Exhibit 10.11
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made as of the 7th day of November, 2003, is by and
between ADA REALTY LLC, a West Virginia Limited Liability Company, with an
address at ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Seller"), and GEN-NET LEASE
INCOME TRUST, INC., a Michigan corporation with an address at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Buyer").
SECTION 1. SALE OF THE PROPERTY
1.1 On the terms and conditions contained in this Agreement, Seller
agrees to sell and Buyer agrees to purchase that certain tract or parcel of land
consisting of one 35,894 sq. ft. warehouse and storage building, known as BUREAU
OF PUBLIC DEBT located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇, more
particularly described on EXHIBIT A attached hereto and by this reference made a
part hereof, together with the buildings and improvements thereon and together
with all appurtenant rights of way, easements, water rights and covenants (said
land, building together with the alternate electric power source described in
Section 1.4 hereof, and appurtenances hereinafter sometimes collectively
referred to as the "Property").
1.2 All of Seller's right, title and interest in and to any fixtures and
items of intangible or tangible personal property attached to the improvements
on the Property and owned by Seller are included in the sale and shall be
conveyed "as is."
1.3 If required by the Lease of the Premises to the General Services
Administration, Buyer will form a single asset entity of its choosing to take
title to the Property. Such entity shall be formed prior to Closing. Seller
hereby consents to the assignment of this contract to such single asset entity
at Closing.
1.4 The Property, as herein defined, includes without limitation the
existing 35854 square foot warehouse facility with an alternate source of
electric power now under construction. The alternate electric power source
project is currently under contract with the United States General Services
Administration ("GSA") (the "Power Contract"). The Power Contract will be
completed at the time of Closing. All costs associated with the Power Contract
are being paid by and are the responsibility of the General Services
Administration ("GSA"). Completion of the Power Contract or receipt by Buyer of
satisfactory assurances from Seller and the GSA regarding completion of and
payment for the Power Contract shall be a condition precedent to Buyer's
obligation to close hereunder.
SECTION 2. PURCHASE PRICE.
2.1 The purchase price for the Property (the "Purchase Price") shall be
FIVE MILLION THIRTY-FIVE THOUSAND AND 00/DOLLARS ($5,035,000.00), and shall be
payable as follows:
(a) One Hundred Thousand Dollars ($100,000.00) shall be paid
into with an Escrow Agent selected by Buyer (the "Title Company") on or
before the date that is five (5) business days after the Effective Date
(see Section 16.13 hereof) of this Agreement. Such amount shall be held
and released by the Title Company in accordance with the
provisions of this Agreement and the escrow provisions attached as
EXHIBIT B. Such payments shall be non-refundable, except as expressly
set forth herein. Such payment is referred to herein as the "Deposit."
(b) The balance of the Purchase Price, subject to adjustment as
provided herein, shall be deposited into escrow by Buyer with the Title
Company no later than 11:00 a.m. on the date that the closing of title
pursuant to Section 7 takes place (the "Closing Date") by wire transfer
of good federal funds.
2.2 The Deposit shall be placed in an interest-bearing escrow account.
All interest accruing on the Deposit, not otherwise applied to escrow costs
pursuant to Section 3.1(b), shall be credited against the Purchase Price payable
at the closing of title pursuant to Section 7 (the "Closing"). If the Closing
does not take place, the interest accrued on the Deposit shall be paid to the
party entitled to receive the Deposit pursuant to the terms of this Agreement.
The Title Company shall serve as custodian of all documents to be delivered into
escrow pursuant to this Agreement and to handle the recordation of all documents
to be admitted to record.
SECTION 3. ADJUSTMENTS AND APPORTIONMENTS
3.1 The following are to be apportioned or adjusted as of the date of
Closing (the "Closing Date"):
(a) Any charges, which are not paid by the UNITED STATES
GOVERNMENT GENERAL SERVICES ADMINISTRATION ("Tenant"), including but not
limited to, real estate taxes, water and sewer charges, electricity,
fuel and other utility charges shall be apportioned as of the Closing
Date in accordance with local custom for transactions of this type.
(b) Any escrow fees charged by the Title Company for acting as
the escrow agent hereunder shall be offset by the total interest income
from the escrowed funds, and any excess shall be shared equally by the
parties.
(c) Rental payments from the Tenant shall be apportioned as of
the Closing Date. Rental deposits, if any, shall be paid to Buyer.
(d) The following closing costs shall be paid by Buyer:
i. documentary stamps, transfer and intangible taxes, if
any, on Buyer's mortgages and notes;
ii. recording costs on the deed, Buyer's mortgage and
financing statements;
iii. the cost of the Lender's and one-half (1/2) of the
cost of the Buyer's title insurance commitment and policy;
iv. survey update, if any;
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v. Buyer's loan costs;
vi. all expenses of due diligence and all fees and
expenses related to Buyer's financing;
vii. all other expenses incurred by Buyer including
without limitation, all legal fees and expenses of Buyer's
counsel;
(e) The following closing costs shall be paid by Seller:
i. documentary stamps, transfer and intangible taxes on
the deed;
ii. one-half (1/2) the cost of the Buyer's title
insurance commitment and policy;
iii. all costs associated with curative or remedial
title work and the recording of any corrective title instruments
and releases;
iv. all other expenses incurred by Seller, including
without limitation all fees and expenses of Seller's counsel.
3.2 The terms and provisions of this Section 3 shall survive the Closing
Date.
SECTION 4. TITLE
4.1 Within seven (7) days following the Effective Date, Seller shall
obtain a commitment for title insurance under an Extended Coverage Policy of
Title Insurance (ALTA form acceptable to Buyer) issued by Escrow Company on
behalf of a title insurance company acceptable to Buyer (the "Commitment"). Such
Commitment shall commit to insure that marketable title in fee simple will vest
in Buyer at Closing subject to standard ALTA printed policy exceptions (Schedule
B, Section 2 Exceptions) and such other exceptions as will not interfere with
the contemplated use, leasing, financing, or resale of the Property ("Permitted
Exceptions"). Provided, however, that the standard exceptions for mechanic's
liens, construction liens and survey shall not be deemed Permitted Exceptions
and shall be removed prior to Closing. All costs associated with the commitment
and issuance of the Owner's policy shall divided equally between Seller and
Buyer. Seller shall convey the Property to Buyer by General Warranty Deed in a
form reasonably acceptable to Buyer.
4.2 Buyer shall have ten (10) days after receipt of the commitment to
notify Seller, in writing, of any matter identified in the commitment or
otherwise known to Buyer which would render the title conveyed to Buyer other
than good, clear, record and marketable other than Permitted Exceptions ("Defect
of Title"). Failure by Buyer to give such notice within the prescribed time
period shall be deemed a waiver of any Defect of Title disclosed by the
commitment or otherwise known to Buyer which existed on the Effective Date and
such Defect of Title shall be deemed a Permitted Exception.
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Buyer shall notify Seller of any Defect of Title which does not
exist at the Effective Date but which arises prior to Closing. Such notice shall
be in writing and shall be given on or prior to the Closing Date.
Any notice from Buyer to Seller identifying one or more
Defect(s) of Title shall be referred to herein as a "Title Objection Notice".
4.3 Upon receipt of a Title Objection Notice, Seller shall use
reasonable good faith efforts to cure any such Defect(s) of Title. Seller shall
have the right to delay the Closing for up to 45 days to permit such remedy or
cure (such period as provided herein to Seller to cure any such Defect(s) of
Title is referred to herein as the "Title Cure Period"). As part of such cure,
Seller shall remove any consensual liens securing the payment of money. If
Seller remedies or cures such Defect(s) of Title, Seller shall notify Buyer of
such remedy or cure and if Buyer deems such remedy or cure to be satisfactory,
Seller shall have the right to set the Closing Date by giving Buyer written
notice thereof; provided that such Closing Date shall be no sooner than ten (10)
business days after such notice. If the Defect(s) of Title set forth in the
Title Objection Notice are not corrected or remedied within the Title Cure
Period, then Buyer shall elect, by written notice to Seller within five (5)
business days after the end of the Title Cure Period either (i) to accept title
to the Property subject to the uncured Defect(s) of Title without reduction of
the Purchase Price (other than Seller's obligation to pay off any consensual
liens securing the payment of money) and without any right to damages and
without any other liability on the part of Seller, or (ii) to terminate this
Agreement, whereupon all obligations of the parties hereunder shall cease and
neither party shall have any claim against the other by reason of this
Agreement, except with respect to any provision hereof that expressly survives
the termination of this Agreement. If Seller does not remedy or cure such
Defect(s) of Title within the Title Cure Period, and if Buyer elects to proceed
with the Closing, the Closing Date shall be the tenth business day after the end
of the Title Cure Period.
4.4 If, on the Closing Date, there are any liens or encumbrances
securing the payment of a fixed liquidated amount of money, that Seller is
obligated to pay or discharge in order to convey good, clear, record and
marketable title to the Property to Buyer. Seller may elect to use any portion
of the Purchase Price to satisfy the same, provided Seller shall authorize the
Title Company to retain a sufficient portion of the Purchase Price to ensure the
payment in full of such liens and encumbrances and the obtaining and the
recording of such satisfactions and releases. Buyer shall be entitled to verify
the sufficiency of any amounts retained to satisfy or discharge of the
obligation to which they are assigned. Assuming due verification of the
sufficiency of the amounts retained to satisfy or discharge the obligation to
which they are assigned, the existence of any such liens or encumbrances shall
not be deemed objections to title if Seller shall comply with the foregoing and
the Title Company is willing to insure the Property without exception for such
lien or encumbrance.
SECTION 5. DELIVERY OF SELLER'S DOCUMENTS
5.1 Within ten (10) business days after the Effective Date, Seller shall
deliver to Buyer, to the extent Seller has not already done so, copies of all
title policies, plans, surveys, engineering and environmental reports, operating
and financial documents, records, reports, audits, agreements, contracts for
services, leases, construction and development documents,
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warranties, tests, reports, studies, notices, advisories, permits, certification
for occupancy, and anything else in its possession material to the status or
condition of the Property, to the extent the same are in the possession or
control of Seller.
5.2 Seller shall deliver an ALTA/ACSM Land Survey of the Property within
five (5) days following the end of the Due Diligence Period. Such survey shall
bear a creation or recertification date not more than thirty (30) days prior to
the Closing Date.
5.3 Buyer agrees that any and all information delivered by Seller or its
agents and representatives with respect to the Property shall be held by Buyer
in confidence and not released or shared with anyone except such employees,
lenders and professional advisors as are reasonably necessary to allow Buyer to
evaluate the Property. If for any reason this transaction does not close, any
such information and any copies that have been made by Buyer shall be promptly
returned to Seller. The provisions of this Section 5.3 shall survive the
termination of this Agreement.
SECTION 6. DUE DILIGENCE.
6.1 Unless extended by written agreement of Seller and Buyer, Buyer
shall have a period of forty-five (45) days from the Effective Date to conduct
an inspection of the Property. Such period shall hereinafter be referred to as
the "Due Diligence Period". During the Due Diligence Period during normal
business hours and after reasonable notice to Seller or its designated agents,
Buyer, or its engineers, architects, building consultants, environmental
investigators, or other representatives, at Buyer's sole cost and expense, may
inspect and test the Property. Seller shall reasonably cooperate by allowing
Buyer's representatives reasonable access to the Property. Buyer's right of
inspection shall include entry upon the Property, in the company of
representatives of Seller, with its agents and their equipment for the purpose
of making such environmental tests as Buyer deems appropriate, including without
limitation soil borings, provided that Buyer shall be responsible for the prompt
restoration of the Property to its condition prior to making such tests. The
obligation to return the Property to its prior condition shall survive the
termination of this Agreement. Buyer shall comply with all laws, rules and
regulations of any governmental authority and obtain all licenses and permits
required in connection with such activities. Buyer agrees to indemnify and hold
Seller harmless from and against any property damage or personal injury or claim
or lien against the Property resulting from any such access or inspection by
Buyer or its representatives. Such indemnification shall survive the Closing or
earlier termination of this Agreement. Buyer shall also have the right during
such Due Diligence Period to examine and review environmental conditions of the
Property, zoning and land use regulations, governmental entitlements,
governmental approvals and any restrictions, agreements, obligations and
liabilities affecting the Property. If Seller fails to provide the documentation
identified in Section 5 hereof within the prescribed 10-day period, the Due
Diligence Period will be extended one (1) day for each day or partial day delay
in the delivery of such documentation.
6.2 Buyer shall have the right to extend the Due Diligence Period for an
additional period of forty five (45) days by giving written notice to Seller,
not later than fifteen (15) days prior to the end of the initial Due Diligence
Period, of its intent to extend and by declaring that the Deposit is non
refundable, on or before the last day of the initial Due Diligence Period. If
the
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Seller extends the Due Diligence Period, the Deposit shall be non refundable in
the event Buyer terminates this Agreement based on matters discovered during the
Due Diligence Period. Nothing contained in this Section 6.2 shall be deemed to
make the Deposit non refundable if this Agreement is terminated due to the
inability of Seller to convey good, clear, unencumbered and marketable title to
the Property to Buyer, the inaccuracy of any warranties or representations made
by Seller or for any other breach of this breach of this Agreement by Seller.
6.3 Buyer shall have the right to terminate this Agreement at any time
during the Due Diligence Period or during any extension thereof in its sole and
absolute discretion for any reason or no reason by giving written notice to
Seller on or before the last day of the Due Diligence Period. If Buyer timely
gives notice of termination under this Section, all obligations of the parties
hereunder shall cease and neither party shall have any claim against the other
by reason of this Agreement, except with respect to any provision hereof that
expressly survives the termination of this Agreement. Except as provided in
Section 6.2, upon restoration of the Property as provided in Section 6.1, the
Deposit shall be returned to the Buyer; provided, however, that in the event of
termination following the initial Due Diligence Period, as set forth in Section
6.2, the Deposit, together with any accrued interest, shall be paid to Seller.
If Buyer fails to give such written notice of termination on or before the last
day of the Due Diligence Period, Buyer shall be deemed to have waived its right
to terminate this Agreement pursuant to this Section.
6.4 If Buyer terminates this Agreement in accordance with Section 6.3
above, Buyer shall return to Seller all documents provided to Buyer by Seller,
and any copies thereof made by Buyer and shall provide Seller with copies of all
reports, surveys, plans, studies and analysis prepared by or for Buyer with
respect to the Property. Buyer agrees that any and all information obtained by
it or its agents and representatives with respect to the Property, including
without limitation all reports, surveys, plans, studies and analysis prepared by
or for Buyer with respect to the Property, shall be held by Buyer in confidence
and not released or shared with anyone other than Seller, except for such
employees, lenders and professional advisors as are reasonably necessary to
allow Buyer to evaluate the Property. The provisions of this Section 6.4 shall
survive the termination of this Agreement. If Buyer waives its right to
terminate as provided above, Buyer shall be deemed to have accepted the Property
in an "as is" condition, without any representations or warranties, except as
specifically provided herein, and without abatement or reduction of the Purchase
Price.
SECTION 7. CLOSING AND ESCROW.
7.1 Upon execution of this Agreement, the parties shall deliver an
executed counterpart of this Agreement to the Title Company. This Agreement
shall serve as the instructions to the Title Company as the escrow holder for
consummation of the purchase and sale contemplated hereby. Seller shall promptly
notify the Title Company and Buyer in writing as to the Effective Date and the
date that the Due Diligence Period ends, which dates shall be controlling unless
Buyer objects in writing within three (3) business days after receipt of such
notice or unless the parties otherwise agree. Seller and Buyer agree to execute
such additional and supplementary escrow instructions as may be appropriate to
enable the escrow holder to comply with the terms of this Agreement; provided,
however, that in the event of any conflict
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between the provisions of this Agreement and any supplementary escrow
instructions, the terms of this Agreement shall control.
7.2 The consummation of the transactions contemplated hereby shall be
held and delivery of all items to be made at the Closing under the terms of this
Agreement shall be made at the office of the Title Company, on a date which is
fifteen (15) days following the end of the Due Diligence Period, or such later
date as provided in Section 4.3 or as may be agreed by the parties in writing.
7.3 At least one business day prior to the Closing Date, Seller shall
deliver the following into escrow with the Title Company (all in form reasonably
acceptable to the Title Company and Buyer's counsel):
(a) A duly executed and acknowledged General Warranty Deed
(herein referred to as the "Deed") in recordable form conveying the
Property to Buyer as grantee therein, subject only to Permitted
Exceptions.
(b) A duly executed ▇▇▇▇ of sale ("▇▇▇▇ of Sale") transferring
all of Seller's right, title and interest in and to the fixtures and
personal property described in Section 1.2.
(c) An affidavits dated as of the date of Closing, duly
executed, certifying that Seller is not a foreign person within the
meaning of the Internal Revenue Code and its regulations.
(d) Such customary affidavits or certificates, duly executed, as
shall be reasonably required by the Title Insurance Company for the
purpose of issuing an Seller's title insurance policy without exception
for parties in possession or mechanics and materialmen's or construction
liens claiming by, through or under any contract, agreement or
understanding with Seller or any entity affiliated with Seller.
(e) A certificate, duly executed, updating the representations
and warranties of Seller set forth in this Agreement through Closing,
which certificate shall state that there has been no material change in
such representations and warranties, or if so, what changes have taken
place.
(f) A duly executed Closing Statement setting forth the Purchase
Price and the various adjustments and prorations set forth herein,
identical to the Closing Statement signed by Buyer pursuant to Section
7.4.
(g) A duly executed 1099-S Designation Form.
(h) Such other documents as are reasonably necessary to
consummate this Agreement including, without limitation, such events as
may be required by Lease with the General Services Administration
("Tenant") including without limitation, an Estoppel Certificate and
Subordination Agreement by Tenant.
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Buyer may waive compliance on Seller's part under any of the foregoing items by
an instrument in writing.
7.4 Buyer shall deliver the following into escrow with the Title
Company, at least one business day prior to the Closing Date, unless
otherwise specified:
(a) The balance of the Purchase Price as required by
Section 2.1(b), which will be wired to the Title Company no
later than 11:00 a.m. on the Closing Date.
(b) A duly executed certificate updating the
representations and warranties of Buyer set forth in this
Agreement through such Closing Date, which certificate shall
state that there has been no material change in said
representations and warranties, or if so, what changes have
taken place.
(c) A certificate from the Michigan Secretary of State
dated no more than sixty (60) days prior to the Closing,
confirming that Buyer is duly formed and in good standing under
the laws of such state.
(d) Such resolutions, authorizations, bylaws or other
documents relating to Buyer as shall be reasonably requested to
evidence the authority of Buyer to enter into and consummate the
transactions contemplated by this Agreement.
(e) A duly executed Closing Statement setting forth the
Purchase Price and the various adjustments and prorations set
forth herein, identical to the Closing Statement signed by
Seller pursuant to Section 7.3.
(f) Such other documents as are reasonably necessary to
consummate this Agreement.
Seller may waive compliance on Buyer's part under any of the foregoing items by
an instrument in writing.
7.5 Upon receipt of all the funds and documents described in Sections
7.3 and 7.4, above, the Title Company shall, in accordance with escrow
instructions reasonably agreed upon by Seller and Buyer, (a) record the Deed and
deliver the documents delivered into escrow by Seller to Buyer, and (b) disburse
the Purchase Price, as adjusted, in accordance with the closing statement and in
accordance with wiring instructions provided by Seller (provided that if Seller
assigns this Agreement to a qualified intermediary in accordance with the
provisions of Section 16.5, funds due Seller on account of the Purchase Price
shall instead be delivered to such qualified intermediary), and deliver the
documents from escrow to the party entitled to receive the same.
SECTION 8. REPRESENTATIONS AND WARRANTIES.
8.1 Seller hereby represents and warrants to Buyer, and acknowledges
that Buyer is relying on each of the following statements in entering into this
Agreement, as follows:
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(a) Seller is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of West
Virginia and has full power and authority to enter into this Agreement
and to carry out the transactions contemplated hereby, and the persons
executing this Agreement on behalf of Seller are duly authorized to
execute, on behalf of Seller, this Agreement, the Deed, ▇▇▇▇ of Sale,
assignments and other instruments or documents reasonably necessary to
effect the transactions contemplated by this Agreement.
(b) Seller has full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and to
execute this Agreement, the Deed, ▇▇▇▇ of Sale, assignments and other
instruments or documents reasonably necessary to effect the transactions
contemplated by this Agreement.
(c) This Agreement and all documents executed and delivered by
Seller are or at the time of Closing will be duly authorized, executed,
and delivered by Seller and will constitute the legal, valid, and
binding obligations of Seller, enforceable in accordance with their
terms. Such documents do not violate any provisions of any agreement,
instrument or judicial order to which Seller is a party or by which
Seller or the Property is bound including without limitation, the lease
with the United States Government Service Administrator.
(d) There are no attachments, executions, assignments for the
benefit of creditors, receiverships, conservatorships or voluntary or
involuntary proceedings in bankruptcy or pursuant to any other debtor
relief laws filed by Seller or pending against Seller or Seller's
interest in the Property.
(e) Seller has no knowledge of any litigation or enforcement or
regulatory action or proceeding against or relating to the Property.
(f) Seller has no actual knowledge of any taking, condemnation
or special assessment, actual or proposed, with respect to any part of
the Property.
(g) Seller is not a party to any service contracts relating to
the Property except as delivered by Seller to Buyer during the first ten
(10) days of the due diligence period.
(h) To the best of Seller's knowledge no hazardous or toxic
material, substance, pollutant, contaminant, waste, asbestos or
petroleum product has been released by Seller or to the best of Seller's
knowledge by any of Seller's predecessors in title or tenants into the
environment, discharged, placed or disposed of at, near or on the
Property. The Property has not been used at any time by Seller or to the
best of Seller's knowledge, any person as a landfill or waste disposal
site. No claims, litigation, administrative proceedings, are pending or
threatened and no judgments or orders have been entered related to any
hazardous substance, hazardous waste, discharge, emission or other form
of pollution relating in any way to the Property. No hazardous substance
or hazardous waste, as defined by the Resource Conservation Recovery
Act, as amended, 42 U.S.C. 6901, et. seq., or the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42
U.S.C. 9601, et. seq., has been generated, manufactured,
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refined, transported, treated, stored, handled or disposed of, on, at or
near the Property by Seller or to the best of Seller's knowledge by any
of Seller's predecessors in title or tenants. These representations and
warranties shall survive Closing.
8.2 Buyer hereby represents, warrants and covenants to Seller, and
acknowledges that Seller is relying on each of the following statements in
entering into this Agreement, as follows:
(a) Buyer is a corporation duly formed, validly existing and in
good standing under the laws of the State of Michigan and has full power
and authority to enter into this Agreement and to carry out the
transactions contemplated hereby, and the persons executing this
Agreement on behalf of Buyer are duly authorized to execute, on behalf
of Buyer, this Agreement, the assignments and other instruments or
documents reasonably necessary to effect the transactions contemplated
by this Agreement.
(b) This Agreement and all documents executed and delivered by
Buyer are or at the time of Closing will be duly authorized, executed,
and delivered by Buyer and will constitute the legal, valid, and binding
obligations of Buyer, enforceable in accordance with their terms. Such
documents do not violate any provisions of any agreement, instrument or
judicial order to which Buyer is a party or by which Buyer is bound.
8.3 If either party discovers prior to or at the Closing that any
representation or warranty of the other party was materially untrue or incorrect
when made, the discovering party shall, as its sole remedy, elect to either
waive any such misrepresentation and proceed with the Closing or to terminate
this Agreement. The foregoing notwithstanding, if it is determined that any
representation or warranty of a party was materially untrue or incorrect when
made, the party making such representation shall take reasonable steps to
correct such representation or warranty or to otherwise make such representation
or warranty true.
8.4 Except as otherwise herein provided, the representations and
warranties contained in this Section and elsewhere in this Agreement, refer to
the date of execution of this Agreement, or with respect to any date-down
certificate delivered by the parties pursuant to Sections 7.3 or 7.4, the date
of such certificates. Seller will notify Buyer, promptly after acquiring
knowledge thereof, of any change in facts which arise prior to the conclusion of
the Closing which would make any such representation or warranty untrue if such
state of facts had existed on the date of execution of this Agreement. Seller
shall not be in default under this Section or be deemed to have breached any
representation or warranty hereunder unless such representation or warranty were
incorrect or untrue in a material respect when made or when restated pursuant to
the date-down certificates referenced in Sections 7.3 and 7.4 hereof.
SECTION 9. COVENANTS OF SELLER.
9.1 Between the date hereof and the Closing Date, Seller shall not sell,
transfer or convey, mortgage or otherwise encumber the Property, or any part
thereof, which would adversely affect Seller's ability to perform under this
Agreement, without the written consent of the Buyer.
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9.2 Seller shall not, without the prior written consent of Buyer, enter
into any contract with respect to the Property that will survive the Closing or
will otherwise affect the use, operation, enjoyment or development of the
Property after the Closing.
9.3 Seller shall notify Buyer, promptly after acquiring knowledge
thereof, of any event or circumstances that would make any representation or
warranty of Seller to Buyer under this Agreement to be materially untrue.
9.4 Seller shall maintain the Property in the same condition as it
exists on the Effective Date, reasonable wear and tear excepted.
9.5 Seller shall keep, or cause to be kept, fire, casualty and extended
insurance covering the Property, in an amount of not less than the Purchase
Price through the Closing Date.
SECTION 10. CONDITIONS TO BUYER'S OBLIGATIONS.
10.1 Buyer's obligations hereunder, including the obligation to purchase
and pay for the Property, are subject to the satisfaction of the following
conditions, any of which may be waived by Buyer, in writing signed by Buyer:
(a) The representations and warranties made by Seller in this
Agreement being true and correct in all material respects on and as of
the Closing Date with the same force and effect as though such
representations and warranties had been made as of the Closing Date;
(b) Seller having performed in all material respects all
covenants and obligations required by this Agreement to be performed by
Seller on or prior to the Closing Date;
(c) Buyer receiving, at Closing, an ALTA Seller's Extended
Coverage Policy of Title Insurance insuring good, clear, record,
marketable and fee simple title to the Property subject only to the
Permitted Exceptions;
(d) Seller delivering possession of the Property free and clear
of all tenants, other than the United States General Services
Administration; and
(e) Seller delivering an Estoppel Certificate and Subordination
Agreement from Tenant to Buyer.
(f) Between the expiration of the Due Diligence Period and the
Closing Date, there shall have occurred no material adverse change in
the environmental conditions of the Property or to the physical
condition of the Property, reasonable wear and tear excepted; provided,
however, that the parties acknowledge and agree that certain adverse
changes to the physical condition of the Property will be governed by
Section 12 below and with respect to those changes, Section 12 will
determine whether or not they are grounds for termination of this
Agreement.
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(g) Conditioned upon Seller having entered into a lease with the
United States Government General Services Administration for the subject
property in their entirety (including the addition described in Section
1.4 and 10.1(i) hereof providing for the gross rent and expense
escalators earlier represented to Buyer by Seller's/Buyer's agent in the
APOD which lease is not terminable by Tenant prior to November 1, 2012/5
year option ending 2017.
(h) Approval of the acquisition by the Board of Directors of
Buyer, such approval and notice thereof to be forthcoming in written
form prior to the end of the initial Due Diligence Period. Should the
Board of Directors of Buyer not approve the acquisition prior to the end
of the initial Due Diligence Period, Buyer shall have the right to
terminate without penalty or liability to Seller and the Deposit
together with interest accrued thereon, if any, shall be returned to
Buyer.
(i) Delivery to Buyer of all documents and records reasonably
required and necessary to fulfill its disclosure obligations as a public
company, including financial information on the Property for five (5)
years (or as long as owned by Seller if fewer than five (5) years)
sufficient to enable Buyer's auditors, at Buyer's cost, to prepare a
ALCPA standard audited financial statements, provided that Buyer shall
promptly notify Seller, in writing, of any deficiency in such reasonably
required materials and Buyer may delay the Closing pending production of
such documents necessary to cure such deficiency; provided, however,
that Seller shall not be required to create any materials that do not
already exist.
(j) Completion of the construction required by the Power
Contract or receipt of assurances satisfactory to Buyer regarding
completion of and payment for the Power Contract.
10.2 If any of the conditions set forth in Section 10.1 above are not
satisfied, Buyer, by written notice delivered to Seller on or before the Closing
may elect to (a) waive such condition and proceed with the Closing, or (b)
terminate this Agreement and have the Deposit returned to it.
10.3 The parties acknowledge that in addition to the matters set forth
in Section 10.1, under certain circumstances, Defect of Title that are not
Permitted Exceptions and which are timely objected to as provided in Section 4
above, may become conditions to Buyer's obligations hereunder, subject to and in
accordance with Section 4.
SECTION 11. CONDITION TO SELLER'S OBLIGATIONS.
11.1 Seller's obligation hereunder including the obligation to sell and
deliver title to Buyer for the Premises are subject to satisfaction of the
following condition which may be waived by Seller, but only in a writing signed
by Seller.
11.2 Seller's obligation to close this transaction is subject to the
satisfaction of the following condition precedent prior to the end of the Due
Diligence Period unless waived by Seller. If such condition precedent is not
satisfied on or before the Closing Date, this Agreement shall terminate subject
only to the obligation of Buyer. Pursuant to Section 6 hereof, the Deposit
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shall be returned to Buyer and neither party shall have any further liability or
obligation to the other.
SECTION 12. CASUALTY AND CONDEMNATION.
12.1 If, prior to the Closing Date, all or a "Material Portion of the
Property" (as such term is defined below) is taken by public authority, then
Seller shall promptly notify Buyer and Buyer shall have the option, exercisable
by notice given to Seller within thirty (30) days after notice of such taking,
but in any event prior to the Closing, either to proceed with the Closing "as
is," without a reduction of the Purchase Price, and otherwise pursuant to the
terms hereof, or to terminate this Agreement, in which event the Deposit shall
be returned to Buyer.
12.2 If, prior to the Closing Date, all or a Material Portion of the
Property is damaged or destroyed by fire or other casualty, other than by the
fault or negligence of Buyer, or Buyer's employees, agents, invitees or anyone
claiming right to possession under or through Buyer, then Seller shall promptly
notify Buyer and Seller shall have, at its option, a period of not more than 120
days after receipt of such notice within which to repair any such destruction or
damage, subject to reasonable extension due to delays caused by weather, labor
strikes, unavailability of materials or other causes beyond the control of
Seller (such period being referred to herein as the "Restoration Period"). If
Seller elects to repair any such damage or destruction, the Closing shall be
extended to the date that is five (5) business days after the expiration of such
Restoration Period; provided, however, that if such destruction or damage is
repaired before the end of such Restoration Period, Seller shall have the right
to close earlier by giving Buyer written notice setting a Closing Date not
sooner than five (5) business days after such notice. If such destruction or
damage is not substantially corrected or remedied within such Restoration
Period, or if Seller elects not to repair such destruction or damage, then Buyer
may elect, by written notice to Seller on or before the earlier of (i) the
Closing Date, as the same may be extended by Seller hereunder or (ii) five days
after receipt of notice from Seller electing not to repair such destruction or
damage, to terminate this Agreement, in which event the Deposit shall be
returned to Buyer and neither party shall have any further obligations to the
other hereunder, except with respect to any provision hereof that expressly
survives the termination of this Agreement. Anything to the contrary herein
notwithstanding, Buyer shall have no right to terminate this Agreement if (a)
such damage was due to the fault or negligence of Buyer, or Buyer's employees,
agents, invitees or anyone claiming right to possession under or through Buyer
or (b) such damage is substantially restored prior to receipt by Seller of
Buyer's notice to terminate. If Buyer does not timely elect to terminate this
Agreement as provided above, Buyer shall be deemed to have waived any right to
terminate this Agreement as a result of such destruction or damage and Buyer
shall accept title to the Property subject to such destruction or damage but
without reduction of the Purchase Price and without any right to damages and
without any other liability on the part of Seller, subject to the provisions of
Section 12.3 below.
12.3 If this Agreement is not terminated as provided above, then Seller
on the Closing Date shall assign to Buyer (without recourse) the right to
recover insurance proceeds (together with the amount of any deductible which
shall be paid to Buyer by Seller) or condemnation awards, if any, payable by
virtue of such casualty or taking; provided, however that such assignment shall
reserve to Seller the right to recover from such proceeds or award any expenses
13
incurred in obtaining such proceeds or award and reimbursement for any funds of
Seller expended in restoring the Property prior to the Closing Date.
12.4 If, prior to the Closing Date, any portion of the Property is
damaged or destroyed by fire or other casualty (and such damage or destruction
has not been completely restored by Seller), or is taken by public authority,
and such portion is not a Material Portion of the Property, then both Seller and
Buyer shall proceed with the Closing and the Property and the personal property
will he conveyed "as is," without an abatement of the Purchase Price and
pursuant to the terms hereof, but the actual amount of insurance proceeds or
condemnation award, as the case may be, which are collected by the Seller shall
be paid over to Buyer, minus any expenses incurred in obtaining such proceeds or
award and minus any proceeds or award used by Seller to restore the Property. If
uncollected prior to the Closing Date, the right to receive such proceeds or
award, as the case may be, shall be assigned to Buyer (without recourse), such
assignment reserving to Seller the right to recover from such proceeds or award
any expenses incurred in obtaining such proceeds or award and reimbursement for
any funds of Seller expended in restoring the Property prior to the Closing
Date. If Seller has completely restored the Property, Seller shall be entitled
to the entire insurance proceeds.
12.5 For the purposes of this Section, "Material Portion of the
Property" is defined as damage to or a taking of the Property with respect to
which (i) 15% or more of the Property are damaged or taken by the condemning
authority, or (ii) access to the Property is permanently lost or materially
modified to the detriment of the Property as a result thereof.
12.6 The parties shall promptly notify each other in writing after
acquiring knowledge thereof, of any taking, destruction or damage to the
Property to which this Section applies. The provisions of this Section shall
survive the Closing hereunder.
SECTION 13. DEFAULT AND REMEDIES.
13.1 If at or prior to Closing, Buyer shall default in the performance
of Buyer's obligations under this Agreement, including without limitation the
obligation to pay the Purchase Price for the Property in accordance with the
provisions of Section 2.1 hereof, Seller shall be entitled to receive the
Deposit together with all interest accrued hereto and Buyer hereby authorizes
the Title Company to pay such Deposit to Seller together with all interest
accrued thereon in such event. Seller shall receive the Deposit in consideration
of Seller's covenants and agreements herein and as liquidated damages for
Buyer's default. Such liquidated damages shall be Seller's sole remedy and
thereafter neither party shall have any rights or liabilities against or to the
other, except as to any provision that expressly survives Closing or the
termination of this Agreement. The parties acknowledge if Buyer defaults, it is
impossible to compute exactly the damages that would accrue to Seller. Taking
these facts into account, the parties have agreed that the amount of the Deposit
together with all interest accrued thereon is a reasonable estimate by them of
the amount of such damages and fair consideration for Seller's covenants and
agreements set forth herein.
13.2 If at or prior to Closing, Seller shall default in the performance
of Seller's obligations under this Agreement, Buyer, as its sole remedy, may
either (a) terminate this
14
Agreement for such default and have the Deposit returned to it together with all
interest accrued thereon, or (b) seek specific performance of this Agreement.
SECTION 14. NOTICES.
14.1 All notices required to be given under this Agreement shall be
deemed given upon the earlier of actual receipt or two days after (i) being
mailed by certified mail, return receipt requested, (ii) delivery to a
nationally recognized overnight delivery service, or (iii) electronic facsimile
transfer addressed as follows:
(a) If intended for Buyer, at
Gen-Net Lease Income Trust, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
CB ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Lieben, Whitted, Houghton,
Slowiaczek & ▇▇▇▇▇▇▇▇, L.L.O.
100 Scoular Building
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
(b) If intended for Seller, at
ADA REALTY LLC
c/o ▇. ▇▇▇▇▇ Province
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
15
With a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone Number : ▇▇▇ ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
14.2 Anything contained in this Section to the contrary notwithstanding,
all notices pursuant to the Agreement from Seller to Buyer, or from Buyer to
Seller will be effective if executed by and sent by their respective attorneys
(including facsimile transfer during normal business hours of the recipient).
Buyer and Seller, and their respective counsel, all hereby agree that if notice
is given hereunder by counsel, such counsel may communicate directly in writing
with all principals, as required to comply with the foregoing notice provisions.
SECTION 15. SURVIVAL AND WAIVER.
15.1 The acceptance by the Buyer of the Deed on the Closing Date shall
be deemed full performance and discharge of each and every agreement and
obligation on the part of Seller hereunder to be performed, and any and all
agreements, representations and warranties of Seller contained in this Agreement
shall not survive the Closing Date, except to the extent expressly provided in
this Agreement. The Property are being sold and will be conveyed "as is," "where
is", without any representation or warranties as to habitability,
merchantability, fitness, condition or otherwise, and at the Closing, Seller
shall be released from all liability pertaining to the Property, except as
expressly set forth herein. Neither party is relying upon any statements or
representations not embodied in this Agreement.
15.2 It is understood and agreed that (i) all contemporaneous or prior
representations, statements, understandings and agreements, oral or written,
between the parties are merged in this Agreement, which alone fully and
completely expresses the agreement of the parties, and (ii) that this Agreement
is entered into after full investigation, neither party relying on any statement
or representation made by the other which is not embodied in this Agreement.
15.3 The provisions of this Section shall survive the Closing Date.
SECTION 16. MISCELLANEOUS PROVISIONS.
16.1 This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when
executed and delivered shall be of the same binding effect as an original.
16.2 If any one or more of the provisions of this Agreement shall be
held invalid, illegal or unenforceable in any respect, such provision shall not
affect any other provision hereof, and this Agreement shall be construed as if
such provision had never been contained herein.
16
16.3 In the event either party commences a lawsuit or other proceeding
to enforce its rights hereunder after a breach by the other party, the
prevailing party shall be entitled to reasonable attorney's fees and expenses.
The provisions of this Section shall survive the Closing Date.
16.4 This Agreement, and all the covenants, terms and provisions
contained herein, shall be binding upon and inure to the benefit of the parties
hereto and to their respective successors and assigns.
16.5 Buyer agrees that Seller may assign this Agreement with respect to
any or all of the Property to an escrow agent, trustee, qualified intermediary
or similar party for the purpose of accomplishing a like-kind exchange within
the meaning of Section 1031 of the Internal Revenue Code, and further agrees to
reasonably cooperate with the Seller to allow Seller to accomplish such
like-kind exchange, provided that Buyer shall not be obligated to incur any
expenses or liability as a result thereof. Buyer may assign this Agreement as
provided in Section l.3 hereof.
16.6 TIME IS OF THE ESSENCE HEREOF.
16.7 Neither Seller nor Buyer have employed or engaged any broker or
agent in connection with this transaction or have incurred any other obligation,
contingent or otherwise, for a broker's or finder's fee with respect to the
matters provided for in this Agreement, except for CB ▇▇▇▇▇▇▇ ▇▇▇▇▇/Pittsburgh
and CB ▇▇▇▇▇▇▇ ▇▇▇▇▇/Kansas City (the "Brokers"). Upon consummation of the
purchase and sale of the Property at Closing, Seller shall pay in full a total
fee not to exceed One Hundred Thousand and NO/00 dollars ($100,000) which shall
be apportioned equally between the Brokers. Brokers shall certify as to the
aggregate amount of fees received from all parties. Seller and Buyer agree to
hold the other party harmless from and against any and all costs, expenses,
claims, losses or damages, including reasonable attorney's fees, resulting from
a violation of the representations, warranties and covenants set forth in this
Section. Seller and Buyer further agree to defend one another under the
agreement against all costs and claims for broker's commissions or finder's fees
made by any other person other than the brokers in connection with this
transaction. This agreement shall survive the Closing hereunder, or if the
Closing does not occur, the termination of this Agreement.
16.8 Neither party shall record this Agreement and breach of this
covenant shall, at the option of the non-breaching party, be treated as a
default hereunder.
16.9 This Agreement is and shall constitute a contract under and is to
be construed in accordance with the internal laws of the State of West Virginia.
16.10 This Agreement may not be changed or terminated orally.
16.11 The captions to sections hereof are not part of this Agreement and
shall not be deemed to affect the meaning or construction of any of its
provisions.
16.12 Unless otherwise specified, in computing any period of time
described herein, the day of the act or event after which the designated period
of time begins to run is not to be included and the last day of the period so
computed is to be included, unless such last day is a
17
Saturday, Sunday or legal holiday for national banks in the location where the
Property are located, in which event the period shall run until the end of the
next day which is neither a Saturday, Sunday, or legal holiday. The last day of
any period of time described herein shall be deemed to end at 6:00 p.m. Eastern
Standard Time.
16.13 The "Effective Date" for purposes of this Agreement shall be the
date that the last of the parties hereto executes this Agreement, as specified
below.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as a sealed instrument as of the day and year first above written.
SELLER:
ADA REALTY, LLC, a West Virginia
Limited Liability Company
By: /s/ ▇. ▇▇▇▇▇ Province
------------------------------------ ---------------------------------
Witness Its: Member
--------------------------------
Date:11/11 , 2003
BUYER:
GEN-NET LEASE INCOME TRUST, INC.,
A Michigan corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------ ---------------------------------
Witness Its: President/CEO
Date: November 7, 2003
19
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
(See attached description)
EXHIBIT B
ESCROW INSTRUCTIONS
1. Investment and Use of Funds. The Title Company shall invest the
deposit in government insured interest-bearing accounts satisfactory to Buyer
and Seller, shall not commingle the Deposit with any funds of the Title Company
or others, and shall promptly provide Buyer and Seller with confirmation of the
investments made. If the Closing under this Agreement occurs, the Title Company
shall deliver the Deposit to, or upon the instructions of, Buyer and Seller on
the Closing Date. Provided such supplemental escrow instructions are not in
conflict with this Agreement as it may be amended in writing from time to time,
Seller and Buyer agree to execute such supplemental escrow instructions as may
be appropriate to enable Title Company to comply with the terms of this
Agreement. For purposes of tax reporting, the Deposit shall be invested on
behalf of Buyer, with interest to be paid in accordance with Section 2 of this
Agreement. Seller and Buyer agree to execute and deliver to the Title Company
originally executed W-9 forms.
2. Termination. Upon a termination of this Agreement, either party to
this Agreement may give written notice to the Title Company and the other party
of such termination and the reason for such termination. Such notice shall
specify the Section or Sections of the Agreement giving rise to such right of
termination. The non-terminating party shall then have five (5) business days
after receipt of such notice in which to object in writing to the release of the
Deposit to the terminating party. If the non-terminating party provides such an
objection, then the Title Company shall retain the Deposit until it receives
written instructions executed by both Seller and Buyer as to the disposition and
disbursement of the Deposit, or until ordered by final court order, decree or
judgment, which is not subject to appeal, to deliver the Deposit to a particular
party, in which event the Deposit shall be delivered in accordance with such
notice, instruction, order, decree or judgment, or proceed in accordance with
Paragraph 3 below.
3. Interpleader. Except as specifically provided above, Seller and Buyer
mutually agree that in the event of any controversy regarding the Deposit,
unless mutual written instructions are received by the Title Company directing
the Deposit's disposition, the Title Company shall not take any action, but
instead shall await the disposition of any proceeding relating to the Deposit
or, at the Title Company's option, the Title Company may interplead all parties
and deposit the Deposit with a court of competent jurisdiction in which event
the Title Company may recover all of its court costs and reasonable attorneys'
fees. Seller or Buyer, whichever loses in any such interpleader action, shall be
solely obligated to pay such costs and fees of the Title Company, as well as the
reasonable attorneys' fees of the prevailing party in accordance with the other
provisions of this Agreement.
4. Liability of Title Company. The parties acknowledge that the Title
Company is acting solely as a stakeholder at their request and for their
convenience, that the Title Company shall not be deemed to be the agent of
either of the parties, and that the Title Company shall not be liable to either
of the parties for any action or omission on its part taken or made in good
faith, and not in disregard of this Agreement, but shall be liable for its
negligent acts. Seller and Buyer shall jointly and severally indemnify and hold
the Title Company harmless from and against all costs, claims and expenses,
including reasonable attorneys' fees, incurred in connection with the
performance of the Title Company's duties hereunder, except with respect to
actions or omissions taken or made by the Title Company in bad faith, in
disregard of this Agreement or involving negligence on the part of the Title
Company.
5. Escrow Fee. Except as expressly provided herein to the contrary, the
escrow fee, if any, charged by the Title Company for holding the Deposit or
conducting the Closing shall be shared equally by the Seller and Buyer.
The undersigned acknowledges receipt of $100,000.00 of the Deposit and a
copy of the Purchase and Sale Agreement between ADA REALTY, LLC as Seller and
Gen-Net Lease Income Trust, Inc. as Buyer and agrees to hold, account for and
deliver the Deposit in accordance with the terms of said Agreement and the
foregoing Escrow Instructions.
DATED: , 2003.
--------------
------------------------------------
Title Co.
By:
---------------------------------
------------------------------------
Typed or Printed Name and Title
B-2
SCHEDULE B
B-3
