Exhibit 10.10
AGREEMENT OF SALE AND PURCHASE
BANK OF AMERICA, N.A.
("Seller")
and
FIRST STATES GROUP, L.P.
("Purchaser")
DATED: FEBRUARY 14, 2003
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT ................................................ 1
1. DEFINED TERMS ........................................................ 1
2. SALE AND PURCHASE OF PROPERTIES ...................................... 6
3. PROPERTIES - REAL AND PERSONAL ASSETS ................................ 7
4. PURCHASE PRICE ....................................................... 8
5. RETAINED PREMISES LEASE .............................................. 8
6. SETTLEMENT; SETTLEMENT PROCEDURE ..................................... 9
7. TITLE ................................................................ 10
8. SERVICE AND MAINTENANCE CONTRACTS .................................... 12
9. DOCUMENTS TO BE DELIVERED BY SELLER AT SETTLEMENT .................... 13
10. DOCUMENTS TO BE DELIVERED BY PURCHASER AT SETTLEMENT ................. 15
11. POSSESSION; RELEASE SPACE ............................................ 15
12. ADJUSTMENTS .......................................................... 16
13. EXPENSES ............................................................. 17
14. DEFAULT .............................................................. 18
15. RISK OF LOSS ......................................................... 19
16. BROKERS .............................................................. 19
17. PROPERTIES "AS-IS." .................................................. 20
18. DISCLAIMER ........................................................... 20
19. DUE DILIGENCE PERIOD; PURCHASER'S ACCESS TO PROPERTIES ............... 22
20. NOTICES AND ASSESSMENTS; TAX APPEALS ................................. 26
21. NOTICES .............................................................. 26
22. NO SURVIVAL .......................................................... 27
23. FURTHER ASSURANCES ................................................... 27
24. ESTOPPEL CERTIFICATES; SNDA .......................................... 27
25. MISCELLANEOUS ........................................................ 27
26. PURCHASER'S REPRESENTATIONS .......................................... 29
27. SELLER'S REPRESENTATIONS ............................................. 29
28. INDEMNIFICATION ...................................................... 30
29. MARKETING ............................................................ 31
30. NO OFFER ............................................................. 31
31. NO LIABILITY ......................................................... 31
32. RADON NOTICE ......................................................... 31
-i-
AGREEMENT OF SALE AND PURCHASE
THIS AGREEMENT OF SALE AND PURCHASE ("Agreement"), made as of February
14, 2003, between BANK OF AMERICA, N.A., a national banking association, having
an address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ("Seller"), and FIRST STATES GROUP, L.P., a Delaware limited partnership,
having an address at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Purchaser").
Preliminary Statement
WHEREAS, Seller owns various Parcels, Buildings and Appurtenances more
particularly described on Exhibit A attached hereto (hereinafter collectively
referred to as the "Properties" and individually as a "Property");
WHEREAS, Purchaser is the operating partnership of American Financial
Realty Trust, a Maryland real estate investment trust; and
WHEREAS, Seller desires to sell the Properties to Purchaser and
Purchaser desires to purchase the Properties from Seller, all on the terms and
conditions hereinafter provided.
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), Seller and Purchaser, intending
to be legally bound hereby, agree as follows:
1. Defined Terms. The following terms shall have the meanings set
forth below when used in this Agreement:
(a) "Additional Properties" shall have the meaning given such
term in Section 2(b).
(b) "Agreement" shall have the meaning given such term in the
parties paragraph.
(c) "Approved Closing Costs" shall have the meaning given such
term in Section 13(b).
(d) "Appurtenances" shall have the meaning given such term in
Section 3(ii).
(e) "Assignment" shall have the meaning given such term in
Section 9(d).
(f) "ATM" shall have the meaning given such term in the last
paragraph of Section
(g) 3.
(h) "▇▇▇▇ of Sale" shall have the meaning given such term in Section
9(b).
(i) "BOMA Standard" shall have the meaning given such term in Section
19(f).
(j) "Buildings" shall have the meaning given such term in Section
3(iii).
(k) "CERCLA" shall have the meaning given such term in Section 18(b).
(l) "Deeds" shall have the meaning given such term in Section 9(a).
(m) "Due Diligence Indemnity" shall have the meaning given such term in
Section 19(e).
(n) "Due Diligence Inspections" shall have the meaning given such term
in Section 19(a).
(o) "Due Diligence Objection" shall have the meaning given such term in
Section 19(e).
(p) "Due Diligence Period" means the period that ends seventy-five (75)
days following the date on which Seller and Purchaser agree on and confirm in
writing the definitive form of the Retained Premises Lease.
(q) "Environmental Requirements" shall have the meaning given such term
in Section 18(b).
(r) "Escrow Agent" means Chicago Title Insurance Company, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
(s) "Escrow Closing Documents" shall have the meaning given such term
in Section 6(c).
2
(t) "Excluded Items" shall have the meaning given such term in the last
paragraph of Section 3.
(u) "Gap Notice" shall have the meaning given such term in Section
7(c).
(v) "Hazardous Materials" shall have the meaning given such term in
Section 18(b).
(w) "Initial Settlement Date" means May 30, 2003.
(x) "Initial Settlement Properties" shall have the meaning given such
term in Section 6(b).
(y) "Intangible Personal Property" shall have the meaning given such
term in Section 3(v).
(z) "Intangible Property Assignment" shall have the meaning given such
term in Section 9(c).
(aa) "Knowledge" shall mean, with respect to Seller, the actual
knowledge, after due investigation and inquiry, of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇.
(bb) "Lease Files" shall have the meaning given such term in Section
9(d).
(cc) "Leases" means those leases for tenants occupying space in the
Properties as set forth on the Rent Roll and including the Retained Premises
Lease for each Property.
(dd) "Measurement" shall have the meaning given such term in Section
19(f).
(ee) "Monetary Objection" shall have the meaning given such term in
Section 7(d).
(ff) "NBV" shall have the meaning given such term in Section 4.
(gg) "NBV Purchase Price" shall have the meaning given such term in
Section 4.
3
(hh) "Operating Expense" shall have the meaning given such term in
Section 19(g)(ii).
(ii) "Outside Settlement Date" means October 30, 2003.
(jj) "Parcels" shall have the meaning given such term in Section 3(i).
(kk) "Phase I Study" shall have the meaning given such term in Section
13(d).
(ll) "Phase II Study" shall have the meaning given such term in Section
13(d).
(mm) "Purchaser" shall have the meaning given to such term in the
parties paragraph.
(nn) "Purchase Price" shall have the meaning given such term in Section
4.
(oo) "Purchaser's Broker" shall have the meaning given such term in
Section 13(a)(i).
(pp) "Purchaser's Closing Costs" shall have the meaning given such term
in Section 13(a).
(qq) "Purchaser's Closing Documents" shall have the meaning given such
term in Section 10.
(rr) "RCRA" shall have the meaning given such term in Section 13(b).
(ss) "Release Space" shall have the meaning given such term in
Section11(b).
(tt) "Remediation Conditions' shall have the meaning given such term in
Section 13(d).
(uu) "Rent Roll" means the rent roll attached hereto as Exhibit L.
4
(vv) "Retained Premises" means the aggregate rentable square feet
located in each Property as set forth on Exhibit B, which shall be leased by
Seller from Purchaser for a term commencing on the Settlement Date for each
Property pursuant to the terms of the Retained Premises Lease. The Retained
Premises shall exclude the Released Space.
(ww) "Retained Premises Lease" shall have the meaning given such term
in Section 5.
(xx) "SEC" shall have the meaning given such term in Section 29(a).
(yy) "Seller" shall have the meaning given such term in the parties
paragraph.
(zz) "Seller's Broker" shall have the meaning given such term in
Section 13(b)(i).
(aaa) "Seller's Closing Documents" shall have the meaning given such
term in Section 9.
(bbb) "Seller's Documentation" shall have the meaning given such term
in Section 13(c).
(ccc) "Service Contracts" shall have the meaning given such term in
Section 8(a).
(ddd) "Settlement" shall have the meaning given such term in Section
6(a).
(eee) "Settlement Date" with respect to a Property shall mean the date
of Settlement for such Property.
(fff) "Settlement Designation Notice" shall have the meaning given such
term in Section 6(b).
(ggg) "SNDA" shall have the meaning given such term in Section 24(b).
(hhh) "Substitute Property" shall have the meaning given such term in
Section 2(b).
(iii) "Successor" shall have the meaning given such term in Section
7(a)(viii).
5
(jjj) "Tangible Personal Property" shall have the meaning given such
term in Section 3(iv).
(kkk) "Tenant Estoppel" shall have the meaning given such term in
Section 24(a).
(lll) "Tenant Pass-Throughs" shall have the meaning given such term in
Section 12(b).
(mmm) "Tenant Security Deposits" shall have the meaning given such term
in Section 12(a).
(nnn) "Termination Notice" shall have the meaning given such term in
Section 19(c).
(ooo) "Title Objection Notice" shall have the meaning given such term
in Section 7(c).
(ppp) "Uncured Objection" shall have the meaning given such term in
Section 7(d).
2. Sale and Purchase of Properties.
(a) On the terms and conditions hereinafter provided, Seller shall
convey to Purchaser, and Purchaser shall acquire from Seller, Seller's right,
title and interest in and to all of the Properties.
(b) During the Due Diligence Period, Seller may (i) substitute one or
more Properties with one or more real properties identified by Seller and
approved by Purchaser (individually, a "Substitute Property", and collectively,
the "Substitute Properties") in accordance with the provisions of this Section
2(b), (ii) remove one or more Properties covered by this Agreement, however,
Seller shall not, in the aggregate, remove Properties from this Agreement which
decrease the NBV Purchase Price by more than 20%, without Purchaser's prior
written consent, which consent may be withheld in Purchaser's sole discretion,
or (iii) add one or more properties to this Agreement ("Additional Properties").
If Seller elects to convey Substitute Properties or Additional Properties to
Purchaser, Seller shall deliver to Purchaser written notice containing the
information contained on Exhibit A regarding such Property, Seller's net book
value for each Property, and all other information required by this Agreement
("Substitute Property Information"). For Substitute Properties and Additional
Properties, Purchaser shall have ten (10) days to review the Substitute Property
Information and approve the Substitute Property or Additional Property, as
applicable. Purchaser shall disapprove of a Substitute Property or Additional
Property by delivering written notice to Seller prior to the expiration of the
10-day
6
period. If Purchaser fails to deliver written notice within the 10-day period,
Purchaser shall be deemed to have approved the Substitute Property or Additional
Property. The Due Diligence Period for the Substitute Properties and Additional
Properties shall begin one business day after the date Purchaser receives the
Substitute Property Information for each Substitute or Additional Property. For
each Substitute Property and Additional Property added to this Agreement, the
NBV Purchase Price shall be adjusted by subtracting from the NBV Purchase Price
the NBV of each Property removed by Seller, and adding to the NBV Purchase Price
the NBV of each Substitute Property and Additional Property. In addition, the
Average Rent Factor (as such term is defined in Exhibit C) shall be adjusted to
reflect any changes in Seller's initial Occupancy Percentage (as such term is
defined in Exhibit C) as a result of differences in the size of each Substitute
and Additional Property. For each Property removed or substituted pursuant to
this Section 2(b), Seller shall reimburse Purchaser for all out-of-pocket
expenses incurred by Purchaser in connection with the Due Diligence Inspections
for such Property removed or substituted from this Agreement, such expenses
shall be included as an Approved Closing Cost pursuant to Section 13(b) below.
3. Properties - Real and Personal Assets. The conveyance to Purchaser
by Seller of each Property shall include Seller's right, title and interest, if
any, in and to the following:
(i) except as set forth on Exhibit M attached hereto, all tracts, lots
or parcels of land identified on Exhibit A ("Parcels") regardless of whether
Seller allocates or provide a NBV for the Parcels; all parking lots, areas,
garages, parking decks or other facilities used in connection with the
Properties;
(ii) all rights, privileges and easements appurtenant to the Parcels,
including, without limitation, all of Seller's right, title and interest, if
any, in and to all minerals, oil, gas and other hydrocarbon substances,
development rights, land use entitlements, including without limitation building
permits, licenses, permits and certificates, utilities commitments, air rights,
water, water rights, sewerage allocations, riparian rights and water stock
relating to the Properties and any rights-of-way or other appurtenances used in
connection with the beneficial use and enjoyment of the Properties, and all of
Seller's right, title and interest in and to all roads, easements, rights of way
and alleys adjoining or servicing the Properties (collectively,
"Appurtenances");
(iii) all improvements and fixtures located on the Parcels or
Appurtenances, including, without limitation, the buildings and other
improvements ("Buildings") erected or existing thereon; all other improvements
integral to the use or operation of the Properties, regardless of whether such
improvements are located on the Properties; all apparatus, fixtures, equipment,
and appliances attached to or located on the Properties or used in connection
with the operations or occupancy of the Properties, such as heating and air
conditioning systems and facilities used to provide any utility, refrigeration,
ventilation, garbage disposal, recreation or other services on the Properties;
(iv) except as set forth on Exhibit N attached hereto and as set forth
below, all tangible personal property owned by Seller and located on and used in
connection with the Properties, including, without limitation, all building
plans; all common area furnishings and
7
equipment; all pylons, monuments and other signage; all maintenance tools,
vehicles and equipment; all cafeterias or commissaries, including, without
limitation, all fixtures, equipment and appliances used in connection therewith;
any gymnasiums, fitness or exercise centers, including, without limitation, all
equipment, fixtures and furnishings therein located; and, at all properties that
include retail banking facilities, all vaults, vault doors, drive-through
facilities and equipment, teller counters and equipment and under-counter steel
(collectively, "Tangible Personal Property");
(v) all intangible personal property now or hereafter owned by
Seller and used in the ownership, use or operation or development of the
Property or the Tangible Personal Property, including, without limitation, all
building licenses and permits to the extent transferable; all warranties and
guaranties to the extent transferable, together with all tenant leases,
agreements, records, substantive correspondence and other documents affecting in
any way a right to occupy any portion of the Properties and all guaranties
thereof and all amendments thereto (collectively, "Intangible Personal
Property").
Notwithstanding the foregoing, the conveyance to Purchaser by Seller of each
Property shall specifically exclude the following (collectively, "Excluded
Items"): (i) any Tangible Personal Property that is located in or used
exclusively in connection with the Retained Premises and (ii) all trade
fixtures, equipment, furniture, furnishings, supplies, records, documents, cash,
coin, and other items of moveable personal property relating to the operation of
Seller's business, including, without limitation, all safe deposit boxes (but
not the nests or frames thereof), safes, Seller identification signage,
automated teller machines ("ATM") connected to or located within the Buildings
or situated as freestanding structures on the Property and ATM equipment,
telecommunication equipment, security systems and equipment, satellite dishes
and antennas, computers, computer terminals and computer equipment, any office
equipment (whether leased or owned) located in the Buildings, framed artwork not
permanently affixed to the Property, and any personal property belonging to any
tenant occupying any portion of the Property. All of the Excluded Items are
hereby excluded from the Properties to be conveyed hereunder and shall remain
the property of Seller.
4. Purchase Price. The total purchase price ("Purchase Price") of the
Properties shall be the sum of (i) $710,801,910, representing the net book value
for each Property ("NBV") as set forth on Exhibit A attached hereto less any
depreciation taken by Seller from the date of such NBV on Exhibit A and February
28, 2003, as such NBV may be adjusted from time to time pursuant to Section 2(b)
(the "NBV Purchase Price") and (ii) the Approved Closing Costs. The Purchase
Price shall be allocated among each Property (including therein an additional
allocation between real and all Tangible and Intangible Personal Property) as
set forth on Exhibit A attached hereto.
5. Retained Premises Lease. Seller and Purchaser acknowledge that Seller
currently occupies space in certain of the Properties and following Settlement
will continue to occupy space in the Retained Premises pursuant to a lease
agreement the material terms and conditions of which are set forth on Exhibit C
(the "Retained Premises Lease"). The rent and other consideration to be paid by
Seller to Purchaser under the Retained Premises Lease for each of the Retained
Premises is
8
set forth on Exhibit B. Seller and Purchaser shall use their respective best
efforts to agree on and finalize the form of the Retained Premises Lease not
later than February 28, 2003. In the event that Seller and Purchaser fail or are
unable to agree on and finalize the form of the Retained Premises Lease by such
date, either party may terminate this Agreement by written notice to the other
party on or before March 3, 2003.
6. Settlement; Settlement Procedure.
(a) Settlement shall be the meeting at which Seller transfers
ownership of the Properties to Purchaser by deed and Purchaser pays the Purchase
Price (as adjusted in accordance with this Agreement) to Seller ("Settlement").
All Settlements shall occur at the office of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, Pennsylvania, or at such other place as Seller and
Purchaser may mutually agree.
(b) Fifteen days prior to the Initial Settlement Date, Seller and
Purchaser shall identify those Properties for which Purchaser has approved or
otherwise waived all Due Diligence Inspections (the "Initial Settlement
Properties"). The Initial Settlement Properties shall be identified in a written
notice executed by Purchaser and Seller ("Settlement Designation Notice"), which
notice shall include (i) the specific name or other identifying information of
each Initial Settlement Property, (ii) the NBV Purchase Price for each Initial
Settlement Property, and (iii) an allocation of the Approved Closing Costs in a
manner jointly acceptable to Purchaser and Seller. Settlement for the Initial
Settlement Properties shall occur on the Initial Settlement Date.
(c) If on the Initial Settlement Date, (i) one or more Properties has
uncured problems objected to by Purchaser and raised during the Due Diligence
Inspections, or (ii) the Due Diligence Period for a Substitute Property or
Additional Property has not expired or otherwise been waived by Purchaser (each,
a "Delayed Property"), then Seller and Purchaser shall deliver their respective
closing documents for each Delayed Property (except that Purchaser shall not
deliver the Purchase Price and Seller and Purchaser shall not calculate the
adjustments contemplated by Section 12 for any Delayed Property until the actual
Settlement Date for such Delayed Property) to Escrow Agent (the "Escrow Closing
Documents"), who shall hold the Escrow Closing Documents pursuant to joint
written instructions of Purchaser and Seller. On or before the 15th day of each
calendar month subsequent to the Initial Settlement Date, Purchaser and Seller
shall execute a Settlement Designation Notice for each Delayed Property in which
all Due Diligence Inspections have been accepted or otherwise waived by
Purchaser. Settlement for each Delayed Property identified on a Settlement
Designation Notice shall occur on the second to last business day of each
calendar month subsequent to the Initial Settlement Date, at which time
Purchaser shall pay the Purchase Price and Seller and Purchaser shall calculate
the adjustments contemplated by Section 12 for all Delayed Properties for each
Delayed Property identified in the applicable Settlement Designation Notice.
(d) Fifteen days before the Outside Settlement Date, Seller and
Purchaser shall execute a final Settlement Designation Notice. Any Delayed
Properties for which Settlement has not occurred by the Outside Settlement Date
and for which Seller fails to indemnify Purchaser in
9
accordance with Section 19 hereof shall be removed from this Agreement. On the
Outside Settlement Date, Purchaser and Seller shall reconcile all Properties for
which Settlement has occurred hereunder. Such reconciliation shall include,
without limitation, a true-up of escrows, post-closing deliverables (including
Estoppel Certificates), square footage measurements, Seller Occupancy
Percentages and any other open items or issues between Purchaser and Seller.
7. Title.
(a) As to each Property, on the Settlement Date, the title conveyed
shall be good, marketable, indefeasible and insurable by any reputable title
insurance company at regular rates, free and clear of all liens, judgments and
similar encumbrances, subject however to:
(i) the state of facts shown on an accurate survey of the
Property, other than a matter which would constitute an Objection that Purchaser
does not waive pursuant to Section 7(c) below;
(ii) zoning regulations, municipal building restrictions and
all other laws, ordinances, regulations and restrictions of any duly constituted
public authority enacted prior to the Settlement Date;
(iii) grants to governmental entities or to utility and/or power
companies, the right of the public in sidewalks and abutting public
rights-of-way, and easements given to the public for water course maintenance,
slope rights or sight rights, but only to the extent such rights do not impair
or restrict the use of the Property for the uses contemplated by Purchaser;
(iv) the lien of current taxes and assessments not due and
payable as of the Settlement Date;
(v) special taxes and assessments becoming a lien on or after
the Settlement Date;
(vi) if applicable, the Leases, and any other leases of the
Property entered into with Purchaser's consent pursuant to Section 8(b) below;
(vii) standard exceptions set forth in the form of title
insurance policy of the title insurance company selected by Purchaser; and
(viii) any other matter which would constitute an Objection that
Purchaser waives pursuant to Section 7(c) below, provided that with respect to
any Monetary Objection against Seller, same shall not constitute an Objection if
a title insurance company authorized to do
10
business in the state in which the affected Property is located agrees that it
will insure title free of such Monetary Objection to Purchaser, their successors
and assigns, including without limitation, future purchasers ("Successor"), or
with affirmative insurance against the enforcement of such Monetary Objection
against the affected Fee Property to Purchaser and any Successor, and such
removal or affirmative coverage does not require Purchaser or any Successor to
defend an action brought on any such judgment.
Notwithstanding anything to the contrary contained in this Section 7(a), in no
event shall the provisions of this Section 7(a) be interpreted or otherwise
construed as requiring Seller to warrant title to the Property except as set
forth in the Deeds delivered pursuant to Section 9(a) below.
(b) The term "Objection" shall mean any matter shown on the survey
obtained by Purchaser or any covenant, easement, restriction or other title
defect or encumbrance (including, without limitation, any lien or the lack of
direct access to a dedicated public road or street), other than the matters
referred to in Section 7(a) above, which renders title to the Property either
unmarketable or uninsurable at regular rates, reduces the value of the Property
or impairs or restricts the current use of the Property.
(c) As to each Property, Purchaser shall order, at Purchaser's
expense, a title commitment from a title insurance company authorized to do
business in the state in which such Property is located and, if so desired by
Purchaser, a survey at Purchaser's expense. Within ten (10) days of Purchaser's
receipt thereof but in no event later than the expiration of the Due Diligence
Period, Purchaser shall deliver to Seller a copy of the title commitment and, if
applicable, survey for such Property, along with written notice of any Objection
("Title Objection Notice") to Seller. Purchaser shall be deemed to have waived
any Objection existing on the last day of the Due Diligence Period and not
specified in the Title Objection Notice. Purchaser may, at or prior to
Settlement, notify Seller in writing (the "Gap Notice") of any objections to
title (x) raised by the Title Company between the expiration of the Due
Diligence Period and the Settlement Date and that have been recorded on the land
records after the expiration of the Due Diligence Period or (y) known to Seller
and not otherwise disclosed to the Title Company or Purchaser. If Purchaser
sends a Gap Notice to Seller, Purchaser and Seller shall have the same rights
and obligations with respect to such notice as apply to a Title Objection Notice
in accordance with the provisions of this Section 7(c).
(d) Seller shall have no obligation to bring any action or proceeding
or otherwise to incur any expense or liability (contingent or otherwise) to
remedy an Objection; provided, however, that if an Objection is a monetary lien,
judgment or encumbrance of an ascertainable amount (a "Monetary Objection"),
Seller shall be obligated at or prior to the Settlement Date, to cause such
Monetary Objection to be satisfied or to cause the title insurance company to
insure title free of such Monetary Objection or with affirmative insurance
against the enforcement of such Monetary Objection by delivery of an acceptable
indemnity. If Seller is unable to convey title to a Property in accordance with
this Agreement or does not elect to remedy an Objection (other than a Monetary
Objection), Purchaser may elect either (i) to accept such title as Seller is
able to convey at Settlement, without any reduction of the Purchase Price or any
credit or allowance on account
11
thereof or any other claim against Seller, or (ii) to terminate this Agreement
as to the Property encumbered or affected by the Objection. Such election shall
be made by Purchaser within ten (10) days after written notice from Seller to
Purchaser stating that Seller is unable to convey title in accordance with this
Agreement or does not elect to remedy an Objection (other than a Monetary
Objection) (an "Uncured Objection"), such notice of an Uncured Objection from
Seller to be given within ten (10) days after its receipt of the Title Objection
Notice, in which event this Agreement shall be null and void as to the Property
encumbered or affected by the Uncured Objection, and the parties shall have no
further liabilities or obligations hereunder, except as to those obligations
which expressly survive the termination of this Agreement.
(e) Although Seller is not obligated to do so, Seller shall have the
right to remedy any Objection with respect to a Property on written notice given
to Purchaser within ten (10) days after Seller's receipt of the Title Objection
Notice. For the purpose of remedying an Objection, Seller shall have the right
to one or more adjournments of the Settlement for an aggregate period not to
exceed the Outside Settlement Date. If Seller fails to remedy the Objection
prior to the adjourned Settlement, the provisions of Section 7(d) above shall be
applicable, and Seller shall be deemed to have elected not to remedy the
Objection.
(f) The sale includes whatever right, title and interest Seller has in
and to the equipment and fixtures presently on each Property which are
appurtenant to or used in the operation thereof (subject to the exclusions set
forth in Section 3 above). Seller makes no representations as to the quality,
kind or condition thereof, and Purchaser agrees to take the same "WHERE-IS" and
"AS-IS."
8. Service and Maintenance Contracts.
(a) On or before March 15, 2003, as to the Properties listed on
Exhibit A (and, as to any Substitute or Additional Properties, within thirty
(30) days following the date on which such new Properties are added to this
Agreement by Seller), Seller shall identify for Purchaser in writing any and all
maintenance, service and other contracts for the Properties that Seller desires
Purchaser to assume at Settlement (the "Service Contracts"). At Settlement for
each Property, Seller shall assign to Purchaser, and Purchaser shall assume, all
previously identified Service Contracts relating to such Property, but only if
the Service Contracts are validly assignable. Any Service Contracts that, by
their terms, are not validly assignable to Purchaser shall be retained by
Seller. Seller shall indemnify, defend and hold Purchaser harmless from and
against all claims for payment by such contractors for services with respect to
such Property rendered prior to the date of the Settlement for such Property.
Purchaser may terminate (and Seller shall, at no cost to Seller, assist
Purchaser in terminating) any Service Contracts that Purchaser desires to
terminate, but Purchaser shall be solely responsible for paying, and shall
indemnify Seller against, any and all fees and other costs associated with any
such Service Contract terminations. The foregoing provisions of this Section
8(a) shall survive the Settlement for such Property and delivery of the Deed or
Assignment, as applicable.
(b) Seller hereby agrees that from and after the date hereof, Seller
shall not enter
12
into any leases of or contracts for any Property, the term of which leases or
contracts extend beyond the Settlement for such property without Purchaser's
prior written consent, which consent for leases may be given or withheld in
Purchaser's sole discretion, but for contracts shall not be unreasonably
withheld. Purchaser shall object to any request for consent within five (5) days
of presentment by Seller or Purchaser shall be deemed to have consented to the
requested lease or contract (each an "Approved Lease"). Purchaser shall pay for
all tenant improvement, brokerage and other leasing costs in connection with any
Approved Leases to the extent such costs are not reflected in the calculation of
the NBV Purchase Price.
9. Documents to be Delivered by Seller at Settlement. At Settlement,
Seller shall deliver to Purchaser (collectively, "Seller's Closing Documents"):
(a) for each Property, the customary form of special or limited
warranty deed (such that Seller shall only warrant for claims arising by,
through or under Seller, but none others) for the state for which the Property
is located (collectively, the "Deeds") shall be duly executed by Seller, be in
form for recordation, contain the permitted exceptions listed on Exhibit O
attached hereto, and be accompanied by completed realty transfer tax forms (to
be provided by Purchaser's title insurance company);
(b) for each Property, a ▇▇▇▇ of sale in the form attached hereto as
Exhibit D ("▇▇▇▇ of Sale"), pursuant to which Seller shall sell and transfer the
personal property at each Property subject to this Agreement to Purchaser;
(c) for each Property, two counterpart originals of an assignment and
assumption of intangible property in the form attached hereto as Exhibit E
("Intangible Property Assignment"), pursuant to which Seller shall assign and
Purchaser shall assume Seller's interest in the Intangible Personal Property;
(d) for each Property, all originals of all Leases and tenant files in
Seller or Seller's agents possession (the "Lease Files") and two (2) counterpart
originals of an assignment and assumption of leases in the form attached hereto
as Exhibit F ("Assignment"), pursuant to which Seller shall assign and Purchaser
shall assume Seller's interest as lessor in the Leases; the Lease Files shall be
delivered to Purchaser at Settlement at Seller's offices in Charlotte, North
Carolina;
(e) for each Property, notices to tenants under the Leases of the
occurrence of the sale of the Property in the form attached hereto as Exhibit G
duly executed by or on behalf of Seller;
(f) at each Settlement, a closing statement (to be prepared by
Purchaser's title insurance company) showing the applicable Settlement
adjustments, duly executed by Seller;
(g) at each Settlement, a FIRPTA affidavit in the form attached hereto
as Exhibit H
13
and the customary form of mechanic's lien and possession affidavit, each duly
executed by Seller, together with such documents and other evidence as is
reasonably required by Purchaser's title insurance company to establish that
Seller is authorized to execute the closing documents. A California Form 590
shall also be provided for each Property located in California. A Georgia
Broker's Lien Affidavit shall be provided for each Property located in Georgia;
(h) at each Settlement, a Certificate of Seller in the form attached
hereto as Exhibit I, confirming the truth, accuracy and completeness of the
representations and warranties of Section 27 hereof with respect to Seller;
(i) at the initial Settlement, a certified copy of the Bylaws adopted
by the Board of Directors of Seller confirming the authority of certain officers
to execute documents and a certified statement of incumbency of the officer of
Seller executing the documents described in this Section 9;
(j) at each Settlement, originals, to the extent in Seller's
possession, of surveys, permits, licenses, leases, subleases, warranties and
guarantees covered by this Agreement;
(k) at the Initial Settlement, four (4) counterpart originals of the
Retained Premises Lease in the form provided in Section 5 above and, at each
Settlement after the Initial Settlement, four (4) counterpart originals of an
amendment thereto that adds the new Retained Premises to the Retained Premises
Lease;
(l) at the Initial Settlement, three (3) counterpart originals of the
SNDA and, at each Settlement after the Initial Settlement, three (3) counterpart
originals of an amendment thereto that adds the new Retained Premises to the
SNDA, all duly executed by Seller;
(m) at each Settlement, a rent roll dated as of the Settlement Date
and certified to Purchaser as true, accurate and correct to the best of Seller's
Knowledge;
(n) at each Settlement, Tenant Estoppels as required in Section 24
below; and
(n) at each Settlement, for the space vacated or otherwise not
occupied pursuant to the Retained Premises Lease by Seller in each Property: all
keys and locks, alarm codes, vault or safe combinations, and all written
warranties or guaranties transferred hereunder.
Purchaser may waive compliance on Seller's part under any of the foregoing items
only by an instrument in writing.
14
10. Documents to be Delivered by Purchaser at Settlement. At Settlement on
each Property, Purchaser shall deliver to Seller (collectively, "Purchaser's
Closing Documents"):
(a) for each Property the Purchase Price as described in Section 4, as
adjusted pursuant to Sections 12, 13 and 15, by wire transfer of immediately
available funds;
(b) for each Property, two (2) counterpart originals of the Intangible
Property Assignment described in Section 9(c) above duly executed by Purchaser;
(c) for each Property, two (2) counterpart originals of the Assignment
described in Section 9(d) above duly executed by Purchaser;
(d) at each Settlement, a closing statement (to be prepared by
Purchaser's title insurance company) showing the applicable Settlement
adjustments, duly executed by Purchaser;
(e) at each Settlement, a Certificate of Purchaser or Purchaser's
permitted assignee, in the form attached hereto as Exhibit J, confirming the
truth, accuracy and completeness of the representations and warranties of
Section 26 hereof with respect to Purchaser or such assignee, as applicable, and
duly executed by Purchaser or Purchaser's permitted assignee;
(f) at the Initial Settlement, four (4) counterpart originals of the
Retained Premises Lease in the form provided in Section 5 above and, at each
Settlement after the Initial Settlement, four (4) counterpart originals of an
amendment thereto that adds the new Retained Premises to the Retained Premises
Lease; and
(g) at the Initial Settlement, three (3) counterpart originals of the
SNDA and, at each Settlement after the Initial Settlement, three (3) counterpart
originals of an amendment thereto that adds the new Retained Premises to the
SNDA, all duly executed by Purchaser and Purchaser's lender.
Seller may waive compliance on Purchaser's part under any of the foregoing items
only by an instrument in writing.
11. Possession; Release Space.
(a) At Settlement on each Property, Seller shall give Purchaser
possession of the Property, in broom clean condition, free and clear of all
tenants except for the Leases (including the Retained Premises Lease) and such
other permitted leases pursuant to Section 8(b).
(b) The Retained Premises Lease shall grant Seller a period of twelve
months following the Settlement Date for each Property to vacate space in the
Property not covered by the Retained Premises Lease (the "Release Space").
During the initial six-month period following the Settlement Date for a
Property, Seller shall pay its proportionate share of Operating Expenses (as
such term is defined in Exhibit C) for the Release Space. During the seventh
through twelfth month following the Settlement Date for each Property, Seller
shall pay its proportionate share of Operating Expenses and Annual Basic Rent
(as such term is defined in Exhibit C) for such space.
15
Seller shall demise and return the Release Space to Purchaser in compliance with
the applicable provisions of the Retained Premises Lease. This Section 11(b)
shall survive the Outside Settlement Date or the earlier termination of this
Agreement.
12. Adjustments.
(a) At Settlement, Purchaser and Seller shall adjust for real estate
taxes and assessments on the Properties, municipal water and sewer charges,
fuel, utility charges, rent, and lease liabilities, such adjustments to be
calculated as of 11:59 PM on the day immediately preceding Settlement. In
addition, Seller shall (i) account to and turn over to Purchaser any and all
security deposits paid by existing tenants of the Properties ("Tenant Security
Deposits"), or (ii) provide Purchaser a credit against the Purchase Price in the
amount of the Tenant Security Deposits. Seller shall pay all service providers
under the service and maintenance contracts for the Properties for services
rendered up to the day prior to the Settlement. If the Settlement shall occur
before the tax rate or assessed valuation of a Property is fixed for the
then-current year, the apportionment of real estate taxes for the year of
Settlement shall be upon the basis of the most recent tax bills and the tax rate
for the most recent tax year applied to the latest assessed valuation. There
shall be no post-Settlement reconciliations or reprorations.
(b) All rents (including operating expense and real estate tax
contributions or reimbursements and similar charges (collectively, "Tenant
Pass-Throughs"), credits, security deposits and set-offs due or required to be
paid under or by reason of the Leases shall be adjusted by appropriate credit to
the Seller or Purchaser (as the case may be) on the Settlement Date. If, at the
Settlement Date, any tenant is in arrears in the payment of rents, Seller will
disclose the same to Purchaser in writing or on the Rent Roll and such amounts
shall not be adjusted on the Settlement Date. Prior to the Settlement Date,
Seller shall use Seller's current business practices to collect such arrearages.
If Purchaser shall collect any such arrearages within ninety (90) days after the
Settlement Date, then Purchaser shall turn over to Seller the arrearages so
collected, less the reasonable cost of collection thereof, if any; provided,
however, Seller may continue to seek to collect the arrearages by legal action
following the Settlement Date. All rents collected by Purchaser after the
Settlement Date (except for amounts specifically billed and paid as end of year
reconciliation payments for Tenant Pass-Throughs, which shall be separately
accounted for and allocated, pro rata, between Seller and Purchaser as their
interest may appear) shall be first applied to rents payable after the
Settlement Date and only the excess thereof shall be paid over to Seller on
account of the arrearages. To the extent that items to be apportioned hereunder
may be required to be paid directly by a tenant under its Lease, same shall not
be apportioned, provided, however, that such items shall have been paid by such
tenant currently through the month including the Settlement Date. The provisions
of this subparagraph (b) shall survive the Settlement and the delivery of the
Deeds and Assignments.
(c) Seller shall pay, at or prior to Settlement, all brokerage fees and
commissions for existing Leases entered into prior to the date hereof. If
Settlement takes place, all brokerage fees and commissions, if any, for
renewals, extensions and expansions of existing Leases exercised after the date
hereof, and for new Leases and modifications of existing Leases entered into
16
after the date hereof and approved by Purchaser as provided in Section 8(b)
above, shall be paid by Purchaser.
13. Expenses.
(a) At Settlement and if and only if the subject transaction closes,
Purchaser shall pay the following closing costs (collectively, "Purchaser's
Closing Costs"):
(i) Real estate brokerage commissions payable to Strategic
Alliance Realty, LLC ("Purchaser's Broker");
(ii) Phase I Environmental Study expenses for all Properties;
(iii) All transfer taxes and recording fees as required by
applicable law;
(iv) Survey expenses for all Properties;
(vi) All title insurance search fees and premiums, and all escrow
and closing charges of the settlement or closing agent;
(vii) Structural and physical inspection expenses for all
Properties;
(ix) All recording fees in connection with the conveyances of the
Properties;
(x) All out-of-pocket direct expenses incurred by Purchaser,
except for expenses incurred directly with any financing obtained by Purchaser;
(xi) All fees and costs paid in connection with the Bank of
America Corporate Real Estate Proposed Transaction - Consulting Proposal with J
& J Family Investments, LLC;
(xi) Miscellaneous expenses incurred by Purchaser and approved in
advance by Seller, including, without limitation, Seller's cost of Reimbursing
Purchaser for Purchaser's out-of-pocket expenses incurred in connection with
Purchaser's due diligence investigations of any Substitute Property as expressed
in Section 2(b).
Notwithstanding anything to the contrary contained in this Section 13(a) and
without inclusion in Purchaser's Closing Costs, Purchaser shall pay Purchaser's
legal fees and expenses, appraisal costs and all costs of Purchaser's financing,
if any.
(b) At Settlement and if and only if the subject transaction closes,
Purchaser, as a component of the Purchase Price, shall pay the actual,
out-of-pocket amounts paid or incurred by Seller for the following closing costs
(collectively, the "Approved Closing Costs"):
(i) Real estate brokerage commissions payable to ▇▇▇▇▇▇▇▇ ▇▇▇▇
Corporate Services, Inc. and ▇▇▇▇▇ Lang LaSalle (collectively, "Seller's
Broker");
17
(ii) All cost and expense of Measurement;
(iii) any recording fees for the satisfaction of any mortgages,
liens or judgments affecting any Property; and
(iv) Miscellaneous expenses incurred by Seller and approved in
advance by Purchaser.
Notwithstanding the provisions of this Section 13(b) and without contribution
from Purchaser, Seller shall pay (A) expenses and costs for any Phase II and
Phase III environmental studies, testing and remediation required in Section
19(b), and (B) Seller's legal fees and expenses.
(c) Purchaser shall have no obligation to provide a credit to Seller
for any costs associated with this transaction other than those specifically set
forth in Section 13(b)(i)-(iii) above. Purchaser shall have no obligation to
reimburse or otherwise pay Seller for the Approved Closing Costs incurred by
Seller or any third parties engaged by Seller in the event a Settlement does not
occur. Evidence of the actual amounts paid or to be paid by Purchaser for the
aforesaid items shall be provided by Seller to Purchaser at least five (5) days
before Settlement either in the form of paid receipts or invoices or by line
items to be disbursed at Settlement as shown on the Settlement Statement
together with detailed invoices supporting such unpaid items.
(d) During the initial term of the Retained Premises Lease, Seller
shall pay Annual Closing Cost Basic Rent (as such term is defined in Exhibit C)
equal to the sum of the Approved Closing Costs and one-half of the Purchaser's
Closing Costs multiplied by 8.73%. Seller's payment of the Annual Closing Cost
Basic Rent shall be paid in accordance with the applicable provisions of the
Retained Premises Lease. This Section 13(d) shall survive the expiration or
earlier termination of this Agreement.
14. Default.
(a) If Seller breaches this Agreement prior to or at Settlement, the
sole liability of Seller shall be and the sole remedy of Purchaser shall be
limited to either (i) payment to Purchaser, as liquidated damages, for each
Property for which Settlement has not occurred and for which Purchaser has
performed some or all of its investigations pursuant to Sections 7 and 19, the
sum equal to Purchaser's actual, reasonable out-of-pocket costs and expenses
incurred subsequent to the date of this Agreement for title, survey and other
due diligence reports and evaluations, whereupon Purchaser shall deliver to
Seller complete copies (with all appendices and exhibits) of all due diligence
reports, evaluations, investigations, surveys and title searches in Purchaser's
possession or control (without representation or warranty and with a disclaimer
of reliance), and this Agreement shall become null and void and the parties
shall have no further liabilities or obligations hereunder; or (ii) a suit by
Purchaser for specific performance only.
18
(b) If Purchaser breaches this Agreement prior to or at any Settlement,
Seller shall be entitled to terminate this Agreement in its entirety and to
receive as liquidated damages the sum of Seller's actual, out-of-pocket costs
and expenses incurred subsequent to the date of this Agreement (exclusive of
attorney's fees) for due diligence reports and evaluations, and this Agreement
shall become null and void and the parties shall have no further liabilities or
obligations hereunder. In addition, Purchaser shall deliver to Seller complete
copies (with all appendices and exhibits) of all due diligence reports,
evaluations, investigations, surveys and title searches in Purchaser's
possession or control (without representation or warranty and with a disclaimer
of reliance). The provisions of this subparagraph (b) shall survive the
expiration or earlier termination of this Agreement. The parties acknowledge
that the aforesaid liquidated damages are reasonable and do not constitute a
penalty and are being agreed upon due to the difficulty of calculating the
actual amount of damages that Seller might sustain in the event of a default by
Purchaser and termination of this Agreement.
(c) Notwithstanding anything to the contrary contained in Section
14(a), in the event Seller's breach is caused by or arises out of regulatory
issues, Seller shall have no liability whatsoever to Purchaser; this Agreement
shall become null and void in its entirety, and the parties shall have no
further liabilities or obligations hereunder, except for those obligations which
expressly survive the termination of this Agreement.
15. Risk of Loss. If a condemnation proceeding is instituted against a
Property or any portion thereof, or if a Property is substantially damaged by
fire or other casualty, prior to Settlement, Purchaser may terminate this
Agreement with respect to such Property upon ten (10) days written notice to
Seller, whereupon the parties shall have no further liabilities or obligations
hereunder, except for those obligations which expressly survive the termination
of this Agreement. If Purchaser does not so terminate this Agreement in the case
of condemnation or substantial damage by fire or other casualty, or if in the
case of fire or other casualty to a Property there is less than substantial
damage, then in each of such cases, this Agreement shall continue to be
effective as to all of the Properties, and Seller shall assign to Purchaser at
Settlement all of Seller's right to receive any award for such condemnation or
insurance proceeds as a result of such damage (as the case may be), together
with all of Seller's rights to litigate such claim and to negotiate a settlement
with the condemning authority or the insurance carrier; provided, however, to
the extent Seller self-insures (including a deductible or any under-insured
amount) against a casualty, then the Purchase Price for the affected Property
shall be adjusted to reflect a credit in favor of Purchaser for the amount of
such under-insured amount. For purposes of this Section 15, a Property shall be
deemed to have been "substantially damaged" if such damage occurs at a Property
that Seller is responsible to restore and such restoration either will require
more than one-hundred twenty (120) days to complete or will cost in excess of
twenty-five percent (25%) of the Purchase Price of such Property. Seller agrees
to maintain its current property insurance policies, if any, on the Properties
during the pendency of this Agreement.
16. Brokers. Each party represents and warrants to the other that it has
not dealt with any real estate broker, agent or finder in connection with this
Agreement, other than Seller's Broker and Purchaser's Broker. The parties agree
to indemnify and hold one another harmless based upon their actions and dealings
from any claims or causes of action concerning brokerage or
19
finder's fees or commissions. If any claim against Seller is asserted by any
person, firm or corporation claiming a commission and/or finder's fee with
respect to the transactions contemplated by this Agreement, and resulting from
any act, representation or promise of Purchaser, Purchaser shall indemnify,
defend and save harmless Seller from such claim resulting from any act,
representation or promise of Purchaser. If any claim against Purchaser is
asserted by any person, firm or corporation claiming a commission and/or a
finder's fee with respect to the transactions contemplated by this Agreement,
and resulting from any act, representation or promise of Seller, Seller shall
indemnify, defend and save harmless Purchaser from such claim resulting form any
act, representation or promise of Seller. The terms of this Section 16 shall
survive the Settlement on each Property and the delivery of the Deed or
Assignment, as applicable, and shall survive the expiration or earlier
termination of this Agreement.
17. Properties "AS-IS." Purchaser either (a) has heretofore inspected each
of the Properties, or caused an inspection thereof to be made on Purchaser's
behalf, or (b) will have done so prior to the end of the Due Diligence Period or
(c) will have waived its right to do so as hereinbelow set forth, so that, by
the end of the Due Diligence Period, Purchaser shall be (or shall have had the
opportunity to become) acquainted with the condition of the Properties and the
improvements located therein. Purchaser agrees to take the Properties "AS-IS,"
"WHERE-IS," and in their present condition, subject to reasonable use, wear and
tear, and (subject to Section 15 above) damage by fire and other casualties, and
(subject to Section 16 above) due to a taking by condemnation or eminent domain,
between the date hereof and the Settlement on each of the Properties. Until the
Settlement, Seller agrees to maintain each Property in its present condition,
reasonable wear and tear excepted. The provisions of this Section 17 shall
survive the Settlement and the delivery of the Deeds and Assignments.
18. Disclaimer.
(a) PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, DOES
NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES
(OTHER THAN THE WARRANTY OF TITLE AS SET OUT IN THE DEED), PROMISES, COVENANTS,
AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR
IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH
RESPECT TO (A) THE NATURE, QUALITY OR CONDITION OF ANY OF THE PROPERTIES,
INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY; (B) THE INCOME TO BE
DERIVED FROM ANY OF THE PROPERTIES; (C) THE SUITABILITY OF ANY OF THE PROPERTIES
FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER OR ANYONE ELSE MAY CONDUCT
THEREON; (D) THE COMPLIANCE OF OR BY ANY OF THE PROPERTIES OR THEIR OPERATION
WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY; (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY,
PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY OR THE PROPERTIES; (F)
THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED
INTO ANY OF THE PROPERTIES; (G) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF
REPAIR OF ANY OF THE PROPERTIES; OR (H) ANY OTHER MATTER WITH RESPECT TO ANY
20
OF THE PROPERTIES, AND SPECIFICALLY, THAT SELLER HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING COMPLIANCE WITH ANY
ENVIRONMENTAL PROTECTION, POLLUTION, ZONING OR LAND USE LAWS, RULES,
REGULATIONS, ORDERS OR REQUIREMENTS, INCLUDING THE EXISTENCE IN OR ON ANY OF THE
PROPERTIES OF HAZARDOUS MATERIALS. PURCHASER FURTHER ACKNOWLEDGES AND AGREES
THAT, HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT EACH PROPERTY, PURCHASER IS
RELYING SOLELY ON ITS OWN INVESTIGATION OF EACH PROPERTY AND NOT ON ANY
INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER. SELLER IS NOT LIABLE OR BOUND
IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR
INFORMATION PERTAINING TO ANY OF THE PROPERTIES, OR THE OPERATION THEREOF,
FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR OTHER PERSON. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF
PROPERTIES AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" CONDITION AND BASIS WITH
ALL FAULTS. ALL PROVISIONS OF THIS ARTICLE SHALL SURVIVE SETTLEMENT OR THE
EXPIRATION OR EARLIER TERMINATION OF THIS AGREEMENT WITHOUT SETTLEMENT, AS
APPLICABLE.
(b) "Hazardous Materials" shall mean any substance which is or contains
(i) any "hazardous substance" as now or hereafter defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. (S)9601 et. seq.) "CERCLA") or any regulations promulgated under or
pursuant to CERCLA; (ii) any "hazardous waste" as now or hereafter defined in
the Resource Conservation and Recovery Act, as amended (42 U.S.C. (S) 6901 et
seq.) ("RCRA") or regulations promulgated under or pursuant to RCRA; (iii) any
substance regulated by the Toxic Substances Control Act, as amended (15 U.S.C.
(S) 2601 et seq.); (iv) gasoline, diesel fuel, or other petroleum hydrocarbons;
(v) asbestos and asbestos containing materials, in any form, whether friable or
non-friable; (vi) polychlorinated biphenyls; (vii) radon gas; and (viii) any
additional substances or materials which are now or hereafter classified or
considered to be hazardous or toxic under Environmental Requirements or the
common law, or any other applicable laws relating to each Property. Hazardous
Materials shall include, without limitation, any substance, the presence of
which on each Property, (A) requires reporting, investigation or remediation
under Environmental Requirements; (B) causes or threatens to cause a nuisance on
the Property or adjacent property or poses or threatens to pose a hazard to the
health or safety of persons on the Property or adjacent property; or (C) which,
if it emanated or migrated from the Property, could constitute a trespass.
(c) "Environmental Requirements" shall mean all laws, ordinances,
statutes, codes, rules, regulations, agreements, judgments, orders, and decrees,
now or hereafter enacted, promulgated, or amended, of the United States, the
states, the counties, the cities, or any other political subdivisions in which
the Property is located, and any other political subdivision, agency or
instrumentality exercising jurisdiction over the owner of the Property, the
Property or the use of the Property, relating to pollution, the protection or
regulation of human health, natural resources, or the environment, or the
emission, discharge, release or threatened release of pollutants, contaminants,
21
chemicals, or industrial, toxic or hazardous substances or waste or Hazardous
Materials into the environment (including, without limitation, ambient air,
surface, water, ground water or soil).
(d) Purchaser acknowledges that, subject to the termination rights
set forth in Section 19(b), Purchaser shall accept all Properties (including all
improvements located thereon) at Settlement in their AS IS physical condition
WITH ALL FAULTS, including, without limitation, with the presence of Hazardous
Materials thereon or therein. Purchaser, on behalf of itself and its successors
and assigns, hereby waives, releases, acquits and forever discharges Seller its
current and former officers, directors, shareholders, employees, agents,
attorneys, representatives, and any other persons acting on behalf of Seller and
the successors and assigns of any of the preceding, of and from any and all
claims, actions, causes of action, demands, rights, damages, costs, expenses or
compensation whatsoever, direct and indirect, known or unknown, foreseen or
unforeseen, which Purchaser or its successors or assigns now has or which may
arise in the future on account of or in any way related to or in connection with
any past, present, or future physical characteristic or condition of each
Property or the improvements thereon, including, without limitation, any
Hazardous Materials in, at, on, under or related to the Property or the
improvements thereon or any violation or potential violation of any
Environmental Requirement applicable thereto and further including, without
limitation, any claim for contribution or indemnification arising under any
Environmental Requirements, common law or otherwise. Notwithstanding anything to
the contrary set forth herein, this release shall survive the Settlement and the
expiration or earlier termination of this Agreement.
This release includes claims of which Purchaser is presently unaware or
which Purchaser does not presently suspect to exist which, if known by
Purchaser, would materially affect Purchaser's release to Seller. Purchaser
specifically waives the provision of California Civil Code Section 1542, which
provides as follows:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected the settlement with the debtor."
(E) The provisions of this Section 18 shall survive the Settlement
and the delivery of the Deeds and Assignments.
19. Due Diligence Period; Purchaser's Access to Properties. The
obligations of Seller and Purchaser under this Agreement shall be subject to and
contingent upon timely satisfaction of the following conditions, which
conditions, if not satisfied or waived as hereinafter provided, shall entitle
Seller or Purchaser, as the case may be, to terminate this Agreement in
accordance with (and within the time periods set forth in) this Section 19:
(a) Access. During the Due Diligence Period, Purchaser shall be
granted access to each of the Properties in order to perform such due diligence
review and analysis of the Properties as Purchaser deems necessary including,
without limitation, to investigate, review, measure, survey and physically
inspect each Property, including, without limitation, the structural
22
and building elements of each Property, to obtain a title search and survey, to
conduct Phase I environmental studies and engineering studies of each Property
as described below, to review the Leases being assigned to Purchaser and other
documents requested by Purchaser in Section 19(g) below (collectively, the "Due
Diligence Inspections"). All Due Diligence Inspections of the Properties shall
be scheduled at times mutually convenient to Seller and Purchaser upon not less
than three (3) prior business days' notice to Seller, which notice shall
identify the nature of the investigation to be performed at each Property, when
Purchaser desires the investigations to occur and the person or entity engaged
by Purchaser to perform the investigation.
(b) Insurance and Indemnity. During the Due Diligence Period for each
Property, as same may be extended with respect to such Property pursuant to
Sections 19(d) hereof, Purchaser, its employees and agents, at Purchaser's sole
cost and expense, shall have the right to enter upon such Property to conduct
the Due Diligence Inspections. Purchaser shall give Seller at least 48 hours
prior written notice of its desire to enter upon the Property and shall
coordinate such entry and Due Diligence Inspections with Seller so that the
entry is at a mutually convenient time. Purchaser shall conduct the Due
Diligence Inspections in a manner which shall not interfere with Seller's
business operations on the Property and notwithstanding anything to the contrary
contained in this Agreement, Purchaser shall not be permitted entry into any
vaults, safes, or other areas of the Buildings containing confidential or secure
property of Seller. Prior to Purchaser's start of the Due Diligence Inspections,
Purchaser shall provide certificates of insurance to Seller evidencing liability
insurance in the minimum amount of $2,000,000.00 combined per occurrence limit
carried by Purchaser and/or Purchaser's agents in order to insure any loss
arising out of or in connection with entry upon the Property. The aforesaid
insurance shall be issued by an insurance company licensed in the state where
the Property is located and said insurance company shall be reasonably
acceptable to Seller. Upon completion of the Due Diligence Inspections,
Purchaser, shall restore the Property to the condition in which it existed prior
to the Due Diligence Inspections. Purchaser shall and hereby does indemnify,
defend, and save harmless Seller from and against any and all claims arising out
of the entry on and inspection of each and every Property by Purchaser and/or
Purchaser's employees and agents, including, without limitation, Seller's
reasonable attorneys' fees and costs. Notwithstanding anything contained in this
Agreement to the contrary, the terms of this subsection shall survive (i)
Settlement on such Property and the delivery of the Deed, and (ii) the
expiration or earlier termination of this Agreement.
(c) Physical Inspection/Diligence Review. During the Due Diligence
Period for each Property, Purchaser may, at its sole cost and expense, review
the documents requested in Section 19(g) ("Seller's Documentation") and the
physical and environmental condition of the Land and Improvements. Purchaser
shall have until the end of the Due Diligence Period to disapprove of the
Seller's Documentation and/or the physical and environmental condition of the
Properties and to terminate this Agreement by delivering a written notice (a
"Termination Notice") to Seller on or before the expiration of the Due Diligence
Period, with time being of the essence with respect to Purchaser's obligation to
deliver such notice. If for any reason whatsoever Purchaser determines, in its
sole discretion, that the Properties, the Seller's Documentation or any aspect
thereof is unsuitable for Purchaser's acquisition, Purchaser shall have the
right to terminate this Agreement by delivering said Termination Notice to
Seller prior to the expiration of the Due Diligence Period, and if Purchaser
gives such notice of termination within the Due Diligence Period, this Agreement
shall
23
terminate. If Seller does not receive a Termination Notice from Purchaser before
the end of the Due Diligence Period, with time being of the essence, Purchaser
shall be deemed to have approved of the Seller's Documentation and the physical
and environmental condition of the Properties and all other matters relating
thereto.
(d) Environmental Inspection. Prior to the expiration of the Due
Diligence Period, if Purchaser's environmental consultant, based on records and
other documentation obtained during its Phase I environmental investigation
("Phase I Study"), determines that a Phase II environmental study ("Phase II
Study") is necessary with respect to a Property, Purchaser shall give to Seller
written notice thereof, together with a complete copy of the Phase I Study and a
reasonably detailed explanation of the reasons therefor from Purchaser's
environmental consultant. Within ten days after receipt of such notice, Seller,
at its sole election, shall either (i) obtain the Phase II Study at Seller's
sole cost and expense, (ii) permit Purchaser to obtain a Phase II Study at
Seller's sole cost and expense, which shall be conducted by an environmental
consultant satisfactory to Seller in its reasonable judgment pursuant to a scope
of study satisfactory to Seller in its reasonable judgment; or (iii) withdraw
the Closed Property from this Agreement, and in the latter event, this Agreement
shall terminate and be null and void as to such withdrawn Property, but shall
continue in full force and effect as to the remaining Properties. Unless Seller
notifies Purchaser during such ten-day period of Seller's election to obtain (or
to permit Purchaser to obtain) a Phase II Study, Seller shall be deemed to have
elected to withdraw the Property from this Agreement as expressed in clause
(iii) above. If Seller or Purchaser obtains a Phase II Study for such Property,
as provided above, and if the Phase II Study identifies one or more
environmental conditions requiring remediation ("Remediation Conditions"), then,
within ten days after Seller delivers the Phase II Study to Purchaser, or
Purchaser delivers the Phase II Study to Seller, as applicable, Seller, at its
sole election, shall either (A) agree to remediate and ▇▇▇▇▇ the Remediation
Condition(s) at Seller's sole cost and expense in conformity with all applicable
Environmental Requirements or (B) withdraw the Property from this Agreement, and
in the latter event, this Agreement shall terminate and be null and void as to
such withdrawn Property, but shall continue in full force and effect as to the
remaining Properties. Unless Seller notifies Purchaser during such ten-day
period of Seller's election to remediate and ▇▇▇▇▇ the disclosed environmental
condition(s), Seller shall be deemed to have elected to withdraw the Property
from this Agreement as expressed in clause (B) above. Unless the Property is
withdrawn from this Agreement by Seller as aforesaid, the Due Diligence Period
and Settlement automatically shall be extended for such time as is necessary for
Seller or Purchaser, as applicable, to complete the environmental investigations
and remediations described above. In the event of a withdrawal of a Property
pursuant to this subparagraph or a termination of this Agreement as provided
herein as to such Property, Seller shall be solely responsible for all of
Purchaser's out-of-pocket due diligence and investigation costs and expenses,
which costs shall be included as an Approved Closing Cost.
(e) Due Diligence Indemnity. If Seller elects to remediate and ▇▇▇▇▇
the Remediation Conditions pursuant to clause (d)(i) above or Seller has been
unable to cure, remove or otherwise satisfy an Objection raised during
Purchaser's review of title and survey for each Property (collectively, a "Due
Diligence Objection") and such remediation, abatement, cure or satisfaction of
the Due Diligence Objection shall extend beyond the Outside Settlement Date,
Seller, at Seller's sole option, may indemnify, defend and protect Purchaser
against any claims, costs, judgments,
24
actions, liability, and expense, including without limitation reasonable
attorney's fees and costs arising from or in connection with the Seller's
actions to remediate, ▇▇▇▇▇, cure, remove, or satisfy the Due Diligence
Objection (the "Due Diligence Indemnity"). If Seller provides Purchaser with a
Due Diligence Indemnity for a Property, Seller shall be deemed to have satisfied
such uncured Due Diligence Objections and the Property or Properties shall be
ready for Settlement pursuant to Section 6 above.
(f) Measurement. Purchaser shall retain a consultant or firm reasonably
acceptable to Seller, which approval shall not be unreasonably conditioned or
delayed to measure the rentable square footage of each Building (the
"Measurement"). The Measurement shall be conducted in accordance with the Z65.1
Standard Method for Measuring Floor Area in Office Buildings promulgated and
issued by the Building Owners and Managers Association (the "BOMA Standard").
All cost and expense of the Measurement shall be paid by Purchaser as an
Approved Closing Cost pursuant to Section 13(b) above, provided that if
Settlement does not occur on a Property for which Measurement costs have been
incurred, such costs shall be paid by the party responsible for such Settlement
not to occur. The results of the Measurement shall be delivered to Purchaser and
Seller within ten (10) following completion thereof and, in any event,
Measurements for all Properties shall be completed no later than ten (10) days
before the Outside Settlement Date. The Measurement shall be binding on Seller
and Purchaser, unless prior to the Outside Settlement Date, either Seller or
Purchaser delivers written notice to the other party specifying deviations from
the BOMA Standard, in which event, the consultant shall be instructed to revise
the results of the Measurement to comply with the BOMA Standard and such
revision shall be binding on Seller and Purchaser.
(g) Seller's Document Deliveries. On or before February 28, 2003, as to
the Properties listed on Exhibit A (and, as to any Substitute or Additional
Properties, within ten (10) days following the date on which such new Properties
are added to this Agreement by Seller), Seller shall make available to Purchaser
at the location or locations where such documents are kept in the ordinary
course of Seller's business for inspection and copying at Purchaser's expense
all of the following documents:
(i) copies of (A) all existing and pending Leases, lease files and
tenant correspondence, (B) tenant financial statements, (C) a schedule of
outstanding leasing commission on a space by space basis, and (D) any bonds,
guaranties or letters of credit provided in lieu of a cash security deposit;
(ii) all income and expense statements, year-end financial monthly
operating statements and year to dated statements for the Properties
(collectively, the "Operating Expense") for the three (3) most recent calendar
years prior to Settlement and, to the extent available, the current year, all of
which shall be certified by Seller as true and correct to the best of Seller's
Knowledge;
25
(iii) to the extent available, a copy of the budget for each
Property for the current year;
(iv) a detailed summary of any litigation, investigation or
proceeding that is pending or threatened in writing against a Property, against
the Seller related to a Property or being prosecuted by Seller with respect to a
Property;
(v) copies of any and all existing and proposed easements,
covenants, restrictions, agreements or other documents which affect title to a
Property and which are not recorded or otherwise of record and in Seller's
possession; and
(vi) copies of all leasing and brokerage agreements pursuant to
which commissions remain owing or are anticipated to become owing after the
Settlement Date.
20. Notices and Assessments; Tax Appeals.
(a) Seller shall (i) comply with the requirements of any and all
notices relating to each Property which may be issued by municipal or other
public authorities prior to the Settlement Date and (ii) pay for all work and
improvements done or ordered to be done prior to the Settlement Date by any such
authority. If Settlement takes place as to such Property, all other requirements
and notices shall be complied with by Purchaser and all other work or
improvements done or ordered done shall be performed and paid for Purchaser.
(b) Seller agrees that from and after Seller's execution of this
Agreement that Seller will not file any real estate tax assessment appeal with
respect to any Property prior to Settlement on such Property without Purchaser's
prior written consent.
21. Notices. All notices hereunder shall be in writing and shall be deemed
to have been properly given if personally delivered, sent via facsimile or sent
by private overnight express carrier, such as Federal Express, next business day
delivery, charges prepaid, addressed to Seller at Bank of America, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇; with a copy to Bank of America,
N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇, Esquire, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇; addressed to Purchaser at ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
facsimile number (▇▇▇) ▇▇▇-▇▇▇▇; with a copy to ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire,
facsimile number (▇▇▇) ▇▇▇-▇▇▇▇; and addressed to Escrow Agent at Chicago Title
Insurance Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇. Notices by the parties may be given
on their behalf by their respective counsel. Notice shall be deemed to have been
given upon the date of delivery, if personally delivered, or sent via facsimile
or one business day after the date of deposit if sent by private overnight
express carrier, next business day delivery.
26
22. No Survival. Except as otherwise provided, none of the provisions of
this Agreement shall survive any Settlement and delivery of any of the Deeds or
Assignments, as applicable.
23. Further Assurances. From time to time and at the request of either
Seller or Purchaser (whether before, at or after the Settlement), the other
party shall execute, acknowledge and deliver such other and further documents as
the requesting party may reasonably request to effectuate the provisions of this
Agreement. The provisions of this Section 23 shall survive the expiration or
earlier termination of this Agreement.
24. Estoppel Certificates; SNDA.
(a) At Settlement, Seller shall, as tenant under the Retained Premises,
execute and deliver to Purchaser and Purchaser's lender, a tenant estoppel in
substantially the form attached as Exhibit K hereto ("Tenant Estoppel"). Within
ten (10) days of Purchaser's receipt of the Rent Roll, Seller shall deliver a
Tenant Estoppel to those tenant's listed on the Rent Roll. Seller shall use
commercially reasonable efforts to obtain and deliver to Purchaser and
Purchaser's lender during the Due Diligence Period, Tenant Estoppels executed by
at least fifty-one percent (51%) of the tenants under the Leases (excluding the
Retained Premises Lease), provided that (i) Seller shall obtain and deliver to
Purchaser and Purchaser's lender (or give a Seller estoppel on the Outside
Settlement Date in connection with) at least one Tenant Estoppel from a third
party tenant in each Property that contains third-party tenants, (ii) Seller
shall obtain and deliver to Purchaser and Purchaser's lender (or give a Seller
estoppel on the Outside Settlement Date in connection with) all third party
Leases covering 50,000 or more rentable square feet and (iii) the fifty-one
percent (51%) shall be calculated on the basis of number of Leases or rentable
square feet occupied at each Building that has third party Leases, whichever is
greater. Seller shall use commercially reasonable efforts after the Settlement
of each Property as a post-closing obligation to obtain the required number of
Tenant Estoppels for each Property. If by the Outside Settlement Date, Seller is
unable to deliver the requisite number of Tenant Estoppels to Purchaser and
Purchaser's lender, Seller shall deliver to Purchaser an estoppel certificate
dated as of the Outside Settlement Date certifying to the best of Seller's
knowledge after due inquiry and investigation the matters set forth in the
Tenant Estoppel. The phrase "commercially reasonable efforts" as used in this
Section does not require Seller to declare a default or terminate any of the
Leases or initiate any litigation to compel the delivery of a Tenant Estoppel.
(b) Seller, as tenant under the Retained Premises Lease, Purchaser, and
Purchaser's lender, shall execute and deliver to each other at each Settlement a
Subordination, Non-Disturbance and Attornment Agreement for the Retained
Premises Lease and any amendment thereto in the form reasonably agreed to by
Seller, Purchaser, and Purchaser's lender ("SNDA"). Purchaser shall obtain the
execution of each SNDA by Purchaser's lender and deliver the same to Seller at
Settlement.
25. Miscellaneous.
(a) This Agreement shall not be recorded in the office for the
recording of deeds or in any other office or place of public record. Prior to
Settlement, this Agreement shall not be
27
deemed or construed to give Purchaser any equitable ownership of, or title to,
any Property.
(b) This Agreement and the exhibits attached hereto contain the entire
agreement between Seller and Purchaser and there are no other terms,
obligations, covenants, representations, statements or conditions, oral or
otherwise, of any kind or nature whatsoever. This Agreement may be modified only
by an agreement in writing between the parties hereto.
(c) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, personal and legal
representatives, successors and permitted assigns; provided, however, that
Purchaser shall not assign or otherwise transfer this Agreement without the
prior written consent of Seller, which Seller may grant or deny in its sole
discretion. Notwithstanding anything to the contrary in the preceding sentence,
Purchaser, may, with Seller's prior written consent, not to be unreasonably
withheld, conditioned or delayed, assign this Agreement to one or more
partnerships, limited liability companies or corporations which are an
"Affiliate" of Purchaser. Purchaser's request for consent to the assignment to
an Affiliate must be delivered to Seller at least ten (10) days prior to the
Settlement Date and accompanied by evidence reasonably satisfactory to Seller of
the relationship among Purchaser and such Affiliate. For purposes hereof, the
term "Affiliate" shall mean a partnership, limited liability company, or
corporation that is owned by or is under common control and ownership with,
Purchaser. In no event shall any assignment of this Agreement relieve Purchaser
named herein from liability hereunder.
(d) This Agreement shall be governed and construed in accordance with
the laws of the State of North Carolina.
(e) Whenever in this Agreement a period of time is stated as a number
of days, it shall be construed to mean calendar days; provided, however, that
when any period of time so stated would end upon a Saturday, Sunday, or legal
holiday, such period shall be deemed to end upon the next day following which is
not a Saturday, Sunday or legal holiday.
(f) The date and time for the performance of all obligations hereunder
shall be deemed to be of the essence of this Agreement.
(g) If any term or provision of this Agreement shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement shall not be affected
and each such remaining provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
(h) This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same instrument. The date of this Agreement shall be the
date of Seller's execution hereof.
28
26. Purchaser's Representations. Purchaser (and, if applicable,
Purchaser's Affiliate) represents to Seller, which representations shall be
true, correct and complete as of each Settlement Date hereunder and which shall
survive each Settlement, as follows:
(a) Purchaser is, and at the Settlement shall be, a corporation (or
limited liability company, or limited partnership, as applicable) duly
organized, validly existing, and in good standing under the laws of the state of
formation, and as of each Settlement, with full power and authority to conduct
its business affairs each state where the Properties are located.
(b) The execution, delivery and performance of this Agreement, in
accordance with its terms, do not violate Purchaser's articles of incorporation,
by-laws, or any contract, agreement, commitment, order, judgment or decree to
which Purchaser is a party or by which it is bound.
(c) The execution and delivery of this Agreement and the performance
by Purchaser of its obligations hereunder have been duly authorized by all
required action of Purchaser and the officers of Purchaser in full compliance
with the provisions of Purchaser's articles of incorporation and by-laws. The
person executing this Agreement on behalf of Purchaser is duly authorized to do
so.
(d) Purchaser has the right, power and authority to make and perform
its obligations under this Agreement and this Agreement is a valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with its
terms.
27. Seller's Representations. Seller represents to Purchaser, which
representations shall be true, correct and complete as of the Settlement Date
hereunder and which shall survive the Settlement, as follows:
(a) Seller is, and at the Settlement shall be, a national banking
association, duly organized and validly existing, with full power and authority
to conduct its business affairs in each state where the Properties are located.
(b) The execution, delivery and performance of this Agreement by
Seller, in accordance with its terms, do not violate Seller's articles of
incorporation, by-laws, or any contract, agreement, commitment, order, judgment
or decree to which Seller is a party or by which it is bound.
(c) The execution and delivery of this Agreement and the performance
by Seller of its obligations hereunder have been duly authorized by all required
action of Seller and the officers of Seller in full compliance with the
provisions of Seller's articles of incorporation and by-laws. The person
executing this Agreement on behalf of Seller is duly authorized to do so.
29
(d) Seller has the right, power and authority to make and perform its
obligations under this Agreement and this Agreement is a valid and binding
obligation of Seller enforceable against Seller in accordance with its terms.
(e) To Seller's Knowledge, the NBV listed on Exhibit A for each
Property is true, accurate and correct as of the date such schedule was
prepared.
28. Indemnification. With respect to and following the Settlement on the
Properties:
(a) Purchaser shall indemnify and hold Seller harmless from and
against all claims, lawsuits, costs (including reasonable counsel fees), losses,
damages and liabilities that arise out of or relate to (i) the presence of any
Hazardous Materials in, on or at a Property (or any improvements) at the time of
Settlement, but only to the extent that the presence of such Hazardous Materials
were disclosed in a Phase I Study or Phase II Study obtained by Purchaser, (ii)
transactions or operations at a Property on and after the Settlement Date or
(iii) any breach by Purchaser of any representation, warranty or covenant of
Purchaser contained in this Agreement that survives the Settlement. If any claim
or lawsuit is made or commenced as to which Seller proposes to demand such
indemnification, it shall notify Purchaser with reasonable promptness; provided,
however, that any failure of Seller to notify Purchaser shall not relieve
Purchaser from its obligations hereunder, except to the extent Purchaser is
actually prejudiced by such failure to give notice. Purchaser shall have the
option of defending such claim or lawsuit with counsel of its own choosing at
its own cost and expense and such counsel shall, to the extent consistent with
its professional responsibilities, cooperate with Seller and any counsel
designated by Seller. Purchaser shall be liable for any settlement of any claim
or lawsuit against Seller made with Purchaser's written consent, which consent
shall not be unreasonably withheld.
(b) Seller shall indemnify and hold Purchaser harmless from and
against all claims, lawsuits, costs (including reasonable counsel fees), losses,
damages and liabilities that arise out of or relate to (i) transactions or
operations at a Property before the Settlement Date, but specifically excluding
any matter relating to the physical condition of a Property or the presence of
any Hazardous Materials in, on or at a Property (or any improvements) at the
time of Settlement, and (ii) any breach by Seller of any representation,
warranty or covenant of Seller contained in this Agreement that survives the
Settlement. If any claim or lawsuit is made or commenced as to which Purchaser
proposes to demand such indemnification, it shall notify Seller with reasonable
promptness; provided, however, that any failure of Purchaser to notify Seller
shall not relieve Seller from its obligations hereunder, except to the extent
that Seller is actually prejudiced by such failure to give notice. Seller shall
have the option of defending such claim or lawsuit with counsel of its own
choosing at its own cost and expense and such counsel shall, to the extent
consistent with its professional responsibilities, cooperate with Purchaser and
any counsel designated by Purchaser. Seller shall be liable for any settlement
of any claim or lawsuit against Purchaser made with Seller's written consent,
which consent shall not be unreasonably withheld.
(c) The provisions of this Section 28 shall survive the Settlement
and the delivery of the Deeds and Assignments.
30
29. Marketing.
(a) Seller acknowledges and agrees that the terms of this Agreement
shall be included in Purchaser's S-11 Filing with the Securities and Exchange
Commission ("SEC") and shall be available for review by the public, including
access through the SEC's ▇▇▇▇▇ internet search engine and document retrieval
system. In addition, in connection with Purchaser's planned initial public
offering of shares, Purchaser shall discuss and release the terms of this
Agreement with its shareholders, investors, potential investors, investment
bankers, investment advisors, money managers, and other interested or affected
parties. Seller authorizes Purchaser to release, distribute, and discuss the
terms and conditions of this Agreement as set forth in this Section 29(a)
without need for Seller's prior consent or approval.
(b) Notwithstanding anything to the contrary contained in Section
29(a) above, following expiration of the Due Diligence Period, Purchaser may
market space in the Properties not covered by the Retained Premises Lease or
otherwise occupied by Seller or any third-party tenant, to Purchaser's contacts
(including existing tenants occupying space in a Property and persons who
Purchaser believes may be interested in using such Property and persons,
including brokers, who may have contacts and relationships with such users), but
in doing so, shall not publicly market or advertise or promote in any manner the
availability of such Property for sale, lease or other disposition.
30. No Offer. This Agreement shall neither be deemed an offer to sell nor
shall it bind, obligate or be effective against Seller unless and until (a) the
Agreement has been approved in writing by Seller's appropriate management
authority and (b) this Agreement has been fully executed by Seller and Purchaser
and an executed copy is delivered to Seller.
31. No Liability. No individual officers, directors, shareholders, agents
or representatives of Seller or of Purchaser shall have any personal liability
under this Agreement, either for the observance or performance of such party's
rights, duties or obligations hereunder, or for the default of such party to
observe and perform its obligations hereunder, or under any document executed in
connection with the transactions contemplated hereby, or otherwise.
32. Radon Notice. RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS THAT,
WHEN IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT
HEALTH RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT
EXCEED FEDERAL AND STATE GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN FLORIDA.
ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY BE OBTAINED FROM
YOUR COUNTY PUBLIC HEALTH UNIT.
31
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement as of the date first written above.
SELLER
BANK OF AMERICA, N.A.
By: __________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Associate General Counsel
Date of Execution: February 14, 2003
PURCHASER
FIRST STATES GROUP, L.P.
A Delaware limited partnership
By: First States Group, LLC
Its general partner
By: _______________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Senior Vice-President
Date of Execution: February 14, 2003
32
LIST OF EXHIBITS
Exhibit A List of Properties
Exhibit B Retained Premises Allocation and Rent Schedule
Exhibit C Form of Retained Premises Lease
Exhibit D Form of ▇▇▇▇ of Sale
Exhibit E Form of Intangible Property Assignment
Exhibit F Form of Lease Assignment and Assumption Agreement
Exhibit G Form of Notice to Tenants
Exhibit H FIRPTA Affidavit
Exhibit I Seller's Certificate of Representations and Warranties
Exhibit J Purchaser's Certificate of Representations and Warranties
Exhibit K Form of Tenant Estoppel
Exhibit L Rent Roll
Exhibit M Property Exclusion List
Exhibit N Tangible Property Exclusion List
Exhibit O List of Permitted Exceptions for the Deeds