duly organized, validly existing and in good standing under the laws of the state of its formation, with full power to enter into this Agreement. 10.2. Optionee has (or will have prior to the date by which a particular step is required to be taken or performance of a particular obligation is required to be commenced pursuant to this Agreement) all requisite power and authority required to enter into this Agreement and the instruments referenced in this Agreement, to consummate the transaction contemplated hereby and to take any steps contemplated thereby or hereby, and to perform its obligations hereunder and thereunder. 10.3. Optionee has obtained (or will have obtained prior to the date by which a particular step is required to be taken or perfonance of a particular obligation is required to be commenced pursuant to this Agreement) all required consents in connection with entering into this Agreement and the instruments and documents referenced in this Agreement to which Optionee is or shall be a party and the consummation of the transactions contemplated hereby. 10.4. The individual executing this Agreement and the individual that will execute the instruments referenced in this Agreement on behalf of Optionee have, or will have upon execution thereof, the legal power, right and actual authority to bind Optionee to the terms and conditions hereof and thereof. 10.5. This Agreement is duly authorized, executed and delivered by Optionee and all documents required in this Agreement to be executed by Optionee pursuant to this Agreement shall be, at such time as they are required to be executed by Optionee, duly authorized, executed and delivered by Optionee and are or shall be, at such time as the same are required to be executed hereunder, valid, legally binding obligations of and enforceable against Optionee in accordance with their terms, except as enforceability may be limited by bankruptcy laws or other similar laws affecting creditors' rights. 10.6. Neither the execution or delivery of this Agreement or the documents referenced in this Agreement, nor the incurring of the obligations set forth in this Agreement, and the certificates, declarations and other documents referenced in this Agreement, nor the consummation of the transactions in this Agreement contemplated, nor compliance with the terms of this Agreement and the documents referenced in this Agreement, will violate any provision of law, any order of any court or governmental authority or conflict with or result in the breach of any terns, conditions, or provisions of, or constitute a default under any bond, note or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, 10 51528687.9 partnership agreement, lease or other agreements or instruments to which Optionee is a party or which affect any of the Property or the transactions contemplated by this Agreement. 10.7. Other than as disclosed by Optionor in writing to Optionee, there are no legal proceedings either pending or, to the knowledge of the Optionee Representatives, threatened, to which Optionee is or may be made a party, or to which the Property, is or may become subject or which could reasonably affect the ability of Optionee to carry out its obligations hereunder or which would affect the Property. Optionee shall promptly advise Optionee in writing if Optionee becomes aware that any representation or warranty made by Optionee is or becomes untrue in any material respect prior to any Close of Escrow. Optionee's representations and warranties set forth in this Section shall be deemed to be restated at consummation of any purchase contemplated in this Agreement and shall survive any such purchase. 11. Destruction/Condemnation of Property: Other Notices. In the event that all or any portion of the Land or Improvements is damaged or destroyed by any casualty or is subject to a taking or condemnation under the provisions of applicable law after the Effective Date but prior to the date of Closing, Optionor shall give Optionee immediate written notice of the same. Optionor shall promptly notify Optionee of any building code violation notices or actions pending, and of any event that causes the representation of Optionor under this Agreement to no longer be true or correct. 12. Notices. Any notice, request, demand, instruction or other document required or permitted to be given or served hereunder or under any document or instrument executed pursuant hereto will be in writing and will be delivered personally or sent by United States registered or certified mail, return receipt requested, postage prepaid or by overnight express courier, postage prepaid and addressed to the parties at their perspective addresses set forth below, and the same will be effective upon receipt if delivered personally or via overnight express courier or on the third Business Day after deposit if mailed. A party may change its address for receipt of notices by service of a notice to such change in accordance herewith. If to Optionee: St. Joseph Health System 3345 Michelson Drive, Suite 100 Irvine, California 92612 Attn: Annette Walker with a copy to: St. Joseph Health System 3345 Michelson Drive, Suite 100 Irvine, California 92612 Attn: General Counsel If to Optionor: (-,6 " I S6 I'\j "Gi &w' - C04V Zo 0 1VIc Ce4l4er` FIkza Art ,,.: f erid Or2S y C-1 Irecf'uC with a copy to: CAA pt jeWS tee -tt- 4 4ht G, A('( fwi&r, Clef K -�� 51528687.9 Attn.: 13. Memorandum of Agreement. At Optionee's request, Optionor shall execute a memorandum of this Agreement in a form satisfactory to Optionee and Optionee may record such memorandum in the real estate records of the County in which the Real Property is located. 14. Assignment. Optionor may not assign its interest in this Agreement, or any of its rights or obligations hereunder, without the prior written consent of Optionee, which shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing paragraph, Optionee may, without the prior written consent of Optionor assign its interest in this Agreement, or any of its rights or obligations hereunder to a Permitted Transferee (as defined below). As used herein, the term "Permitted Transferee" means (a) any affiliate of Optionee, being a person or entity who, directly or indirectly, controls, is controlled by, or is under common control with, Optionee, including any partner, member, stockholder or other equity holder of Optionee (for purposes of this definition, "control" shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of Optionee, whether through ownership of voting securities, membership, partnership or other ownership interests, by contract or otherwise; and the terms "controlling" and "controlled" shall have correlative meanings); or (b) a successor related to Optionee by merger, consolidation, non - bankruptcy reorganization or government action. No transfer or assignment in violation of the provisions hereof shall be valid or enforceable. Subject to the foregoing, this Agreement and the terms and provisions hereof shall inure to the benefit of and shall be binding upon the successors and assigns of the parties. 15. Further Instruments. Each Party will, whenever and as often as it shall be reasonably requested to do so by the other, cause to be executed, acknowledged or delivered any and all such further instruments and documents as may be necessary or proper, in the reasonable opinion of the requesting party, in order to carry out the intent and purpose of this Agreement. 16. Calculation of Time Periods: Business Day; Time of Essence. Unless otherwise specified, in computing any period of time described herein, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is not a Business Day, in which event the period shall run until the end of the next day which is a Business Day. The last day of any period of time described herein shall be deemed to end at 5:00 p.m. local time in the state in which the Real Property is located. As used herein, the term "Business Day" means any day that is not a Saturday, Sunday or legal holiday for national banks in the city in which the Real Property is located. Subject to the foregoing provisions, time is of the essence of this Agreement. 17. Entire Agreement; Amendments. This Agreement (including the documents delivered pursuant to this Agreement), constitutes the entire agreement of the Parties pertaining to the subject matter of this Agreement and supersedes all prior agreements or letters of intent of the Parties. This Agreement may not be amended, modified, or supplemented except by a written instrument signed by an authorized representative of each of the Parties. 12 51528687.9 18. Binding Effect; Enforcement. The covenants, agreements, representations, and warranties contained herein will be binding upon, be enforceable by and inure to the benefit of the representatives, successors, and permitted assigns of the respective parties hereto. 19. Applicable Law. This Agreement will be construed and interpreted under, and governed and enforced according to, the laws of the State of California applicable to contracts made and to be performed entirely therein. 20. Counterparts. This Agreement may be executed in any number of counterparts and by different Parties to this Agreement in separate counterparts, each of which when so executed and delivered will be deemed original, but all such counterparts, together, will constitute but one and the same instrument. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Agreement will become effective upon the execution and delivery of a counterpart hereof by each Party to this Agreement. A signature of a Party to this Agreement sent by facsimile, electronic mail (including a scanned portable document format copy sent by electronic mail), or other electronic transmission will have the same force and effect as delivery of an original signature of such Party. 21. Internretation. The paragraph and section headings in this Agreement are solely for convenience and will not be deemed to limit or otherwise affect the meaning or construction of any part of this Agreement. Any pronoun used in this Agreement will be deemed to cover all genders. The terms "include," "including," and similar terms will be construed as if followed by the phrase "without being limited to." The term "or" has, except where otherwise indicated, the inclusive meaning represented by the phrase "and /or." The words "hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision or section of this Agreement. Words in this Agreement importing the singular number will mean and include the plural number, and vice versa. 22. Severability of Provisions. Wherever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement will be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 23. Condemnation. From the Effective Date through and until the earlier of Closing or the termination of this Agreement, Optionor shall not exercise the power of eminent domain or similar powers on any portion of the Property, except to the extent required in order for Optionor to satisfy its obligations in connection with Section 4.2.6 of this Agreement. 24. Optionor's Breach. In the event of a breach by Optionor of its obligations under this Agreement that continues without cure beyond the applicable cure period, if any, or, if none, for more than thirty (30) days after Optionee shall have given Optionor written notice thereof ( "Optionor Breach "), Optionee may elect to terminate this Agreement, in which event: (a) this Agreement shall terminate and the Parties shall have no further rights or obligations under this Agreement, except for rights and obligations which, by their terms, survive the termination of this Agreement; and (b) Optionor shall reimburse Optionee for Optonee's reasonable costs incurred in performing Optionee's due diligence (as provided in this Agreement), inspections of the Property (as provided in this Agreement) and design of the Project, not to exceed $50,000.00, forty -five (45) days of Optionee's notice of such termination. 13 51528687.9 25. Optionee Indemnity. Subject to the terms and conditions set forth in this Section, Optionee shall indemnify, hold harmless, and defend Optionor and its officers, directors, employees, agents, affiliates, successors and permitted assigns (collectively, " Optionor Indemnified Party ") against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable attorneys' fees, that are incurred by an Optionor Indemnified Party (collectively, " Optionor Losses "), arising out of any claim alleging: (i) any breach or non- fulfillment of any covenant or any negligent or more culpable act or omission of Optionee or its personnel (including any reckless or willful misconduct) in connection with this Agreement; (ii) any false representation of Optionee under this Agreement; or (iii) any claim for payment of Commissions to any other person or entity claiming by, through or under Optionee. Notwithstanding anything to the contrary in this Agreement, Optionee is not obligated to indemnify, hold harmless or defend any Optionor Indemnified Party against any claim (whether direct or indirect) if such claim or corresponding Optionor Losses arise out of or result from: (a) any pre - existing facts, circumstances, liabilities for matters merely discovered by Optionee (i.e., latent environmental contamination to the extent Optionee does not materially exacerbate same following its initial discovery), (b) Optionor Indemnified Party's and /or Optionor's agents' gross negligence or more culpable act or omission (including recklessness or willful misconduct), or (c) Optionor Indemnified Party's bad faith failure to materially comply with any of its material obligations set forth in this Agreement. Payments by Optionee under this Section in respect of any Optionor Losses are limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment actually received by any Optionor Indemnified Party in respect of any such indemnity claim. Any Optionor Indemnified Party shall use its best efforts to seek to recover any insurance proceeds in connection with malting a claim under this Section. Promptly after the realization of any insurance proceeds, indemnity, contribution or other similar payment, any Optionor Indemnified Party shall reimburse Optionee for such reduction in Optionor Losses for which any Optionor Indemnified Party was paid under this Section before the realization of reduction of such Optionor Losses. Any Optionor Indemnified Party shall give Optionee prompt written notice (a "Claim Notice ") of any Optionor Losses or discovery of facts on which such Optionor Indemnified Party intends to base a request for indemnification under this Section. Any Optionor Indemnified Party's failure to provide a Claim Notice to Optionee under this Section does not relieve Optionee of any liability that Optionee may have to any Optionor Indemnified Party, but in no event shall Optionee be liable for any Optionor Losses that result from a delay in providing a Claim Notice. Each Claim Notice must contain a description of the claim and the nature and amount of the related Optionor Losses (to the extent that the nature and amount of the Optionor Losses are known at the time). Any Optionor Indemnified Party shall furnish promptly to Optionee copies of all papers and official documents received in respect of any Optionor Losses. Optionee's duty to defend applies immediately, regardless of whether any Optionor Indemnified Party has paid any sums or incurred any detriment arising out of or relating, directly or indirectly, to any claim. Optionee may assume, at its sole option, control of the defense, appeal or settlement of any claim that is reasonably likely to give rise to an indemrification claim under this Section (an " Optionee Indemnified Claim ") by sending written notice of the assumption to Optionor on or before thirty (30) days after receipt of a Claim Notice to acknowledge responsibility for the defense of such Optionee Indemnified Claim and undertake, conduct and control, through reputable 14 51528687.9 independent counsel of its own choosing (which Optionor shall find reasonably satisfactory) and at Optionee's sole cost and expense, the settlement or defense thereof. If Optionee assumes control of the defense under this Section, Optionor Indemnified Party (a) shall fully cooperate with Optionee in connection therewith; and (b) may employ, at any time, separate counsel to represent it; provided, that Optionor Indemnified Party is solely responsible for the costs and expenses of any such separate counsel. Notwithstanding anything to the contrary in this Section, Optionor Indemnified Party may defend an Optionee Indemnified Claim with counsel of its own choosing and without the Optionee's participation if: (a) the Optionee Indemnified Claim is one for which Optionor properly gave Optionee a Claim Notice under this Section, and Optionee fails to assume the defense or refuses to defend the Optionee Indemnified Claim under this Section; (b) the Optionee Indemnified Claim seeks only an injunction or other equitable relief against Optionor Indemnified Party; or (c) Optionor Indemnified Party reasonably believes: (i) that there are one or more legal or equitable defenses available to it that are different from or in addition to those available to Optionee; and (ii) counsel for Optionee could not adequately represent the interest of Optionor Indemnified Party because such interest could be in conflict with those of Optionee; or (iii) such action or proceeding involves, or could have a material effect on, any material matter beyond the scope of the indemnification or defense obligations of Optionee. If Optionor Indemnified Party assumes control of the defense under this Section, Optionee shall: (a) reimburse Optionor Indemnified Party promptly and periodically for the reasonable costs properly incurred in defending against the Optionee Indemnified Claim (including reasonable attorneys' fees and expenses); and (b) remain responsible to Optionor Indemnified Party for any Optionor Losses indemnified under this Section. Optionee shall give prompt written notice to Optionor of any proposed settlement of an Optionee Indemnified Claim. Optionee may not, without Optionor's prior written consent, which Optionor shall not unreasonably withhold, condition or delay, settle or compromise any claim or consent to the entry of any judgment regarding which indemnification is being sought hereunder unless such settlement, compromise or consent: (a) includes an unconditional release of Optionor Indemnified Party from all liability arising out of such claim; (b) does not contain any admission or statement suggesting any wrongdoing or liability on behalf of Optionor Indemnified Party; and (c) does not contain any equitable order, judgment or term (other than the fact of payment or the amount of such payment) that in any manner affects, restrains or interferes with the business of Optionor Indemnified Party. Optionor Indemnified Party may not settle or compromise any claim or consent to the entry of any judgment regarding which it is seeking indemnification hereunder without the prior written consent of Optionee, which Optionee shall not unreasonably withhold, condition or delay, unless: (a) if the Optionee Indemnified Claim is one for which Optionor properly gave Optionee a Claim Notice under this Section, and Optionee fails to assume the defense or refuses to defend the Optionee Indemnified Claim under this Section; or (b) such settlement, compromise or consent: (i) includes an unconditional release of Optionee from all liability arising out of such claim; (ii) does not contain any admission or statement suggesting any wrongdoing or liability on behalf of Optionee; and (iii) does not contain any equitable order, judgment or term (other than the fact of payment or the amount of such payment) that in any manner affects, restrains or interferes with the business of Optionor Indemnified Party. The obligations of Optionee and Optionor Indemnified Party under this Section shall survive the Closing or earlier termination of the Disposition Agreement and the expiration or earlier termination of this Agreement. 26. Optionor Indemnity. Subject to the terms and conditions set forth in this Section, 15 51528687.9 Optionor shall indemnify, hold harmless, and defend Optionee and its officers, directors, employees, agents, affiliates, successors and permitted assigns (collectively, " Optionee Indemnified Party ") against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable attorneys' fees, that are incurred by an Optionee Indemnified Party (collectively, " Optionee Losses "), arising out of any claim alleging: (i) any breach or non- fulfillment of any covenant or any negligent or more culpable act or omission of Optionor or its personnel (including any reckless or willful misconduct) in connection with this Agreement; (ii) any false representation of Optionor under this Agreement; (iii) the existence of any Environmental Conditions upon the Property or obligations related to such Environmental Conditions accruing prior to the Closing under the Disposition Agreement; or (iv) any claim for payment of Commissions to any other person or entity claiming by, through or under Optionor. Notwithstanding anything to the contrary in this Agreement, Optionor is not obligated to indemnify, hold harmless or defend any Optionee Indemnified Party against any claim (whether direct or indirect) if such claim or corresponding Optionee Losses arise out of or result from: (a) Optionee Indemnified Party's and/or Optionee's agents' gross negligence or more culpable act or omission (including recklessness or willful misconduct); or (b) Optionee Indemnified Party's bad faith failure to materially comply with any of its material obligations set forth in this Agreement. Payments by Optionor under this Section in respect of any Optionee Losses are limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment actually received by any Optionee Indemnified Party in respect of any such indemnity claim. Any Optionee Indemnified Party shall use its best efforts to seek to recover any insurance proceeds in connection with making a claim under this Section. Promptly after the realization of any insurance proceeds, indemnity, contribution or other similar payment, any Optionee Indemnified Party shall reimburse Optionor for such reduction in Optionee Losses for which any Optionee Indemnified Party was paid under this Section before the realization of reduction of such Optionee Losses. Any Optionee Indemnified Party shall give Optionor a prompt Claim Notice of any Optionee Losses or discovery of facts on which such Optionee Indemnified Party intends to base a request for indemnification under this Section. Any Optionee Indemnified Party's failure to provide a Claim Notice to Optionor under this Section does not relieve Optionor of any liability that Optionor may have to any Optionee Indemnified Party, but in no event shall Optionor be liable for any Optionee Losses that result from a delay in providing a Claim Notice. Each Claim Notice must contain a description of the claim and the nature and amount of the related Optionee Losses (to the extent that the nature and amount of the Optionee Losses are known at the time). Any Optionee Indemnified Party shall furnish promptly to Optionor copies of all papers and official documents received in respect of any Optionee Losses. Optionor's duty to defend applies immediately, regardless of whether any Optionee Indemnified Party has paid any sums or incurred any detriment arising out of or relating, directly or indirectly, to any claim. Optionor may assume, at its sole option, control of the defense, appeal or settlement of any claim that is reasonably likely to give rise to an indemnification claim under this Section (an " Optionor Indemnified Claim ") by sending written notice of the assumption to Optionee on or before thirty (30) days after receipt of a Claim Notice to acknowledge responsibility for the defense of such Optionor Indemnified Claim and undertake, conduct and control, through reputable independent counsel of its own choosing (which Optionee shall find reasonably satisfactory) and at Optionor's sole cost and expense, the settlement or defense thereof. If 16 51528687.9 Optionor assumes control of the defense under this Section, Optionee Indemnified Party (a) shall fully cooperate with Optionor in connection therewith; and (b) may employ, at any time, separate counsel to represent it; provided, that Optionee Indemnified Party is solely responsible for the costs and expenses of any such separate counsel. Notwithstanding anything to the contrary in this Section, Optionee Indemnified Patty may defend an Optionor Indemnified Claim with counsel of its own choosing and without the Optionor's participation if: (a) the Optionor Indemnified Claire is one for which Optionee properly gave Optionor a Claim Notice under this Section, and Optionor fails to assume the defense or refuses to defend the Optionor Indemnified Claim under this Section; (b) the Optionor Indemnified Claim seeks only an injunction or other equitable relief against Optionee Indemnified Party; or (c) Optionee Indemnified Party reasonably believes: (i) that there are one or more legal or equitable defenses available to it that are different from or in addition to those available to Optionor; and (ii) counsel for Optionor could not adequately represent the interest of Optionee Indemnified Party because such interest could be in conflict with those of Optionor; or (iii) such action or proceeding involves, or could have a material effect on, any material matter beyond the scope of the indemnification or defense obligations of Optionor. If Optionee Indemnified Party assumes control of the defense under this Section, Optionor shall: (a) reimburse Optionee Indemnified Party promptly and periodically for the reasonable costs properly incurred in defending against the Optionor Indemnified Claim (including reasonable attorneys' fees and expenses); and (b) remain responsible to Optionee Indemnified Party for any Optionee Losses indemnified under this Section. Optionor shall give prompt written notice to Optionee of any proposed settlement of an Optionor Indemnified Claim. Optionor may not, without Optionor's prior written consent, which Optionee shall not mieasonably withhold, condition or delay, settle or compromise any claim or consent to the entry of any judgment regarding which indemnification is being sought hereunder unless such settlement, compromise or consent: (a) includes an unconditional release of Optionee Indemnified Party from all liability arising out of such claim; (b) does not contain any admission or statement suggesting any wrongdoing or liability on behalf of Optionee Indemnified Party; and (c) does not contain any equitable order, judgment or term (other than the fact of payment or the amount of such payment) that in any manner affects, restrains or interferes with the business of Optionee Indemnified Party. Optionee Indemnified Party may not settle or compromise any claim or consent to the entry of any judgment regarding which it is seeking indemnification hereunder without the prior written consent of Optionor, which Optionor shall not unreasonably withhold, condition or delay, unless: (a) if the Optionor Indemnified Claim is one for which Optionee properly gave Optionor a Claim Notice under this Section, and Optionor fails to assume the defense or refuses to defend the Optionor Indemnified Claim under this Section; or (b) such settlement, compromise or consent: (i) includes an unconditional release of Optionor from alI liability arising out of such claim; (ii) does not contain any admission or statement suggesting any wrongdoing or liability on behalf of Optionor; and (iii) does not contain any equitable order, judgment or term (other than the fact of payment or the amount of such payment) that in any manner affects, restrains or interferes with the business of Optionee Indemnified Party. The obligations of Optionee Indemnified Party and Optionor under this Section shall survive the Closing or earlier termination of the Disposition Agreement and the expiration or earlier termination of this Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURES FOLLOW] 17 51528687,9 IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the Effective Date. OPTIONEE: ST. JOSEPH HEALTH SYSTEM, a California nonprofit public benefit corporation By: Name: Annette Walker Its: Executive Vice President, Strategic Services OPTIONOR: CITY OF SANTA, a public ody, corporate and politic r By: IL °� 2 k 2G1�Iame: �1aJ1(>� CG1.VA�.C�3 Its: C,fv Mayo, elm Exhibits: Exhibit "A" Legal Description of the Property Exhibit `B" Notice of Exercise of Option ATTEST: cc,, 99 CITY OF SANTA ANA JAN MARIA D. HUIZA DAVID CAVAZOS Clerk of the Council City Manager APPROVED AS TO FORM: RECOMMENDED FOR APPROVAL: SON AR ALHO City tI in By Ryan I *elly odg Reenders Assistan itv A omev Executive Director- CDA 51528687.9 Signature page to Purchase Option Agreement 18 EXHIBIT A LEGAL DESCRIPTION RW prWerty In the CILy of Santa Ana, County of Orange, State of Callfomla„ desaib< cd as follows: A PORTION OF BLOCKS °C' AND "D" OF SPURGEON 'S ADDITION TO SANTA ANA, AS SHOWN ON A NAIL FILED IN BOOK I PAGE 56, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE ODUNTY REMRDER OF SAID COUNTY, A PORTION OF THE ALLOTMENT TO JACOB ROSS AS DESCRIBED IN THE FINAL DECREE OF PARTITION OF TKE RANCI -III SANTIAGO DE SANTA ANA, WHICH WAS ENTERED IN 1868, IN BOOK "B® PAGE 414 OF JUDGMENTS OF THE DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND FOR LOS ANGELES COUNTY, FATE OF CALIFORNIA, TOGETH ER WITH A PORTION OF A STRIP OF LAND BOUNDED ON THE NORTH BY SOUTH LINE OF SAID ALLOTMENT70 JACOB ROSS, ON THE EAST BY TH E WESTERLY LINE SYCAMORE STREET, AS SAID SYCAMORE STREET WAS ESTABLISHED BY DEED RECORDED IN BOOK 16, PAGE III OF DEEDS, RECORDS OF SAID ORANGE COUNTY; ON THE SOUTH BY THE NORTHERLY LINE OF SAID SPURGEON'S ADDITION; AND ON THE WEST By THE CAST LINE OF BROADWAY, AS SAID BROADWAY EXISTED ON SEPTEMBER 7, 1922, DESCRIBED AS A WHIOLE AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE NORTHERLY LINE OF EIGHTH STREET, FORMALLY KNOWN AS CHURCH STREET WITH THE EASTERLY LINE OF THE WESTERLY 96.00 FEET OF SAID BLOCK ' VAS DESCRIDED IN PARCEL 1 OF THAT CERTAIN GRANT DEED RECORDED JUNE 25, 7001 AS INSTRUMENT NOA 241010416173 OF tOFFJCIA4. RECORDS, IN SAID OFFICE OF THE COUNTY RECORDER, THENCE NORTHERLY ALONG SAID EASTERLY LINE AND THE EASTERLY LINE OF PARCEL 2 OF SAID GRANT GEED, NORTH 03" 21' 30" EASI` 9.93,07 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID ALLOTMENT TO JACOB ROSS, THENCE ALONG SAID SOUTHERLY LINE NORTH 94' 00'000 EAST 28.31 FEET TO A POINT ON A LINE PARALLEL WITH AND 125.00 FEET WEST OF THE WESTERLY LINE OF SYCAMORE STREET, AS WAS ESTABLISHED BY DEED RECORDED IN BOOK 16, PAGE I I1 OF DEED% IN THE OFFICE OF SAID COUNTY RECORDER; THENCE NORTHERLY ALONG SAID PARALLEL LINE NORTH 046 I.61 0S" EAST 115,35 FEET TO A POINT ON THE NORTHERLY LINE OF THAT CERTAIN QUITCIAIM DEED RECORDED MARCH 2% 1947 IN BOOK 1465, PAGE 500 OF SAID OFFICIAL RECORDS; THENCE ALONG SAID NORTHERLY LINE NORTH 890 59'250 EAST 125.00 FEET TO SAID WE=STERLY LINE OF SYCAMORE SiREI -T; THENCE SOUTHERLY ALONG, SAID WESTERLY LINE, SOUTH 00.16' 06° WEST 3438.99 FEET TO SAID NORTHERLY LINE OF EIGHTIH STREET; THENCE ALONG SAID NORTHERLY LINE NORTH 89' 47" 45" WEST 153,61 FEEiTTO SAID POINT OF BEGINNING,. APN: 005-18 +25 A -1 51528687.9 EXHIBIT B OPTION EXERCISE NOTICE To: Pursuant to the provisions of that certain Purchase Option Agreement (this "Agreement "), made as of December , 2015 (the "Effective Date "), at Santa Ana, California, by and between City of Santa Ana, a public body, corporate and politic ( "Optionor "), and St. Joseph Health System, a California nonprofit public benefit corporation ( "Optionee "), Optionee hereby exercises the Option. Capitalized terms not defined in this Notice of Exercise shall have the meanings ascribed to them in the Agreement. Dated: , 201_ OPTIONEE: ST. JOSEPH HEALTH SYSTEM, a California nonprofit public benefit corporation By: _ Name: Its: B -1 51528687.9 STJOSEP -05 THURSTONJA acoizom CERTIFICATE OF LIABILITY INSURANCE `+-'� DATE(MMID V) 6/1/20115 5 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Willis Insurance Services of California, Inc. c/o 26 Century Blvd P.O. Box 305191 NAME: certificates @willis.com PHONE (877) 945 -7378 arc No: 888 467 -2378 AIC No Ext : ( ) E'MAIL -ADDRESS: certificates @willis.com Nashville, TN 37230.5191 INSURER(S) AFFORDING COVERAGE NAICIt INSURERA:Safety National Casualty Corporation 15105 $ INSURED INSURER B $ INSURER C: MED EXP(Anyone person) St. Joseph Health System INSURER D: PERSONAL &ADV INJURY 3345 Michelson Drive, Suite 100 Irvine, CA 92612 INSURER E, $ INSURER F: $ COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. HER LTR TYPE OF INSURANCE I SD NNE POLICY NUMBER POLICY POLICY YY LIMITS Santa Ana CA 92701.4637 COMMERCIAL GENERAL LIABILITY CLAIMS -MADE 17 OCCUR EACH OCCURRENCE $ PREMISES Ea occurrence $ GEN'LAGGREGATE MED EXP(Anyone person) $ PERSONAL &ADV INJURY $ LIMIT APPLIES PER: POLICY [7 PRO- JECT ❑ LOC OTHER: GENERALAGGREGATE $ PRODUCTS - COMPIOP AGO $ $ AUTOMOBILE LIABILITY ANYAUTO ALL OWNED SCHEDULED AUTOS AUTOS NON -OWNED HIRED AUTOS AUTOS COMBINED SINGLE LIMIT Ea accident $ BODILY INJURY (Per person) $ BODILY INJURY (Par accident) $ PROPERTY DAMAGE Per accident $ UMBRELLA LIAR EXCESS LIAB OCCUR CLAIMS -MADE EACH OCCURRENCE $ AGGREGATE $ DEO RETENTIONS $ A WORKERS COMPENSATION AND EMPLOYERS' LIABILITY ANY PROPRIETORIPARTNERIEXECUTIVE YIN OFFICERIMEMBEREXCLUOED2 (Mandatory in NH) If yes, d -scrhe under DESCRIPTION OF OPERATIONS below NIA LDS4052992 05/31/2015 05/31/2016 X PER OTH- STATUTE ER E.L. EACH ACCIDENT $ 1,600,000 E.L. DISEASE - EA EMPLOYEE $ 1,600,000 E.L. DISEASE - POLICY LIMIT $ 1,600,000 DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached If more space is required) (1 Re: Right of Entry Permit for property located at 203 -205 West Civic Center Drive, Santa Ana, CA, YMCA Building. CERTIFICATE HOLDER CANCELLATION ACORD 25 (2014/01) ©1988 -2014 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE The City of Santa Ana 20 Civic Center Plaza Santa Ana CA 92701.4637 CO/ ACORD 25 (2014/01) ©1988 -2014 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD ACOR ®® � CERTIFICATE OF LIABILITY INSURANCE page 1 of 2 DATE (MMIDM YYY) 07/01/2015 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies)must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsement(s). PRODUCER CONTACT Willis Management (Bermuda) Limited 58 Par -la -Ville Road PHONE FAX 877- 945 -7378 888 - 467 -2378 E -MAIL certificates ®W11119.COm P. 0. Box 1995 Hamilton y y Bermuda, HM HX INSURER(S)AFFORDING COVERAGE NAIL# INSURERA: American Unity Group Limited C0929 -001 INSURED St. Joeeph Health System INSURERS: INSURERC: S 3345 Michelson Drive, Suite 100 Irvine, CA 92612 INSURER C INSURER E: INSURER F: PERSONAL It ADV INJURY COVERAGES CERTIFICATE NUMBER: 23354500 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ITS TYPE OF INSURANCE DDL SUB POLICY NUMBER POLICY EFF POLICY EXP LIMITS Santa Ana, CA 92701 -4637 A X COMMERCIAL GENERAL LIABILITY CLAIMS -MADE OCCUR y y UNICGLIS01031 6/30/2015 6/30/2016 EEoAAqCC�HHq(O;ppCrCrURRENCE $ 11000,000 YNEMISES eoccuredo.) $ MED EXP (Any one person) S PERSONAL It ADV INJURY $ 11000,000 GEN'LAGGREGATE LIMIT APPLIES PER: X POLICV ❑ PRO- JECT ❑ LOC GENERALAGGREGATE $ 2,000,000 PRODUCTS- COMPIOPAGG $ $ OTHER: AUTOMOBILE LIABILITY (EareddentSINGLE LIMIT $ BODILY INJURY(Per person) $ ANYAUTO ALLOWNED SCHEDULED AUTOS AUTOS ( er acc ) BODILY? NJURYPident $ HIREDAUTOS NON -OWNED AUTOS PROPERTY DAMAGE (pare.. Want) $ A X UMBRELLALIAB X OCCUR UNIUMB1501028 6/30/2015 6/30/2016 EACH OCCURRENCE $ 1,000,000 AGGREGATE $ 1,000,000 EXCESS LIAB CLAIMS -MADE BED I RETENTION$ $ WORKERS COMPENSATION - PER UER ANDEMPLOYERS'LIABILITY YIN ANY PROPRIETOWPARTNERIEXECUTIVE❑ NIA E.L. EACH ACCIDENT $ OFFICER/MEMBER EXCLUDED? 'Mandatory is NH) f yes, describe under E. L. DISEASE - EA EMPLOYEE $ DESCRIPTION OF OPERATIONS below E. L. DISEASE - POLICY LIMIT $ DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Re: Right of Entry Permit for 203 -205 West Civic Center Drive, Santa Ana, CA commonly know as the YMCA Building. The City, and its respective elected and appointed officials, officers, employees, agents and representatives are included as Additional Insureds as respects to General Liability when equired by written contract. M•. S g /� CERTIFICATE HOLDER CANCELLATION I Coll:4720652 Tpl:1973414 Cert:23954500 © 1988 -20'14 ACORD CORPORATION. All rights reserved. ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE The City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 -4637 I Coll:4720652 Tpl:1973414 Cert:23954500 © 1988 -20'14 ACORD CORPORATION. All rights reserved. ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD AGENCY CUSTOMER ID: LOC #: Alh.. `�O® ADDITIONAL REMARKS SCHEDULE Page 2 of 2 AGENCY NAMEDINSURED Willis Management (Bermuda) Limited St. Joseph Health System 3345 Michelson Drive, Suite 100 Irvine, CA 92612 POLICY NUMBER See First Page CARRIER NAIC CODE EFFECTIVEDATE: See First Page American Unity Group Limited C0929 -001 AUUI I IUNAL KEMAKKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: 25 FORM TITLE: CERTIFICATE OF LIABILITY INSURANCE Waiver of Subrogation applies in favor of Additional Insureds with respects to General Liability when required by written contract. Umbrella liability provides excess over the automobile liability which is represented on a separate certificate. ACORD 101(2008/01) Coll:4720652 Tpl:1973414 Cert:23354500 ©2008 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD A� 'a CERTIFICATE OF LIABILITY INSURANCE 6/23/2015 ' THIS CERTIFICATE IS ISSUED A$ A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER, IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s), PRODUCER Sanford & Tatum Insurance Agency 6303 Indiana Ave. P.O. Box 64790 Lubbock TX 79464 CONTACT Tammy Dipp21_ PaoNE . (806)792• -5564 FAX (806)992 -9349 EMAIL fordtatu. acct ADDRESS: di pp eltpsan m INSURERS AFFORDING COVERAGE NAIC If INSURERA:Zurich Commercial 16535 0003 INSURED St Joseph Health System 3345 Michelson Suite 100 Irvine CA 92612 INSURER B: _ INSURER 0: V � INSURER D: INSURER E: $ INSURER P: COMMERCIAL GENERAL LIABILITY CLAIMS -MADE ❑ OCCUR COVERAGES CERTIFICATE NUMBER.15 -16 St Joseph REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ILTR TYP OFINSURANCS E ADDL &UDR POLICY NUMBER POLICYEFF MIDD POLICY EXP MMIDDIYYYY LIMITS Douglas Sanford/,TRW —�•d- -t- GENERAL LIABILITY EACH OCCURRENCE $ COMMERCIAL GENERAL LIABILITY CLAIMS -MADE ❑ OCCUR DAMA SiE TO HEWIED $ MED EXP(Any one person ) $ PERSONAL &ADV INJURY $ GENERAL AGGREGATE $ GEN'L AGGREGATE LIMIT APPLIES PER; PRODUCTS- COMPIOPAGG $ POLICY PRO LOC ECT �Y $ AUTOMOBILE LIABILITY X EeeBB tle DSINGLE LIMIT $ 11000 ,000 BODILY INJURY (Per person) $ A X ANY AUTO ALL OWNED SCHEDULED AUTOS AUTOS AR9300970 -14 6130/2015 6/3012016 BODILY INJURY (POT a0ddent) $ PPe�acGtlenlI MA $ X HIRED AUTOS X AU OS ED Uninsured Motorist combined $ 1,000,0001 UMBRELLA LIPS OCCUR EACH OCCURRENCE $ AGGREGATE $ EXCESS LIA13 CLAIMS -MADE DED RETENTION$ $ WORKERS COMPENSATION AND EMPLOYERS' LIABILITY YIN ANY FFICERlMEMBER EXCLUDED ?ECUTIVE❑ NIA TOM, STATU- I OTH. E E.L. EACH ACCIDENT 8 E.L. DISEASE - EA EMPLOYEE S (Mandatary In NH) If yes, desotlbe under DESCRIPTION OF OPERATIONS below E.L. DISEASE - POLICY LIMIT $ A Hired Physical Damage AE9300970 -14 6/30/2015 6/30/2016 $M0 Deductible Comprehensive $65,000.00 $1,000 Deductible Collision DESCRIPTION OF OPERATIONS :LOCATIONS [VEHICLES (Aaach ACORD ID1, Adtliflsnal Remarks SChetlule, if more space is required) Re: Right of Entry Permit for property located at 203 -205 West Civic Centex Drive, Santa Ana, CA, YMCA Building. The City, and its respective elected and appointed officials, officers, employees, agents and _✓J representatives are named as Additional Insured when required by written aontrai I /0/4 CERTIFICATE HOLDER CANCELLATION ACORD 26 (2010 @6) ©1908.2010 ACORD CORPORATION. All rights reserved. INS025 (201005).01 The ACORD name and logo are registered marks of ACORD SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. The City of Santa Ana 20 Civic Center Plaza AUTHORIZED REPRESENTATIVE Santa Ana, CA 92701 -4637 Douglas Sanford/,TRW —�•d- -t- ACORD 26 (2010 @6) ©1908.2010 ACORD CORPORATION. All rights reserved. INS025 (201005).01 The ACORD name and logo are registered marks of ACORD