Exhibit 10.1
REAL ESTATE PURCHASE AND SALE AGREEMENT
SCHNITZER INVESTMENT CORP., SELLER
and
BARRETT BUSINESS SERVICES, INC.
Dated: August 9, 2005
INDEX TO
REAL ESTATE PURCHASE AND SALE AGREEMENT
Page
1. Property Included in Sale............................................1
2. Purchase Price/Remedies..............................................2
3. Title to the Property................................................3
4. Buyer's Due Diligence................................................3
5. Buyer's Conditions to Closing........................................5
6. Seller's Conditions to Closing.......................................6
7. The Closing..........................................................7
8. Representations and Warranties.......................................10
9. Leasing and Indemnification..........................................13
10. Condition of Property................................................13
11. Possession...........................................................15
12. Tax-Deferred Exchange................................................15
13. Confidentiality......................................................15
14. Miscellaneous........................................................16
REAL ESTATE PURCHASE AND SALE AGREEMENT
THIS REAL ESTATE PURCHASE AND SALE AGREEMENT (the "Agreement"), is made as
of the 9th day of August, 2005 (the "Agreement Date") by and between SCHNITZER
INVESTMENT CORP., an Oregon corporation ("Seller"), and BARRETT BUSINESS
SERVICES, INC., a Maryland corporation ("Buyer").
R E C I T A L S:
WHEREAS, Seller desires to sell certain improved real property along with
certain related personal and intangible property, and Buyer desires to purchase
said real, personal and intangible property on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
undertakings set forth herein, and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Buyer and Seller
hereby agree as follows:
1. Property Included in Sale. Seller hereby agrees to sell and convey to
Buyer, and Buyer hereby agrees to purchase from Seller, the following:
(a) the improved real property commonly known as: 8100 NE Parkway Drive,
Vancouver, Washington, and legally described on Exhibit A (the "Real Property");
(b) Seller's interest in all rights, privileges and easements appurtenant
to the Real Property, including, without limitation, all minerals, oil, gas and
other hydrocarbon substances as well as all development rights, air rights,
water, water rights (and water stock, if any) relating to the Real Property and
any easements, rights-of-way or other appurtenances used in connection with the
beneficial use and enjoyment of the Real Property;
(c) Seller's interest in all improvements and fixtures located on the Real
Property, including all buildings and structures presently located on the Real
Property, all apparatus, equipment and appliances used in connection with the
operation or occupancy of the Real Property, such as heating and air
conditioning systems and facilities used to provide any utility services,
refrigeration, ventilation, garbage disposal, recreation or other services on
the Real Property (all of which are collectively referred to as the
"Improvements");
(d) Seller's interest in any tangible or intangible personal property
owned by Seller and used in the ownership, use and operation of the Real
Property and Improvements, (excepting those including the name "Schnitzer") now
used in connection with the Real Property (the "Personal Property") and any
contract or lease rights, agreements, utility contracts, maintenance and service
contracts or other rights relating to the ownership, use and operation of the
Real Property.
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(e) All of the items referred to in subparagraphs (a), (b), (c) and (d)
above are hereinafter collectively referred to as the "Property."
2. Purchase Price/Remedies.
(a) The total purchase price (the "Purchase Price") for the Property is
Eight Million Eight Hundred Fifty Thousand and No/100 Dollars ($8,850,000.00).
The Purchase Price is payable by wire transfer of immediately available funds in
U.S. dollars by the federal bank wire transfer system deliverable no later than
12:00 p.m. Pacific on the Closing Date (as defined herein) to Pacific Northwest
Title of Oregon, Inc., 111 SW Columbia, Ste. 1280, Portland, Oregon 97201, Attn:
Yvonne Clifford (telephone: (503) 350-5040) (the "Escrow Agent").
(b) Within two (2) business days of the Agreement Date, Buyer shall
deposit into escrow with the Escrow Agent a promissory note in the amount of Two
Hundred Thousand and No/100 Dollars ($200,000.00) as earnest money (the "Earnest
Money Note"). If Buyer elects to proceed with the transaction, then upon giving
its Approval Notice (as defined in Section 4(d) below), Buyer will convert the
Earnest Money Note to cash and deposit the same into escrow with the Escrow
Agent (the "Deposit"). Any interest earned on the Deposit shall be considered
part of the Deposit. Except as otherwise provided in this Agreement, the Deposit
shall be held by the Escrow Agent in a federally insured interest bearing
account and applied against the cash portion of the Purchase Price at Closing.
(c) IF BUYER FAILS, WITHOUT LEGAL EXCUSE, TO COMPLETE THE PURCHASE OF THE
PROPERTY PURSUANT TO THIS AGREEMENT, THE DEPOSIT (INCLUDING ALL INTEREST EARNED
FROM THE INVESTMENT THEREOF) SHALL BE PAID TO AND/OR RETAINED BY SELLER AS
LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE
EVENT THAT THE SALE IS NOT CONSUMMATED WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. THEREFORE, BY SEPARATELY EXECUTING THIS SECTION
BELOW, THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES AND AS
SELLER'S EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT OF A BREACH BY BUYER AND
THE CLOSING DOES NOT OCCUR AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST
BUYER ARISING FROM SUCH DEFAULT. NOTWITHSTANDING THE FOREGOING, IN NO EVENT
SHALL THIS PARAGRAPH 2(c) LIMIT THE DAMAGES RECOVERABLE BY EITHER PARTY AGAINST
THE OTHER PARTY DUE TO THE OTHER PARTY'S OBLIGATION TO INDEMNIFY SUCH PARTY IN
ACCORDANCE WITH THIS AGREEMENT. MOREOVER, THIS SECTION SHALL NOT PRECLUDE SELLER
FROM RECOVERING ADDITIONAL DAMAGES FROM BUYER PURSUANT TO PARAGRAPH 9.
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SELLER'S INITIALS BUYER'S INITIALS
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(d) In the event that Seller shall be in default hereunder, Buyer's sole
and exclusive remedy shall be either: (i) deliver a written notice to Seller
within three (3) business days of learning of such default, stating with
particularity the alleged default of Seller and the action required by Seller to
cure such default, and stating Buyer's intent to terminate this Agreement if the
default is not cured, whereupon Seller shall have seven (7) business days after
receipt of such written notice in which to cure the alleged default to Buyer's
reasonable satisfaction and to thereby prevent termination of this Agreement
(and the Closing Date shall be delayed, if necessary, until the end of such
seven (7) business day period), or in the event such default is not cured within
such seven (7) business day period, terminate this Agreement by written notice
to Seller and the Escrow Agent, in which case the Deposit shall be returned to
Buyer; or (ii) if Seller's default results from its failure to transfer
possession and title to the Property to Buyer at Closing, enforce specific
performance; provided, however, that if specific performance is not obtained
within thirty (30) days of the scheduled Closing Date, Seller shall be liable to
Buyer for Buyer's actual out-of pocket costs and expenses (including, without
limitation reasonable attorneys' fees and costs) incurred in connection with
this Agreement or as a result of Seller's default hereunder. In no event under
(i) or (ii) above shall Seller be liable to Buyer for any punitive, speculative,
consequential or other damages.
3. Title to the Property. At the Closing, Seller shall convey to Buyer and
Buyer shall accept marketable and insurable fee simple title to the Real
Property, all rights, privileges and easements appurtenant thereto, and to the
Improvements, by duly executed and acknowledged Statutory Warranty Deed in the
form attached as Exhibit B (the "Deed"). Evidence of delivery of marketable and
insurable fee simple title shall be the issuance of a current ALTA Owner's
Extended Coverage Policy of Title Insurance (Form 1970-B) containing no
exceptions to coverage other than the Permitted Exceptions (the "Title Policy")
by Pacific Northwest Title of Oregon, Inc. (the "Title Company"), in the
allocable amount of the Purchase Price, insuring fee simple title to the Real
Property, Improvements, and appurtenant rights, privileges and easements, in the
Buyer.
4. Buyer's Due Diligence. On or before the date five (5) business days
after mutual execution of this Agreement by Seller and Buyer (the "Delivery
Date"), Seller shall deliver the following documents and instruments relating to
the Property, all to the extent the same exist and are in Seller's possession or
control (collectively "Seller Information"): (a) leases or occupancy agreements
for any portion of the Property (including any parking area) and any amendments
or other agreements relating to the leases (collectively the "Leases"); (b) any
environmental reports in Seller's possession or control relating to the
Property; (c) operating statements for the Property for the calendar years 2003
and 2004 to date; (d) current rent roll; (e) any existing surveys in Seller's
possession or control; (f) occupancy permits and certificates of occupancy for
the Improvements; (g) service and maintenance contracts which would remain in
effect after Closing; (h) the most recent tax bills for the Property; and (i)
pleadings, correspondence and other documentation relating to any litigation
affecting the Property.
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Buyer shall be allowed to conduct the following due diligence prior to
purchasing the Property ("Buyer's Due Diligence Review"):
(a) Buyer's review of title to the Property as shown on an existing
preliminary commitment for an ALTA (Form 1970-B) Owner's Extended Coverage title
insurance policy and copies of all recorded documents referenced therein
(collectively, the "Title Report") from the Title Company issued with respect to
the Real Property and a current as-built ALTA/ACSM land survey showing the
location of all improvements and recorded easements and other matters affecting
title to the Property and certified to Buyer and Title Company (the "Survey"),
all of which shall be delivered by Seller with the other Due Diligence Items.
Within ten (10) business days after Buyer's receipt of the Title Report and
Survey (the "Title Documents"), Buyer may approve or disapprove (in its sole and
absolute discretion) the Title Documents for the Property by delivering written
notice to Seller ("Buyer's Title Notice") specifying each title defect or matter
for which Buyer is requesting a cure by Seller ("Title Defect") and each Title
Company requirement ("Title Requirement") which Buyer is requesting Seller to
satisfy in order for the Title Policy to be issued for the Property at Closing.
Buyer's failure to deliver Buyer's Title Notice to Seller within the time period
specified above shall be a conclusive presumption that Buyer has approved the
Title Documents and this Agreement shall remain in full force and effect. Within
five (5) business days after Buyer's Title Notice is given, Seller shall deliver
to Buyer written notice ("Seller's Title Notice") of those Title Defects which
Seller covenants and agrees to either eliminate or cure to Buyer's satisfaction
by the Closing Date and those Title Requirements which Seller agrees to satisfy
by the Closing Date. Seller's failure to deliver Seller's Title Notice to Buyer
within the time period specified above shall be deemed to constitute Seller's
election not to eliminate or cure any such Title Defect or to satisfy any such
Title Requirements. If Seller elects (or is deemed to have elected) not to
eliminate or cure any Title Defects or to not satisfy any Title Requirements,
the Buyer shall have the right, by written notice delivered to Seller within
five (5) business days of Seller's Title Notice or within five (5) business days
after the expiration of the time period during which Seller is entitled to
deliver Seller's Title Notice, whichever occurs first, to either (i) waive its
prior notice as to the Title Defects which Seller has elected not to cure and
those Title Requirements which Seller has elected not to satisfy; or (ii)
terminate this Agreement as provided later in this section. Buyer's failure to
deliver any written notice within such five (5) business day period shall be a
conclusive presumption that Buyer has approved the Title Documents and this
Agreement shall remain in full force and effect.
(b) Buyer's review of the Seller Information provided to Buyer as set
forth above.
(c) Buyer's review of the physical and environmental characteristics and
condition of the Property. Seller agrees to provide Buyer access to the Property
following the Agreement Date for the purpose of performing, at Buyer's sole cost
and expense, studies, physical inspections, investigations and tests on the
Property (the "Studies"), provided that no such tests shall be conducted without
at least two (2) business days prior notice to Seller (which may be oral) and
Seller's prior approval of such Studies, which approval shall not be
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unreasonably withheld, conditioned or delayed. Buyer's access is further
conditioned on Seller having a representative accompany Buyer and Buyer's
consultants and Buyer providing Seller with certificates of insurance evidencing
that Buyer's agents or contractors performing said Studies have insurance in
types and amounts satisfactory to Seller as determined by Seller in its
reasonable discretion. Buyer shall be required to conduct such Studies in a
manner as to not disturb or interfere with the current use of the Property
(which may require more than two (2) business days' notice for certain types of
invasive testing), and upon completion of such Studies, Buyer agrees at its sole
cost to restore the Property to the condition it was in immediately prior to
such Studies, including, but not limited to, the immediate removal of anything
placed on the Property in connection with such Studies. Copies of any reports,
letters or other written information generated as a result of such Studies shall
be provided to Seller. Buyer shall indemnify, defend (with counsel reasonably
satisfactory to Seller), protect, and hold Seller harmless from and against any
and all liability, loss, cost, damage, or expense (including, without
limitation, attorneys' fees and costs) which Seller may sustain or incur by
reason of or in connection with any Studies made by Buyer or Buyer's agents or
contractors relating to or in connection with the Property, or entries by Buyer
or its agents or contractors onto the Property; provided, however, that such
indemnity obligation shall not include any liability, loss, cost, damage or
expense (including attorneys' fees and costs) incurred by or asserted against
Seller because of any existing environmental condition discovered or disclosed
by such Studies. Notwithstanding any provision to the contrary in this
Agreement, the indemnity obligations of Buyer under this Agreement shall survive
any termination of this Agreement or the delivery of the deed and the transfer
of title pursuant to this Agreement.
(d) Seller shall use its good faith diligent efforts to arrange a meeting
between Buyer and a representative of each tenant. Seller shall use its good
faith diligent efforts to obtain from all tenants of the Property estoppel
certificates in the form attached as Exhibit C and to deliver same to Buyer
prior to the Approval Date, as such term is defined immediately below. Buyer's
Due Diligence period shall include Buyer's review and satisfaction with the form
and content of such estoppels.
If on or before 5:00 p.m. Pacific time on the date that is thirty (30)
days after the date this Agreement has been fully executed by both parties (the
"Approval Date"), Buyer notifies Seller in writing of Buyer's satisfaction with
the results of Buyer's Due Diligence Review (the "Approval Notice"), then this
Agreement shall remain in full force and effect and the Deposit shall be held by
the Escrow Agent and credited to the Purchase Price at Closing as provided
herein. In the event Buyer fails to notify Seller in writing of Buyer's
satisfaction with the results of Buyer's Due Diligence Review or in the event
Buyer notifies Seller that it disapproves any aspect of its Due Diligence
Review, on or before 5:00 p.m. Pacific time on the Approval Date, then this
Agreement shall terminate without any liability on the part of either party,
except for Buyer's indemnity obligations set forth in paragraph 4 above. In the
event of such termination, the Earnest Money Note shall be returned to Buyer.
5. Buyer's Conditions to Closing. The following conditions are conditions
precedent to Buyer's obligation to purchase the Property:
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(a) Seller maintaining the Property in its present condition until
Closing, reasonable wear and tear excepted. In the event that prior to Closing
the Property, or any part thereof, is destroyed or materially damaged, and such
damage exceeds $250,000.00, or if condemnation proceedings (including any
conveyance in lieu of condemnation) are commenced against the Property, Buyer
shall have the right, exercisable by giving notice of such decision to Seller
within ten (10) business days after receiving written notice of such damage,
destruction or condemnation proceedings, to terminate this Agreement, in which
case neither party shall have any further rights or obligations hereunder. In
the event of such termination, the Deposit shall be returned to Buyer. If Buyer
elects to accept the Property in its then condition, all proceeds of insurance
or condemnation awards payable to Seller by reason of such damage, destruction
or condemnation shall be paid or assigned to Buyer and Seller shall credit the
Purchase Price to the extent of any deductible under any policies of insurance,
which credit shall not exceed the amount of such damages. In the event the
casualty damage to the Property is $250,000.00 or less, Buyer shall accept the
Property in its then condition and proceed with the purchase, in which case
Buyer shall accept payment or assignment of applicable insurance proceeds, if
any, from policies of insurance maintained and paid for by Seller covering the
Property up to the amount necessary to make the necessary repairs or
restorations and Seller shall credit the Purchase Price to the extent of any
deductible under any policies of insurance, which credit shall not exceed the
amount of such damages.
(b) Delivery by Seller at Closing of the Deed.
(c) Delivery by Seller of the Assignment and Assumption of Leases in the
form attached as Exhibit D.
(d) Delivery by Seller of an Assignment of Warranties, Guaranties and
Service Contracts in the form attached as Exhibit E.
(e) Performance by Seller as and when required by this Agreement of each
and every term, covenant, condition and agreement required to be performed by
Seller pursuant to this Agreement.
In the event that the conditions set forth above in this paragraph 5 are
not satisfied (and Buyer is not otherwise in default of this Agreement), Buyer
may terminate this Agreement, subject to paragraph 2(d) hereof, or waive
satisfaction of the condition and close escrow, in either instance by giving
written notice to Seller. In the event of such termination for reasons described
in (a) - (e) above, the Deposit shall be returned to Buyer.
6. Seller's Conditions to Closing. The following conditions are conditions
precedent to Seller's obligation to sell the Property:
(a) Delivery by Buyer at Closing of the Purchase Price, the executed
Assignment and Assumption of Leases in the form attached as Exhibit D and the
executed Assignment of Warranties, Guaranties and Service Contracts in the form
attached as Exhibit E.
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(b) Performance by Buyer as and when required by this Agreement of each
and every term, covenant, condition and agreement required to be performed by
Buyer pursuant to this Agreement.
In the event that the conditions in this paragraph 6 are not satisfied,
Seller may elect, at its sole discretion, to terminate this Agreement or waive
satisfaction of the condition and close escrow. In the event of such
termination, the Deposit shall be retained by Seller and shall be non-refundable
to the Buyer.
7. The Closing.
(a) The Closing hereunder shall be held and delivery of all items to be
made at the Closing under the terms of this Agreement shall be made at the
offices of the Escrow Agent within ten (10) business days after the Approval
Date, or such other date prior thereto as Buyer and Seller may mutually agree in
writing (the "Closing Date"). If the Closing does not occur on or before the
Closing Date, the Escrow Agent shall, subject to the provisions of paragraph 2,
and unless it is notified by both parties to the contrary, within three (3)
business days after the Closing Date, return to the depositor thereof items
which may have been deposited pursuant to this Agreement (other than the Deposit
which shall be distributed as required above). Any such return shall not,
however, relieve either party hereto of any liability it may have for its
wrongful failure to close.
(b) At or before the Closing, Seller shall deliver to escrow the
following:
(i) the Deed;
(ii) originals or copies of all Leases and New Leases (and amendments
thereto, if any) in Seller's actual and physical possession covering any portion
of the Property, any security deposits relating thereto in Seller's possession,
and an executed Assignment and Assumption of Leases in the form attached as
Exhibit D;
(iii) Seller's Non-Foreign Certification in the form attached as
Exhibit F;
(iv) notices to the tenants in the form attached as Exhibit G;
(v) the executed Assignment of Warranties, Guaranties and Service
Contracts in the form attached as Exhibit E; and
(vi) if applicable, an executed Bill of Sale in the form attached
as Exhibit H.
Buyer may waive compliance on Seller's part under any of the foregoing
items by an instrument in writing.
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(c) At or before the Closing, Buyer shall deliver to escrow the Purchase
Price, the executed Assignment and Assumption of Leases in the form attached as
Exhibit D and the executed Assignment of Warranties, Guaranties and Service
Contracts in the form attached as Exhibit E.
(d) Seller and Buyer shall each deposit such other instruments as are
reasonably required by the Escrow Agent to close the escrow and consummate the
purchase of the Property in accordance with the terms hereof.
(e) Prorations
(i) The following items shall be apportioned between Seller and
Buyer effective at 12:01 a.m. on the date the Deeds are recorded and pro-rated
on the basis of a 365-day year.
(A) Collected Rent. All collected rent (excluding tenant
reimbursements for Operating Costs) and other collected income (and any
applicable state or local tax on rent) under Leases in effect on the Closing
Date shall be prorated as of the Closing. Buyer shall be credited with any rent
and other income collected by Seller before Closing but applicable to any period
of time after Closing. Any rent received by Seller after the Closing with
respect to time periods after the Closing shall be delivered to Buyer within ten
(10) days of Seller's receipt. Buyer shall apply rent and other income from
tenants that are collected after the Closing first to the current obligations
then owing to Buyer for its period of ownership and then remitting sums owing to
Seller with respect to periods prior to Closing, if any, to Seller. Buyer will
make reasonable efforts, without suit, to collect any rents from tenants in
occupancy at Closing owed to Seller with respect to any period prior to Closing.
Seller may pursue collection as to any rent not collected by Buyer within six
(6) months following the Closing Date, provided that Seller shall have no right
to terminate any Lease or any tenant's occupancy under any Lease in connection
therewith. Seller is not restricted in any way from collecting any rent or other
income owed by past tenants who are no longer in occupancy at Closing.
(B) Operating Costs. Seller, as landlord under the Leases, may
be currently collecting from tenants under the Leases additional rent to cover
taxes, insurance, utilities (to the extent not paid directly by tenants), common
area maintenance and other operating costs and expenses (collectively,
"Operating Costs") in connection with the ownership, operation, maintenance and
management of the Real Property. Seller and Buyer shall each receive a debit or
credit, as the case may be, for the difference between the tenants' current
account balances for Operating Costs and amount of Operating Costs reimbursable
to Seller. The parties shall reasonably estimate Operating Costs for Seller's
period of ownership if final bills are not available. Those Operating Costs
being paid directly by a tenant shall not be prorated. Operating Costs that are
not payable by tenants either directly or reimbursable under the Leases shall be
prorated between Seller and Buyer on an accrual basis.
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(C) Taxes and Assessments. Real estate taxes and assessment
installments imposed by governmental authority that are not yet due and payable
and that are not reimbursable by tenants under the Leases as Operating Costs
shall be prorated as of the Closing based upon the most recent ascertainable
assessed values and tax rates. Seller shall receive a credit for any taxes and
assessments paid by Seller and applicable to any period after the Closing. All
refunds or tax savings relating to real estate taxes shall inure to the benefit
of Seller if such refunds or tax savings relate to any period for which Seller
owned the Property. Buyer shall remit to Seller any such refund or tax savings
relating to such period immediately upon Buyer's receipt, after deducting any
amounts due to tenants under the Leases. Any additional taxes relating to the
year of Closing arising out of a change in the use of the Property or a change
in ownership shall be assumed by Buyer effective as of Closing and paid by Buyer
when due and payable, and Buyer shall indemnify Seller from and against any and
all such taxes, which indemnification obligation shall survive Closing.
(D) Final Adjustment After Closing. If final prorations cannot
be made at Closing for any item being prorated under this section, then Buyer
and Seller agree to allocate such items on an accrual basis as soon as invoices
or bills are available and applicable reconciliation with tenants have been
completed, with final adjustment to be made no later than sixty (60) days after
Closing. Income and expenses shall be received and paid by the parties on an
accrual basis with respect to their period of ownership. Seller shall not,
however, be charged for any increase in Operating Costs due to increased costs
incurred by Buyer in respect of such subsequent to the Closing. Payments in
connection with the final adjustment shall be due within thirty (30) days of
written notice. Each party shall have reasonable access to, and the right to
inspect and audit the other party's supporting documentation to confirm the
final prorations; provided at least three (3) business days advance notice is
given by the auditing party to the audited party.
(ii) Leasing Commissions and Cost of Tenant Finish. At Closing,
Buyer shall assume the obligation to pay all leasing commissions and the costs
of tenant finish due after the Closing Date or that become due during the
pendency of this Agreement with respect to the portion of the term of any Lease,
expansion or renewal after the Closing Date. Leasing commissions or tenant
finish costs that are payable on a monthly or other periodic basis during the
Lease terms shall be prorated between the parties in the same manner as
Operating Costs. Any leasing commissions and costs of tenant finish with regard
to new leases of the Property entered into subsequent to the Agreement Date and
prior to Closing (the "New Leases") shall be prorated between Buyer and Seller
at Closing based upon the revenue from such New Leases received by Seller prior
to Closing and the revenue to be received by Buyer for the term of the New
Leases after Closing.
(iii) Tenant Deposits. All tenant security deposits actually
received by Seller (and interest thereon if required by law or contract to be
earned thereon) and not theretofore applied to tenant obligations under the
Leases or New Leases shall be transferred or credited to Buyer at Closing. As of
the Closing, Buyer shall assume Seller's obligations related to tenant security
deposits. Buyer shall indemnify, defend, and hold Seller harmless from and
against
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all demands and claims made by tenants with respect to any security deposits
actually transferred or credited to Buyer and shall reimburse Seller for all
attorneys' fees incurred or that may be incurred as a result of any such claims
or demands as well as for all loss, expenses, verdicts, judgments, settlements,
interest, costs and other expenses incurred or that may be incurred by Seller as
a result of any such claims or demands by tenants. Seller shall indemnify,
defend, and hold Buyer harmless from and against all demands and claims made by
tenants with respect to any security deposits not actually transferred or
credited to Buyer and shall reimburse Buyer for all attorneys' fees incurred or
that may be incurred as a result of any such claims or demands as well as for
all loss, expenses, verdicts, judgments, settlements, interest, costs and other
expenses incurred or that may be incurred by Buyer as a result of any such
claims or demands by tenants.
(iv) Utility Deposits. Buyer shall take all steps necessary to
effectuate the transfer of all utilities to its name as of the Closing Date, and
where necessary, post deposits with the utility companies. Seller shall use good
faith diligent efforts to cause all utility meters are read as of the Closing
Date. Seller shall be entitled to recover any and all deposits held by any
utility company as of the Closing.
(v) Insurance. The fire, hazard, and other insurance policies
relating to the Property shall be cancelled by Seller as of the Closing Date and
shall not, under any circumstances, be assigned to Buyer. All unearned premiums
for fire and any additional hazard insurance premium or other insurance policy
premiums with respect to the Property shall be retained by Seller.
(f) The costs incurred in this transaction shall be allocated as follows:
(i) Seller shall pay the portion of the Title Policy premium for
an ALTA standard coverage owner's policy. Buyer shall pay for any special
endorsements to the title policy and any ALTA extended coverage and recording
fees applicable to the sale.
(ii) Seller shall pay the cost of any transfer taxes.
(iii) Buyer shall pay the cost of any update of the Survey.
(iv) Each party shall pay its own legal fees and expenses.
(v) Seller and Buyer shall each pay one-half (1/2) of the Escrow
Agent's fee.
8. Representations and Warranties.
(a) Seller hereby represents and warrants to Buyer as follows:
(i) Seller is a corporation duly organized and validly existing
under the laws of the State of Oregon and is in good standing under the laws of
Oregon.
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(ii) All closing documents executed by Seller which are to be
delivered to Buyer at the Closing are or at the Closing will be duly authorized,
executed, and delivered by Seller, are or at the Closing will be legal, valid,
and binding obligations of Seller, are sufficient to convey title, and do not
violate any provisions of any agreement to which Seller is a party or to which
it is subject.
(iii) To the best of Seller's knowledge, there are no parties or
trespassers in possession or that have a right to possession of the Property,
other than those tenants that have possession rights according to the Lease or
New Leases.
(iv) Seller has not received any written notice of any pending
condemnation or similar proceeding affecting the Property, nor, to Seller's
knowledge, is there any such proceeding or assessment contemplated by any
governmental authority.
(v) Seller has not received, nor is aware of any written
notification from any governmental authority requiring any work to be done on
the Property or advising of any condition (including, without limitation,
hazardous substances or wastes) that would render the Property unusable or
affect the usability of the Property or any part thereof for the purposes of
Buyer.
(vi) Seller has not granted, nor is Seller aware of, any right of
first refusal or option to acquire any interest in the Property or any part
thereof, and Seller has not sold or contracted to sell the Property or any party
thereof, in favor of any person or entity other than Buyer and which is in
effect as of the Agreement Date.
(vii) Seller is the sole legal fee owner of the Property, and is not
holding fee title as a nominee for any other person or entity.
(viii) Except as included in the Seller Information or otherwise
disclosed by Seller to Buyer, there exists no employment, union, purchase,
service or maintenance contracts or any other contracts which would be binding
on the Property after Closing.
(ix) To the best of Seller's knowledge, Seller is not in default,
and there has occurred no uncured event that, with notice, the passage of time
or both would be a default, under any contract, agreement, lease, encumbrance,
or instrument pertaining to the Property.
(x) To the best of Seller's knowledge, there is no litigation or
threatened litigation that could now or in the future in any way constitute a
lien, claim, or obligation of any kind on the Property, affect the use,
ownership or operation of the Property or otherwise adversely affect the
Property. For purposes of this Section, litigation includes lawsuits, actions,
administrative proceedings, governmental investigations and all other
proceedings before any tribunal having jurisdiction over the Property.
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(xi) To the best of Seller's knowledge, the Property is not in
violation of any law, ordinance, rule or regulation relating to the
environmental conditions thereon. Moreover, Seller represents and warrants that,
except as set forth in any environmental report(s) provided to, or made
available for review by, Buyer, Seller has not used, generated, manufactured,
produced, stored, released, discharged or disposed of on, under or about the
Property (or off-site of the Property that might affect the Property) or
transported from the Property, any Hazardous Substance (as defined below) in
violation of any applicable Environmental Laws (as defined below), nor to the
best of Seller's knowledge has any Hazardous Substance been used, generated,
manufactured, produced, stored, released, discharged or disposed of on, under or
about the Property (or off-site of the Property that might affect the Property).
To the best of Seller's knowledge, except as disclosed in any environmental
report(s) provided to, or made available for review by, Buyer, no underground
storage tanks have been removed from the Property, and no underground storage
tanks are located on the Property. The term "Hazardous Substance" means any
hazardous or toxic substance, material or waste, pollutants or contaminants, as
defined, listed or regulated now or in the future by any federal, state or local
law, ordinance, code, regulation, rule, order or decree regulating, relating to
or imposing liability or standards of conduct concerning, any environmental
conditions, health or industrial hygiene (collectively, "Environmental Laws"),
including without limitation, (i) chlorinated solvents, (ii) petroleum products
or by-products, (iii) asbestos, (iv) polychlorinated biphenyls, and (v) anything
that would be a hazardous waste, material or substance, toxic substance or
pollutant, as defined under the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et. seq.;
Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et. seq.; Resource
Conservation and Recovery Act, 42 U.S.C. ss. 6901 et. seq., the Clean Water Act,
42 U.S.C. ss. 1251 et. seq., and the regulations promulgated thereunder.
(xii) To the best of Seller's knowledge, no labor, material or
services have been furnished in, on, or about the Property or any part thereof
as a result of which any mechanic's, laborer's or materialmen's liens or claims
might arise.
When used herein, the term "to the best of Seller's knowledge" shall mean
and be limited to the current actual knowledge of current employees of each of
Seller and its property management affiliate, Schnitzer Northwest, at the times
indicated only, and not any implied, imputed or constructive knowledge, and
without any express or implied duty of such individuals to conduct any
independent inquiry or investigation and without any personal liability.
(b) Buyer hereby represents and warrants to Seller as follows: (i) Buyer
is a corporation duly organized and validly existing under the laws of the State
of Maryland; (ii) all documents executed by Buyer which are to be delivered to
Seller at Closing are or at the Closing will be duly authorized, executed, and
delivered by Buyer, and are or at the Closing will be legal, valid, and binding
obligations of Buyer, and do not and at the Closing will not violate any
provisions of any agreement to which Buyer is a party or to which it is subject;
(iii) Buyer shall furnish all of the funds for the purchase of the Property
(other than funds supplied by institutional lenders which will hold valid
mortgage liens against the Property) and such funds will not be from sources of
funds or properties derived from any unlawful activity; and (iv)
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Buyer is a sophisticated investor with substantial experience in investing in
assets of the same type as the Property and has such knowledge and experience in
financial and business matters that Buyer is capable of evaluating the merits
and risks of an investment in the Property.
(c) The above representations of Seller and Buyer shall be true and
correct as of the date such parties execute this Agreement and shall be deemed
to be re-certified by Seller and Buyer as of the Closing Date. Each of Seller
and Buyer shall defend, indemnify and hold harmless the other and their
respective directors, officers, employees, agents, partners, subsidiaries,
successors and assigns from any loss, damages, costs, expenses or liabilities
(including reasonable attorneys' fees and costs) directly or indirectly arising
from or attributable to the breach of any representation or warranty set forth
in this Section 8 by such indemnifying party; provided, however, that all claims
of Seller and Buyer against the other based on any such representation or
warranty being false or based on any indemnity obligations of such party
pursuant to this Agreement, must be made, if at all, no later than eighteen (18)
months after the Closing Date, after which date the representations, warranties
and indemnification obligations of the parties hereunder shall terminate and be
of no further force or effect.
9. Leasing and Indemnification. Buyer acknowledges that Seller may
continue its leasing activity in the ordinary course of its business through the
Approval Date. Seller shall submit any prospective leases and any modifications,
amendments, renewals (which are not pre-approved per the terms of the lease) or
terminations (other than the pre-described end of term) of existing leases to
Buyer and shall arrange for Buyer to interview tenants and prospective tenants
of the Property; provided, that Seller shall be entitled to have a
representative present during any such interviews. All such prospective leases,
modifications, amendments, renewals and terminations shall be subject to Buyer's
reasonable consent which shall be deemed given if written notice of object is
not given to Seller within three (3) business days of Seller's written request
for consent and Buyer's interview of the tenant or prospective tenant. Any costs
of tenant finish and lease commissions with regard to New Leases or renewal of
current Leases of the Property entered into subsequent to the Agreement Date and
prior to Closing shall be prorated between Buyer and Seller at Closing, provided
the leases are approved in accordance with this paragraph, and subject to the
prorations provisions of paragraph 7(e) above. Buyer shall indemnify Seller and
Seller shall be fully released from any and all liability arising as a result of
any Future Leasing Commissions due under any leasing commission agreements
affecting the Property. "Future Leasing Commissions" shall be limited to those
commissions resulting from the renewal or extension of any existing Lease, the
exercise of any options under an existing Lease or the execution of a new lease
after the Closing Date, and shall not include any commissions due and owing on
or before the Agreement Date under the terms of any Leases or New Leases or
leasing commission agreements in existence on the Agreement Date. Seller shall
indemnify Buyer and Buyer shall be fully released from all liability arising as
a result of any commissions due and owing on or before the Agreement Date under
the terms of any leases or leasing commission agreements in existence on the
Agreement Date. Notwithstanding the above, Seller and Buyer acknowledge that, in
the event Seller presents to Buyer for approval a lease of any remaining vacant
space in the building located on the Property and Buyer declines or fails to
approve the same, then, in the event this transaction fails to close for any
reason other than Seller's default or inability to convey the property to Buyer
hereunder, Buyer shall pay
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Seller within ten (10) days of demand, a sum equal to six (6) months rent under
such proposed lease to reimburse Seller for loss of rentals from such proposed
lease for a six (6) month period.
10. Condition of Property. At or before the Approval Date, Buyer will have
approved the physical and environmental characteristics and condition of the
Property, as well as the economic characteristics of the Property. By waiver of
its Due Diligence Review condition pursuant to paragraph 4, Buyer hereby waives
any and all defects in the physical, environmental and economic characteristics
and condition of the Property which would be disclosed by such inspection. Buyer
further acknowledges that neither Seller nor any of Seller's officers or
directors, nor Seller's employees, agents, representatives, nor any other person
or entity acting on behalf of Seller (hereafter, for the purpose of this
paragraph, such persons and entities are individually and collectively referred
to as the "Seller"), except as otherwise expressly provided in paragraphs 8(a)
and 14(b) herein, have made any representations, warranties or agreements
(express or implied) by or on behalf of Seller as to any matters concerning the
Property, the economic results to be obtained or predicted, or the present use
thereof or the suitability for Buyer's intended use of the Property, including,
without limitation, the following: suitability of the topography; the
availability of water rights or utilities; the present and future zoning,
subdivision and any and all other land use matters; the condition of the soil,
subsoil, or groundwater; the purpose(s) to which the Property is suited;
drainage; flooding; access to public roads; or proposed routes of roads or
extensions thereof. Buyer acknowledges and agrees that the Property is to be
purchased, conveyed and accepted by Buyer in its present condition, "as is" and
that no patent or latent defect in the physical or environmental condition of
the Property whether or not known or discovered, shall affect the rights of
either party hereto. Any documents furnished to Buyer by Seller relating to the
Property including, without limitation, rent rolls, service agreements,
management contracts, maps, surveys, studies, pro formas, reports and other
information, including but not limited to the Due Diligence Items, shall be
deemed furnished as a courtesy to Buyer but without warranty from Seller. All
work done in connection with preparing the Property for the uses intended by
Buyer including any and all fees, studies, reports, approvals, plans, surveys,
permits, and any expenses whatsoever necessary or desirable in connection with
Buyer's acquiring, developing, using and/or operating the Property shall be
obtained and paid for by, and shall be the sole responsibility of Buyer. Buyer
has investigated and has knowledge of operative or proposed governmental laws
and regulations including land use laws and regulations to which the Property
may be subject and shall acquire the Property upon the basis of its review and
determination of the applicability and effect of such laws and regulations.
Buyer has neither received nor relied upon any representations concerning such
laws and regulations from Seller.
Except for claims of fraud or willful misrepresentation by Seller, and
except for those representations and warranties expressly set forth herein,
Buyer, on behalf of itself and its employees, agents, successors and assigns
attorneys and other representatives, and each of them, hereby releases Seller
from and against any and all claims, demands, causes of action, obligations,
damages and liabilities of any nature whatsoever, whether alleged
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under any statute, common law or otherwise, directly or indirectly, arising out
of or related to the condition, operation or economic performance of the
Property.
By signing in the space provided below in this paragraph 10, Buyer
acknowledges that it has read and understood the provisions of this paragraph
10.
Buyer: BARRETT BUSINESS SERVICES, INC.,
a Maryland corporation
By: /s/ Michael D. Mulholland
-------------------------
Name: Michael D. Mulholland
Its: VP-Finance and Secretary
11. Possession. Subject to the rights of tenants and other occupants,
Buyer shall have the right of possession on the Closing Date, provided, however,
that Seller shall allow authorized representatives of Buyer reasonable access to
the Property for the purposes of satisfying Buyer with respect to satisfaction
of any conditions precedent to the Closing contained herein.
12. Tax-Deferred Exchange. Buyer and Seller agree that, at either Buyer's
or Seller's sole election, this transaction shall be structured as an exchange
of like-kind properties under Section 1031 of the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations and proposed regulations
thereunder. The parties agree that if either wishes to make such election, it
must do so prior to the Closing Date. If either so elects, the other shall
reasonably cooperate, provided any such exchange is consummated pursuant to an
agreement that is mutually acceptable to Buyer and Seller and which shall be
executed and delivered on or before the Closing Date. The electing party shall
in all events be responsible for all costs and expenses related to the Section
1031 exchange and shall fully indemnify, defend and hold the other harmless from
and against any and all liability, claims, damages, expenses (including
reasonable attorneys' and paralegal fees and reasonable attorneys' and paralegal
fees on appeal), proceedings and causes of action of any kind or nature
whatsoever arising out of, connected with or in any manner related to such 1031
exchange that would not have been incurred by the non-electing party if the
transaction were a purchase for cash. The provisions of the immediately
preceding sentence shall survive closing and the transfer of title to subject
Property to Buyer. Notwithstanding anything to the contrary contained in this
paragraph, any such Section 1031 exchange shall be consummated through the use
of a facilitator or intermediary so that Buyer shall in no event be requested or
required to acquire title to any property other than the Property.
13. Confidentiality. Buyer agrees not to disclose the terms of this
Agreement or any "Confidential Information" (as defined below) to any party,
other than such Buyer's agents, accountants, attorneys, employees, consultants
and lender ("Buyer's Representatives") who have a need to know such information,
without the Seller's prior written consent, except as may be required by law.
Seller agrees not to disclose the terms of this Agreement to any party, other
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than such Seller's agents, accountants, attorneys, employees and consultants who
have a need to know such information, without the Buyer's prior written consent
except as may be required by law. Buyer will cause Buyer's Representatives to
observe the terms of this paragraph, and Buyer will be responsible for any
breach of this provision by Buyer or any of Buyer's Representatives. If Buyer or
any of Buyer's Representatives are requested pursuant to, or become compelled by
applicable law, regulation or legal process to disclose any Confidential
Information, Buyer or Buyer's Representative(s) (as applicable) will provide
Seller with prompt notice thereof and agree to assist Seller, at Seller's
expense, to obtain protection of the Confidential Information by court order or
otherwise. If Buyer elects under rights granted in this Agreement to terminate
this Agreement, Buyer will deliver to Seller promptly after its termination
notice copies of all written Confidential Information in Buyer' and Buyer's
Representatives' possession or control, excepting information independently
developed by or for or on behalf of Buyer which it may retain, subject to its
obligation of confidentiality hereunder.
For purposes of this provision, the term "Confidential Information" shall
mean all written information given by Seller to Buyer or Buyer's
Representatives, including environmental reports, analyses, cost information,
reports, names of prospective tenants, existing tenant lists, license
agreements, leases, contracts, agreements, studies, plans and specifications,
and other items described in paragraph 4. Confidential Information shall not
include information which (i) is or becomes generally available to and is known
by the public (other than as a result of a disclosure by Buyer or Buyer's
Representatives without written permission from Seller); (ii) is or becomes
available to Buyer on a nonconfidential basis from any source (other than Seller
or Seller's representatives), provided that such source is not prohibited from
disclosing the information by legal, contractual or fiduciary obligation to
Seller or another party; or (iii) is independently developed by Buyer.
14. Miscellaneous.
(a) Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to be an adequate and
sufficient notice if given in writing and service is made either by (i) personal
delivery, in which case the service shall be deemed received the date of such
personal delivery or refusal of delivery by the addressee; or (ii) nationally
recognized overnight air courier service, next day delivery, prepaid, in which
case the notice shall be deemed to have been received one (1) business day
following delivery to such nationally recognized overnight air courier service,
and to the following addresses:
If to Seller:
Anton U. Pardini
Schnitzer Investment Corp.
3200 NW Yeon Avenue
Portland, OR 97210
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If to Buyer:
William W. Sherertz
Barrett Business Services, Inc.
4724 SW Macadam Avenue
Portland, OR 97239
or such other address as either party may from time to time specify in
writing to the other.
(b) Brokers and Finders. Neither party has had any contact or dealings
regarding the Property, or any communication in connection with the subject
matter of this transaction, through any licensed real estate broker, entity,
agent, commission salesperson, or other person who will claim a right to
compensation or a commission or finder's fee as a procuring cause of the sale
contemplated herein other than Columbia Commercial Properties, LLC, who
represented Buyer and who will be paid a three percent (3%) commission by
Seller. In the event that any other company, firm, broker, agent, commission
salesperson or finder perfects a claim for a commission or finder's fee based
upon any such contract, dealings or communication, the party through whom the
company, firm, broker, agent, commission salesperson or finder makes his claim
shall be responsible for said commission or fee and all costs and expenses
(including reasonable attorneys' fees) incurred by the other party in defending
against the same. No commission shall be paid or become payable unless the
Closing actually occurs. The provisions of this subparagraph (b) shall survive
Closing and any termination, cancellation or rescission of this Agreement.
(c) Successors and Assigns. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors,
heirs, administrators and assigns, and may be assigned by Buyer to an entity
owned or controlled by Buyer, provided that Seller is given prior written notice
and copies of the applicable documentation confirming such assignment; and
provided further that any assignee by accepting assignment of this Agreement
expressly agrees to assume all of Buyer's obligations under this Agreement and
that no such assignment shall relieve Buyer from its primary liability under
this Agreement.
(d) Amendments and Terminations. Except as otherwise provided herein, this
Agreement may be amended or modified only by a written instrument executed by
Seller and Buyer.
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Washington.
(f) Merger of Prior Agreements. This Agreement supersedes all prior
agreements and understandings between the parties hereto relating to the subject
matter hereof.
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(g) Enforcement. In the event either party hereto fails to perform any of
its obligations under this Agreement or if a dispute arises concerning the
meaning or interpretation of any provision of this Agreement, the party not
prevailing in such dispute shall pay any and all costs and expenses incurred by
the prevailing party in enforcing or establishing its rights hereunder,
including, without limitation, court costs and reasonable attorneys' fees,
whether incurred in mediation or arbitration, at trial or on appeal, or in any
bankruptcy proceeding. Each of Buyer and Seller acknowledge that it has been
advised by counsel as to its respective rights, duties and obligations in this
Agreement and have had ample opportunity to negotiate same. Thus, both Buyer and
Seller acknowledge that any ambiguity in this Agreement should not necessarily
be resolved against the drafter of this Agreement.
(h) Time of the Essence. Time is of the essence of this Agreement.
(i) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but such counterparts when taken
together shall constitute but one Agreement.
(j) No Recordation. Neither Seller nor Buyer shall record this Agreement
or any memorandum thereof in or among the land or chattel records of any
jurisdiction.
(k) Proper Execution. The submission by Seller to Buyer of this Agreement
in unsigned form shall have no binding force and effect, shall not constitute an
option, and shall not confer any rights upon Buyer or impose any obligations on
Seller irrespective of any reliance thereon, change of position or partial
performance until Seller shall have executed this Agreement and the Earnest
Money Note shall have been received by the Escrow Agent.
(l) Computation of Time. The time in which any act is to be done under
this Agreement is computed by excluding the first day, and including the last
day, unless the last day is a holiday or Saturday or Sunday, and then that day
is also excluded. Unless expressly indicated otherwise, (a) all references to
time shall be deemed to refer to Pacific time; and (b) all time periods shall
expire at 5:00 p.m. Pacific time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Seller:
SCNNITZER INVESTMENT CORP.,
an Oregon corporation
By: /s/ Anton U. Pardini
--------------------
Name: Anton U. Pardini
Its: Vice President
Buyer:
BARRETT BUSINESS SERVICES, INC.,
a Maryland corporation
By: /s/ Michael D. Mulholland
-------------------------
Name: Michael D. Mulholland
Its: VP-Finance and Secretary
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SCHEDULE OF EXHIBITS
Exhibit A Legal Description of the Property
Exhibit B Statutory Warranty Deed
Exhibit C Estoppel Certificate
Exhibit D Assignment of Leases
Exhibit E Assignment of Warranties, Guaranties and Service Contracts
Exhibit F Non-Foreign Certification
Exhibit G Notice to Tenants
Exhibit H Bill of Sale
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