EXHIBIT 10.4
AGREEMENT FOR SALE AND LEASEBACK
By and Between
INFOCROSSING, INC.
a Delaware corporation,
as Seller
and
LSAC OPERATING PARTNERSHIP L.P.
a Delaware limited partnership,
as Buyer
November 30, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇
And Tempe, Arizona
AGREEMENT FOR SALE AND LEASEBACK
THIS AGREEMENT FOR SALE AND LEASEBACK ("Agreement") is made
and entered into as of November 30, 2005 by and between INFOCROSSING, INC., a
Delaware corporation ("Seller"), and LSAC OPERATING PARTNERSHIP L.P., a Delaware
limited partnership ("Buyer").
R E C I T A L S
A. Seller is a party to that certain Purchase Agreement, dated as of October 24,
2005 (the "ACQUISITION AGREEMENT"), pursuant to which Seller shall acquire the
outstanding membership interests of (i)Structure, LLC, a Delaware limited
liability company ("TARGET");
B. Target presently owns or leases two properties: (1) a
certain 3.74 acre parcel of land containing a data center with approximately
86,800 rentable square feet in Omaha, Nebraska (the "OMAHA PROPERTY") and (2) a
certain 10.98067 acre parcel of land containing a data center with approximately
60,000 rentable square feet in Tempe, Arizona (the "TEMPE PROPERTY") (the Omaha
Property and the Tempe Property being jointly referred to as the "PROPERTIES"),
each in case together with all other improvements located thereon.
C. Buyer is willing to purchase the Properties and to lease
them back to Target on the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, FOR VALUABLE CONSIDERATION, the receipt and
adequacy of which are hereby acknowledged, Seller and Buyer agree as follows:
ARTICLE I
SALE AND LEASEBACK
1.1 SALE. Seller hereby agrees to cause Target to sell and
convey to Buyer, and Buyer hereby agrees to purchase from Target, subject to the
terms and conditions set forth herein, the property described in Sections 1.1(a)
through 1.1(e) below.
(a) FEE SIMPLE INTEREST IN LAND. The fee simple interest in
the parcel of real property more particularly described in EXHIBIT A-1 (the
"OMAHA LAND"). Subject to the terms and conditions hereof, the Omaha Land and
Improvements located thereon shall be conveyed to Buyer at the Closing described
below by a special warranty deed in the form of EXHIBIT B-1 (the "DEED");
(b) LEASEHOLD INTEREST IN LAND. The leasehold interest in the
parcel of real property more particularly described in EXHIBIT A-2 (the "TEMPE
LAND") pursuant to that certain ASU Research Park Lease dated December 17, 1997
(the "ORIGINAL SUBLEASE") between ▇▇▇▇▇-▇▇▇▇▇▇▇ Research Inc. (the "GROUND
LESSEE") as landlord and PKS Information Services, Inc. as tenant which was
assigned to and assumed by (i)Structure, LLC pursuant to an assignment and
assumption agreement dated November 12, 2004 and thereafter amended by that
certain First Amendment to ASU Research Park Lease and Consent dated January 28,
2003 (the Original Sublease as so assigned and amended being hereinafter
referred to as the "SUBLEASE") which Sublease demised certain land subject to
that certain Ground Lease dated November 8, 1984 between The Arizona Board of
Regents as ground lessor ("Owner") and Ground Lessee as amended by that certain
First Amendment to Ground Lease dated June 1, 1991, that certain Second
Amendment to Ground Lease dated November 20, 1992, that certain Third Amendment
to Ground Lease dated December 1, 1995 and that certain Fourth Amendment to
Ground Lease dated April 25, 2002 (the Original Ground Lease as so amended being
hereinafter referred to as the "GROUND LEASE"). Target's interest in the Tempe
Property shall be assigned to Buyer by an assignment of lessee's interest in
Sublease in the form of EXHIBIT B-2 (the "SUBlEASE ASSIGNMENT").
(c) IMPROVEMENTS. All improvements located on the Land,
including (i) the one story office and data center containing approximately
86,800 square feet in Omaha, Nebraska and (ii) the one story office and data
center containing approximately 60,000 square feet in Tempe, Arizona and all
other buildings, structures and other improvements owned by Target which are
permanently affixed to the Land (all of which are collectively referred to as
the "IMPROVEMENTS");
(d) PERSONAL PROPERTY. All building systems and equipment
affixed to the Land and/or the Improvements (including generators) or otherwise
located on or necessary for the operation of the Land and Improvements as a data
center (all of which are collectively referred to as the "PERSONAL PROPERTY")
all of which shall be transferred to Buyer at the Closing by an instrument in
the form of EXHIBIT C (the "▇▇▇▇ OF SALE"). As used herein, "Personal Property"
shall not be deemed to include Target's furniture, moveable trade fixtures,
office equipment, computers and inventory, but shall include those items
identified on Schedule B of the ▇▇▇▇ of Sale; and
(e) INTANGIBLE PROPERTY. All of the interest of Seller and
Target in any intangible personal property owned by Target and Seller now or on
the Closing Date which relates to and is reasonably required for the ownership
of the Land or occupation of the Improvements (as opposed to and excluding
intangible personal property and intellectual property which relate to the
operation of the business to be conducted by Target on the Property, which
intangible personal property and intellectual property shall not be included in
the sale of the Property hereunder), including without limitation, building
plans and specifications, certain licenses and entitlements (e.g., building
permits and certificates of occupancy), claims and causes of action related to
the Land or Improvements, surveys, maps, any and all warranties (including roof
warranties), guarantees, utility contracts, permits and other rights owned by
Target and/or Seller, if any, relating to the ownership of all or any part of
the Property ("INTANGIBLE PROPERTY"), all of which shall be transferred, to the
extent assignable, to Buyer at the Closing by an instrument in the form of
EXHIBIT D (the "ASSIGNMENT OF INTANGIBLE PROPERTY").
1.2 CERTAIN DEFINITIONS.
(a) The Omaha Land and the Tempe Land are hereinafter jointly
referred to as the "LAND". The Land, the Improvements, the Personal Property and
the Intangible Property are collectively referred to herein as the "PROPERTY".
The Land and the Improvements are collectively referred to herein as the "REAL
PROPERTY".
(b) The Real Property located in Omaha, Nebraska on the Land
more specifically described on EXHIBIT A-1 is referred to herein as the "OMAHA
PROPERTY".
(c) The Real Property located in Tempe, Arizona on the Land
more specifically described on EXHIBIT A-2 is referred to herein as the "TEMPE
PROPERTY".
1.3 LEASEBACK. Concurrently with consummation of the Closing, Buyer (as
landlord) agrees to lease to Target, which is, or will be at the time of the
Closing, an affiliate of Seller, and Target shall lease from Buyer, the Omaha
Property and the Tempe Property, pursuant to leases in substantially the form
and substance of EXHIBIT E-1 and EXHIBIT E-2 (the "NET LEASES"). The fixed rent
under the Omaha Net Lease shall be $1,166,780 per annum which reflects a 9.08%
cap rate on the Omaha Purchase Price. The fixed rent under the Tempe Net shall
be $1,127,520 which reflects a 9.28% cap rate on the Tempe Purchase Price and
assumes a Closing Date of December 14, 2005 and shall be subject to adjustment
in accordance with Section 6.2(c) below. In addition, the Tempe Net Lease will
provide that Target will be obligated be pay all ground rent due the Owner and
Ground Lessee and other charges under the Permitted Encumbrances affecting the
Tempe Property. The obligations of Target under the Net Leases shall be
unconditionally guaranteed by Seller pursuant to lease guarantees in
substantially the form and substance of EXHIBIT E-3 and EXHIBIT E-4 (the "LEASE
GUARANTEES")
1.4 CONTINGENCY. The parties acknowledge that Seller does not
own the Property and is currently engaged in a transaction to acquire Target and
its business. Target is the current owner and operator of the data centers
located at the Omaha Property and the Tempe Property. If, for any reason
whatsoever, Seller's acquisition of Target fails to occur on or before January
31, 2006, then either party shall have the right, upon notice to the other, to
terminate this Agreement whereupon the Deposit shall be returned in full to
Buyer and Seller shall reimburse Buyer for its reasonable out-of-pocket expenses
in an aggregate amount not to exceed $ 100,000 (the "DUE DILIGENCE COSTS") and
upon such payments to Buyer, the parties shall thereafter be without further
obligation to one another.
ARTICLE II
PURCHASE PRICE
2.1 PURCHASE PRICE. (a) Subject to the provisions of
Section 2.1(b) below, the purchase price for the Property shall be Twenty Five
Million Dollars ($25,000,000.00) (the "PURCHASE PRICE"), subject to
the allocation provided for in Section 2.1(b) below.
(b) The Purchase Price shall be allocated for real property
transfer tax and title insurance purposes in accordance with the Appraisals;
that portion of the Purchase Price allocated to the Omaha Property shall be
known the "OMAHA PURCHASE PRICE" and shall be in the amount of $12,850,000.00
and that portion of the Purchase Price allocated to the Tempe Property shall be
known as the "TEMPE PURCHASE PRICE" and shall be in the amount of
$12,150,000.00.
2.2 Buyer shall deposit the sum of Two Hundred Fifty Thousand
Dollars ($250,000.00) (the "DEPOSIT") with First American Title Insurance
Company (the "ESCROW AGENT") within two (2) business days of the date that this
Agreement is executed by Seller and Buyer, which shall be held and disbursed in
accordance herewith and with the instructions set forth in EXHIBIT F (the
"DEPOSIT INSTRUCTIONS"); provided however, in the event of any conflict between
the terms of this Agreement and the terms of the Deposit Instructions, the terms
of this Agreement shall control. As set forth in the Deposit Instructions, the
Deposit shall be invested in an interest bearing account, as directed by Buyer.
If the sale of the Property to Buyer closes, the Deposit and the interest earned
thereon shall be a credit against the Purchase Price and shall be delivered by
the Escrow Agent to Seller, or as directed by Seller, at the Closing in
accordance with the provisions of Section 6.1(d). If the sale of the Property to
Buyer does not close for any reason other than Buyer's default under this
Agreement, the Deposit shall be returned to Buyer together with any interest
earned thereon.
ARTICLE III
TITLE TO REAL PROPERTY; DUE DILIGENCE; AND SEC FILING REQUIREMENTS
3.1 TITLE.
(a) Seller has delivered to Buyer preliminary title reports or
title commitments from First American Title Insurance Company (the "TITLE
COMPANY") for (i) an ALTA Owner's Policy of Title Insurance with respect to the
Omaha Property in the full amount of the Omaha Purchase Price and (ii) an ALTA
Leasehold Owner's Policy of Title Insurance with respect to the Tempe Property
in the full amount of the Tempe Purchase Price (jointly, the "TITLE
COMMITMENTS"), accompanied by complete and legible copies of all exceptions to
title contained therein.
(b) On or before the date hereof, Seller shall obtain and
deliver to Buyer and the Title Company an "as-built" survey of the Omaha
Property prepared by a surveyor or civil engineer licensed in Nebraska (the
"OMAHA SURVEY") and an "as-built" survey of the Tempe Property prepared by a
surveyor licensed in Arizona (the "TEMPE SURVEy") (the Omaha Survey and the
Tempe Survey shall hereinafter be jointly referred to as the "SURVEYS"). Each
Survey shall be acceptable in form to Buyer, dated no earlier than October 24,
2005 and shall conform to the "Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys" for urban properties jointly adopted in 1999
including items 1-4, 6-11 and 13-16 of Table A thereof. The Surveys shall be
certified to Buyer, the Title Company and such other persons as Buyer may
reasonably require in the form set forth in EXHIBIT G.
(c) At its expense, Seller shall remove, or cause Target to
remove, as liens on the Real Property at or prior to the Closing: (i) all
delinquent taxes, bonds and assessments together with interest and penalties
thereon (but expressly excluding any installments of taxes, bonds and
assessments not yet due and payable); (ii) all other monetary liens, including
without limitation all those shown on the Title Commitment (including judgment
and mechanics liens, whether or not liquidated, and mortgages and deeds of
trust, with Target and Seller being fully responsible for any fees or penalties
incurred in connection therewith, but specifically excluding those caused by
Buyer and its agents, employees and contractors); and (iii) any matter which
would constitute a breach by Seller of its representations in Article VII;
provided however, with respect to the Tempe Property, neither Seller nor Target
shall have any obligation to remove any lien solely encumbering the fee estate
of Owner or the ground lease estate of the Ground Lessee. If Seller fails to
remove, or cause the removal of, the foregoing items at or prior to the time
required above, Buyer may elect to close the purchase of the Property, cure or
remove the non-approved matters which have not been removed and, if they are
matters required to be removed by Seller, credit the reasonable costs of such
cure or removal against the Purchase Price payable by Buyer.
(d) On or before the expiration of the Due Diligence Period,
Buyer shall deliver notice to Seller (the "TITLE OBJECTION NOTICE") with a list
of anything disapproved by Buyer on each of the Surveys and a list of any
exceptions to title shown on the Title Commitments required to be removed by
Seller or Target, other than easements and minor exceptions which do not
materially interfere with the operation or the mortgage financing of the
Property. Failure of Buyer to give the Title Objection Notice shall be deemed to
be an approval of all matters set forth in the Title Commitments and the
Surveys. Seller shall have a period of two (2) business days to respond as to
whether Seller agrees to attempt to remove or cause Target to remove such
disapproved matters. Failure of Seller to respond in such two (2) business day
period shall be deemed a rejection of Buyer's Title Objection Notice. If Seller
rejects or is deemed to have rejected Buyer's Title Objection Notice, Buyer
shall have the right to either (A) take title to the Property subject to such
title or Survey defects without abatement or reduction of the Purchase Price or
(B) elect to terminate this Agreement and receive its Deposit in which event
Seller shall also pay Buyer's Due Diligence Costs. If Buyer has not terminated
this Agreement, Seller shall cause Target to convey title to each Property to
Buyer at the Closing subject to no exceptions other than the following
("PERMITTED EXCEPTIONS"): (i) those exceptions or matters set forth in the Title
Commitment and Survey not disapproved by Buyer in the manner provided above or
if disapproved, which Seller has not agreed to remove, (ii) the documents called
for by this Agreement to be recorded at the Closing, or (iii) any lien placed on
the Property at Closing by Buyer. If Seller agrees to remove or cause Target to
remove any of the matters in the Title Objection Notice, Seller shall exercise
its reasonable, good faith efforts to remedy, or cause Target to remedy, to
Buyer's satisfaction any such matter as promptly as possible. Buyer shall take
title to the Property at the Closing if Target or Seller cures, on or before the
Closing, any such title or Survey defects identified by Buyer in the Title
Objection Notice. If Seller agrees to remove any matters set forth in the Title
Objection Notice and, despite the exercise of its (and/or Target's) reasonable,
good faith efforts, is not able to cure, on or before the Closing, any such
title or Survey defects, Buyer shall have the right, either then or at the end
of the 60 day cure period referenced in Section 3.1(d)(B) below, to (A) take
title to the Property subject to such title or Survey defects without abatement
or reduction of the Purchase Price, or (B) extend the Closing Date for an
additional period of time not to exceed sixty (60) days to afford Seller or
Target, as the case may be, additional time to cure such title defects or (C)
elect to terminate this Agreement and receive its Deposit in which event Seller
shall also pay Buyer's Due Diligence Costs.
(e) On or before the Closing Date, Seller shall cause the
Title Company to deliver to Buyer binding commitments, in form acceptable to
Buyer, to issue at the Closing an ALTA-B Owner's Policy of Title Insurance with
liability in the amount of the Omaha Purchase Price with respect to the Omaha
Property and an ALTA Leasehold Owner's Policy of Title Insurance with liability
in the amount of the Tempe Purchase Price with respect to the Tempe Property,
insuring Buyer's interest in the Omaha Property and the Tempe Property
respectively, and all easements benefiting each such Property, subject to the
Permitted Exceptions, together with the following endorsements: zoning (ALTA
3.1), survey, access, subdivision, tax lot and contiguity.
3.2 DUE DILIGENCE ITEMS. Buyer shall have the period beginning
on the date hereof and ending at 5 p.m. Eastern Standard Time November 29, 2005
with respect to the Omaha Property and December 9, 2005 with respect to the
Tempe Property (the "DUE DILIGENCE PERIOD") to examine the Property and all
matters related thereto. As used herein, the term "Due Diligence Period" with
respect to the Omaha Property, means the period ending on November 29, 2005 and
"Due Diligence Period" with respect to the Tempe Property, means the period
ending on December 9, 2005. Notwithstanding the foregoing, Buyer acknowledges
that the only outstanding due diligence matters with respect to the Tempe
Property are title, survey and zoning. On or before the date of this Agreement,
Seller shall deliver to Buyer each of the following items to the extent not
previously delivered (the "DUE DILIGENCE MATERIALS"):
(i) soil and geotechnical reports, engineering
reports and other contracts or documents of any nature relating to the
Property or any portion thereof, as disclosed on EXHIBIT H (the
"Reports"); and
(ii) to the extent in its possession or under its
control, all other governmental
permits, licenses, entitlements and approvals with respect to the Property
obtained or held by Seller (or Target and reasonably obtainable by Seller) and
relating to the construction, ownership or occupancy of the Property or any
portion thereof..
3.3 COOPERATION WITH BUYER'S AUDITORS AND SEC FILING REQUIREMENTS.
Upon the request of Buyer, from and after the Closing Date, Seller shall, and
shall cause Target to, provide to Buyer (at Buyer's expense) copies of, or shall
provide Buyer access to, such factual information as may be reasonably requested
by Buyer, and in the possession or control of Seller, Target, Seller's or
Target's property manager or accountants, to enable Buyer (and/or its
Affiliates) to file its or their Current Report on Form 8-K, if, as and when
such filing may be required by the Securities and Exchange Commission ("SEC").
At Buyer's sole cost and expense, from and after the Closing Date, Seller shall,
and shall cause Target to, allow Buyer's independent public accounting firm (the
"AUDITOR") to conduct an audit of the income statements of the Property for most
recently completed three fiscal years and the period since the end of the most
recent fiscal year through the date of Closing, and shall cooperate (at no cost
to Seller or Target) with the Auditor in the conduct of such audit. In addition,
Seller agrees to provide, and to cause the Target to provide, to the Auditor a
letter of representation in a form reasonably satisfactory to the Auditor (the
"REPRESENTATION LETTER") and, if requested by the Auditor, historical financial
statements for the Property, including income and balance sheet data for the
Property, whether required before or after Closing. Without limiting the
foregoing, (i) Buyer or the Auditor may audit Seller's or Target's operating
statements of the Property, at Buyer's expense; and Seller shall provide, and
cause the Target to provide, such documentation as Buyer or the Auditor may
reasonably request in order to complete such audit, (ii) Seller shall furnish,
and cause the Target to furnish, to Buyer such financial and other information
as may be reasonably required by Buyer to make any required filings with the SEC
or other governmental authority; provided, however, that the foregoing
obligations of Seller and the Target shall be limited to providing such
information or documentation as may be in the possession of, or reasonably
obtainable by, Seller, Target, their respective property manager or accountants,
at no cost to Seller or Target, and in the format that Seller or Target (or
their respective property manager or accountants) have maintained such
information; and (iii) the Representation Letter is not intended to expand,
extend, supplement or increase such representations or warranties in any manner
or to expose Seller or Target to any risk of liability to third parties, other
than the Auditor as set forth in the Representation Letter. Notwithstanding
anything to the contrary, the provisions of this Section 3.3 shall survive
Closing for a period of twelve (12) months.
ARTICLE IV
OPERATION OF THE PROPERTY PENDING THE CLOSING
4.1 CONTINUING OPERATIONS. Between Seller's execution of this
Agreement and the Closing, Seller shall at Seller's sole cost and expense, on
its own behalf and shall cause Target to: (i) maintain, or cause to be
maintained, the Properties in good order, condition and repair, casualty
excepted; (ii) maintain, or cause to be maintained, accurate books and records
regarding the ownership, development and construction of the Properties; (iii)
comply, or cause compliance, with all applicable laws, rules and regulations
relating to the Properties and their respective operation; (iv) maintain, or
cause to be maintained, property damage and comprehensive general liability
insurance covering the Improvements in amounts and coverages not less than that
presently maintained; and (v) pay, or cause to be paid, all taxes and
assessments prior to delinquency.
4.2 OTHER AGREEMENTS. Between Seller's execution of this
Agreement and the Closing, Seller shall not, and shall insure that Target does
not (other than as permitted under the terms of the Net Leases): (i) enter into,
amend in any material respect or terminate any lease, contract or agreement
pertaining to the Properties (provided, however, that any such agreement entered
into or amended shall not create privity of contract with Buyer); nor shall
Seller (ii) modify in any material respect any contract or agreement pertaining
to either of the Properties or waive any rights of Seller or Target thereunder;
(iii) take any action which would preclude or interfere with the timely
satisfaction of the conditions set forth in Article V; (iv) permit any
alteration, modification or addition to the Improvements or the Land, except for
insubstantial and immaterial changes which do not adversely affect the same or
the value thereof; or (v) sell or agree to sell the Properties or any part
thereof, other than pursuant to the Acquisition Agreement and the transactions
therein contemplated.
4.3 ENCUMBRANCES. Seller shall not, and shall insure that
Target does not, further encumber or suffer to be further encumbered all or any
portion of the Properties between the date hereof and the date the same is
acquired by Buyer pursuant to this Agreement.
4.4 CASUALTY; CONDEMNATION. In the event the Improvements on
either Property are materially destroyed or damaged in an amount exceeding three
hundred thousand dollars ($300,000), or if condemnation proceedings are
threatened or commenced against all or any material portion of either of the
Properties in each case between the date hereof and the date the same is
scheduled to be acquired by Buyer pursuant to this Agreement, Buyer shall have
the option, exercisable in its sole discretion and by giving notice of such
decision to Seller within ten (10) business days after Buyer's receipt of notice
of such damage, destruction or condemnation proceedings, to terminate this
Agreement. In the event Buyer does not elect to so terminate, (i) in the case of
condemnation, Seller shall cause Target to assign to Buyer at the Closing all of
its right, title and interest in and to all proceeds resulting from such
condemnation of such Property, after deducting therefrom any third party costs
or expenses incurred by Target in settling, adjusting or compromising such
condemnation award, including the right to apply for and prosecute the same,
which proceeds shall be held by Seller or Target until disbursed in accordance
with the provisions of Section 6.5 of the Net Lease; provided however, that this
assignment shall not preclude Target from filing a separate claim for non-real
property related condemnation proceeds (other than the Personal Property),
including but not limited to, loss of business, future profits, and good will;
damages related to stock and/or trade fixtures, furniture and other personal
property belonging to Target; the cost of removing fixtures, equipment and
inventory; moving expenses related to the relocation of the business, and any
and all other related damages or expenses incurred as a result thereof and for
loss of or damage to its leasehold interest in the Property, provided that such
claim shall not diminish any condemnation award otherwise due to Buyer; and (ii)
in the case of casualty, Seller shall repair or cause Target to repair such
damage at its expense prior to the Closing, or if that is impossible, then
promptly following such Closing, in the manner and subject to the standards in
Section 5.5 of the Net Lease.
4.5 NO SOLICITATION. Seller shall not, and shall insure that
Target does not, solicit, seek, negotiate, or respond to any offer to purchase,
ground lease, lease or sell and leaseback, all or any portion of either or both
of the Properties for the period commencing on the date hereof and continuing
through the Closing Date, unless the Closing is delayed or fails to occur as a
result of any breach of this Agreement by Buyer. If the Closing is delayed as a
result of a refusal of performance by Seller, Seller's covenant set forth in
this Section 4.5 shall continue until such failure or refusal is cured.
ARTICLE V
CONDITIONS TO CLOSING
A. BUYER'S CONDITIONS TO CLOSING. The obligations of Buyer to
purchase the Property and lease the same to Target are subject to satisfaction
of the following conditions on or before the Closing Date:
5.1 TITLE. The Title Company issuing the binding
commitments called for by Section 3.1(e).
5.2 PHYSICAL CHARACTERISTICS OF THE PROPERTY. Prior to the
expiration of the Due Diligence Period, Buyer's review and approval of (i) an
engineering report confirming to Buyer's satisfaction that the structures,
fixtures and equipment located on the Land are structurally sound, suited for
their intended use, and constructed in accordance with the Plans and
Specifications (the "ENGINEERING REPORT"), (ii) a Phase I environmental report
confirming to Buyer's satisfaction that neither of the Properties is affected by
hazardous substances or hazardous wastes at levels requiring reporting or
remediation under applicable Laws (as hereinafter defined) (the "ENVIRONMENTAL
REPORT"); and (iii) the Plans and Specifications with respect to each of the
Properties. If Buyer does not terminate the Agreement by the expiration of the
Due Diligence Period, this condition shall be deemed to be waived.
5.3 LEGAL COMPLIANCE. Each of the Properties having no
outstanding violations of any laws, statutes, requirements, ordinances and
regulations (including, without limitation, those relating to zoning, land use,
building codes, the environment, health and safety) relating to the Property
(collectively, "LAWS") (including the Americans with Disabilities Act of, 42
U.S.C. ss.12,101 et seq. ("ADA"). If Buyer does not terminate the Agreement by
the expiration of the Due Diligence Period, this condition shall be deemed to be
waived.
5.4 FINANCIAL CONDITION. Buyer shall have received and found
satisfactory the audited financial statements of Seller and there shall have
been no subsequent material adverse change in the financial condition of Seller.
5.5 REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties by Seller and on behalf of Target contained herein, or made in
writing by Seller pursuant to this Agreement, shall have been true and correct
in all material respects when made and shall be true and correct in all material
respects as of the Closing Date.
5.6 NON-FOREIGN STATUS OF SELLER AND TARGET. The execution and delivery to
Buyer, at the Closing Date, of certificates on behalf of Seller and Target in
the form attached hereto as EXHIBIT J (the "NON-FOREIGN Certificate").
5.7 APPROVAL OF UPDATE CERTIFICATE. Seller's and Target's
execution and delivery to Buyer at the Closing of an Update Certificate in the
form of EXHIBIT K.
5.8 DELIVERY OF OWNER AND GROUND LESSEE CONSENT. Delivery of
the Landlord's Consent and Release with respect to the Sublease, duly executed
by the Ground Lessee, in form attached hereto as EXHIBIT L-1 (the "SUBLEASE
CONSENT"), an amendment to the Recognition, Nondisturbance and Attornment
Agreement, duly executed by Owner and Ground Lessee, in the form attached hereto
as EXHIBIT L-2 (the "RECOGNITION AGREEMENT AMENDMENT") and an estoppel
certificate from Owner (the "OWNER ESTOPPEL CERTIFICATE") in the form attached
hereto as EXHIBIT L-3.
5.9 DELIVERIES BY SELLER. Seller's and Target's due and timely
execution and delivery of Seller's closing documents and all of the other
documents and items specified in Section 6.3 ("SELLER'S CLOSING DOCUMENTS").
5.10 JOINDER AGREEMENT. Seller's delivery of a
joinder agreement executed by Target in the form attached hereto as EXHIBIT
5.11 (THE "JOINDER AGREEMENT").
The foregoing conditions contained in this Section 5(A) are
intended solely for the benefit of Buyer. Buyer shall have the right to
terminate this Agreement for any reason on or before the expiration of the Due
Diligence Period upon notice to Seller. In addition, if the conditions are not
satisfied by the expiration of the Due Diligence Period with respect to the
matters in Sections 5.2, 5.3 and 5.9 and by the Close of Escrow with respect to
all other matters in this Section 5(A), Buyer may elect in its sole discretion
to either waive such matters or deliver written notice to Seller that this
Agreement shall terminate and thereafter the parties shall have no further
obligation to one another except that the indemnities provided for in Section
9.2 , Section 9.16 and the provisions of the Deposit Instructions shall survive
(the "SURVIVING OBLIGATIONS").
B. SELLER'S CONDITIONS TO CLOSING. Seller's obligation to
cause the sale of the Properties to Buyer and their lease to Target by Buyer is
conditioned upon satisfaction of the following conditions on or before the
Closing Date: (i) Seller shall have purchased the membership interests of Target
pursuant to the Acquisition Agreement; (ii) the final form and content of the
Net Lease shall have been agreed to by Seller and Buyer on or before the
expiration of the Due Diligence Period; (iii) all of Buyer's representations and
warranties made in this Agreement shall have been true and correct in all
material respects when made and as of the Closing Date; and (iv) Buyer's due and
timely execution and delivery of all documents and items to be executed and/or
delivered by Buyer pursuant to this Agreement including, without limitation, (a)
the Purchase Price adjusted in accordance with Section 2.1(b) and Article 3, (b)
the Net Lease, and (c) all of the other documents and items specified in Section
6.4 (the Net Lease and such other documents executed and delivered on behalf of
Buyer, "BUYER'S CLOSING DOCUMENTS").
The foregoing conditions contained in this Section 5(B ) are
intended solely for the benefit of Seller. If any of the foregoing conditions
are not satisfied in a timely manner or waived by Seller in its sole discretion,
Seller may elect to terminate this Agreement upon written notice to Buyer and
this Agreement shall terminate and thereafter the parties shall have no further
obligation to one another except for the Surviving Obligations. Any actions by
Seller in respect of such election to terminate shall be binding upon and inure
to the benefit of Target.
ARTICLE VI
CLOSING AND RECORDING
6.1 CLOSING AND CLOSING DATE. Subject to the provisions of
Article V, the parties shall consummate the sale and leaseback of the Property
as contemplated herein at a closing (the "CLOSING") to be held after the
expiration of the Due Diligence Period with respect to each Property and
specifically on November 30, 2005 with respect to the Omaha Property and or
about December 14, 2005 with respect to the Tempe Property (each, a "CLOSING
DATE"), by means of an escrow closing held at the offices of the Escrow Agent in
New York City, New York. Recording by Buyer of the Deed will be conclusive
evidence that all conditions to the Closing with respect to the Omaha Property
have been satisfied or waived. As used herein, "Closing" with respect to the
Omaha Property means the Closing on the Omaha Property and "Closing" with
respect to the Tempe Property means the Closing on the Tempe Property. "Closing
Date" with respect to the Omaha Property means the date on which the Closing of
the Omaha Property occurs and with respect to the Tempe Property means the date
on which the Closing of the Tempe Property occurs.
(a) The Closing shall be deemed to have occurred when all
conditions to such Closing have been satisfied (or waived in writing by the
party in whose favor the condition was established).
(b) In order to effect the Closing, the parties shall deliver
to the Escrow Agent at least one (1) business day prior to the Close of Escrow
all documents and other instruments required hereunder to be delivered at such
Closing, although no delivery shall be deemed complete until all of such
documents and other instruments have been delivered and the other conditions to
such Closing have been satisfied (or waived as provided above).
(c) The procedure for satisfying the condition in Section
3.1(e) ("TITLE CONDITION") shall be as follows: when all conditions to the
Closing have been satisfied other than the Title Condition and the delivery of
the Purchase Price, Seller shall cause the Title Company to deliver to Buyer,
irrevocably, the binding commitments required by the Title Condition, together
with a written commitment by the Title Company to: (i) promptly record the
documents required to be recorded in order for the title insurance policy called
for by the Title Condition to be issued; and (ii) deliver said title insurance
policy to Buyer within thirty (30) days following the Closing Date. The form of
Buyer's and Seller's recording instructions to the Title Company and the Title
Company's written commitment to comply with such instructions and the terms of
this Agreement are contained in EXHIBIT M.
(d) When the Title Condition pertaining to the Closing has
been satisfied, the Title Company shall deliver to Seller, or to such party as
Seller may direct, the Purchase Price by wire transfer of immediately available
funds in accordance with written instructions of Seller in the form of EXHIBIT
N. The Purchase Price shall be adjusted on account of any credits due to Seller
or Buyer, as the case may be, pursuant to this Agreement and shall be reduced by
the amount of the Deposit and any interest thereon, which shall be delivered to
Seller, or at Seller's direction, by the Title Company pursuant to the Deposit
Instructions. Following telephonic or electronic confirmation of such wire
transfer, the other documents and instruments shall be deemed delivered and the
Closing shall be deemed consummated.
(e) Seller shall have the right to adjourn the Closing Date
for the Tempe Property for period expiring no later than March 31, 2006 by
giving written notice to Buyer to such effect no later than December 13, 2005 in
the event that either (i) on or before the close of business on December 9,
2005, Buyer gives notice to Seller that the Tempe Property is not in legal
compliance as required by Section 5.3 above, including any failure to comply
with required zoning obligations and Seller provides written notice to Buyer
prior to December 14, 2005 that it is affirmatively acting to cure such
non-compliance or (ii) in the event that the Owner and the Ground Lessee fail to
make a determination with respect to Seller's request for consent to this
transaction (as opposed to rejecting Seller's request for consent) or require
Seller to make a delivery as a condition to such consent. In such event the
fixed rent due pursuant to the Tempe Net Lease shall be adjusted as contemplated
in Section 6.2(c) below.
6.2 SINGLE SALE. (a) Anything in this Agreement to the
contrary notwithstanding, the parties agree that the transaction contemplated
herein is for both the Omaha Property and the Tempe Property and in no event
shall Buyer have the right or the obligation to purchase one Property without
purchasing both Properties. A failure of condition, or Seller or Buyer default,
as to one Property shall have the same effect as if such failure of condition or
default shall have occurred with respect to both Properties.
(b) Notwithstanding the provisions of Section 6.2(a), Buyer
has agreed to accommodate the requirements of Seller's acquisition of Target by
holding the Closing on the Omaha Property prior to the Closing on the Tempe
Property. In consideration thereof, Purchaser shall only be obligated to fund
90% of the Omaha Purchase Price on the Closing Date for the Omaha Property with
the 10% balance of the Omaha Purchase Price (the "OMAHA HOLDBACK") funded on the
Closing Date for the Tempe Property if, as and when the Closing Date for the
Tempe Property occurs. If the Closing of the Tempe Property fails to occur, the
following shall apply:
(i) If the Closing of the Tempe Property fails to occur as a result of a default
by Seller, Buyer shall retain the Omaha Holdback;
(ii) If the Closing of the Tempe Property fails to
occur as a result of a default
by Buyer, Buyer shall pay to Seller the Omaha Holdback;
(iii) If the Closing of the Tempe Property fails to occur as a result of the
failure or refusal of the Owner and/or the Ground Lessee to consent to this
transaction and/or execute and deliver the Sublease Consent and/or the Second
Amendment to the Recognition, Nondisturbance and Attornment Agreement solely
because of such entity's rejection of Buyer as a successor tenant of the Tempe
Property, Buyer shall pay to Seller the Omaha Holdback less a fee of $250,000;
(iv) If the Closing of the Tempe Property fails to occur as a result of the
failure or refusal of the Owner and/or the Ground Lessee to consent to this
transaction and/or execute and deliver the Sublease Consent and/or the Second
Amendment to the Recognition, Nondisturbance and Attornment Agreement for any
reason other than such entity's rejection of Buyer as a successor tenant of the
Tempe Property, Buyer shall retain the Omaha Holdback;
(v) If the Closing of the Tempe Property fails to occur as a result of a
casualty or other event at the Tempe Property which would otherwise have given
Buyer the right to terminate this Agreement pursuant to Section 4.4 above, Buyer
shall retain the Omaha Holdback;
(vi) Subject to Seller's rights pursuant to Section 6.1(e), if the Closing of
the Tempe Property fails to occur as a result of a termination of this Agreement
by Buyer by reason of its timely exercise of its right to terminate this
Agreement pursuant to Sections 5.1 or 5.3 as modified by Section 3.2., Buyer
shall retain the Omaha Holdback; and
(vii) In no event shall the fixed rent due pursuant to the Omaha Lease be
adjusted as a result of the failure of the Tempe Closing to occur.
(c) In addition, in the event that the Owner and the Ground Lessee fail
to make a determination with respect to Seller's request for consent to this
transaction (as opposed to rejecting Seller's request for consent), the Closing
Date for the Tempe Property shall be adjourned to a date no later than March 31,
2006 and all of the provisions of this Agreement, including Section 6.2(b),
shall remain in effect except that the fixed rent due under the Tempe Lease
shall increase by an amount equal to the product of (i) the Tempe Purchase Price
and (ii) the sum of (A) 9.28% and (B) .007 for each basis point increase, if
any, in the 10 year U.S. Treasury yield from the yield in effect on December 14,
2005 to the yield in effect for such 10 year U.S. Treasuries on the adjourned
Closing Date for the Tempe Property.
6.3 DEPOSITS BY SELLER. On or prior to the date that is one
(1) business day prior to each Closing Date, Seller shall deposit, or cause to
be deposited, with the Title Company Seller's Closing Documents with respect to
each Property as more fully described in EXHIBIT P.
6.4 DEPOSITS BY BUYER. On or prior to the date that is one (1)
business day prior to the Closing Date, Buyer shall deposit with the Title
Company Buyer's Closing Documents with respect to each Property as more fully
described in EXHIBIT Q.
6.5 OTHER INSTRUMENTS. Seller and Buyer shall each deposit, or
cause to be deposited, such other instruments as are reasonably required by the
Title Company or otherwise required to consummate the sale and leaseback of the
Property in accordance with the terms of this Agreement.
6.6 PRORATIONS. No prorations shall be required to be made in
connection with the Closing since Seller, or Target, as the case may be, as
owner, shall be responsible for all costs incurred in connection with the
Property up to the Closing Date and Target, as tenant under the Net Leases,
shall be responsible for all costs incurred in connection with the Property from
and after the Closing Date.
6.8 COSTS AND EXPENSES. Buyer shall pay all of Buyer's legal
fees and costs, and all expenses incurred by Buyer in its review of the
Property, subject to Seller's obligation to pay Due Diligence Expenses in the
event that this transaction is not consummated other than by reason of Buyer's
default. Seller shall pay all other costs and expenses incurred or payable in
connection with this Agreement and the Net Leases, including without limitation,
the premium for the policies of title insurance called for herein and all
endorsements thereto, the cost of the Surveys, the conveyance and transfer taxes
and recording and filing fees charged by the Title Company to record and/or file
any documents required to be recorded and/or filed as necessary to deliver title
pursuant to this Agreement (including the Deed, the Sublease Assignment and
Memoranda of Leases), all legal fees and costs incurred by Seller, all sales
tax, if any, applicable with respect to the sale of the Intangible Property, the
fee of the Broker and all Escrow Agent fees and expenses.
6.9 SETTLEMENT STATEMENT. On or prior to each respective
Closing Date, Buyer and Seller shall cause the Title Company to prepare and the
parties shall execute and deliver final settlement statements for each of the
Properties showing the categories and amounts of the closing costs and all
adjustments to the Purchase Price called for herein.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement and to
consummate the sale and leaseback transaction contemplated hereby, Seller hereby
represents and warrants to and agrees with Buyer, both as of the date hereof and
again as of the Closing Date, that:
7.1 CONDITION OF PROPERTY. To the knowledge of Seller, except
as disclosed in the environmental and engineering reports heretofore delivered
by Seller to Buyer, there are no material physical or mechanical defects in any
of the Improvements, including, without limitation, the plumbing, heating, air
conditioning, ventilating, life safety and electrical systems, and all such
items are in good operating condition and repair and in compliance with all Laws
(including the ADA). All contractors and subcontractors who have performed work
and/or delivered materials to the Property have been paid in full for all work
performed and materials delivered.
7.2 USE AND OPERATION. To the knowledge of Seller, the use and
operation of each of the Properties and their respective facilities, fixtures,
installations and equipment, complies with applicable Laws.
7.3 UTILITIES. All water, sewer, electric, telephone and
drainage facilities and all other utilities required for the normal use and
operation of each of the Properties are installed to the property lines of the
Land, are all connected and operating pursuant to valid permits, are adequate to
service such Property and to permit full compliance with all requirements of Law
and the contemplated usage of such Property, and are connected to such Property
by means of one or more public or private easements extending from such Property
to one or more public streets, public rights-of-way or utility facilities.
7.4 USE PERMITS AND OTHER APPROVALS. Target has obtained all
licenses, permits, approvals, easements and rights of way required from all
governmental authorities having jurisdiction over each of the Properties or from
private parties for the intended normal use and operation of each Property and
to ensure free and unimpeded vehicular and pedestrian ingress to and egress from
each Property as required to permit the current usage of each Property and its
invitees, licensees and customers. No violations have been recorded in respect
of any such licenses, permits or approvals and no proceeding is pending, or to
the knowledge of Seller, threatened, to revoke or limit any of such licenses,
permits, approvals, easements or rights of way. Target is in compliance with all
such licenses, permits and approvals.
7.5 AUTHORITY OF SELLER. (i) Seller is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Delaware, (ii) the persons executing Seller's Closing Documents are, or will be
at Closing, duly appointed and authorized by Seller to execute such documents,
(iii) Seller's Closing Documents will, when delivered, have been duly
authorized, executed and delivered by Seller or Target, as the case may be, and
will constitute legal, valid and binding obligations of Seller and Target, as
the case may be, enforceable against Seller and/or Target in accordance with
their respective terms, (iv) subject to receipt of approval as provided in
Section 5(B)(i), Seller has the full power and authority to execute, deliver and
perform its obligations under Seller's Closing Documents and to carry on its
business as presently conducted, (v) as of the Closing, Target shall have the
full power and authority to execute, deliver and perform its obligations under
Seller's Closing Documents to be executed by Target and to carry on its business
as presently conducted, (vi) subject to receipt of approval as provided in
Section 5(B)(i), Seller has obtained all necessary permits, licenses,
entitlements and/or approvals required to comply with the provisions of Seller's
Closing Documents, and to carry on its business as presently conducted, (vii)
the execution, delivery and performance by Seller of this Agreement does not
violate any provision of Seller's certificate of incorporation or by laws or any
agreement or document to which Seller is a party or by which Seller is bound
(including, any loan agreement, line of credit agreement, mortgage, deed of
trust or license), or of any order, writ, injunction, decree or regulation of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over Seller or the Properties, and (viii) ) the execution, delivery
and performance by Target of the Seller's Closing Documents to be executed by
Target will not violate any provision of Target's certificate of formation or
limited liability company agreement or any agreement or document to which Target
is a party or by which Target is bound (including, any loan agreement, line of
credit agreement, mortgage, deed of trust or license), or of any order, writ,
injunction, decree or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Target or the Properties.
7.6 ZONING AND ENVIRONMENTAL.
(a) Each of the Properties constitutes separate tax lots,
except for off-site utility easements, if any. There are no conditional use or
similar permits and no zoning or other variances from applicable zoning,
building and land use and/or regulations in connection with the development or
operation of either of the Properties. There are no condemnation, environmental,
zoning or other land use regulations or proceedings, either instituted or, to
Seller's knowledge, planned or threatened, which might detrimentally affect the
use or enjoyment of the Properties by Buyer in any material respect. Neither
Seller nor Target has received any notice of any investigations or intent to
investigate zoning or environmental violations. Target has complied in all
material respects with the requirements of all declarations, covenants,
conditions and easements, including bit limited to the payment of all fees,
costs and expenses required thereunder.
(b) During the period of Target's and Seller's ownership of
the Properties, other than those disclosed by the environmental report described
on EXHIBIT R, to the knowledge of Seller, there have been no Environmental
Conditions with respect to the Properties. Seller has no current, actual
knowledge of any Environmental Condition with respect to either of the
Properties which may have occurred prior to its ownership of the Properties. As
used herein, "ENVIRONMENTAL CONDITION" shall mean the presence, disposal,
release or threatened release of hazardous substances or hazardous wastes on,
from or under either of the Properties, other than those in DE MINIMIS
quantities and in compliance with Environmental Laws. The terms "disposal,"
"RELEASE," "THREATENED RELEASE," "HAZARDOUS SUBSTANCES" and "HAZARDOUS WASTES"
shall have the definitions assigned to those terms by the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended to
date. Except as disclosed on EXHIBIT I, to the knowledge of Seller, there have
been no toxic or hazardous materials used in the development or construction of
the Improvements, other than those in DE MINIMIS quantities and in compliance
with Environmental Laws.
(c) With respect to each of the Properties, to the knowledge
of Seller, Target is in compliance with the provisions of all applicable
federal, state and local requirements pertaining to or governing the use,
disposal, release or presence of hazardous substances or hazardous wastes
pertaining to or governing the use, disposal, release or presence of hazardous
substances or hazardous wastes ("ENVIRONMENTAL LAWS").
7.7 ASBESTOS. Except as previously disclosed by Seller or by
the environmental reports, if any, attached hereto as EXHIBIT R, to the
knowledge of Seller, there is no asbestos in any of the Improvements or personal
property used in connection with either of the Properties.
7.8 LEASES. Other than the Ground Lease and the Sublease with
respect to the Tempe Property, there are no leases, tenancies or license,
franchise, occupancy, concession or other agreements pertaining to possession or
ownership of either of the Properties or any portion thereof.
7.9 CONTRACTS. Neither Seller nor Target has any obligation
under the terms of any contract or other instrument relating to the construction
development, maintenance or operation of the Property and there will be, as of
the Closing Date, no such obligation. There are no service, maintenance or other
contracts with respect to either of the Properties for which Buyer will be
liable on or after the Closing Date.
7.10 LITIGATION. There is no litigation pending or, after due
and diligent inquiry, to the knowledge of Seller, threatened, against Seller or
Target, that arises out of the ownership or operation of either of the
Properties; and (i) might materially and detrimentally affect the use and
operation of either of the Properties for its current usage or the value of
either of the Properties, or (ii) might materially and adversely affect the
ability of Seller and/or Target to perform its obligations under this Agreement,
the Net Leases or the Lease Guarantees, or (iii) might constitute or result in a
lien on either of the Properties or any portion thereof.
7.11 OTHER CONTRACTS TO CONVEY PROPERTY. Neither Seller nor
Target is a party to, and neither Seller nor Target is aware of, any currently
effective agreement or option to sell either or both of the Properties, or any
portion thereof, to any party other than Buyer or to Seller under the
Acquisition Agreement. Seller has not hypothecated or assigned any rents or
income from either or both of the Properties, except for hypothecations or
assignments on behalf of lenders with respect to loans to Target which will be
terminated or as to which releases of such lenders' liens will be obtained at
the Closing. No person or entity has any right to acquire or to lease either of
the Properties or any part thereof, or to obtain any interest therein (other
than as contemplated by this Agreement, the Net Leases and the Acquisition
Agreement). There are no outstanding rights of first refusal, rights of reverter
or options relating to either of the Properties or any interest therein. No
person or entity holding a security interest in either of the Properties or any
part thereof has the right to consent or deny consent to the sale of the
Properties as contemplated herein.
7.12 CONFLICTS. The terms of this Agreement do not conflict
with or result in a breach or violation of any term or provision of, or
constitute a default under (i) the Certificates of Incorporation or Bylaws of
Seller or (ii) any loan agreement, line of credit agreement, mortgage, deed of
trust, lease, license or other agreement or instrument to which Seller is a
party or by which Seller is bound. The terms of this Agreement do not conflict
with or result in a breach or violation of any term or provision of, or
constitute a default under (i) the Certificates of Formation or limited
liability company agreement of Target or (ii) any loan agreement, line of credit
agreement, mortgage, deed of trust, lease, license or other agreement or
instrument to which Target is a party or by which Target is bound.
7.13 FULL DISCLOSURE. (a) This Agreement (including for
purposes hereof any exhibit attached hereto or instrument delivered by Seller or
Target to Buyer pursuant hereto) does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained in this Agreement and the exhibits, in the light of the circumstances
under which they were made, misleading as a whole. Subject to the limitations
set forth below, Seller hereby agrees to indemnify, defend, protect and hold
Buyer harmless from and against any and all loss, cost, liability, damage, claim
and expense including, without limitation, reasonable attorneys' and paralegals'
fees and expenses incurred by Buyer in connection with or arising from any
breach by Seller of any of the representations and warranties made by Seller in
this Agreement.
(b) As used in this Agreement, "to the knowledge of Seller" or
"Seller's knowledge" shall mean the actual and constructive knowledge of Seller
and Target and their respective officers, directors, executive level employees
and managerial employees in charge of the operation of the Omaha Property and
the Tempe Property made after due investigation and inquiry of the matters
involved.
7.14 LIMITATION OF REPRESENTATIONS AND WARRANTIES. Buyer
represents, warrants, acknowledges and agrees that upon Closing, Seller shall
sell and convey to Buyer and Buyer shall accept the Property "AS IS, WHERE IS,
WITH ALL FAULTS," subject to the representations, warranties and covenants set
for in this Agreement, Seller's Closing Documents, the Net Leases and the Lease
Guarantees. Except as expressly set forth in this Agreement, Seller's Closing
Documents, the Net Leases and the Lease Guarantees, Buyer has not relied and
will not rely on, and Seller has not made and is not liable for or bound by, any
express or implied warranties, guarantees, statements, representations or
information pertaining to the Properties or relating thereto (including
specifically, without limitation, Property information packages distributed with
respect to the Properties) made or furnished by Seller, or any real estate
broker, agent or third party representing or purporting to represent Seller, to
whomever made or given, directly or indirectly, orally or in writing. Buyer
represents that it is a knowledgeable, experienced and sophisticated purchaser
of real estate and that, except as expressly set forth in this Agreement,
Seller's Closing Documents, the Net Leases and the Lease Guarantees, it is
relying solely on its own expertise and that of Buyer's consultants in
purchasing the Property and shall make an independent verification of the
accuracy of any documents and information provided by Seller or Target or any of
Seller's or Target's agents or representatives. Buyer will conduct such
inspections and investigations of the Properties as Buyer deems necessary,
including, but not limited to, the physical and environmental conditions
thereof, and shall rely upon same. By failing to terminate this Agreement prior
to the expiration of the Due Diligence Period, Buyer acknowledges that Seller
has afforded Buyer a full opportunity to conduct such investigations of the
Properties as Buyer deemed necessary to satisfy itself as to the condition of
the Properties and the existence or non-existence or curative action to be taken
with respect to any hazardous materials on or discharged from the Properties,
and will rely solely upon same and not upon any information provided by or on
behalf of Seller, Target or their respective agents or employees with respect
thereto, other than such representations, warranties and covenants of Seller as
are expressly set forth in this Agreement, Seller's Closing Documents and the
Net Leases. Upon Closing, subject to Seller's and Target's undertakings in this
Agreement, Seller's Closing Documents and the Net Leases, Buyer shall assume the
risk that adverse matters, including, but not limited to, adverse physical or
construction defects or adverse environmental, health or safety conditions, may
not have been revealed by Buyer's inspections and investigations.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF BUYER
8.1 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
represents and warrants to Seller that (i) Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware, (ii) the persons executing Buyer's Closing Documents are duly
appointed and authorized by Buyer to execute such documents, (iii) Buyer's
Closing Documents will, when delivered, have been duly authorized, executed and
delivered by Buyer and will constitute legal, valid and binding obligations of
Buyer, and this Agreement will be enforceable against Buyer in accordance with
its terms, (iv) Buyer has full power and authority to execute, deliver and
perform its obligations under Buyer's Closing Documents, (v) to the current,
actual knowledge of Buyer, Buyer is not required to obtain any permits,
licenses, entitlements and/or approvals in order to own the Property for the
purpose of leasing the Properties to Seller or complying with the provisions of
Buyer's Closing Documents, and (vi) the execution, delivery and performance of
Buyer's Closing Documents do not violate any provisions of any agreement or
document to which Buyer is a party or by which Buyer is bound, or of any order
or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Buyer.
SELLER ACKNOWLEDGES THAT BUYER HAS MADE NO REPRESENTATIONS AND
WARRANTIES, EXPRESS OR IMPLIED, OTHER THAN THOSE EXPRESSLY CONTAINED IN THIS
AGREEMENT.
ARTICLE IX
MISCELLANEOUS
9.1 NOTICES. All notices, consent, approvals or other
communications required or permitted to be given under this Agreement shall be
in writing and be deemed to have been duly given (i) when delivered personally
if delivered on a business day (or if the same is not a business day, then the
next business day after delivery), (ii) three (3) business days after being sent
by United States mail, registered or certified mail, postage prepaid, return
receipt requested or (iii) if delivery is made by Federal Express or a similar,
nationally recognized overnight courier service for morning delivery, then on
the date of delivery (or if the same is not a business day, then the next
business day after delivery); and addressed as follows:
If to Seller: Infocrossing, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
And to: ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: D. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ , Esq
If to Buyer: LSAC Operating Partnership L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or such other address as either party may from time to time specify in writing
to the other in the manner aforesaid.
9.2 BROKERS AND FINDERS. Each party represents to the other
party that except for the advisory fee due to Banc of America Leasing ("BROKER")
from Seller, the representing party has incurred no liability for any brokerage
commission, financing fee or finder's fee arising from or relating to the
transactions contemplated by this Agreement. In the event of a claim for any
broker's fee, finder's fee, financing fee, commission or other similar
compensation in connection herewith, other than the advisory fee due to the
Broker, (i) Buyer, if such claim is based upon any agreement alleged to have
been made by Buyer, hereby agrees to indemnify, defend, protect and hold Seller
harmless against any and all liability, loss, cost, damage or expense (including
reasonable attorneys' and paralegals' fees and costs) which Seller may sustain
or incur by reason of such claim, and (ii) Seller, if such claim is based upon
any agreement alleged to have been made by Seller, hereby agrees to indemnify,
defend, protect and hold Buyer harmless against any and all liability, loss,
cost, damage or expense (including reasonable attorneys' and paralegals' fees
and costs) which Buyer may sustain or incur by reason of such claim.
9.3 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, except that neither party's
interest under this Agreement may be assigned, encumbered or otherwise
transferred, whether voluntarily, involuntarily, by operation of law or
otherwise, without the prior written consent of the other party; provided,
however, without being relieved of any liability under this Agreement, Buyer
reserves the right to assign its rights and obligations hereunder to any entity
with which it is affiliated so long as such affiliate assumes the obligations of
Buyer hereunder and Buyer is not released of its obligations hereunder.
9.4 AMENDMENTS. This Agreement may be amended or modified only
by a written instrument executed by the party asserted to be bound thereby.
9.5 CONTINUATION AND SURVIVAL OF INDEMNITIES, REPRESENTATIONS
AND WARRANTIES. All indemnities, representations and warranties by Seller or
Buyer contained herein or made in writing pursuant to this Agreement or any
other instrument delivered by Seller or Buyer pursuant hereto are intended to
and shall remain true, correct and binding as of the time of Closing and shall
survive the execution and delivery of this Agreement, the delivery of the Deeds
and the transfer of title to the Properties for a period of eighteen (18)
months. All representations and warranties of Seller contained in any
certificate or other instrument delivered at any time by or on behalf of Seller
in connection with the transaction contemplated hereby shall constitute
representations and warranties hereunder.
9.6 INTERPRETATION. Whenever used herein, the term "INCLUDING"
shall be deemed to be followed by the words "WITHOUT LIMITATION." Words used in
the singular number shall include the plural, and vice-versa, and any gender
shall be deemed to include each other gender. The captions and headings of the
Articles and Sections of this Agreement are for convenience of reference only,
and shall not be deemed to define or limit the provisions hereof.
9.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, except
that the laws with respect to conflict of laws shall be disregarded.
9.8 MERGER OF PRIOR AGREEMENTS. This Agreement (including the
exhibits hereto) constitutes the entire agreement between the parties with
respect to the purchase and sale of the Property specifically described herein
and supersedes all prior and contemporaneous (whether oral or written)
agreements and understandings between the parties hereto relating to the
specific subject matter hereof.
9.9 ATTORNEYS' FEES. In the event of any action or proceeding
at law or in equity between Buyer and Seller (including an action or proceeding
between Buyer and the trustee or debtor in possession while Seller is a debtor
in a proceeding under the Bankruptcy Code (Title 11 of the United States Code)
or any successor statute to such Code) to enforce or interpret any provision of
this Agreement or to protect or establish any right or remedy of either Buyer or
Seller hereunder, the unsuccessful party to such action or proceeding shall pay
to the prevailing party all costs and expenses, including, without limitation,
reasonable attorneys' and paralegals' fees and expenses, incurred in such action
or proceeding and in any appeal in connection therewith by such prevailing
party, whether or not such action, proceeding or appeal is prosecuted to
judgment or other final determination, together with all costs of enforcement
and/or collection of any judgment or other relief. The term "prevailing party"
shall include, without limitation, a party who brings an action against the
other by reason of the other's breach or default and obtains substantially the
relief sought by judgment of the court. If such prevailing party shall recover
judgment in any such action, proceeding or appeal, such costs, expenses and
attorneys' and paralegals' fees shall be included in and as a part of such
judgment.
9.10 REMEDIES. (a) The parties understand and agree that the
Property is unique and for that reason, among others, Buyer will be irreparably
damaged in the event that this Agreement is not specifically enforced.
Accordingly, in the event of any willful breach or default of this Agreement by
Seller resulting in a refusal to convey and assign the Properties as herein
contemplated or any intentional violation by Seller of the warranties, terms or
provisions hereof, Buyer shall have, as Buyer's remedies hereunder, (i) the
right to demand and have specific performance of this Agreement, (ii) the right
to recover monetary damages resulting from Seller's breach or default of this
Agreement and (iii) the right to a return of the Deposit. Notwithstanding the
foregoing, if the transaction does not close as a result of a failure of
condition with respect to (1) the contingency set forth in Section 1.4, (2) the
condition of title as provided in Section 3.1, (3) the failure of Seller or
Target to cause timely delivery of the Sublease Consent as provided in Section
5.8, (4) a breach by Target of any of the covenants in Article IV or (5) the
disclosure that any of the representations or warranties of Seller or Target are
false in any material respect, in addition to the return of the Deposit, Buyer
will be entitled to receive its Due Diligence Costs.
(b) IF BUYER DEFAULTS IN ITS OBLIGATION TO CLOSE THE
PURCHASE OF THE PROPERTY, THE CASH DEPOSIT, PLUS ANY INTEREST ACCRUED THEREON,
SHALL BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES. THE AMOUNT PAID
TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES SHALL BE SELLER'S SOLE REMEDY IF
BUYER FAILS TO CLOSE THE PURCHASE OF THE PROPERTY. THE PARTIES HERETO EXPRESSLY
AGREE AND ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY
BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN AND THAT THE
AMOUNT OF THE DEPOSIT PLUS ANY INTEREST ACCRUED THEREON REPRESENTS THE PARTIES'
REASONABLE ESTIMATE OF SUCH DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED
DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SELLER. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS SECTION 9.10(b), THIS LIQUIDATED DAMAGES PROVISION IS
NOT INTENDED AND SHALL NOT BE DEEMED OR CONSTRUED TO LIMIT IN ANY WAY BUYER'S
INDEMNITY OBLIGATIONS UNDER SECTIONS 9.2 and 9.16.
SELLER'S INITIALS: /s/ NJL BUYER'S INITIALS: /s/ SS
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9.11 RELATIONSHIP. It is not intended by this Agreement to,
and nothing contained in this Agreement shall, create any partnership, joint
venture, financing arrangement or other agreement between Buyer and Seller. No
term or provision of this Agreement is intended to be, or shall be, for the
benefit of any person, firm, organization or corporation not a party hereto, and
no such other person, firm, organization or corporation shall have any right or
cause of action hereunder.
9.12 AUTHORITY. The individuals signing below represent and
warrant that they have the requisite authority to bind the entities on whose
behalf they are signing.
9.13 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument. It shall be necessary
to account for only one fully executed counterpart in proving this Agreement.
9.14 EXHIBITS. References in this Agreement to Exhibits mean
the exhibits described in the List of Exhibits attached hereto, all of which
exhibits are incorporated by reference into this Agreement.
9.15 ACCESS; CONFIDENTIALITY. After reasonable notice provided
by Buyer, Seller shall give, and shall authorize and instruct its counsel, its
accountants and its other agents and representatives to give to Buyer and
Buyer's counsel, accountants and other representatives full access during normal
business hours to the Property and to all of Seller's books, contracts and
records related to the Property, and shall furnish such information and copies
of such materials related to the Property as Buyer from time to time reasonably
may request, provided, however that in no event shall (i) such inspections or
tests materially disrupt or disturb the operation of the Property, or (ii) Buyer
or its agents, representatives and consultants drill or bore on or through the
surface of the Real Property or the Improvements without Seller's prior written
consent, which consent may be given or withheld in Seller's sole and absolute
discretion. After making such tests and inspections, Buyer shall promptly
restore the Property to the condition that existed prior to making such tests
and inspections (which obligation shall survive the Closing or any termination
of this Agreement). In the event that the Agreement is terminated for any reason
other than Seller's default, Buyer shall promptly deliver to Seller copies of
all written reports, studies and results of tests and investigations obtained or
conducted by Buyer with respect to the Property (which obligation shall survive
any termination of this Agreement) provided that Seller first reimburses Buyer
for the cost of obtaining such reports, studies and results. Buyer shall not
communicate directly with Target absent the presence of a representative of
Seller and all inquiries concerning Target or the Properties shall be directed
to Seller. All information so learned by Buyer shall be kept in confidence
pending the Closing. If the Closing does not take place for any reason, Buyer
shall keep such information in confidence thereafter (unless and until such
information otherwise is or becomes public knowledge through no fault of Buyer)
and shall promptly return to Seller all materials so provided by Seller;
provided, that the foregoing shall not prohibit Buyer from utilizing such
information or materials in connection with the exercise of its rights
hereunder. Buyer shall indemnify, defend and hold harmless Seller from any
damage or injury caused by Buyer's breach of its covenants herein contained or
Buyer's or Buyer's agents' gross negligence or willful misconduct (but
specifically excluding such party's simple negligence) while reviewing Seller's
books and records at the Property. The foregoing provisions shall survive the
termination of this Agreement.
9.16 DAMAGE TO PROPERTY. Buyer acknowledges that Buyer shall
be responsible for any injury or damage to the Property caused by Buyer or
Buyer's consultants during Buyer's review of the Property, regardless of whether
the Closing occurs. Buyer shall keep the Property free from liens filed by
Buyer's contractors and consultants and shall indemnify, defend and hold
harmless Seller and Target from and against all claims, actions, losses,
liabilities, damages, costs and expenses (including, but not limited to
reasonable attorneys' fees and costs) incurred, suffered by, or claimed against
the Seller or Target by reason of any damage to the Property or injury to
persons caused by Buyer and/or its agents, representatives or consultants in
exercising its rights to inspect the Property under this Agreement. The
foregoing provisions shall survive the Closing or any termination of this
Agreement.
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IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of
the date first above written.
"BUYER"
LSAC OPERATING PARTNERSHIP L.P.,
a Delaware limited partnership
By: LSAC General Partner LLC, a Delaware
limited liability company
By: /s/ ▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇
Title: Vice President
"SELLER"
INFOCROSSING, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President