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EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement"), dated as of this
10th day of May, 1998, by and between (a)(i) A&A Greenbrier, Inc. ("AAG") as to
the portion of the Project (hereinafter defined) listed on Exhibit A-1 attached
hereto, (ii) A&A Northpointe B, Inc. ("AANB") as to the portion of the Project
listed on Exhibit A-2 attached hereto, (iii) A&A Northpointe C, Inc. ("AANC") as
to the portion of the Project listed on Exhibit A-3 attached hereto and (iv) A&A
Greenbrier Tech, Inc. ("AAGT") as to the portion of the Project listed on
Exhibit A-4 attached hereto (AAG, AANB, AANC and AAGT shall hereinafter be
referred to, individually and collectively, as the context may require, as
"Seller"), and (b) DDR OFFICEFLEX CORPORATION, an Ohio corporation, or its
permitted assignee or designee ("Buyer").
WITNESSETH:
WHEREAS, each Seller is the owner of certain real property, together
with all improvements located upon such real property and all personal property
of each Seller located thereon or used in connection therewith; and
WHEREAS, each Seller desires to sell to Buyer all of each Seller's
undivided interest in such real and personal property, upon the terms more
particularly set forth below.
NOW THEREFORE, in consideration of the mutual undertakings and
covenants herein contained, Seller and Buyer hereby covenant and agree as
follows:
SECTION 1
SALE OF PREMISES AND ACCEPTABLE TITLE
1.01 Agreement to Buy and to Sell; Project. Each Seller shall
sell to Buyer, and Buyer shall purchase from each Seller, at the price and upon
the terms and conditions set forth in this Agreement, all of such Seller's
undivided interest in the following:
(a) (i) that certain real property more particularly
described on Exhibits A-1 through A-4 attached hereto and made a part hereof
(the "Land");
(b) all buildings, structures and improvements on the Land
and all related improvements, facilities, amenities, structures, driveways,
fixtures, landscaping, paving, site work, walkways, plumbing and heating pipes,
culverts, and mains located on the Land (collectively, the "Improvements");
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(c) all right, title and interest of Seller in and to any
alleys, strips or gores adjoining the Land, and any easements, rights-of-way,
water rights or other interests in, on, under or to, any land, highway, street,
road, right-of-way or avenue, open or proposed, in, on, under, across, in front
of, abutting or adjoining the Land, and all right, title and interest of Seller
in and to any awards for damage thereto by reason of a change of grade thereof;
(d) the accessions, appurtenant rights, privileges,
appurtenances and all the estate and rights of Seller in and to the Land and the
Improvements, as applicable, or otherwise appertaining to any of the property
described in the immediately preceding subparagraphs (a), (b) and/or (c);
(e) the fixtures, equipment, machinery, supplies,
equipment, furniture, chattels, furnishings, and other personal property located
and/or used in connection with the operation and maintenance of the Project, as
defined below, or otherwise owned by Seller (collectively, the "Personal
Property");
(f) all intangible property now or hereafter owned by
Seller and used in connection with the Land, Improvements and Personal Property,
including without limitation, the right to use any trade style or name now used
in connection with the same, any contract rights, tenant security deposits to
the extent in Seller's possession, utility agreements, guarantees, licenses,
approvals, certificates, certificates of occupancy, plans and specifications,
logos, permits, warranties or other rights related to the development of,
construction of, ownership of, or use and operation of, the Project, as
hereinafter defined and any other funds, deposits or monies of Seller; and
(g) all of Seller's interest as lessor in all leases
(herein defined in Section 5.02(a) hereof) covering the Land and Improvements,
including all tenant security and other deposits and interest earned thereon and
prepaid rents and interest earned thereon.
All of the items described in subparagraphs (a), (b), (c) and (d) above
are hereinafter collectively referred to as the "Premises". All of the items
described in subparagraphs (a), (b), (c), (d), (e), (f) and (g) above are
hereinafter collectively referred to as the "Project".
1.02 Title. (a) Each Seller shall convey to Buyer by a duly
executed special warranty deed (the "Deed"), and Buyer shall accept fee simple
title to such Seller's undivided interest in the Premises in accordance with
the terms of this Agreement, and Buyer's obligation to accept said title shall
be conditioned upon Buyer then being conveyed good and clear record, marketable
and insurable title to the Land, excepting only the Permitted Exceptions
(hereinafter defined). It shall be a condition precedent to Buyer's obligation
to close hereunder that a title insurance company (the "Title Company")
acceptable to Buyer and
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any lender providing Buyer's financing stands ready to issue, at the Closing
(herein defined) an ALTA owner's policy of title insurance, insuring Buyer's
interest in the Premises, dated the day of Closing, with liability in the amount
of the Purchase Price (herein defined), subject only to the Permitted Exceptions
(the "Title Policy"). The Title Policy shall insure against all mechanics' liens
and, provided Buyer elects to obtain a Survey (hereinafter defined), shall have
full survey coverage and shall be an extended coverage policy insuring against,
among other things, mechanics' liens, easements and claims of parties in
possession not shown by the public records with all general and standard
exceptions deleted, all at no additional premium to be paid by Buyer.
(b) Simultaneously with the delivery of the Deed, each
Seller shall execute and deliver to Buyer a special warranty bill of sale and
instrument of transfer and assignment (the "Bill of Sale"), in form and
substance reasonably satisfactory to Buyer's counsel, assigning and transferring
all of the tangible and intangible personal property constituting a portion of
the Project owned by such Seller, including, without limitation, such Seller's
undivided interest in (i) any proceeds under any insurance policies or
condemnation proceedings affecting any portion of the Premises owned by such
Seller, (ii) any licenses, permits, variances (if any), governmental approvals
and consents pertaining to the portion of the Project owned by such Seller,
(iii) any warranties and guaranties relating to the portion of the Project owned
by such Seller, (iv) any contracts and agreements which relate to the portion of
the Project owned by such Seller, that Buyer has elected in writing to assume,
and (v) all leases and deposits relating to any portion of the Premises owned by
such Seller, free and clear of all liens and encumbrances, except the Permitted
Exceptions, and indemnifying Buyer from obligations under all of the items
assigned arising prior to Closing and with Buyer's indemnifying Seller from
obligations under all of the items assigned arising from and after the Closing.
(c) Buyer shall, promptly after the Effective Date, order
(i) a commitment for title insurance (the "Commitment") by the terms of which
Buyer's Title Company agrees to issue to Buyer at Closing the Title Policy; (ii)
a photocopy of all documents ("Title Documents") describing all title exceptions
shown on the Commitment (the "Title Exceptions"), and (iii) if Buyer so elects,
an ALTA Land Title Survey of the Land (the "Survey"). If Buyer objects to any
matters disclosed by the Commitment, Title Documents or Survey, Buyer shall
furnish Seller with a written statement thereof within ten (10) days following
receipt by Buyer of the last of the Commitment, Title Documents and Survey. All
matters shown on the Title Exceptions which are not objected to by Buyer within
said ten (10) day period following receipt shall be "Permitted Exceptions".
Seller agrees to use its reasonable efforts to satisfy such objections noted by
Buyer, provided that Seller shall obtain a satisfaction and release of any
monetary liens, including, without limitation, any and all mortgages, mechanics
liens and judgment liens other than the assumable financing, as hereinafter
defined (collectively, "Monetary Liens") and with respect to matters other than
Monetary Liens, Sellers shall be obligated to collectively spend up to $80,000
in the aggregate to cure any
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title objection. Seller shall, within five (5) days after receipt of Buyer's
objections, notify Buyer of Seller's proposed actions to satisfy such
objections, and shall have a reasonable time, not to exceed fifteen (15) days,
to satisfy such objections. If, despite its reasonable efforts to do so, Seller
cannot satisfy such objections (other than the Monetary Liens, which shall be
satisfied by Seller and matters other than Monetary Liens which cost up to
$80,000 in the aggregate to cure) on or before the expiration of such fifteen
(15) day period, as the same may be extended in Buyer's sole discretion, Buyer
shall have the following options: (i) to extend such fifteen (15) day period for
such additional period up to Closing that Buyer may elect, during which Seller
shall continue to use its reasonable efforts to satisfy such objections; (ii) to
waive its objection to such title defect and proceed to Closing; or (iii) to
terminate this Agreement by written notice to Seller and obtain an immediate
refund of the Deposit, as defined in Section 2.02. Notwithstanding any term or
provision contained herein to the contrary, except with respect to Monetary
Liens, the procurement by Seller of a commitment for the issuance of a Title
Policy or an endorsement thereto insuring Buyer against any Title Exception
which Buyer has disapproved pursuant to this Section shall be deemed a cure by
Seller of such objection, subject to Buyer's approval not to be unreasonably
withheld or delayed.
(d) Notwithstanding anything to the contrary contained in
Section 3.01 of this Agreement, if Buyer's objections to title matters are not
satisfied prior to expiration of the Study Period, Closing shall occur on the
later of (a) the date described in Section 3.01 and (b) five (5) business days
following satisfaction of Buyer's title objections in accordance with this
Section.
SECTION 2
PURCHASE PRICE AND ESCROW DEPOSIT
2.01 Purchase Price.
(a) The total purchase price ("Purchase Price") to be
paid by Buyer to Seller for the Project shall be TWENTY SEVEN MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($27,500,000.00). Such Purchase Price shall
be paid to Seller at Closing, as set forth in Section 2.01(b) below, of which
the Deposit (as hereinafter defined) shall constitute a part, subject to
prorations and adjustments as hereinafter provided in this Agreement.
(b) The Purchase Price shall consist of and be payable as
follows:
(i) Buyer shall have the option, which option
must be exercised no later than the end of the Study Period (as defined in
Section 9.01 hereof), either to (A) pay the entire Purchase Price in cash at
Closing, by wire transfer of immediately available funds
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(provided Seller and Buyer mutually agree as to the allocation of payment of any
prepayment penalties to Lenders), or (B) subject to the terms and conditions of
this Agreement and further subject to Lender's prior approval, assume the
existing loans on the Project with those Lenders (collectively, the "Lenders")
and in those amounts as more particularly disclosed on Exhibit B attached hereto
(collectively, the "Loans") of approximately $____________ in the aggregate,
which is the projected balance of the Loans as of May 1, 1998, on the same terms
and conditions as set forth in the loan documents evidencing the Loans
(collectively, the "Loan Documents"), except Seller and any guarantor of the
Loans shall be fully and completely released from the Loan Documents except for
liability with respect to matters which first arose and pertain to the period of
time during which Seller owned the Project (the "Assumable Financing"). If Buyer
is approved for all or any portion of the Assumable Financing, then, at Closing,
Buyer shall execute and deliver to the Escrow Agent, the Lenders and Seller such
documents as are necessary for Buyer to consummate Buyer's assumption of the
Loans. The projected balance of each of said Loans after the debt service
payment due on May 1, 1998, the annual interest rate of each Loan, the amount of
the monthly payments of principal and interest and the amortization schedule are
set forth on Exhibit B,
Buyer shall file, within ten (10) days after the Effective
Date, a complete application seeking to obtain the requisite approvals from each
Lender to assume the Loans on such terms and conditions as each of the Lenders
may require. If prior to the end of the Study Period (a) Buyer does not elect to
assume the Loans, (b) Buyer is not approved for the Assumable Financing which
approval must include each Lender's agreement to release Seller and any
guarantor from the Loan Documents, or (c) Buyer does not accept and approve of
the terms and conditions of the Assumable Financing within five (5) days of each
Lender's offer of such terms and conditions, which terms and conditions must
provide for the release of the Seller and all guarantors from the Loan
Documents, which acceptance or rejection by Buyer must in all events occur by
the end of the Study Period, then either the Buyer or the Seller can elect to
terminate this Agreement within five (5) days of any Lender's rejection of
Buyer's assumption of the Loan in question or Buyer's rejection of such Lender's
terms and conditions. Failure of Buyer to notify Seller of Buyer's election to
assume or reject the Loans by the end of the Study Period shall be deemed to
mean that Buyer has elected to accept the Loans. Notwithstanding any term or
provision contained herein to the contrary, in the event Buyer for whatever
reason does not assume all of the Loans, including, without limitation, in the
event Buyer elects to proceed with an entire cash purchase, Seller shall have
the option to terminate this Agreement. Such termination pursuant to this
Section 2.01(b)(i) shall (w) not be considered a breach of the Agreement; (x)
not result in the assessment of damages or penalties to either party; (y) not
result in either party having liability to the other hereunder; and (z) result
in the return of the Deposit to the Buyer.
If neither the Buyer nor the Seller elects to terminate the
Agreement pursuant to this Section 2.01(b)(i), then the cash portion of the
Purchase Price shall, at the option of Seller, (i) be increased to the full
Purchase Price such that the purchase described in this
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Agreement shall be an all cash transaction or (ii) be increased to reflect the
amount of the Loan not being assumed.
Seller shall pay any and all fees, expenses and other costs
associated with Buyer's application and assumption of the Loans including,
without limitation, any application fees, review fees, processing fees,
transfer/assumption fees and Lender's reasonable costs and expenses, except for
any recordation or mortgage tax and any legal fees of Buyer. Furthermore, if
this transaction is an all cash transaction without an assumption by Buyer of
all of the Loans, Buyer and Seller shall hereafter mutually agree as to which of
Buyer or Seller shall pay any prepayment fees, premiums and other costs and
expenses required in connection with the prepayment of the Loans.
(ii) If Buyer assumes all of the Loans, the
balance of the cash portion of the Purchase Price shall be paid by Buyer at
Closing by wire transfer of immediately available funds. If Buyer does not
assume the Loans, the entire Purchase Price shall be paid by Buyer on or before
12:00 p.m. (ET) at Closing by wire transfer of immediately available funds.
2.02 Deposit; Escrow Agent
(a) Within three (3) business days following the date
that Commercial Title Group, Limited, 8605 Westwood Center Drive, Suite 401,
Tyson's Corner, Vienna, Virginia 22182, Attention: Douglas Nichols ("Escrow
Agent") receives a copy of this Agreement executed by both Seller and Buyer,
Buyer shall deposit with the Escrow Agent the amount of $67,500.00, either by
certified bank or cashier's check or by wire transfer, as a good faith deposit
hereunder. Such $67,500.00 deposit, and all interest earned thereon, shall be
referred to as the "Initial Deposit". All interest on any deposit shall be
deemed income of Buyer. Escrow Agent shall maintain the Initial Deposit in an
FDIC-insured interest-bearing account. The Initial Deposit shall be applied to
the Purchase Price at Closing and shall be non-refundable to the Seller
except as otherwise provided herein. The Initial Deposit shall be released in
accordance with the terms and provisions of this Agreement.
(b) Provided Buyer has not elected to terminate this
Agreement during the Study Period (as defined in Section 9.01), Buyer shall
within two (2) business days after the end of the Study Period deliver to the
Escrow Agent the amount of $236,500.00, via certified bank check or cashier's
check or wire transfer, as an additional earnest money deposit hereunder. Such
$236,500.00, and all interest earned thereon, shall be referred to as the
"Additional Deposit". Escrow Agent shall maintain the Additional Deposit in an
FDIC-insured interest-bearing account. The Initial Deposit together with the
Additional Deposit shall be referred to herein as the "Deposit". The term
"Deposit" a used herein shall, in addition to referring to both the Initial
Deposit and the Additional Deposit may also be deemed to refer to either the
Initial Deposit or the Additional Deposit, as the context requires. Upon receipt
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of the Additional Deposit by the Escrow Agent, both Deposits shall become
non-refundable to Buyer, and shall be applied to the Purchase Price, unless
Seller otherwise defaults in its obligations to close the transaction
contemplated by this Agreement in which event the Deposits, together with all
accrued interest thereupon, shall be refunded to Buyer. The failure of Buyer to
timely deliver any Deposit hereunder shall be a material default, and shall
entitle Seller, at Seller's sole option, to terminate this Agreement
immediately.
(c) Notwithstanding any other provision in this Agreement
to the contrary, if prior to the end of the Study Period (as defined in Section
9.01) Buyer should discover one or more condition(s) or defect(s) in or to the
Project, or have any objection to the Project, which arises pursuant to or in
connection with (i) the title commitment, or (ii) the Survey, then Buyer shall
immediately notify Seller in writing of any such condition(s) requesting that
Seller cure or remedy said condition(s) prior to the Closing date hereof at
Seller's sole expense, said written notice also to include all documentation
reasonably required by Seller in support of Buyer's estimate to remedy the
condition(s) (the "Cure Notice"). Within three (3) business days after receipt
of the Cure Notice, Seller shall notify Buyer in writing whether or not Seller
elects to cure or remedy any condition(s) which is the subject of a Cure Notice.
If Seller elects not to cure or remedy such condition(s), or if Seller fails to
notify Buyer of its election to cure any condition(s) which is the subject of a
Cure Notice within three (3) business days as provided hereinabove, then Buyer
shall have the right to (i) terminate this Agreement by written notice to Seller
and obtain an immediate refund of any Deposit, together with any interest
thereon, in which case neither party shall have any further rights or
obligations hereunder (except for any indemnity obligations of either party
pursuant to the other provisions of this Agreement), and each party shall bear
its own costs incurred hereunder, or (ii) Buyer may elect to proceed with the
purchase of the Project subject to such condition(s) specified in any such Cure
Notice, and in such event, the Purchase Price shall be adjusted at Closing by
the amount set forth in the Cure Notice with respect to the estimated cost to
remedy such condition(s) subject to the dollar limitation (the "Cap") set forth
in Section 1.02(c) hereof; provided however, nothing herein shall obligate
Seller to institute litigation to satisfy any such condition(s), except for the
release of the Loans, subject to the provisions of Section 2.01(b) hereof. In
the event Seller has expended any portion of the Cap pursuant to its obligations
under Section 1.02(c) ("Seller's Prior Expenditures"), any adjustment to the
Purchase Price shall be subject to the Cap as reduced by Seller's Prior
Expenditures.
(d) The Escrow Agent joins in the execution of this
Agreement for the purpose of acknowledging receipt of the Deposit and agreeing
to hold and release the Deposit in accordance with the terms and provisions of
this Agreement.
(e) If there is a dispute between Seller and Buyer
concerning Seller's or Buyer's right to receive the Deposit, or the proceeds of
collection thereof, Escrow Agent shall continue to hold the Deposit until the
dispute is resolved by Seller and Buyer or until
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otherwise directed by a court of competent jurisdiction. Upon termination of the
escrow, all interest earned on the investments shall be paid to the party
entitled to receive the principal thereof.
SECTION 3
THE CLOSING
3.01 Closing. All documents necessary or appropriate to transfer
the Project shall be delivered and closing (the "Closing") shall be held on, or
in Buyer's sole discretion, provided that Seller is furnished with at least five
(5) business days prior written notice of the earlier closing date, before, the
date that is thirty (30) days after expiration of the Study Period. Closing
shall occur at the offices of Hale and Dorr LLP, 1455 Pennsylvania Avenue, N.W.,
Washington, D.C. 20004.
3.02 Conditions to Closing. It is a condition precedent to Buyer's
obligation to close hereunder that as of the Closing (i) Seller shall have
performed all of its covenants contained in this Agreement, and all of Seller's
representations and warranties contained in this Agreement shall be true and
accurate in all material respects on and as of the date of Closing as if made
anew on that date, (ii) Title Company shall stand ready to issue the Title
Policy in the form described in Section 1.02(a) hereof, and (iii) Seller shall
have delivered to the Title Company the items described in Section 10.
3.03 Other Agreement. Contemporaneously with this Agreement, Buyer
shall execute a Purchase and Sale Agreement substantially similar in form to
this Agreement for the property owned by Battlefield/Virginia, Inc. (the
"Battlefield Property") and identified on Exhibit H attached hereto (the "Other
Agreement"). Notwithstanding anything in this Agreement or the Other Agreement
to the contrary, Buyer acknowledges and agrees that in the event Buyer fails or
refuses to close on any property which is listed on Exhibits A and H (including,
without limitation, in the event Buyer cannot close under the Other Agreement as
a result of the tenant leasing the Battlefield Property exercising its option to
purchase the Battlefield Property) then Seller's obligations under this
Agreement and the Other Agreement to sell any of the above-referenced properties
to Buyer shall be null and void at Seller's option. Costs incurred to the date
of such default or failure shall be born by Buyer, and the Deposit hereunder and
the Deposit under the Other Agreement shall be retained by Seller as liquidated
damages and shall be non-refundable to Buyer.
In the event that the condition in this Section 3.03 is 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.
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SECTION 4
SELLER'S PRE-CLOSING DELIVERIES
Seller shall deliver to Buyer, at Seller's sole cost and expense,
within five (5) days after execution of this Agreement, copies of the following
documents relating to the Project (all of the following documents and other
items, together with the Additional Deliverables (hereinafter defined) shall be
referred to herein collectively as the "Pre-Closing Deliverables"):
4.01 Leases. True and correct copies of the Leases and all proposed
additional Leases of space in the Premises currently being negotiated by Seller.
4.02 Permits. To the extent in Seller's possession, copies of all
building permits, certificates of occupancy and governmental permits.
4.03 Taxes. A copy of the most recent available real estate and
personal property tax statements for the Project.
4.04 Plans and Specifications. To the extent in Seller's possession
(i) originals (or copies, if originals are not available) of the "as-built"
plans and specifications for the existing, and any proposed, improvements to the
Project (the "Plans and Specifications") and (ii) a copy of all guaranties and
warranties currently in effect made by any person for the benefit of Seller with
respect to all or any part of the Project in connection with the construction
and equipping of the Project.
4.05 Title Matters/Survey. To the extent in Seller's possession, a
copy of Seller's existing Owner's Title Insurance Policy insuring Seller's
ownership of the Land, a copy of Seller's most recent survey of the Land and a
copy of the site plans of the Project, all of which, if available, are attached
hereto as Exhibit C.
4.06 Utility Bills. Copies of all utility bills relating to the
Project for the prior 12-month period.
4.07 Personal Property. A list of all Personal Property currently
used in the maintenance and operation of the Project.
4.08 Service/Equipment Contracts. Copies of all Service/Equipment
Contracts (hereinafter defined in Section 5.03).
4.09 Insurance Policies. Copies of all insurance policies
(collectively, the "Insurance Policies") pertaining to the Project.
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4.10 Loan Documents. Copies of all documents evidencing the Loans.
4.11 Financial Statements of the Project. A copy of the financial
statements for the most recently concluded fiscal year showing all items of
income and expenses, and monthly operating statements for the Project for the
year-to-date.
From time to time thereafter, Seller shall deliver to Buyer all
information pertaining to the Project prepared by or on behalf of Seller, which
is in Seller's possession and which may reasonably be requested by Buyer
(collectively, the "Additional Deliverables").
SECTION 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Each Seller represents and warrants to Buyer as of the date hereof and
as of the Closing as to itself only and the portion only of the Project owned by
such Seller as follows:
5.01 Ownership. Seller is the owner of the Project of record and in
fact, legally and beneficially, and, to the best of its knowledge, has good,
marketable and insurable title to the Project. There are no options to purchase
the Project which are effective, nor has Seller previously entered into any
other contract of sale or agreement of any kind with a party other than Buyer
which is presently effective and which will not be terminated before the date of
this Agreement.
5.02 Leases.
(a) As of the date of the Agreement there are no leases,
subleases, licenses or other rental agreements or occupancy agreements (written
or verbal) which grant any possessory interest in and to any space situated on
or in any of the Premises or that otherwise give rights with regard to use of
any portions of any of the Premises other than the Leases delivered pursuant to
Section 4.01 hereof (said leases, together with any and all amendments,
modifications and supplements thereto and guarantees thereof and leases entered
into after the date hereof in accordance with this Agreement, are herein
referred to collectively as the "Leases");
(b) The copies of the Leases provided to Buyer pursuant to
Section 4.01 are true, accurate and complete as of the date hereof, are, to the
best of Seller's knowledge, in full force and effect and none of them has been
modified, amended or extended; attached as Exhibit D is a Certified Rent Roll,
which Seller hereby certifies is true, accurate and complete in all material
respects, setting forth the Leases;
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(c) No renewal or extension options have been granted to
tenants other than as now set forth in the Leases;
(d) No tenant, or any other person, entity or association
has an option to purchase, right of first refusal, right of first offer or other
similar right in respect of all or any other portion of the Premises;
(e) No tenant is entitled to rental concessions or
abatements for any period subsequent to the Closing other than as set forth or
permitted in the Leases;
(f) To the best of Seller's knowledge, no parties to any of
the Leases are in default nor do any conditions exist that with the passage of
time, or giving of notice shall constitute a default;
(g) To the best of Seller's knowledge, Seller has received
no notice of any action or proceeding instituted against Seller by any tenant of
any portion of the Project;
(h) There are no security deposits or other deposits other
than those set forth in the Leases; and
(i) No rent has been paid more than one month in advance
under any Lease.
5.03 Service and Management Contracts. To the best of Seller's
knowledge, the agreements provided under Section 4.09 are all of the agreements
concerning the operation and maintenance of the Project entered into by Seller
and affecting the Project (collectively, "Service/Equipment Contracts"). Seller
is not in default under any of the Service/Equipment Contracts and, to the best
of Seller's knowledge, no other parties to any of the Service/Equipment
Contracts are in default, nor do any conditions exist that, with the passage of
time, or giving of notice, or both, shall constitute a default. To the best of
Seller's knowledge, the copies of the Service/Equipment Contracts provided to
Buyer pursuant to Section 4.08 are true, accurate and complete as of the date
hereof, are in full force and effect and none of them has been modified, amended
or extended.
5.04 Hazardous Substances. The Project has not been used by Seller
for the generation, treatment, storage or disposal of any hazardous substances
during the period in which Seller has owned the Project and, to the best of
Seller's knowledge, during the period of time prior to Seller's ownership and,
to the best of Seller's knowledge, there exist no hazardous substances on, under
or at the Premises. Except as disclosed in Exhibit F, attached hereto, or on the
surveys of the Project delivered by Seller to Buyer, to the best of Seller's
knowledge, there are no underground storage tanks located on or under the
Premises. For the purposes of this Section 5.04, "hazardous substances" shall
include "hazardous substances" as defined in the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections
9601 et seq., and regulations adopted pursuant to said Act, or any similar
environmental protection law of the or its political subdivisions.
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5.05 Ability to Perform. AAG is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Virginia. AANB is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Virginia. AANC is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia. AAGT is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Virginia. Seller has
full power and authority to execute, deliver and carry out the terms and
provisions of this Agreement and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of Seller enforceable in
accordance with its terms, subject to creditors' rights, bankruptcy and any
other equitable principles. The execution and delivery of this Agreement by the
party signing on behalf of Seller has been duly authorized. To the best of
Seller's knowledge, no order, permission, consent, approval, license,
authorization, registration or validation of, or filing with, or exemption by,
any governmental agency, commission, board or public authority is required to
authorize, or is required in connection with, the execution, delivery and
performance of this Agreement by Seller or the taking by Seller of any action
contemplated by this Agreement.
5.06 Compliance with Laws. Neither the entering into of this
Agreement nor the consummation of the transaction contemplated hereby will
constitute or result in a violation or breach by Seller of any judgment, order,
writ, injunction or decree issued against or imposed upon it, or will result in
a violation of any applicable law, order, rule or regulation of any governmental
authority. There are no actions, suits, proceedings, arbitrations or
investigations pending or, to the best of Seller's knowledge, threatened (i)
against, relating to or affecting Seller which might interfere in a material
respect with the transaction contemplated by this Agreement, become a cloud on
the title to the Project or any portion thereof or otherwise affect the Project
or Seller's ability to consummate the transaction contemplated hereby or (ii)
against, relating to or affecting the Project.
5.07 No Violation Notice. To the best of its knowledge, Seller has
not received written notice:
(a) from any federal, state, county or municipal authority
alleging any material fire, health, safety, building, pollution, environmental,
zoning or other violation of law in respect of the Premises or any part thereof,
including, without limitation, the occupancy or operation thereof, which has not
been corrected;
(b) concerning the possible or anticipated condemnation of
any part of the Project, or the widening, change of grade or limitation on use
of streets abutting the same or concerning any special taxes or assessments
levied or to be levied against the Premises or any part thereof;
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(c) concerning any change in the zoning classification of
the Premises or any part thereof.
If any such notice is received prior to the Closing, Seller shall
promptly notify Buyer thereof and comply with any requirements of such notice
pursuant to Section 6 hereof prior to the Closing.
5.08 Assessments. To the best of Seller's knowledge, there are no
pending or proposed special assessments affecting or which may affect the
Project or any portion thereof.
5.09 Loans. Seller has provided true, correct and complete copies
of all documents evidencing the Loans, the Loans are in full force and effect,
and there are no defaults under the Loans.
5.10 Miscellaneous Representations and Warranties.
(a) The business operations of the Project will be
conducted in the usual and normal manner until the Closing. After the expiration
of the Study Period, Seller shall not, without the prior written consent thereto
of Buyer, which consent shall not be unreasonably withheld, delayed or
conditioned, make (or knowingly permit) any material physical change in the
Project.
(b) Prior to the expiration of the Study Period, Seller
shall not, without the prior written consent thereto of Buyer, which consent
shall not be unreasonably withheld, delayed or conditioned, enter into any lease
affecting the Project or alter, modify, terminate or renew any existing Lease.
After the expiration of the Study Period, Seller shall not, without the prior
written consent of Buyer, which consent may be withheld by Buyer for any reason
or no reason at all, enter into any lease affecting the Project or alter,
modify, terminate or renew any existing Lease.
(c) Seller is not a "foreign person", as defined in the
Internal Revenue Code.
(d) The premiums are paid and current for the Insurance
Policies and to the best of Seller's knowledge, the Insurance Policies are in
full force and effect.
(e) Except as disclosed in Exhibit G attached hereto and
as otherwise described in Section 10.03 hereof, there are no brokerage fees
pursuant to agreements entered into by Seller which will be Buyer's
responsibility after Closing.
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(f) As of the Closing there will be no employees of
Seller employed at the Project.
5.11 Notice of Change. In the event that Buyer becomes aware at any
time prior to Closing that a representation or warranty made by Seller herein,
while true as of the date made, no longer remains true in all material respects,
due to a change of circumstances beyond the reasonable control of Seller
subsequent to the date of this Agreement, Buyer shall promptly give written
notice of such fact to Seller. Seller shall use its reasonable efforts to remedy
such change of circumstances that causes the representation or warranty to be
untrue. In the event Seller is unable to remedy such change of circumstances by
the Closing, then Buyer shall have the option to (a) terminate this Agreement,
whereupon all obligations of all parties hereto shall cease except for those
obligations which survive a termination, and the Deposit shall be returned to
Buyer, or (b) proceed with Closing notwithstanding such change of circumstances
with no adjustment to the Purchase Price.
5.12 No Other Representations or Warranties. Except as set forth in
Sections 5.01 through 5.11 hereof, Seller disclaims the making of any
representations or warranties, express or implied, regarding the Project or
matters affecting the Project, including, without limitation, the physical
condition of the Project, the existence of certain wetlands on the Project, the
quality of any work or materials used in connection with the improvements on the
Project, title to or the boundaries of the Project, pest control matters, soil
condition, hazardous waste, toxic substance or other environmental matters,
compliance with building, health, safety, land use and zoning laws, regulations
and orders, structural and other engineering characteristics, traffic patterns,
the development potential of the Project and the Project's use, fitness, value
or adequacy for any particular purpose, and all other information pertaining to
he Project. Buyer, moreover, acknowledges (i) that Buyer has entered into this
Agreement with the intention of making and relying upon its own independent
investigation, inspection, analysis, examination and evaluation of the physical,
environmental, economic and legal condition of the Project and all other
relevant facts and circumstances and (ii) that, except as set forth in Sections
5.01 through 5.11 hereof, Buyer is not relying upon any representations and
warranties made by Seller, Seller's agents, brokers, management agent or anyone
else acting or claiming to act on Seller's behalf concerning the Project. Buyer
further acknowledges that it has not received from Seller any investment,
accounting, tax, legal, environmental, architectural, engineering, property
management or other advice with respect to this transaction and is relying
solely upon the advice of its own investment, accounting, tax, legal
environmental, architectural, engineering, property management and other
advisors. Subject to the provisions of Sections 5.01 through 5.11 of this
Agreement, Buyer shall accept the Project in its "as-is, where-is" condition,
with all faults, on the Closing, and assumes the risk that adverse physical,
environmental, economic or legal conditions may not have been revealed by its
investigation.
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Buyer hereby specifically acknowledges that Buyer has carefully
reviewed this Section 5.12 and discussed its import with legal counsel and that
the provisions of this Section 5.12 are a material part of this Agreement. The
disclaimer contained in this Section 5.12 shall not merge with the transfer of
the Project and shall survive Closing, without any limitation as to a survival
period.
SECTION 5A
Buyer represents, warrants and covenants to Seller as of the date
hereof and as of the Closing as follows:
5.01A Ability to Perform. Buyer is a corporation organized, validly
existing and in good standing under the laws of the State of Ohio. Buyer has
full power and authority to execute, deliver and carry out the terms and
provisions of this Agreement and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of Buyer enforceable in
accordance with its terms, subject to creditors' rights, bankruptcy and other
equitable principles. The execution and delivery of this Agreement by the party
signing on behalf of Buyer has been duly authorized. No order, permission,
consent, approval, license, authorization, registration or validation of, or
filing with, or exemption by, any governmental authority or agency, commission,
board or public authority is required to authorize, or is required in connection
with, the execution, delivery and performance of this Agreement by Buyer or the
taking by Buyer of any action contemplated by this Agreement.
5.02A Compliance with Laws, etc. Neither the entering into of this
Agreement nor the consummation of the transaction contemplated hereby will
constitute or result in a violation or breach by Buyer of any judgment, order,
writ, injunction or decree issued against or imposed upon it, or will result in
a violation of any applicable law, order, rule or regulation of any governmental
authority. There are no actions, suits, proceedings, arbitrations or
investigations pending or, to the best of Buyer's knowledge, threatened against,
relating to or affecting Buyer which might interfere in a material respect with
the transaction contemplated by this Agreement or otherwise affect Buyer's
ability to consummate the transaction contemplated hereby. There are no facts,
events, conditions or occurrences by reason of which any such action, suit,
proceeding, arbitration or investigation may be brought by any person or entity
against Buyer.
5.03A Bankruptcy. No attachment, execution, assignment, for the
benefit of creditors or voluntary proceedings in bankruptcy has been commenced
by the Buyer and, to the best of Buyer's knowledge, no such action has been
contemplated or threatened, nor has any involuntary proceedings in bankruptcy
been commenced against the Buyer.
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5.04A Miscellaneous Agreements. Buyer acknowledges that all
information with respect to the Project furnished to Buyer, including, without
limitation, Pre-Closing Deliverables (collectively, the "Confidential
Information"), is and has been so furnished on the condition that Buyer
maintains the confidentiality thereof. Accordingly, Buyer shall, and shall cause
its directors, officers, employees, agents, contractors and representatives to,
hold in strict confidence, and not disclose to any other person or entity
without the prior written consent of Seller until the Closing shall have been
consummated, any of the Confidential Information in respect of the Project
delivered to Buyer by Seller or any of its agents, representatives, directors,
officers or employees. If the Closing does not occur and this Agreement is
terminated, Buyer shall promptly return, or cause to be returned, to Seller all
copies of such Confidential Information without retaining, or permitting
retention of, any copy thereof. Notwithstanding anything to the contrary
hereinabove set forth, Buyer may disclose such Confidential Information (i) on a
need-to-know basis to its employees, its title insurer and members of
professional firms serving it in connection with this transaction, including,
without limitation, its attorneys, architects, environmental consultants and
engineers, and its clients; (ii) as any governmental agency or authority may
require in order to comply with applicable laws or regulations; and (iii) if
required by an order of any court of competent jurisdiction, and this provision
shall survive Closing.
SECTION 6
VIOLATIONS OF LAW
6.01 Responsibility for Violations. All notices of violations of
laws, ordinances, or regulations ("Violations of Law"), which are issued or sent
prior to the Closing by any governmental department, agency or bureau having
jurisdiction as to conditions affecting the Project shall be remedied or
complied with by Seller prior to Closing; provided, however, that if Seller is
unable to remedy such Violations of Law or comply with such notices by the
Closing then Buyer shall have the option to (a) terminate this Agreement,
whereupon all obligations of all parties hereto shall cease, the Deposit shall
be returned to Buyer and this Agreement shall be void and without recourse to
the parties hereto, except for provisions which are expressly stated to survive
such termination; or (b) proceed with Closing notwithstanding such Violations of
Law. Notwithstanding any term or provision contained herein to the contrary, in
no event shall the Sellers collectively be obligated to spend more than $16,000
to remedy any Violations of Law. In the event the Violations of Law require
Sellers to spend collectively more than $16,000 in the aggregate to remedy,
Seller shall notify Buyer of its election not to remedy such Violations of Law,
and Buyer shall elect, by written notice to Seller within five (5) days of
receipt of such notification from Seller, to either (i) waive its objection to
such Violations of Law and proceed to Closing or (ii) terminate this Agreement
and obtain a refund of the Deposit.
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SECTION 7
INSURANCE
7.01 Maintenance of Insurance. Until the Closing, Seller shall
maintain its present insurance on the Project, which insurance in respect of
fire and casualty shall be covered by a standard All-Risk Policy in an amount at
least equal to the full replacement value of the Project. Subject to the
provisions of Section 7.02, the risk of loss in and to the Project shall remain
vested in Seller until the recordation of the Deed to Buyer.
7.02 Casualty or Condemnation. If prior to the Closing, the Project
or any "material" portion thereof is damaged or destroyed by fire or casualty,
or any part of the Project is taken or threatened to be taken by eminent domain
by any governmental entity, then Buyer shall have the option, exercisable by
written notice given to Seller at or prior to the Closing, either to (a)
terminate this Agreement, whereupon all obligations of all parties hereto shall
cease, the Deposit shall be returned to Buyer and this Agreement shall be void
and without recourse to the parties hereto except for provisions which are
expressly stated to survive such termination; or (b) proceed with the purchase
of the Project, and in such case, unless Seller shall have previously restored
the Project to its condition prior to the occurrence of any such damage or
destruction, Seller shall pay over or assign to Buyer, without recourse, all
amounts received or due (plus an amount equal to the sum of any deductible under
any insurance policy covering the Project) from, and all claims against, any
insurance company or governmental entity as a result of such destruction or
taking. Within thirty (30) days after receipt of written notice of such casualty
or condemnation, Buyer will advise Seller in writing whether Buyer desires to
proceed with this transaction in light of such casualty or condemnation. The
term "material" as used in this Section 7.02 shall mean damage or destruction in
an amount equal to or greater than $200,000 per portion of the Project owned by
any individual Seller.
SECTION 8
SELLER'S OBLIGATIONS PRIOR TO CLOSING
Seller covenants that between the date of this Agreement and the
Closing (all of which must be true and correct in all material respects as of
the Closing and shall constitute conditions precedent to Buyer's obligation to
close hereunder):
8.01 Replacement of Personal Property; Inventory. No material
personal property included as part of the Project shall be removed from the
Project unless the same is replaced with similar items of at least equal quality
prior to the Closing.
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8.02 Prudent Business Practices. Each Seller shall maintain the
portion of the Project owned by such Seller in good operating condition and
repair, shall not commit or allow to occur waste of the Project so that the
Project, except for normal wear and tear, is in good repair on the date of
Closing and substantially the same state of repair and condition as existed as
of the Effective Date.
8.03 Tenant Estoppels. Seller shall use reasonable efforts to
obtain and deliver to Buyer at least (5) business days prior to the Closing an
executed estoppel letter dated within sixty (60) days of the Closing, in form
reasonably satisfactory to both Seller's and Buyer's counsels, a pro-forma copy
being attached hereto as Exhibit E (the "Tenant Estoppels"), from tenants whose
leases constitute in the aggregate not less than eighty percent (80%) of the
rentable square footage of the Improvements, or in the form described or
contemplated in the lease, the substance and content of which must be consistent
in all material respects with the Lease, and the Certified Rent Roll. It is
expressly understood and agreed that if Seller agrees under any circumstance to
extend the Closing date as referenced in Section 3.01 hereof to a date which
would cause the Tenant Estoppels to be dated more than sixty (60) days prior to
the Closing, that the Tenant Estoppels shall be deemed satisfactory provided
they are dated within the sixty (60) day period prior to the originally stated
Closing date. In no event shall the preceding sentence imply any obligation or
agreement on the part of Seller to extend the Closing date.
Upon delivery to Buyer prior to or after Closing of a Tenant
Estoppel confirming the matters set forth in Section 5.02 hereof as to such
tenant's Lease, the representations and warranties of the Seller set forth in
Section 5.02 hereof shall be deemed terminated and the Seller shall have no
liability to the Buyer therefor.
Notwithstanding the foregoing, Buyer acknowledges and agrees
that, with respect to any Lease with any U.S. governmental agency and Leases
with State agencies, Seller shall be deemed to have satisfied its obligation to
deliver an estoppel certificate if it uses reasonable efforts to obtain from
such U.S. governmental agency a Lease Status Report or from the State agencies
their form of estoppel certificate or lease status report. If Buyer does not
terminate this Agreement prior to the expiration of the Study Period, Buyer
shall be deemed to have accepted the Tenant Estoppels for all purposes and
Seller shall be deemed to have satisfied this covenant. Seller shall reasonably
cooperate with Buyer and any lender of Buyer in connection with obtaining
subordination, non-disturbance and attornment agreements and tenant estoppels
required by any lender of Buyer from the tenants occupying space within the
Project.
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SECTION 9
STUDY PERIOD
9.01 Study Period. Buyer shall have until 6:00 p.m. on the date
that is sixty (60) days following the Effective Date, as defined below (the
"Study Period") to perform a feasibility study of the Project, including, but
not limited to, test borings, soil analyses, hydrologic and environmental
surveys, marketing and feasibility studies, structural and engineering
investigations, reviewing the books and records of the Seller and the Project,
financial analyses and verifications of existing zoning and status of title and
conferences with governmental staff members. In the event that any such
examinations, studies, tests, reviews and/or inspections cause Buyer, in its
sole and absolute discretion, to believe that it is not prudent to proceed to
Closing, then Buyer may, at any time during the Study Period, terminate this
Agreement by giving written notice of such termination to Seller, whereupon the
parties hereto shall be released from any and all further liability and
obligation hereunder and the Initial Deposit shall promptly be returned to
Buyer. In the event Buyer does not provide written notification to Seller during
the Study Period of termination of this Agreement, Buyer shall be deemed not to
have elected to terminate this Agreement and the parties hereto shall remain
subject to the terms and conditions of this Agreement. In the event Buyer does
not terminate the Agreement as provided in this Section 9.01, Buyer and/or its
designees shall have the continued right until Closing, as hereinafter defined,
to inspect, survey and make other tests of the Project.
9.02 Access. Upon execution of this Agreement, Buyer and its agents
shall have full access to the Project, subject to the rights of tenants with
reasonable notice to them, and full access during business hours upon reasonable
advance notice to Seller to all books, records, files, financial data, leases
and contracts relating to the Project. Seller reserves the right to have a
representative present during any such inspections. Buyer and its agents shall
have the right to inspect and copy the foregoing documents, conduct all surveys,
tests, test borings, soil analyses, engineering, hazardous waste and
environmental studies, studies, examinations and to make such inquiries
concerning the Project as Buyer may determine necessary or desirable. Seller
shall use reasonable efforts to cooperate in such examinations and shall
instruct Seller's agents, servants, employees, and representatives to cooperate
in assisting Buyer in the exercise of Buyer's study rights including, without
limitation, allowing Buyer access to such materials in the Project Manager's
office or elsewhere. In the event Buyer enters upon the Project for purposes of
this Section 9.02, Buyer will indemnify, defend and hold harmless Seller and its
agents, servants and employees from and against any loss, cost, expense, claim
or liability made against Seller or its agents, servants or employees as a
result of such entry, including, without limitation, the costs of restoring the
Project to its original condition existing immediately prior to Buyer's action,
or death or injury to any person which occurs as a result of the acts or
omissions of Buyer or any of its employees, consultants, engineers, agents and
representatives, during any entry onto or inspection of the Project, or during
the conduct of any of the Feasibility Studies, by Buyer or any of its employees,
agents or representatives. Buyer agrees to restore the Project to its condition
existing immediately prior to Buyer's or its agent's actions. This Section 9.02
shall survive any termination of this Agreement or Closing hereunder. Seller
shall also
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furnish Buyer, within the Study Period, all additional information in
Seller's possession which Buyer may reasonably request with respect to the
Seller, the Project or the operation of the Project.
SECTION 10
SELLER'S CLOSING OBLIGATIONS
10.01 Closing, Deliveries and Obligations. At or prior to the
Closing, Seller shall deliver the following to Buyer (all of which shall
constitute condition precedents to Buyer's obligation to close hereunder):
(a) Deed; Bill of Sale. The Deed and Bill of Sale, all
in form reasonably satisfactory to Buyer's counsel, duly executed and
acknowledged, which together convey the Project to Buyer, subject only to the
Permitted Exceptions.
(b) Assignment of Leases. An assignment of the Leases,
in form reasonably satisfactory to Buyer's counsel.
(c) Lease Records. The original Leases, or to the extent
not in Seller's possession, photocopies, certified by Seller as true and
complete, of Leases, and all rent records and related documents in the
possession or under the control of Seller. To the extent any deposits are in a
form other than cash, such deposits shall be transferred to Buyer at Closing in
a manner reasonably acceptable to Buyer.
(d) Plans, Specifications, Warranties, Guaranties and
Licenses. To the extent in Seller's possession, copies of all current site
plans, surveys, soil and substrata studies, architectural drawings, plans and
specifications, engineering plans and studies, floor plans, landscape plans and
other plans or studies of any kind that relate to all or any part of the
Project. Seller shall also deliver (i) originals (or copies, if originals are
not then available) of all then effective assignable guaranties, warranties
and/or payment and performance bonds made by any person for the benefit of
Seller, with respect to the Project or any of its components, together with an
instrument assigning such guaranties and warranties to Buyer and (ii) originals
(or copies, if originals are not then available) of all certificates, Licenses,
permits, authorizations and approvals issued for or with respect to the Project
by governmental and quasi-governmental authorities having jurisdiction, to the
extent such items are in Seller's possession.
(e) Title Affidavits. Such affidavits, indemnities and
lien waivers as Buyer's title insurer may reasonably require.
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(f) Files. To the extent available, originals (or
copies, if originals are not available) of all documents and books and records
necessary for the continued operation of the Project, other than proprietary
information, including without limitation, lease files, rent records, escalation
records and statements and maintenance records.
(g) Notices of Sale. Sufficient original letters,
executed by Seller in form and substance reasonably satisfactory to Buyer,
advising tenants under the Leases of the sale of the Project to Buyer and
directing that all rents and other payments thereafter becoming due be sent to
Buyer or as Buyer may direct.
(h) Certificate as to Representations, Warranties and
Covenants. A certificate by each Seller to the effect that all of the
representations, warranties and covenants of such Seller as it relates to the
portion of the Project owned by such Seller set forth in Sections 5 and 8 remain
true and correct in all material respects as of the Closing.
(i) Notices. Any required approval or notice required by
any federal, state or local government authority required in connection with the
transfer of the title hereunder.
(j) Evidence of Tax Payments. A receipt or receipts from
the appropriate taxing authorities evidencing that all real estate taxes and
personal property taxes affecting the Project are not delinquent.
(k) Organizational Documents. The organizational
documents of Seller together with an original resolution of Seller authorizing
the execution of this Agreement, the conveyance documents and all other
documents to be executed by Seller and the performance by Seller hereunder and
thereunder together with a good standing certificate of Seller.
(l) Assumable Financing. The Loan Documents, if any, and
an assignment thereto.
10.02 Possession. At the Closing and as a condition precedent to
Closing, Seller shall deliver full possession of the Project, free of all
tenants or occupants other than under the Leases, which Leases shall be in full
force and effect.
10.03 Covenant and Indemnity. (a) As additional consideration for
Buyer's purchasing the Project and paying the Purchase Price to the Seller, each
Seller hereby covenants and agrees as it relates to the portion of the Project
owned by such Seller to remain fully liable for the performance and payment of
all tenant improvements and the payment of all leasing commissions currently due
and owing (including any delinquent amounts) under any of the Leases or under
any leasing/commission agreement or which shall hereafter be due and owing under
any of the Leases or under any leasing/commission agreement, excluding, however,
tenant
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improvement costs and leasing commissions with respect to any option to renew or
extend leases and leasing commissions and tenant improvements costs which shall
hereafter be owing under any leases or leasing/commission agreements for any new
Leases approved by Buyer after the Effective Date or new Leases executed by
Buyer subsequent to the Closing (collectively, the "Buyer's Commissions and
Costs"). It is expressly understood and agreed that Buyer is assuming and
agreeing to be bound by and liable for such Buyer's Commissions and Costs. Buyer
is not assuming the obligations to perform or pay for any tenant improvements or
to pay for any leasing commissions which have heretofore accrued, and which are
now owing under any of the Leases or under any leasing/commission agreement
other than as aforesaid. Notwithstanding anything to the contrary contained
herein, Buyer shall pay, by reimbursing Seller for any amount it has paid
therefor prior to Closing and assuming any amount which is unpaid as of Closing
those items described in Exhibit G, attached hereto.
(b) Buyer and Seller shall each indemnify, defend and hold the
other party (together with its officers, directors, partners, and employees)
harmless from and against all claims, demands, causes of actions, judgments,
damages, costs and expenses (including, without limitation, reasonable, actual
attorneys' fees and court costs), deficiencies, settlements and investigations
which relate to matters, actions or omissions which arise out of or are based
upon any of the following during such parties' period of ownership, which for
Seller shall be the period of time prior to Closing and for Buyer shall be the
period of time on and after Closing:
(i) any obligation under any contracts, agreements and
writings entered into by or on behalf of such party in respect of the use,
construction, operation, ownership, occupancy or maintenance of any portion of
the Project arising out of an event occurring during such parties' period of
ownership;
(ii) any accident, injury, death or damage whatsoever
caused to any person or entity or loss of property, occurring in or about the
Premises or any part thereof, or on any other property connected with or
adjacent thereto during such parties' period of ownership; or
(iii) any breach of the covenant set forth in Section
10.03(a), above, or with respect to any payment or performance obligation under
any of the Leases for tenant improvements or under any of the Leases and/or
leasing/commission agreements for leasing commissions which have heretofore
accrued, which are now due and owing or which shall hereafter accrue.
(iv) any breach of a representation or warranty set forth
in this Agreement.
This Section 10.03 shall survive the Closing until the first
anniversary of the Closing; provided, however, subject to the terms of Section
8.03, the representations set forth in Section 5.02, above, shall survive until
the expiration of each lease currently in effect at the Project.
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SECTION 11
BUYER'S CLOSING OBLIGATIONS
At the Closing, Buyer shall:
11.01 Payment of Purchase Price. Deliver to Seller the Purchase
Price, as adjusted for apportionments under Section 12, and any other
adjustments thereto required pursuant to the express provisions of this
Agreement.
11.02 Assumable Financing. Deliver the assumption, if applicable, of
the Loan Documents and other documents relative thereto as required by Lender
and the Escrow Agent, together with causing each Lender to deliver such
documents as are necessary to release Seller and the new guarantor of the Loans
from any and all liability under the Loans except for liabilities with respect
to matters which first arose and pertain to the period of time during which the
Seller owned the Project.
11.03 Closing Certificate. A certificate by Buyer (i) to the effect
that all of the representations, warranties and covenants of Buyer set forth in
Section 5A remain true and correct in all material respects as of the Closing
and (ii) confirming the waivers and acknowledgments set forth in Section 5.12
hereof.
11.04 Indemnity. Buyer hereby covenants and agrees to indemnify,
defend and hold Seller (and its officers, directors and employees) harmless from
and against all claims, demands, causes of actions, judgments, damages, costs
and expenses (including, without limitation, reasonable attorneys' fees and
court costs), deficiencies, settlements and investigations which relate to
matters, actions or omissions which arise out of or are based upon any
obligations under any of the Loan Documents (except for liability with respect
to matters which first arose and pertain to the period of time during which
Seller owned the Project).
11.05 Other Documents. Deliver any other documents required by this
Agreement to be delivered by Buyer, including, without limitation, the Bill of
Sale and Assignment of Leases.
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SECTION 12
APPORTIONMENTS AND ADJUSTMENTS TO PURCHASE PRICE;
CLOSING EXPENSES
12.01 Apportionments. The following items shall be prorated as of
12:01 A.M. on the Closing and the net amount thereof shall be added to or
deducted from, as the case may be, the amount of the Purchase Price to be paid
at the Closing;
(a) general real estate, personal property and ad valorem
taxes and assessments for the current tax year of the Project. If any such taxes
or assessments are payable in installments all installments due through the
Closing together with the accrued but unpaid portion of any other installments
not yet due as of the Closing shall be paid for by the Seller;
(b) taxes, water, sewer and front foot benefit charges, and
charges for electricity, gas, telephone and other utilities and license fees;
(c) rent and other charges under the Leases (to the extent
monies have actually been collected therefor);
(d) all other income and expenses relating to the Project,
including principal and interest payable under each of the Loans; and
(e) any other items that are customarily prorated in
transactions of this nature excluding, however, insurance premiums under the
Insurance Policies.
Any and all security deposits, prepaid rent and all interest earned
thereon shall be a credit to Buyer at Closing. Seller shall be fully liable for
any wages and other amounts due and owing any employees at the Project. Seller
shall retain, and shall not be entitled to any credit for, the deposits, if any,
made by Seller in connection with the provision of electric, sewer, water,
telephone and other utility services to the Project.
Seller shall retain any and all deposits and escrows relating to the
Loans.
For purposes of calculating prorations, Buyer shall be deemed to be in
title to the Project, and, therefore, entitled to the income therefrom and
responsible for the expenses thereof for the entire day upon which the Closing
occurs. All such prorations shall be made on the basis of the actual number of
days of the month which shall have elapsed as of the day of the Closing and
based upon the actual number of days in the month and a three hundred sixty-five
(365) day year. The amount of such prorations shall be initially performed by
Title Company at Closing but shall be subject to adjustment in cash after the
Closing outside
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of escrow as and when complete and accurate information becomes available, if
such information is not available at the Closing. Seller and Buyer agree to
cooperate and use their best efforts to make such adjustments no later than
sixty (60) days after the Closing (except with respect to property taxes, which
shall be adjusted within sixty (60) days after the tax bills for the applicable
period are received).
Without limiting the generality of the foregoing, Seller and Buyer
hereby agree that with respect to any year-end reconciliations of reimbursable
expenses under the Leases, Seller and Buyer shall cooperate to complete such
reconciliations as soon as possible after the Closing, with Seller responsible
for amounts owing to tenants under the Leases, and entitled to Rents
(hereinafter defined) payable by tenants under the Leases (as the case may be),
with respect to periods prior to the Closing, and with Buyer responsible for
amounts owing to tenants under the Leases, and entitled to Rents payable by
tenants under the Leases (as the case may be), with respect to periods from and
after the Closing (and, with respect to any such amounts payable to Seller,
Buyer shall have no obligation to collect such Rents, including having no
obligation to institute legal proceedings, including any action for unlawful
detainer, against a tenant owing any such Rents, other than to use commercially
reasonable efforts to collect such rents and to respond to any periodic
inquiries made by Seller relating to the collection of such rents and to the
extent Buyer actually receives any delinquent Rents owing to Seller Buyer shall
tender the same to Seller to the extent of amounts delinquent and actually due
Seller but only after (y) reimbursing Buyer for its actual out-of-pocket costs
and expenses of collection incurred with respect to such tenant, and (z) all
Rents due and owing to Buyer have been paid to Buyer in full (including, without
limitation, the payment to Buyer of delinquencies in Rent owing to Buyer)).
The term "Rent" as used herein shall mean all rents, including any
percentage rent and any accrued tax and operating expense escalation, charges,
and other revenue of any kind generated from or in connection with the Leases.
Except as set forth in this Section 12.01, all items of income and expense which
accrue for the period prior to the Closing will be for the account of Seller and
all items of income and expense which accrue for the period on and after the
Closing will be for the account of Buyer. Buyer shall receive a credit against
the Purchase Price for all amounts of Rent which are allocable to the period on
and after the Closing and which have been prepaid as of the Closing Date. The
provisions of this Section 12.01 shall survive the Closing.
12.02 Operating Expense Pass-throughs. With respect to expenses of
the Project which are chargeable to the tenants pursuant to the provisions of
the Leases (the "CAM Charges"), Seller shall determine (1) the amount of those
expenses paid or payable by Seller from January 1 in the year in which the
Closing occurs through the date of Closing (or, with regard to taxes and
assessments, the amount of the proration thereof charged to Seller) and (2) the
amount tenants have paid to Seller from January 1 in the year in which Closing
occurs until the date of Closing as the tenants' pro rata share of such tenant
expenses. Buyer shall be
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entitled to a credit at Closing equal to the amount Seller has received as of
the Closing Date as pro rata expense payments from tenants in excess of the
expenses paid or payable by Seller through the Closing Date. If accurate
allocations of CAM Charges cannot be made at Closing because current bills are
not obtainable, the parties shall allocate such expenses at Closing on the best
and most current information available, subject to adjustment in cash after the
Closing outside of escrow as and when final bills or other evidence of the
applicable expense are received. Buyer shall also be entitled to a credit at
Closing equal to any CAM Charges for 1997 and prior years which are owing to any
of the tenants (to the extent collected from such tenants) of the Project which
are presently in occupancy. The provisions of this Section 12.02 shall survive
the Closing.
12.03 Closing Expenses. Buyer shall pay for all of its diligence
costs and expenses including, without limitation, the costs of the survey of the
Premises, the charges for the title commitment and report, and the premium for
the Title Policy. Buyer shall also pay for one-half of any escrow charges and
for any and all state and local transfer, recordation and documentary taxes and
any and all recording costs applicable to the transactions contemplated herein
except for the Virginia Grantor's Tax which shall be paid for by Seller. Each
party will be responsible for its own legal fees, consultant's fees and costs of
inspection. Seller shall pay for one-half of any escrow charges, the Virginia
Grantor's Tax and any and all fees, expenses and other costs associated with
Buyer's application and assumption of the Loan including, without limitation,
any application fees, review fees, processing fees, transfer/assumption fees and
Lender's costs and expenses, excluding, however, Buyer's legal fees and expenses
incurred in connection with such application and assumption and excluding any
mortgage or other taxes incurred in connection therewith. The provisions of this
Section 12.03 shall survive the Closing.
SECTION 13
FAILURE TO PERFORM
13.01 Seller's Default. If at the Closing, Seller is unable to give
title or to make conveyance, or to deliver possession of the Project, or to
satisfy all of the terms and conditions precedent to Closing as set forth in
this Agreement, all as herein stipulated, or if on such date the Project does
not conform with the provisions hereof, and Buyer does not elect to take title,
Seller shall be in default under this Agreement and Buyer shall have the right
to terminate the Agreement and the Deposit shall be forthwith returned to Buyer,
and Buyer may pursue the right to compel specific performance and the right to
collect its costs and expenses incurred in connection therewith as its sole and
exclusive remedy. Buyer hereby waives and releases all other claims for damages
and other remedies against Seller for non-performance and expressly acknowledges
and agrees that in no event shall any officer, director, member, partner or
shareholder of Seller ever have any liability hereunder.
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13.02 Buyer's Default. The parties acknowledge that in the event of
Buyer's failure to fulfill its obligations hereunder it is impossible to compute
exactly the damages which would accrue to the Seller in such event. The parties
have taken these facts into account in setting the amount of the Deposit,
required pursuant to Section 2.02, and hereby agree that: (i) such amount is the
pre-estimate of such damages which would accrue to Seller from a default by
Buyer; (ii) such amount represents damages and not any penalty against Buyer;
and (iii) if this Agreement shall be terminated by Seller by reason of Buyer's
failure to fulfill Buyer's obligations hereunder, the Deposit shall be Seller's
full and liquidated damages in lieu of all other rights and remedies (including
the right of specific performance) which Seller may have against Buyer at law or
in equity. Seller's sole and exclusive remedy for Buyer's default shall be to
receive the Deposit as liquidated damages in lieu of all other rights and
remedies which Seller may have against Buyer at law or in equity. Seller hereby
waives and releases all other claims for damages and other remedies against
Buyer for non-performance and expressly acknowledges and agrees that in no event
shall any officer, director or shareholder of Buyer ever have any liability
hereunder.
SECTION 14
BROKERAGE FEES
14.01 For the Seller. The Seller represents and warrants that it has
not engaged any broker or finder or incurred any liability for brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement. The Seller agrees to indemnify and hold harmless the Buyer
against any claims or liabilities asserted against Buyer by any person acting or
claiming to act as a broker or finder in connection with the transaction
described in this Agreement.
14.02 For the Buyer. The Buyer represents and warrants that it has
not engaged any broker or finder or incurred any liability for brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement. The Buyer agrees to indemnify and hold harmless the Seller
against any other claims or liabilities asserted against it by any person acting
or claiming to act as a broker or finder on behalf of the Buyer.
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SECTION 15
NOTICES
15.01 Effective Notices. Any notices or other communications
required or permitted hereunder shall be sufficiently given if delivered
personally or sent by telecopy machine, Federal Express or other recognized
overnight courier, registered or certified mail, postage prepaid, addressed as
follows or to such other address of which the parties may have given notice:
To the Seller: Samnan Trading Establishment
P.O. Box 28008
Alsour Street
Alnaser Building
Safat, Kuwait
Attention: Dr. Louai Alassar
Phone No.: 011 965-240-5701/2
Telecopy No.: 011 965-240-5703
With a copy to: Cambridge Holdings
560 Herndon Parkway
Suite 210
Herndon, Virginia 20170
Attention: Mr. Andrew J. Czekaj
Phone No.: 703-709-8866
Telecopy No.: 703-847-9611
With a copy to: Hale and Dorr LLP
1455 Pennsylvania Avenue, N.W.
Suite 1000
Washington, D.C. 20004
Attention: Steven S. Snider, Esq.
Phone No.: (202) 942-8494
Telecopy No.: (202) 942-8484
To the Buyer: DDR OfficeFlex Corporation
c/o Developer's Diversified Realty Corporation
34555 Chagrin Boulevard
Moreland, Ohio 44022
Attention: James A. Schoff, Esq.
Executive Vice-President and
Chief Operating Officer
Phone No.: (216) 247-4700
Telecopy No.: (216) 247-1118
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With a copy to: Developer's Diversified Realty Corporation
34555 Chagrin Boulevard
Moreland Hills, OH 44022
Attention: Joan Allgood, Esq.
General Counsel
Phone No.: (440) 247-1731
Telecopy No.: (440) 247-2385
To Escrow Agent: Commercial Title Group, Ltd.
8605 Westwood Center Drive
Suite 401, Tysons Corner
Vienna, Virginia 22182
Attention: Mr. Douglas Nichols
Phone No.: (703) 506-1520
Telecopy No.: (703) 506-9615
Unless otherwise specified herein, such notices or other communications shall be
deemed to be effective: (a) one (1) business day after deposit with the courier
if sent by Federal Express or other recognized overnight delivery service; or
(b) upon receipt if accomplished by hand delivery or by telecopied delivery.
Either party may, from time to time, by notice in writing served upon the other
party, in the same manner as prescribed in this Section, designate a different
mailing address or a different or additional person to which all such notices
are thereafter to be addressed.
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SECTION 16
MISCELLANEOUS PROVISIONS
16.01 Integration. This Agreement embodies and constitutes the
entire understanding between the parties with respect to the transaction
contemplated herein, and all prior agreements, understandings, representations
and statements, oral or written, are merged into this Agreement. Neither this
Agreement nor any provision hereof may be waived, modified, amended, discharged
or terminated except by an instrument signed by the party against whom the
enforcement of such waiver, modification, amendment, discharge or termination is
sought, and then only to the extent set forth in such instrument.
16.02 Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of, the Commonwealth of Virginia.
16.03 Captions. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Agreement or any of the provisions hereof.
16.04 Escrow Agent. Escrow Agent shall hold the Deposit in
accordance with the terms and provisions of this Agreement, subject to the
following:
(a) Escrow Agent undertakes to perform only such duties as
are expressly set forth in this Agreement and no implied duties or obligations
shall be read into this Agreement against Escrow Agent.
(b) Escrow Agent may act in reliance upon any writing or
instrument or signature which it, in good faith, believes of any statement or
assertion contained in such writing or instrument, and may assume that any
person purporting to give any writing, notice, advice or instrument in
connection with the provisions of this Agreement has been duly authorized to do
so. Escrow Agent shall not be liable in any manner for the sufficiency or
correctness as to form, manner and execution, or validity of any instrument
deposited in escrow, nor as to the identity, authority, or right of any person
executing the same, and Escrow Agent's duties under this Agreement shall be
limited to those provided in this Agreement.
(c) Unless Escrow Agent discharges any of its duties under
this Agreement in a negligent manner or is guilty of willful misconduct with
regard to its duties under this Agreement, Seller and Buyer shall indemnify
Escrow Agent and hold it harmless from any and all claims, liabilities, losses,
actions, suits or proceedings at law or in equity, or other expenses, fees, or
charges of any character or nature, which it may incur or with which it may
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be threatened by reason of its acting as Escrow Agent under this Agreement; and
in such connection Seller and Buyer shall indemnify Escrow Agent against any and
all expenses including reasonable attorneys' fees and the cost of defending any
action, suit or proceeding or resisting any claim in such capacity.
(d) If the parties (including Escrow Agent) shall be in
disagreement about the interpretation of this Agreement, or about their
respective rights and obligations, or the propriety of any action contemplated
by Escrow Agent, Escrow Agent may, but shall not be required to, file an action
in interpleader to resolve the disagreement. Escrow Agent shall be indemnified
for all costs and reasonable attorneys' fees in its capacity as Escrow Agent in
connection with any such interpleader action and shall be fully protected in
suspending all or part of its activities under this Agreement until a final
judgment in the interpleader action is received.
(e) Escrow Agent may consult with counsel of its own choice
and have full and complete authorization and protection in accordance with the
opinion of such counsel. Escrow Agent shall otherwise not be liable for any
mistakes of fact or errors of judgment, or for any acts or omissions of any
kind, unless caused by its negligence or willful misconduct.
(f) The Escrow Agent may in its sole discretion resign by
giving thirty (30) days' written notice thereof to the Buyer and Seller. The
Buyer and Seller shall furnish to the Escrow Agent written instructions for the
release of the escrow funds and escrow documents in such event. If the Escrow
Agent shall not have received such written instructions, the Escrow Agent may
petition any court of competent jurisdiction for the appointment of a successor
Escrow Agent, and upon such appointment deliver the escrow funds and escrow
documents to such successor.
16.05 Bind and Inure. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
16.06 Drafts. This Agreement shall not be binding or effective until
properly executed and delivered by both Seller and Buyer. The delivery by Buyer
to Seller of an executed counterpart of this Agreement shall constitute an offer
which may be accepted by the delivery to Buyer of a duly executed counterpart of
this Agreement and the satisfaction of all conditions under which such offer is
made, but such offer may be revoked by Buyer by written notice given at any time
prior to such acceptance and satisfaction.
16.07 Number and Gender. As used in this Agreement, the masculine
shall include the feminine and neuter, the singular shall include the plural and
the plural shall include the singular, as the context may require.
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16.08 Attachments. If the provisions of any exhibit, schedule or
rider to this contract are inconsistent with the provisions of this Agreement,
the provisions of such schedule or rider shall prevail. The Exhibits attached
are hereby incorporated as integral parts of this Agreement.
16.09 Survival of Representations. Subject to the terms and
conditions of Section 8.03, above, all representations and warranties made by
the parties herein or in any instrument or document furnished in connection
herewith shall survive the Closing and any investigation at any time made by or
on behalf of the parties hereto for a period of twelve (12) months from the
Closing.
16.10 Dates. Whenever used herein, unless expressly provided
otherwise, the term "days" shall mean consecutive calendar days, except that if
the expiration of any time period measured in days occurs on a Saturday, Sunday,
legal holiday or other day when federal offices are closed in Washington, D.C.,
such expiration shall automatically be extended to the next business day.
16.11 Time of the Essence. Time is of the essence of this Agreement.
16.12 Assignment. This Agreement may not be assigned by Buyer
without the prior written consent of Seller not to be unreasonably withheld. Any
assignment approved by Seller shall be subject to the assignor remaining liable
under this Agreement. Prior to any request for an assignment hereunder, Buyer
and the proposed assignee shall provide Seller with such information as Seller
may need in order to evaluate the proposed assignment.
16.13 Effective Date. The Effective Date of this Agreement (the
"Effective Date") shall be the date on which this Agreement has been executed by
both Seller and Buyer. The execution hereof by Buyer shall constitute an offer
by Buyer to Seller to purchase the Project on the terms and conditions herein
stated, which must be accepted by Seller on or before 5:00 p.m. on May ____,
1998 by the execution hereof by Seller. If Buyer's offer is not timely accepted,
this Agreement shall be thereafter null and void.
16.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above written.
SELLER:
A&A Greenbrier, Inc.
By:
--------------------------
Name: Louai Alassar
Title: President
A&A Northpointe B, Inc.
By:
--------------------------
Name: Louai Alassar
Title: President
A&A Northpointe C, Inc.
By:
--------------------------
Name: Louai Alassar
Title: President
A&A Greenbrier Tech, Inc.
By:
--------------------------
Name: Louai Alassar
Title: President
- ------------------
Date
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BUYER:
DDR OFFICEFLEX
CORPORATION, an Ohio corporation
By:
- ---------------- --------------------------------
Date James A. Schoff
Executive Vice President and
Chief Operating Officer
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JOINDER BY ESCROW AGENT
Commercial Title Group, Limited, referred to in this Agreement as the
"Escrow Agent," hereby acknowledges that it received this Agreement executed by
Seller and Buyer on the ____ day of ________, 1998, and accepts the obligations
of the Escrow Agent as set forth herein. It further acknowledges that it
received the Deposit on the _____ day of __________ 1998. The Escrow Agent
hereby agrees to hold and distribute the Deposit in accordance with the terms
and provisions of this Agreement. It further acknowledges that it hereby assumes
all responsibilities for information reporting required under Section 6045(e) of
the Internal Revenue Code.
COMMERCIAL TITLE GROUP, LIMITED
By:
-------------------------------
Name: Douglas Nichols
Title: Vice President
Address: 8605 Westwood Center Drive
Suite 401
Tyson's Corner
Vienna, Virginia 22182
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SCHEDULE OF EXHIBITS
Exhibit A-1 through Exhibit A-4 - breakdown of land ownership on a
Seller by Seller basis
Exhibit B - Information on Loans
Exhibit C - Title/Survey
Exhibit D - Certified Rent Roll
Exhibit E - Form of Tenant Estoppel Certificate
Exhibit F - Underground Storage Tanks
Exhibit G - Buyer Leasing and Tenant Improvement Payments
Exhibit H - ATT Property
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EXHIBIT A-1 THROUGH A-4
LAND
37
38
EXHIBIT B
INFORMATION ON LOANS
38
39
EXHIBIT C
TITLE/SURVEY
39
40
EXHIBIT D
CERTIFIED RENT ROLL
40
41
EXHIBIT E
TENANT'S ESTOPPEL CERTIFICATE
41
42
EXHIBIT F
UNDERGROUND STORAGE TANKS
[AS DESCRIBED IN COPIES OF EXISTING ENVIRONMENTAL REPORT, PROVIDED BY SELLER TO
BUYER]
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EXHIBIT G
BUYER LEASING AND TENANT IMPROVEMENT PAYMENTS
GREENBRIER CIRCLE Leasing Ti's Total
- -----------------
Huntsman Chemicals 17,608.48 71,880.90 89,489.38
Gramman/Northrop Corp. 8,490.83 -0- 8,490.83
Applied Technical Services 31,254.11 134,591.97 165,846.08
NORTHPOINTE-B
- -------------
Orbital Sciences 35,092.78 82,640.00 117,732.78
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EXHIBIT H
ATT PROPERTY
44