Exhibit 10.1
AGREEMENT OF SALE AND PURCHASE
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THIS AGREEMENT is made as of the 7th day of August, 1998 by and between
the persons and entities that are the signatories to this Agreement
(collectively, "Seller") and AMERICAN REAL ESTATE INVESTMENT, L.P., a Delaware
Limited Partnership ("Buyer").
W I T N E S S E T H :
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1. AGREEMENT TO SELL AND PURCHASE.
Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, subject to the terms and conditions of this Agreement, certain property
consisting of the following:
(a) REAL PROPERTY. All those certain tracts of land designated
on Schedule 1 hereto as the Whitehorse Road Industrial Park, Standing Springs
Industrial Park, Buncombe Road Industrial Park, Pelham Industrial Park, Piedmont
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ Weve Building and
Rocky Creek Business Park, which are more fully described by metes and bounds on
Exhibit A-1 to Exhibit A-8 hereto (herein collectively called the "Land");
together with all improvements on the Land, including, without limitation, the
33 buildings containing in the aggregate approximately 2,529,198 square feet of
enclosed floor area and each containing the number of square feet of enclosed
floor area which is designated on Schedule 1 hereto; together with all
appurtenances thereto (including, without limitation, all easements,
rights-of-way, water rights, mineral and timber rights, development rights,
privileges, licenses and other rights and benefits belonging to, running with
the owner of, or in any way relating to the Land); and together with all rights,
title and interest of Seller in and to all land lying in the bed of any street,
opened or proposed, abutting the Land and all right, title and interest of
Seller in and to any unpaid award for the taking by eminent domain of any part
of the Land or for damages to the Land by reason of a change of grade of any
street (all of the property, rights and privileges described in this Section
1(a) herein being collectively called the "Real Property"). Provided, the
condemnation award on ▇▇▇▇▇▇▇▇ ▇ - ▇▇▇▇▇▇▇▇ ▇▇▇▇ - of approximately Nine
Thousand Dollars ($9,000) shall remain the property of Seller.
(b) All fixtures, equipment and other personal property
attached or appurtenant to the Real Property; all furniture, supplies, and other
unattached items of personal property located in or on, or used in connection
with, the Real Property which are not owned by Tenants (as defined below); and
all intangible personal property used in the ownership, operation or maintenance
of the Real Property, which is not owned by the Tenants; including, without
limitation, the items set forth on Exhibit B hereto (all of the foregoing items
of property being herein collectively called "Personal Property").
(c) PROPERTY. The Real Property and the Personal Property are
sometimes collectively called the "Property"or the "Properties"; and the Real
Property and the Personal Property with respect to each individual property
listed on Schedule 1, hereto are sometimes individually called a "Property". No
Property may be deleted from this sale without mutual consent of the parties.
2. PURCHASE PRICE.
(a) The purchase price (the "Purchase Price") for the
Property, subject to adjustments and allocation as provided in this Agreement,
shall be Fifty Two Million Dollars ($52,000,000) and shall be paid as follows:
(i) One Hundred Thousand Dollars ($100,000)
(such sum, plus all interest which accrues thereon, being herein called "the
Deposit") shall be paid by Buyer to Commonwealth Land Title Insurance Company
("Title Company") on or prior to the third business day to occur after the date
on which the Inspection Period (as defined below) ends. The Deposit shall be
held by the Title Company in one or more federally-insured money market accounts
acceptable to both Seller and Buyer, or in short-term United States Government
obligations having a maturity date which is not later than the Closing Date (as
defined below).
(ii) The balance of the Purchase Price shall be paid
at Closing by wire transfer of immediately available funds to the account or
accounts designated by Seller.
(b) The Purchase Price shall be allocated among each
respective Property as set forth on Schedule 1 hereto (each of the allocated
amounts set forth on Schedule 1 being herein called an "Allocation Amount").
Provided, however, Seller retains the right to change allocations (in reasonable
amounts) by giving written notice of such change to Buyer at least ten (10) days
prior to the Closing Date.
(c) Seller shall have the option (the "UNIT OPTION"),
exercisable upon written notice to Buyer (the "UNIT NOTICE") at least 15 days
prior to the expiration of the Inspection Period, to elect to receive units of
limited partnership interest in Buyer (the "OP UNITS") at the Closing in lieu of
cash with respect to the Allocation Amount for the Whitehorse Road Industrial
Park Property ("Cash Amount") as follows:
(i) On the Closing Date, Seller and each person
receiving OP Units shall execute an OP Unit Recipient Agreement in form and
substance reasonably satisfactory to Buyer and consistent with previous OP
Unit Recipient Agreements executed by Buyer in connection with contribution
agreements.
(ii) At the Closing, Seller shall receive that
number of OP Units equal to the Cash Amount divided by the Average Price (as
defined below).
(iii) For the purposes of this Section 2(c),
the "Average Price" shall be equal to the arithmetic average of the "Closing
Price" (as defined below) on each of the
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Trading Days (as defined below) during the 10-day period preceding the Closing
Date. The term "Closing Price" shall mean, on any Trading Day, the closing price
of a share of common stock of American Real Estate Investment Corporation
("Company"), par value $0.001 per share, on the American Stock Exchange or, if
the shares are no longer listed on the American Stock Exchange, such other
exchange or quotation system upon which the shares are then listed or quoted,
or, if not listed or quoted, the Closing Price on a Trading Day shall be
determined by the Company acting in good faith on the basis of such quotations
and other information as it considers, in its reasonable judgment, appropriate.
The term "Trading Day" shall mean any day on which securities are traded on the
American Stock Exchange or such other national securities exchange or quotation
system upon which the shares are then trading or quoted.
3. DISPOSITION OF DEPOSIT; DEFAULTS.
(a) The Deposit shall be held in escrow and disbursed by the
Title Company in accordance with the terms of this Agreement. Seller and Buyer
each agrees, upon request, to execute the Title Company's form of escrow
agreement with respect to the Deposit.
(b) If Buyer, without the right to do so and in default of its
obligations under this Agreement fails to complete Closing, Seller shall have
the right to be paid the Deposit as liquidated damages and not as a penalty.
Buyer and Seller acknowledge that the damages which may be incurred by Seller in
the event of Buyer's default are difficult to quantify as of the date of this
Agreement; the Deposit represents the parties' reasonable estimate of Seller's
probable future damages in the event of Buyer's default; and that the Deposit
represents fair and reasonable compensation to Seller in the event of Buyer's
default. The right of Seller to be paid the Deposit shall be Seller's exclusive
and sole remedy, and Seller waives any right to recover the balance of the
Purchase Price, or any part thereof, and the right to pursue any other remedy
permitted by law or in equity against Buyer.
(c) If Seller, without the right to do so and in default of
its obligations under this Agreement fails to complete Closing or otherwise
defaults under or breaches this Agreement, Buyer shall have the right to be paid
the Deposit, which right shall be in addition to all other rights and remedies
of Buyer under this Agreement, at law or in equity, including without limitation
the right to specific performance and injunctive relief.
(d) If Closing is completed hereunder, the Title Company shall
pay the Deposit to Seller on account of the Purchase Price.
(e) Notwithstanding anything contained in this Section 3, if
either party terminates this Agreement as a result of the other's default or
pursuant to the exercise of any right of termination conferred by this
Agreement, the Title Company shall not disburse the Deposit until the earlier to
occur of: (i) receipt by the Title Company of written instructions from Seller
and Buyer or (ii) entry of a final adjudication determining which party is
entitled to receive the Deposit, as applicable, at which time the Deposit shall
be distributed in accordance with such written instructions or adjudication. In
the event of a dispute between the parties with respect to
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the Deposit, the Title Company may deposit the Deposit with a court of proper
jurisdiction and commence an interpleader action. Upon notifying Seller and
Buyer of the commencement of such action, the Title Company shall be released of
all liability with respect to the Deposit, except to the extent of accounting
for any monies previously delivered by the Title Company out of escrow. The
Title Company shall not be liable to either Seller or Buyer other than for the
performance of its duties under this Agreement, its gross negligence or
intentional wrongdoing.
4. CLOSING.
(a) The closing of this transaction ("Closing") shall take
place at the offices of Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇, Twelfth Floor
Packard Building, 15th and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Closing shall commence at 10:00 a.m. on the fifteen (15th) day after the date on
which Inspection Period ends or on such earlier date as Buyer shall designate by
at least five (5) days prior written notice to Seller (the "Closing Date").
(b) If Seller does not elect the Unit Option pursuant to
Section 2(c), above, Seller shall have the right, by written notice given to
Buyer at least 15 days prior to the expiration of the Inspection Period, to
defer the Closing Date with respect to the Whitehorse Road Industrial Park
Property only to January 4, 1999; and in such event Buyer shall pay to Seller
the Allocated Amount for the Whitehorse Road Industrial Park Property on the
deferred Closing Date.
5. CONDITION OF TITLE.
(a) (i) Title to the Properties shall be good and marketable
and free and clear of all liens, restrictions, easements, encumbrances, leases,
tenancies and other title objections, except for the Permitted Encumbrances (as
defined below), and shall be insurable as such and as provided in this Agreement
at ordinary rates by the Title Company pursuant to an ALTA Owner's Policy of
Title Insurance, Form B, amended October 17, 1970 and October 17, 1984 (the
"Owner's Policy of Title Insurance").
(ii) The Owner's Policy of Title Insurance shall also
contain endorsements insuring (A) that the covenants, conditions and
restrictions included in the Permitted Encumbrances have not been violated and
that a future violation thereof will not cause a forfeiture or reversion of
title; and (B) that each of the parcels constituting the Land has direct access
to a publicly dedicated road owned and maintained by the proper governmental
authority.
(iii) The premium (at ordinary rates) for the Owner's
Policy of Title Insurance and such endorsements will be paid by Buyer.
(b) If Seller is unable to convey title to any of the
Properties to Buyer at Closing in accordance with the requirements of this
Agreement, Buyer shall have the options: (i) of taking such title to the
defective Property or defective Properties as Seller is able to convey
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with abatement of the Purchase Price in the amount (fixed or ascertainable) of
any mortgages or other monetary liens on such defective Property or defective
Properties; or (ii) of terminating Buyer's obligations under this Agreement and
being repaid the Deposit. If Buyer does not terminate this Agreement pursuant to
this Section 5(b), upon payment to Buyer of the Deposit pursuant to clause (ii)
above, this Agreement shall be null and void and neither party shall have any
further obligations hereunder. If Buyer terminates this Agreement pursuant to
this Section 5(b), Seller and Buyer shall immediately deliver to the Title
Company written instructions to pay the Deposit to Buyer.
(c) Promptly after the execution of this Agreement, Buyer
shall order from the Title Company a Commitment for Title Insurance ("Title
Commitment") with respect to the Real Property. Buyer shall give to Seller
notice ("Exception Notice") of any exceptions to title set forth in the Title
Commitment which are not acceptable to Buyer ("Unacceptable Exceptions"). Seller
shall, within five (5) days from the date of Seller's receipt of the Exception
Notice, deliver to Buyer an endorsement to the Title Commitment issued by the
Title Company stating which, if any, of the Unacceptable Exceptions the Title
Company has or will commit to remove from the Title Commitment; and if the Title
Company has not issued an endorsement to the Title Commitment removing (or
committing to remove) all of the Unacceptable Exceptions from the Title
Commitment within five (5) days from the date of Seller's receipt of the
Exception Notice, Buyer shall have the right to terminate this Agreement. If
Buyer does not terminate this Agreement pursuant to the provisions of this
Section 5(c), then the exceptions remaining on Schedule B, Section 2 of the
Title Commitment which are not liens securing payment of monetary sums
("Monetary Liens") shall be the "Permitted Encumbrances". Seller agrees to pay
all Monetary Liens and cause all Monetary Liens to be released and satisfied of
record prior to the completion of Closing.
6. POSSESSION. Possession of the Property shall be given to Buyer at
Closing, subject only to the right of occupancy of the Tenants under the Tenant
Leases, by delivery of Seller's Warranty Deeds (the "Deeds") and Bills of Sale
(the "Bills of Sale"), duly executed and acknowledged by Seller and in proper
form for recording. If Buyer causes surveys to be made of the Real Property,
then at Buyer's option, the descriptions of the Real Property contained in the
Deeds shall be based upon the surveys.
7. APPORTIONMENTS; TRANSFER TAXES
(a) (i) Real estate taxes (on the basis of the actual fiscal
years for which such taxes are assessed) on the Real Property; personal property
taxes on the Personal Property; minimum water and sewer charges; minimum rent
and additional rent and other sums paid by the Tenants to the Seller prior to
Closing under the Tenant Leases; and payments due under the Service Agreements
(as defined below) which are to be assigned to Buyer, if any, shall be
apportioned pro rata between Seller and Buyer on a per diem basis as of the
Closing Date; provided, however, that there shall be no apportionment between
Buyer and Seller at Closing with respect to real estate taxes, utility charges
and other sums paid by the Tenants to the taxing authorities, utility companies
or other third parties pursuant to the Tenant Leases for a period or periods of
time from and after the Closing Date.
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(ii) If as of the Closing Date any of the Tenants has
not paid the monthly installment of minimum rent ("Delinquent Installment") due
under its Tenant Lease with respect to the month in which Closing occurs, then
at Closing Buyer shall receive a credit against the Purchase Price in an amount
equal to the portion of the Delinquent Installment applicable to the period of
time from and after the Closing Date and through the balance of the applicable
month; and upon Buyer's receipt of the Delinquent Installment from the Tenant,
Buyer shall pay the full amount thereof to Seller.
(iii) If, at Closing, the Property is affected by an
assessment which is payable in installments of which the first installment is
then a charge or lien, or has been paid, then all unpaid installments of such
assessments, including those which are to become due and payable after Closing,
shall be deemed to be due and payable and to be a lien upon the Property and
shall be paid and discharged by Seller at Closing. The term "assessment" as used
in this Section 7(a)(iii) shall not include real estate brokerage commissions.
(b) Each of Buyer and Seller shall, at Closing, pay one-half
(1/2) of all realty transfer taxes imposed upon the Deeds and/or the conveyance
of the Real Property from Seller to Buyer.
(c) The total sum of all Tenant security, utility, key and
other deposits, together with all interest earned thereon as of the Closing Date
which the Tenants are entitled to receive, shall be given to Buyer at Closing as
a credit against the Purchase Price.
(d) Seller shall obtain readings of the water, electric, gas
and other utility meters servicing the Real Property (other than meters which
exclusively measure utility consumption which is to be paid in full by any of
the Tenants under Tenant Leases) to a date no more than five (5) days prior to
the Closing Date. At or prior to Closing, Seller shall pay all charges based
upon such meter readings, adjusted to include a reasonable estimate of the
additional charges due for the period from the dates of the respective readings
until the Closing Date. If Seller is unable to obtain readings of any meters
prior to the Closing Date, Closing shall be completed without such readings and
upon the obtaining thereof, Seller shall pay the charges incurred prior to the
Closing Date as reasonably determined by Buyer based upon such readings, and at
Closing, Seller shall deposit with the Title Company an amount reasonably
estimated to represent the anticipated obligation of Seller under this sentence.
(e) Notwithstanding the assignment of the Tenant Leases by
Seller to Buyer at Closing, after Closing Seller shall continue to receive (and
Buyer shall remit to Seller upon collection) the remaining balance of the sum of
$350,000 payable in annual installments of $50,000 each from BMW pursuant to the
Lease Agreement between Seller and BMW for the Wunda Weve Property.
(f) The parties agree that any improvements on the Properties
or commissions on the Leases that come into effect or are accepted after July 8,
1998 shall be the responsibility of the Buyer (provided that Seller has given to
Buyer written notice of any such
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improvements or commissions that have come into effect or have been accepted
prior to the date of this Agreement). The Buyer shall assume at Closing any
obligation for real estate commissions due under any of the Tenant Leases to the
extent the obligations for the payment of such commissions are expressly set
forth in the face of the Tenant Leases or in a side letter disclosed to Buyer
during the Inspection Period; the obligations pursuant to this sentence being
limited to: the Lease with BMW (which requires a three percent (3%) commission
in full at the end of the expiration of the initial term of the Lease); the
Lease with R-Max (which requires the payment of a five percent (5%) monthly
commission); the Lease with Fastco Threaded Products (which requires the payment
of a three percent (3%) commission at the commencement of any extension term);
the Lease with Export Packaging (which requires the payment of a six percent
(6%) commission at the commencement of the one (1) year extension term); and the
Lease with Hitachi (which requires a commission payable monthly on 160,000
square foot building at six percent (6%)); the other commission obligations
which are listed on Schedule 5 hereto; and any other commission obligations
resulting from the execution by the Seller prior to Closing of new Tenant Leases
and the extension prior to Closing of existing Tenant Leases (provided that such
new Tenant Leases and such extensions have been approved in writing by Buyer).
8. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller, to induce Buyer to
enter into this Agreement and to complete Closing, makes the following
representations and warranties to Buyer, which representations and warranties
are true and correct as of the date of this Agreement, and shall be true and
correct at and as of the Closing Date in all respects as though such
representations and warranties were made both at and as of the date of this
Agreement, and at and as of the Closing Date. The representations and warranties
of Seller set forth in Sections 8(n) through 8(cc) below are made to the best of
the actual knowledge of Seller without further investigation or obligation to do
so.
(a) The only leases or other agreement with respect to rights
of use and occupancy of the Property in effect are the leases ("Tenant Leases")
listed on Schedule 2 hereto ("Rent Roll") with the tenants ("Tenants")
designated on Schedule 2 hereto.
(b) The Tenant Leases are valid and existing and in full force
and effect; the Tenants are in actual possession of the Property; and neither
the Tenants nor the Seller are in default of their respective obligations under
the Tenant Leases.
(c) The copies of the Tenant Leases previously delivered by
Seller to Buyer are true and complete copies of the Tenant Leases; the Tenant
Leases have not been amended, modified, or supplemented; and the Tenants do not
have any right to extend or renew the terms of the Tenant Leases except as
expressly set forth in the Tenant Leases.
(d) The Tenants have not asserted any claims which could
adversely affect the right of the landlord to collect rent from the Tenants; and
no notice of default or breach on the part of landlord under the Tenant Leases
has been received by Seller from the Tenants which have not been cured.
(e) All construction, painting, repairs, alterations,
improvements and other work required to be performed by the landlord under the
Tenant Leases, and all of the other
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obligations of the landlord required to be performed under the Tenant Leases as
of the Closing Date, have been fully performed and paid for in full by Seller.
(f) The rents and other payments set forth on the Rent Roll
and in the Tenant Leases are the actual rents, income and charges presently
being collected by Seller under the Tenant Leases; all minimum rent payable
under the Tenant Leases is payable monthly in advance and there are no
restrictions upon the amount of rent which may be charged or collected under the
Tenant Leases nor upon tenants to whom space can be leased in the Property by
virtue of rent control laws, ordinances, or regulations, or by virtue of
existing agreements or regulations.
(g) Except as set forth in the Tenant Leases, the Tenants are
not entitled to any concession, allowance, rebate or refund.
(h) The Tenants have not prepaid any rent or other charges for
more than the current month under the Tenant Leases.
(i) Neither the Tenant Leases nor the rent or other amounts
payable under the Tenant Leases have been assigned, pledged or encumbered other
than to the holder of any existing mortgage as collateral security, which
assignment shall be terminated at Closing; and the Tenant Leases may be assigned
by Seller to Buyer at Closing.
(j) No security deposits have been paid by the Tenants under
the Tenant Leases, except as set forth on the Rent Roll.
(k) No brokerage or leasing commissions or other compensation
is or will be due or payable to any party with respect to or on account of the
Tenant Leases or any extensions or renewals thereof or any other actions by
Tenants thereunder; provided, however, that Seller has disclosed to Buyer, and
Buyer agrees to assume, the obligations to pay leasing commissions for the
Tenant Leases designated on Schedule 3 hereto, expressly limited to the Tenant
Leases designated on Schedule 3 hereto and limited to the monthly installments
of minimum rent payable after Closing as designated on Schedule 3 and the
exercise of renewal options as designated on Schedule 3 (herein called "Assumed
Commission Obligations").
(l) The Tenants do not have any options to purchase, right of
first refusal, right of first offer, or other similar or dissimilar right or
option to purchase or otherwise acquire all or any portion of the Property, or
any interest therein; and there are no outstanding agreements with any other
party granting any right or creating any obligation to acquire the Property or
any portion thereof or any interest therein.
(m) The Tenants do not have the right to remove from the
Property any of the currently attached heating, ventilating, air conditioning,
mechanical, electrical and other systems located within the buildings on the
Real Property.
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(n) All of the books, records, information, data and other
items supplied by Seller to Buyer are true, complete and correct in all material
respects, and fairly and accurately presented the results of operations of the
Property.
(o) Seller has not received any notice ("Defect Notice") from
any insurance company which has issued a policy with respect to the Property or
from any board of fire underwriters (or other body exercising similar functions)
claiming any defects or deficiencies in the Property or suggesting or requesting
the performance of any repairs, alterations or other work to the Property.
(p) There are no management, service, equipment, supply,
security, maintenance, construction, concession or other agreements with respect
to or affecting the Property, except for any agreements under which only the
Tenants are bound and except for the agreements listed on Exhibit D to this
Agreement (collectively, the "Service Agreements"); Seller is not in default
under the Service Agreements; each of the Service Agreements designated on
Exhibit D to be assigned to Buyer at Closing is assignable by Seller and will
not be invalidated, violated or otherwise adversely affected by the assignment
thereof or by the transfer of the Property to Buyer; the copies of the Service
Agreements previously delivered by Seller to Buyer are true and complete copies
of such Service Agreements and the same have not been amended, modified or
supplemented; and each of the Service Agreements designated on Exhibit D to be
terminated shall be terminated by Seller at or prior to Closing and all sums due
thereunder paid in full by Seller.
(q) No employee of Seller who performs services at or in
connection with the Property is covered by an employment agreement or union
contract; no demand has been made upon Seller for recognition of a union or
collective bargaining agent for the employees of Seller at the Property; and
none of the employment arrangements with respect to Seller's employees will be
binding upon Buyer or any subsequent owner of the Property after Closing.
(r) All buildings and improvements (including all roads,
parking areas, curbs, sidewalks, sewers and other utilities) included within the
Property have been completed and installed in accordance with the plans and
specifications therefor approved by the governmental authorities having
jurisdiction; no municipal or other governmental improvements affecting the
Property are in the course of construction or installation, and no such
improvement has been ordered to be made; all street paving, curbing, sanitary
sewers, storm sewers and other municipal or other governmental improvements
which have been constructed or installed have been paid for and will not
hereafter be assessed, and all assessments heretofore made have been paid in
full; and there are no private contractual obligations relating to the
installation of or connection to any sanitary sewers or storm sewers.
(s) All permanent certificates of occupancy and all other
licenses, permits, authorizations, consents, certificates and approvals required
by all governmental authorities having jurisdiction and the requisite
certificates of the local board of fire underwriters (or other body exercising
similar functions) have been issued for the Property, have been paid
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for, are in full force and effect, are assignable by Seller, and will not be
invalidated, violated or otherwise adversely affected by the assignment thereof
or by the transfer of the Property to Buyer.
(t) The construction, operation and use of the buildings and
other improvements constituting the Real Property do not violate any zoning,
subdivision, building or similar law, ordinance, order, regulation or recorded
plat or any certificate of occupancy issued for the Property; no zoning
variances, special exceptions or zoning board of adjustment certificates were
issued for the construction of the Property or for its present use; and the
buildings and improvements on the Real Property are not non-conforming uses or
structures.
(u) No portion of the Property and no method of operation of
the Property is in violation ("Violation") of any applicable law, ordinance,
code, rule, order, regulation or requirement of any governmental authority, the
requirements of any local board of fire underwriters (or other body exercising
similar functions), and there are no presently outstanding and uncured notices
of Violations.
(v) There exists no defective condition, structural or
otherwise, with respect to the Property; and the heating, ventilating and air
conditioning, plumbing, sprinkler, electrical and drainage systems, roofs, and
all other fixtures, equipment and systems at or serving the Property are in good
condition, repair and working order.
(w) Exhibit E to this Agreement sets forth the only fire and
extended coverage insurance policies ("Policies") maintained by Seller or by the
Tenants with respect to the Property; the Policies are in full force and effect
and all premiums due thereunder have been paid; and neither Seller nor any of
the Tenants has received any notice from the insurance companies which issued
the Policies, indicating that the Policies will not be renewed or will be
renewed at a higher premium than is presently payable therefor.
(x) There is no action, suit or proceeding pending or
threatened against or affecting Seller or the Property or any portion thereof or
any of the Tenant Leases or relating to or arising out of the ownership,
management or operation of the Property, in any court or before or by any
federal, state, county or municipal department, commission, board, bureau or
agency or other governmental instrumentality.
(y) All real estate taxes currently due and payable with
respect to the Property have been paid; each Property constitutes a separate tax
parcel and is separately assessed for real estate tax purposes; there is no
proceeding pending for the adjustment of the assessed valuation of all or any
portion of the Property; the Property has been assessed and real estate taxes
have been paid on the basis of the value of all improvements as completed; and
there is no abatement, reduction or deferral in effect with respect to all or
any portion of the real estate taxes or assessments applicable to the Property.
(z) No portion of the Property is located within an area
designated as a flood hazard area or an area which will require the purchase of
flood insurance for the obtaining
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of any federally insured or federally related loan; and no portion of the Real
Property is located in any area constituting a "wetland".
(aa) Water, sanitary sewer, storm sewer, drainage, electric,
telephone, gas, and other public utility systems and lines serve the Property
with capacity and in a manner adequate for the present use of the Property and
are directly connected to the lines and/or other facilities of the respective
public authorities or utility companies providing such services or accepting
such discharge, either adjacent to the Real Property or through easements or
rights of way appurtenant to and forming a part of the Real Property; such
easements or rights-of-way have been fully granted, and all charges therefore
have been fully paid by Seller and all charges for the aforesaid utility systems
and the connection of the Real Property to such systems, including without
limitation connection fees, "tie-in" charges and other charges now or hereafter
to become due and payable, have been fully paid by Seller; and the water and
sanitary sewer service described above is supplied by public authority.
(bb) Seller has not received any notice of any condemnation
proceeding or other proceedings in the nature of eminent domain ("Taking") in
connection with the Property, and to Seller's knowledge no Taking has been
threatened.
(cc) Each Property has direct access to a public road owned
and maintained by the applicable municipal authority.
Seller shall provide to Buyer, at least fifteen (15) days prior to the
Closing Date, a statement in writing ("Update Statement") containing a
certification by Seller of any exceptions to the representations and warranties
of Seller set forth in Subparagraphs (a) to (o) of this Section 8; and if Buyer
completes Closing, Buyer shall be deemed to have accepted the exceptions to the
representations and warranties set forth in the Update Statement.
9. OPERATIONS PRIOR TO CLOSING. Between the date of this Agreement and
Closing:
(a) Seller shall, at its expense: make all repairs and
replacements, structural and non-structural, which are required with respect to
any portion of the Property to maintain it in its present condition, except only
damage by Casualty (which term is defined in, and shall be governed by, the
provisions of Section 11 below); perform all of its obligations under the Tenant
Leases and cause the Tenants to perform all of their obligations under the
Tenant Leases; and cure (or cause the Tenants to cure) all notices of any
Violations and/or Defect Notices issued prior to Closing.
(b) Seller shall not enter into any agreement to modify, amend
or otherwise alter any of the terms or provisions of the Tenant Leases or any of
the Service Agreements; and Seller shall not enter into an new lease or other
agreement with respect to the use or occupancy of the Property and/or the
maintenance or operation thereof, without the prior written consent of Buyer.
11
(c) Seller shall perform all acts, and shall make all
payments, necessary to cause the representations and warranties of Seller in
this Agreement to be true and correct.
(d) (i) Buyer, its attorneys, accountants, architects,
engineers and other representatives shall be afforded access to the Property
and to all books, records and files relating thereto from time to time prior to
Closing for the purposes of inspections, preparation of plans, taking of
measurements, making of surveys, making of appraisals, and generally for the
ascertainment of the condition of the Property, including but not limited to the
physical and financial condition of the Property; and there shall be furnished
to Buyer all plans and specifications, engineering reports, feasibility studies,
operating statements, governmental permits and approvals, contracts, leases,
surveys, title information and other documentation concerning the Property in
the possession of Seller and/or Seller's management agent for the Property.
(ii) Buyer, its attorneys, accountants and other
representatives, shall be permitted to make and are authorized to make any
searches of governmental records as they deem necessary with respect to the
Property; and Seller agrees fully to cooperate with Buyer and its attorneys and
other representatives in this regard and to issue any consents or authorizations
required therefor.
(iii) Buyer agrees to indemnify, defend and
reimburse Seller for all costs, expenses (including, without limitation,
attorney's fees, consultant and expert fees and court costs) loss and
liabilities suffered or incurred by Seller as the result of any injuries to
persons or properties caused by Buyer's entry upon the Property prior to Closing
pursuant to the provisions of this Section 9(d). The obligations of Buyer
pursuant to this Section 9(d)(iii) shall survive Closing and/or any termination
of this Agreement.
(e) Promptly after receipt thereof by Seller, Seller shall
deliver to Buyer the following:
(i) a copy of any notice of default given or received
under any of the Tenant Leases or the Service Agreements;
(ii) a copy of any tax ▇▇▇▇, notice or statement of
value, or notice of change in a tax rate affecting or relating to the Property;
(iii) a copy of any notice of an actual or alleged
Violation; and
(iv) a copy of any notice of Taking.
(f) Seller shall complete and deliver for execution by each of
the Tenants a written certification in the form of Exhibit F-1 to this
Agreement, but modified and supplemented by Buyer's counsel to reflect the terms
and provisions of each of the respective Tenant Leases (each, "Tenant Estoppel
Certificate"); and shall use its best efforts to obtain an executed Tenant
Estoppel Certificate (dated no more than thirty (30) days prior to the Closing
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Date) from each of the Tenants. Seller shall deliver to Buyer a copy of each of
the executed Tenant Estoppel Certificates delivered to Seller promptly after
receiving each such certificate. If, notwithstanding the use of its best
efforts, Seller has been unable to obtain Tenant Estoppel Certificates from all
Tenants under the Tenant Leases, then, in lieu of each Tenant Estoppel
Certificate which Seller has not obtained from a Tenant, Seller, shall, instead,
execute and deliver to Buyer a Tenant Estoppel Certificate executed by Seller;
provided, however, that if Buyer does not choose to accept any of the Seller's
executed Tenant Estoppel Certificates, Buyer shall have the right, at Buyer's
sole option to terminate this Agreement by giving written notice of termination
to Seller on or prior to the scheduled Closing Date, in which event the Deposit
shall be returned to Buyer.
(g) Seller shall complete and deliver for execution by each of
the Tenants a Subordination, Non-Disturbance and Attornment agreement in the
form of Exhibit F-2 to this Agreement, but modified and supplemented by Buyer's
counsel to reflect the terms and provisions of each of the respective Tenant
Leases (each, "SNDA"); and Seller shall use its best efforts to obtain an
executed SNDA from each of the Tenants. Seller shall deliver to Buyer a copy of
each of the executed SNDAs delivered to Seller promptly after receiving each
such SNDA. If, notwithstanding the use of its best efforts, Seller has been
unable to obtain SNDAs from all Tenants under the Tenant Leases, then, Buyer
shall have the right, at Buyer's sole option to terminate this Agreement by
giving written notice of termination to Seller on or prior to the scheduled
Closing Date, in which event the Deposit shall be returned to Buyer.
(h) With respect to each of the Tenant Leases, if any, which
grants to the Tenant a right or option to purchase all or any portion of the
Property ("Purchase Option Rights"), Seller shall prepare and deliver for
execution by each of such Tenants a written release and termination of such
right or option in form acceptable to Buyer and to the Title Company (to induce
the Title Company to remove such option to purchase as an exception to title)
("Tenant Option Waiver").
(i) With respect to each of the Tenant Leases, if any, which
grants to the Tenant a right of first offer, right of first refusal, or similar
right to purchase all or any portion of the Property ("Right of First Refusal
Rights"), Seller shall complete and deliver for execution by each of such
Tenants, in form acceptable to Buyer and to the Title Company, a waiver and
release of such right or option with respect to the conveyance of the Property
by Seller pursuant to this Agreement (to induce the Title Company affirmatively
to insure Buyer that such Tenants' rights of first offer, rights of first
refusal or similar rights are not applicable to the conveyance of the Property
by Seller pursuant to this Agreement) and that such rights of first offer,
rights of first refusal or similar rights shall not be applicable to (and shall
not be activated by) any foreclosure of any Mortgage lien on the Property or any
Deed granted by the Mortgagor to the holder of any Mortgage in lieu of
foreclosure of such Mortgage; and that any such foreclosure sale or transaction
in connection with the delivery of the Deed in lieu of foreclosure may be
consummated without first offering to such Tenant any right to purchase the
Property pursuant to the terms and provisions of its respective Tenant Lease
("Tenant Right of First Refusal Waiver").
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(j) With respect to each of the brokers entitled to an Assumed
Commission Obligation, a written confirmation of the amount thereof ("Broker
Confirmation Letter").
10. ENVIRONMENTAL MATTERS.
(a) Seller represents and warrants to Buyer that to the best
of Seller's actual knowledge without further investigation or obligation to do
so:
(i) The Property and all activities and conditions at
the Property are in compliance with all applicable federal, state and local
environmental statutes, ordinances, regulations, orders and requirements of
common law, including without limitation: those relating to the construction,
operation, maintenance or repair of any improvements or equipment; the
discharge, emission or release of any item or substance to the air, soil,
surface water or ground water; the discharge of any dredge or fill material to a
wetland or other water of the United States; the storage, treatment, disposal or
handling of any Contaminant; or the construction, operation, maintenance or
repair of aboveground or underground storage tanks (collectively, "Environmental
Laws").
(ii) No item or substance that may require
remediation under any Environmental Law ("Contaminant") is present on, over or
under or is migrating from the Property.
(iii) Neither radon nor any radon progeny is present
at any area of the Property in excess of 4 picocuries/liter.
(iv) Neither Seller, the Tenants nor any other party
has generated, stored, treated, disposed of, discharged, released, emitted or
otherwise handled any Contaminant on, over, under, from or in any manner
affecting the Property or any premises adjacent to the Property. For the
purposes of this subsection (iv) only, "Contaminant" shall not include office
equipment, fuel and other similar products contained in vehicles and cleaning
solutions and other maintenance materials that are customarily used or stored
incidental to and are reasonably necessary for the operation or maintenance of
the Property.
(v) Neither the Property nor any adjacent premises,
is listed or proposed for listing on the National Priorities List established
pursuant to Section 105(8)(B) of CERCLA, 42 U.S.C. Section 9605(8)(B), or on any
other hazardous site list promulgated by any federal, state or local government
or governmental agency.
(vi) No underground or above ground storage tanks are
present at the Property.
(vii) Seller has provided Buyer with copies of all:
(A) permits, licenses, certificates, registrations, approvals, and any
amendments thereto required for the
14
Property pursuant to or necessary for compliance with Environmental Laws; (B)
applications, reports or other materials submitted to any governmental agency in
connection with any Environmental Law; (C) records or manifests required to be
maintained pursuant to Environmental Laws or which are relevant to the issue of
compliance with Environmental Laws; (D) correspondence, notices of violation,
summonses, orders, administrative, civil or criminal complaints, requests for
information or other documents received by Seller or its agents pertaining to
compliance with Environmental Laws or the generation, storage, treatment,
handling, discharge, emission, release or migration of any Contaminant on, over,
under, from or affecting the Property; and (E) records and analyses of any
environmental tests pertaining to the Property, including without limitation the
results of any air, water or soil analyses or tank integrity testing, which are
in the possession of Seller for the Property or the existence of which is known
to Seller.
(viii) No civil, criminal or administrative
proceeding is pending or threatened relating to Environmental Laws or
Contaminants on, over, under, from or affecting the Property; neither Seller nor
any of the Tenants has received any notice of violation or potential liability
regarding the Property or activities thereon relating to Environmental Law or
Contaminants on, over, under, from or affecting the Property and Seller has no
reason to believe such notices will be received and has no reason to know of
circumstances that would give rise to such notices or proceedings in the future;
neither Seller nor any of the Tenants has entered into any consent order,
consent decree, administrative order, judicial order or settlement relating to
Environmental Laws or Contaminants on, over, under, migrating from or affecting
the Property.
(b) Seller will assist Buyer in giving notice to applicable
government agencies and in transferring or reissuing to Buyer any permit,
license, certificate, registration or other approval necessary to continue
operations at the Property, or in obtaining for Buyer any new permit, license,
certificate, registration or approval required of Buyer under any Environmental
Law.
(c) Seller agrees to indemnify, hold harmless, defend and
reimburse Buyer for, and release Buyer from, all cost, expense, loss and
liability (including without limitation common law and statutory liability)
suffered by Buyer from or in connection with any breach of any of the provisions
in this Section 10 which were known by Seller at Closing and not disclosed by
Seller to Buyer and could not reasonably have been discovered by an
environmental audit prepared by Buyer.
11. CASUALTY.
(a) Seller shall maintain the Policies in effect until the
time of Closing.
(b) (i) If at any time prior to the Closing Date any portion
of the Properties is destroyed or damaged as a result of fire or any other
casualty ("Casualty"), Seller shall promptly give written notice ("Casualty
Notice") thereof to Buyer. If any of the Properties is the subject of a
Casualty, Buyer shall have the right, at its sole option, of terminating this
15
Agreement (by written notice to Seller given within ten (10) days after receipt
of the Casualty Notice from Seller) unless, (i) the cost fully to repair or
restore such damage is less than Fifty Thousand Dollars ($50,000) and sufficient
insurance proceeds are available fully to restore such damage, and (ii) the
insurance companies issuing the Policies have confirmed in writing prior to the
end of such ten (10) day period that such Casualty is covered by the Policies
and that no defense to payment of the claim exists, and (iii) such Casualty will
not result in any of the Tenants terminating any of the Tenant Leases or
asserting a right to terminate any of the Tenant Leases and (iv) any loan
commitment obtained by Buyer for financing to acquire the Property is not
canceled or suspended as a result of such Casualty. If a Casualty Notice is
given to Buyer less than ten (10) days prior to Closing, at Buyer's option
Closing shall be postponed to a date not earlier than ten (10) days after
Buyer's receipt of the Casualty Notice.
(ii) If Buyer terminates this Agreement pursuant to
this Section 11(b), Seller and Buyer shall forthwith deliver to the Title
Company written instructions to pay the Deposit to Buyer.
(iii) If this Agreement continues in effect, the
proceeds of any insurance with respect to the Property paid between the date of
this Agreement and the Closing Date together with an amount equal to Seller's
deductible under the Policies with respect to such Property, shall be paid to
Buyer at the time of Closing (except to the extent that Seller shall have used
such proceeds for repair and restoration pursuant to the provisions of Section
11(c) below), and all unpaid claims and rights in connection with losses to such
Property shall be assigned to Buyer at Closing without in any manner affecting
the Purchase Price.
(c) If the Property is the subject of a Casualty, but Buyer
does not have the right to terminate this Agreement pursuant to the provisions
of Section 11(b) above (or Buyer does not exercise such right), then Seller
shall promptly cause all temporary repairs to be made to the Property as shall
be required to prevent further deterioration and damage to the Property;
provided, however, that any such repairs in excess of Fifty Thousand Dollars
($50,000) shall first be approved by Buyer, which approval shall not be
unreasonably delayed, conditioned or withheld. Seller shall have the right to be
reimbursed from the proceeds of any insurance with respect to the Property paid
between the date of this Agreement and the Closing Date for the cost of all such
repairs made pursuant to this Section 11(c). Except for the obligation of Seller
to repair the Property set forth in this Section 11(c), Seller shall have no
other obligation to repair any Casualty damage in the event Buyer does not elect
to terminate this Agreement pursuant to the provisions of Section 11(b), and in
such event, Buyer shall accept the Property at Closing as damaged or destroyed
by the Casualty and Buyer shall have the right to enter the Real Property prior
to Closing for the purpose of performing such repairs thereto as are reasonably
necessary to protect the Property against further damage prior to the Closing
Date.
12. EMINENT DOMAIN.
(a) If at any time prior to the Closing Date: a Taking affects
all or any part of the Property, or if any proceeding for a Taking is commenced,
or if notice of the contemplated commencement of a Taking is given, Seller shall
promptly give written notice
16
("Taking Notice") thereof to Buyer. If any of the Properties is Taken, Buyer
shall have the right, at its sole option, of terminating this Agreement. If a
Taking Notice is given to Buyer less than ten (10) days prior to Closing, at
Buyer's option Closing shall be postponed to a date not earlier than ten (10)
days after Buyer's receipt of the Taking Notice.
(b) If Buyer terminates this Agreement pursuant to this
Section 12, Seller and Buyer shall forthwith deliver to the Title Company
written instructions to pay the Deposit to Buyer.
(c) If this Agreement continues in effect, the Purchase Price
shall be reduced by the total of any awards or damages received by Seller with
respect to the Property and Seller shall, at Closing, be deemed to have assigned
to Buyer all of Seller's right, title and interest in and to any awards or
damages with respect to the Property to which Seller may have become entitled or
may thereafter be entitled by reason of any exercise of the power of eminent
domain or condemnation with respect to or for the Taking of such Property or any
portion thereof. Provided, however, the condemnation award for ▇▇▇▇▇▇▇▇ ▇ -
▇▇▇▇▇▇▇▇ ▇▇▇▇ - in the amount of Nine Thousand Dollars ($9,000) shall remain the
property of Seller.
13. CONDITIONS OF BUYER'S OBLIGATIONS.
(a) The obligations of Buyer under this Agreement are subject
to the satisfaction at the time of Closing of each of the following conditions
(any one of which may be waived in whole or in part in writing by Buyer at or
prior to Closing):
(i) all of the representations and warranties by
Seller set forth in this Agreement shall be true and correct;
(ii) no representation or warranty by Seller
contained in this Agreement shall contain any untrue statement or shall omit a
material fact necessary to make the statement of fact therein recited not
misleading;
(iii) Seller shall have performed all covenants,
agreements and conditions required by this Agreement to be performed by Seller
prior to or as of the Closing Date;
(iv) there shall have been no material adverse change
in the financial condition of any of the Tenants during the period from the date
of this Agreement to the Closing Date;
(v) Buyer shall have received the executed Tenant
Estoppel Certificates and the SNDAs from the Tenants under the Tenant Leases;
(vi) Buyer shall have received the executed Tenant
Option Waivers and the Tenant Right of First Refusal Waivers from any of the
Tenants under the Tenant Leases which contain Purchase Option Rights and/or
Right of First Refusal Rights;
17
(vii) Buyer shall have received the executed Brokers
Confirmation Letters Agreements from the Brokers ; and
(viii) Buyer shall have received written confirmation
that the Tenant Leases have been amended or renewal options contained therein
have been exercised by the Tenants thereunder to provide for the extensions of
the Tenant Leases designated on Schedule 4 hereto.
(b) In the event any of the conditions set forth in Section
13(a) are not satisfied as of the Closing Date, Buyer shall have the right (in
addition to all other rights and remedies available to Buyer under this
Agreement, at law or equity), at Buyer's sole option (by written notice to
Seller) to (i) terminate Buyer's obligations under this Agreement and have the
Deposit returned to Buyer, or (ii) complete Closing notwithstanding the
unsatisfied condition, or (iii) if such condition is not fulfilled by reason of
Seller's intentional act or omission and can be remedied by the payment of an
ascertainable sum, Buyer may complete Closing and deduct such sum from the
Purchase Price.
14. INSPECTION PERIOD.
(a) Buyer shall, during the period ("Inspection Period") which
shall commence as of the date of this Agreement and which shall end at 11:59 PM
on the 45th day after the date of this Agreement, have the opportunity to
examine the Property, the Tenant Leases, the Service Agreements, the Policies,
the Permitted Encumbrances and any items to be delivered by Seller to Buyer, and
to conduct such other inspections of the Property (including, without
limitation, environmental surveys and inspections and engineering surveys and
inspections) as Buyer, in its discretion, may elect.
(b) (i) Seller acknowledges that Buyer may commission,
prior to Closing, at Buyer's sole cost and expense, an investigation of (without
limitation): compliance with Environmental Laws, the presence of Contaminants
on, over, under, migrating from or affecting the Property including without
limitation in connection with the use and operation of any Personal Property,
and the presence of conditions that may affect Buyer's intended use.
(ii) Seller will cooperate with Buyer and Buyer's
agents in Buyer's investigation, including without limitation: (A) complying
with requests for information and records; (B) warranting that responses to such
requests are true and complete; (C) assisting Buyer in obtaining governmental
agency or other records and upon Buyer's request communicating directly with any
governmental agencies; (D) granting Buyer access to the Property including,
without limitation, access for collecting surface or subsurface samples of soil,
vegetation or water, or samples from buildings and other improvements and
Personal Property located on the Property, including samples from walls, floors,
ceilings, plenums, paved areas and other areas the taking of which samples may
necessitate some damage to the buildings, other improvements or the Personal
Property, and installing groundwater monitoring ▇▇▇▇▇; and (E) delivering to
Buyer any communications, letters, inquiries or notices received by Seller from
18
any regulatory body dealing with environmental matters, water quality, air
quality, life safety and OSHA and with all reports which may have been prepared
within the past five years addressing the presence of PCB emissions, asbestos or
other hazardous materials or waste. Buyer's investigations shall in no way limit
or otherwise affect Seller's representations and warranties under this
Agreement. If Buyer does not complete Closing, Buyer will repair any invasive
testing to the condition of the Property which had reasonably existed prior to
such testing or sampling.
(c) Buyer shall have the right, at Buyer's sole option, to
elect to terminate this Agreement (for any reason whatsoever) by giving notice
of such termination to Seller on or prior to 11:59 P.M. on the second business
day to occur after the date on which the Inspection Period ends. If Buyer
terminates this Agreement pursuant to this Section 14(c), this Agreement shall
be null and void and neither party shall have any further obligations under this
Agreement.
15. ITEMS TO BE DELIVERED AT CLOSING.
(a) At Closing, Seller shall deliver to Buyer the following:
(i) The Deeds. Each of the Deeds shall be
substantially in the form attached hereto as Exhibit G-1.
(ii) The Bills of Sale. Each of the Bills of Sale
shall be substantially in the form attached hereto as Exhibit G-2.
(iii) Assignments in the form of Exhibits G-3 and
G-4, respectively, of the Tenant Leases and the Service Agreements designated on
Exhibit D to be assigned to Buyer, duly executed and acknowledged by Seller and
in proper form for recording, assigning to Buyer all of the lessor's and
Seller's rights, title and interest in the Tenant Leases and such Service
Agreements; together with all correspondence between Seller and the Tenants; an
original executed copy of each of the Tenant Leases and each such Service
Agreement; a letter in the form of Exhibit G-5 duly executed by Seller,
addressed to each of the Tenants and other parties under the Service Agreements
informing it of the assignments. Seller shall also deliver to Buyer at Closing
evidence of Seller's termination of those Service Agreements not assigned to
Buyer and payment of all sums owing to the parties to such Service Agreements.
(iv) An assignment in the form of Exhibit G-6, duly
executed and acknowledged by Seller, of (and delivery to Buyer of originals or
copies of): all permanent certificates of occupancy and all other licenses,
permits, authorizations, consents, certificates and approvals required by all
governmental authorities having jurisdiction over the Property; all fees, escrow
and/or security funds, deposits and other sums heretofore paid by Seller to any
governmental authority in connection with the Property; all certificates issued
by the local Board of Fire Underwriters (or other body exercising similar
functions); all plans, specifications and project manuals for the Property in
Seller's possession; and all guarantees, bonds and warranties with respect to
the Property (together with original counterparts of such instruments).
19
(v) An original counterpart of each of the Tenant
Estoppel Certificates and each of the SNDAs; and an original counterpart of each
of the required Tenant Option Waivers and Tenant Right of First Refusal Waivers.
(vi) Such resolutions and certificates as the Title
Company shall require to evidence the due authorization of the execution and
performance of this Agreement and the documents to be delivered pursuant hereto;
and all affidavits, indemnities and other agreements required by the Title
Company to permit it to issue to Buyer the Owner's Policy of Title Insurance
required pursuant to Section 5(a).
(vii) A statement, certified by Seller (and
accompanied with all relevant back-up documentation) setting forth all
information necessary or required to permit Buyer to calculate and collect after
Closing all payments of additional rent and other charges due under the Tenant
Leases.
(viii) All proper instruments for the conveyance of
the awards referred to in Sections 1(a), 1(b) and 12.
(ix) A Uniform Commercial Code search against Seller,
as debtor, in the relevant offices of the State in which the Property is located
and the County in which the Property is located, revealing no security interests
or liens on the Personal Property, or releases of any which are disclosed.
(x) Duplicate copies of all books, records and
operating reports in Seller's possession which are necessary to insure
continuity of operation of the Property.
(xi) An original executed counterpart of each of the
Broker Confirmation Letters.
(xii) A Guaranty Agreement in the form attached
hereto as Exhibit C wherein Seller shall guaranty to Buyer the obligations of
American Home Ensembles to pay all rent due under its lease for a period of 12
months from and after the Closing Date.
(xiii) Any other documents required to be delivered
by Seller pursuant to any other provisions of this Agreement.
(b) At Closing, Buyer shall deliver to Seller the following:
(i) The portion of the Purchase Price payable
pursuant to Section 2(a)(ii).
(ii) Assumption agreements, in the form of Exhibits
G-3 and G-4 and respectively, of the Tenant Leases and of the Service Agreements
designated on Exhibit D to be assigned to Buyer (including Buyer's Assumption of
the Assumed Commission Obligations), duly executed and acknowledged by Buyer and
in proper form for recording.
20
(iii) Any other document required to be delivered by
Buyer pursuant to any other provisions of this Agreement.
16. INDEMNITY BY SELLER. Seller agrees to indemnify, defend and hold
harmless Buyer from and against, and to reimburse Buyer with respect to, any and
all claims, demands, causes of action, losses, damages, liabilities, costs and
expenses (including without limitation reasonable attorney's fees and court
costs) asserted against or incurred by Buyer by reason of or arising out of (a)
a breach of any representation or warranty of Seller as set forth in this
Agreement, and (b) the failure of Seller to perform any obligation required by
this Agreement to be performed by it. Notwithstanding any provision of this
Agreement to the contrary, it is understood and agreed that the remedy of
indemnity pursuant to this Section 16 and Buyer's remedies at law may be
inadequate in the case of any breach by Seller of its representations,
warranties and obligations under this Agreement, and Seller agrees that Buyer
shall be entitled to equitable relief and the remedy of specific enforcement
with respect thereto.
17. BROKERAGE. Each of Seller and Buyer represents and warrants to the
other that it has dealt with no broker, finder or other intermediary in
connection with this sale, other than Gelcor Realty and ▇▇▇▇▇ & ▇▇▇▇▇/The ▇▇▇▇▇▇
Company. In reliance upon the representation and warranty of each of Seller and
Buyer set forth in the preceding sentence, Seller agrees to pay all brokerage
commissions due to ▇▇▇▇▇ and ▇▇▇▇▇/The ▇▇▇▇▇▇ Company and Buyer agrees to pay
all brokerage commissions due to Gelcor Realty.
18. NO OTHER REPRESENTATIONS; AS IS.
(a) Buyer acknowledges that neither Seller nor anyone acting,
or purporting to act, on behalf of Seller, has, except as expressly set forth in
this Agreement, made any representation or warranty with respect to the
Property.
(b) PROVIDED, HOWEVER, THAT IT IS EXPRESSLY UNDERSTOOD AND
AGREED THAT BUYER HAS THE RIGHT TO PERFORM EXAMINATIONS AND INSPECTIONS OF THE
PROPERTY PRIOR TO THE EXPIRATION OF THE INSPECTION PERIOD AND THAT, EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS PURCHASING THE PROPERTY "AS IS"
AND "WHERE IS".
19. SUCCESSORS AND ASSIGNS. Buyer may assign its rights under this
Agreement (including an assignment to an intermediary in a tax-free exchange)
without the prior consent of Seller, but such assignment shall not relieve or
release Buyer of its obligations under this Agreement. This Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns. Notwithstanding the provisions of Section 17,
Buyer agrees that if this Agreement is assigned by Buyer to Liberty Property
Trust or First Industrial, Buyer agrees to pay the real estate commission which
may be due to Realtors who represented Seller in the aborted sales to Liberty
Property Trust or First Industrial.
20. FIRPTA.
21
(a) Section 1445 of the Internal Revenue Code of 1986, as
amended (the "Code") provides that a transferee of a United States real property
interest must withhold tax if the transferor is a foreign person. To inform
Buyer that withholding of tax is not required upon the disposition by Seller of
a United States real property interest, the undersigned parties executing this
Agreement on behalf of Seller hereby certify the following on behalf of Seller:
(i) Seller is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Code and Income Tax Regulations);
(ii) Seller's U.S. employer identification number is
as follows: __________; and
(iii) Seller's office address is:
252 S. Pleasantburg Drive
5th Floor - Suite A
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Seller, and the parties executing this Agreement on behalf of Seller, understand
that this certification may be disclosed to the Internal Revenue Service by
Buyer and that any false statement made here could be punished by fine,
imprisonment, or both. Under penalties of perjury, the undersigned parties
executing this Agreement on behalf of Seller declare that they have examined
this certification and to the best of their knowledge and belief, it is true,
correct and complete; and they further declare that they have authority to sign
this document on behalf of Seller.
(b) Seller, and the parties executing this Agreement on behalf
of Seller, shall deliver to Buyer at Closing, a restatement of the above
certifications of Seller and of the parties executing this Agreement on behalf
of Seller in the form attached to this Agreement as Exhibit I.
21. NOTICES.
(a) All notices, demands, requests or other communications
from each party to the other required or permitted under the terms of this
Agreement shall be in writing and, unless and until otherwise specified in a
written notice by the party to whom notice is intended to be given, shall be
sent to the parties at the following respective addresses:
22
if intended for Buyer:
Plymouth Meeting Executive Campus
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Butte
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if intended for Seller:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Notices may be given on behalf of any party by its legal counsel.
(b) Each such notice, demand, request or other communication
shall be given (i) against a written receipt of delivery, or (ii) by registered
or certified mail of the United States Postal Service, return receipt requested,
postage prepaid, or (iii) by a nationally recognized overnight courier service
for next business day delivery, or (iv) via telecopier or facsimile transmission
to the facsimile number listed above, provided, however, that if such
communication is given via telecopier or facsimile transmission, an original
counterpart of such communication shall concurrently be sent in either the
manner specified in clause (i) or (iii) above.
(c) Each such notice, demand, request or other communication
shall be deemed to have been given upon the earliest of (i) actual receipt or
refusal by the addressee if sent pursuant to Section (b)(i) or (b)(iv) or (ii)
deposit thereof at any main or branch United States post office if sent in
accordance with section (b)(ii) above or (iii) deposit thereof with the courier
if sent pursuant to section (b)(iii) above.
22. MISCELLANEOUS.
(a) CAPTIONS. The captions in this Agreement are inserted for
convenience of reference only; they form no part of this Agreement and shall not
affect its interpretation.
(b) ENTIRE AGREEMENT; GOVERNING LAW. This Agreement contains
the entire understanding of the parties with respect to the subject matter
hereof, supersedes all prior or other negotiations, representations,
understandings and agreements (including, without limitation, the letter of
intent between Seller and Buyer dated July 8, 1998) of, by or among the parties,
express or implied, oral or written, which are fully merged herein. The express
terms of this Agreement control and supersede any course of performance and/or
customary practice
23
inconsistent with any such terms. Any agreement hereafter made shall be
ineffective to change, modify, discharge or effect an abandonment of this
Agreement unless such agreement is in writing and signed by the party against
whom enforcement of such change, modification, discharge or abandonment is
sought. This Agreement shall be governed by and construed under the laws of the
State of South Carolina.
(c) PROVISIONS SEPARABLE. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other provision may be invalid or unenforceable in whole or in part.
(d) WAIVER OF TENDER OF DEED AND PURCHASE MONIES. The tender
of an executed Deed by Seller and the tender by Buyer of the Purchase Price are
mutually waived, but nothing in this Agreement shall be construed as a waiver of
Seller's obligation to deliver the Deed and/or of the concurrent obligation of
Buyer to pay the portion of the Purchase Price payable at Closing.
(e) GENDER, ETC. Words used in this Agreement, regardless of
the number and gender specifically used, shall be deemed and construed to
include any other number, singular or plural, and any other gender, masculine,
feminine or neuter, as the context indicates is appropriate.
(f) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall be binding when one
or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected on this Agreement as the signatories.
(g) EXHIBITS. All exhibits attached to this Agreement are
incorporated by reference into and made a part of this Agreement.
(h) NO WAIVER. Neither the failure nor any delay on the part
of either party to this Agreement to exercise any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of any such right, remedy,
power or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have
granted such waiver.
(i) INTERPRETATION. No provision of this Agreement is to be
interpreted for or against either party because that party or that party's legal
representative or counsel drafted such provision.
24
(j) TIME. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and holidays;
provided, however, that if the final day of any time period provided in this
Agreement shall fall on a Saturday, Sunday or legal holiday, then the final day
shall extend to 5:00 p.m. of the next full business day. For the purposes of
this Section, the term "holiday" shall mean a day other than a Saturday or
Sunday on which banks in the State of South Carolina are or may elect to be
closed.
(k) ATTORNEY'S FEES. In connection with any litigation arising
out of this Agreement, the prevailing party shall be entitled to recover all
costs incurred, including reasonable attorney's fees. However, the provisions of
this section are expressly subject to the limitation on the Buyer's liability
specified in Section 3.
(l) BUYER'S EXERCISE OF RIGHT TO TERMINATE. If Buyer desires
to terminate its obligations under this Agreement pursuant to any of the
provisions of this Agreement, Buyer shall do so by delivering written notice of
termination to Seller. Upon any such termination the Deposit shall be paid to
Buyer, and except as otherwise expressly provided herein, this Agreement shall
be and become null and void and neither party shall have any further rights or
obligations under this Agreement.
(m) SURVIVAL. Except as otherwise expressly provided in
Section 8, the representations, warranties and agreements of Seller set forth in
Sections 8, 9 and 10 of this Agreement shall survive a termination of this
Agreement, or Closing for a period of 24 months, and thereafter shall survive to
the extent that Buyer shall have given to Seller written notice of breach
thereof. The obligations of Seller and Buyer pursuant to Sections 7, 10, 16, 17,
20, 21, 22(k), 22(n), 23, 24 and 25 of this Agreement shall survive Closing.
Except as otherwise provided in the preceding two sentences of this Section
22(m), the agreements of Seller and Buyer set forth in this Agreement shall not
survive Closing and shall merge into the delivery of the Deed at Closing.
(n) FURTHER ASSURANCES. After Closing, each party shall
execute, acknowledge and deliver, for no further consideration but at the cost
of the requesting party, all documents and instruments as the other party may
reasonably request to further evidence or effectuate the purposes of this
Agreement.
23. TAX FREE EXCHANGE. Each of Seller and Buyer shall cooperate with
the other in effecting an exchange described in Section 1031 of the Internal
Revenue Code ("Tax Free Exchange"), provided, that: (a) the Tax Free Exchange
shall not impose additional financial or legal obligations in addition to those
set forth elsewhere in this Agreement; (b) neither Seller nor Buyer shall have
any obligation to take title to any exchange property; (c) the exchanging party
shall indemnify, defend and save and hold the other party harmless of and from
all expenses, liabilities, claims, losses or actions as a result of
participation in the Tax Free Exchange; and (d) the other party shall have no
obligation to modify any of the provisions of this Agreement to effect the Tax
Free Exchange.
25
24. REPORTS. For the period of time commencing on the date of this
Agreement and continuing through the first anniversary of the Closing Date, and
without limitation of the other document production otherwise required of Seller
hereunder, Seller shall, from time to time, upon reasonable advance written
notice from Buyer, provide to Buyer and its representatives: (i) access to all
financial and other information pertaining to the period of Seller's ownership
and operation of the Property, which information is relevant and reasonably
necessary, in the opinion of Buyer's outside, third party accountants
("Accountants") to enable Buyer and its Accountants to prepare financial
statements in compliance with any and all of (a) Rule 3-05 or Rule 3-14 of
Regulation S-X of the Securities and Exchange Commission (the "Commission"), as
applicable to Buyer; (b) any other rule issued by the Commission and applicable
to Buyer; and (c) any registration statement, report or disclosure statement
filed with the Commission by, or on behalf of Buyer; and (ii) a representation
letter, in form specified by, or otherwise satisfactory to the Accountants,
signed by the individual(s) responsible for Seller's financial reporting, as
prescribed by generally accepted auditing standards promulgated by the Auditing
Standards Division of the American Institute of Certified Public Accountants,
which representation letter may be required by the Accountants in order to
render an opinion concerning Seller's financial statements.
25. ADDITIONAL OBLIGATIONS OF SELLER AND BUYER. At Closing, Seller and
all then identifiable Seller Parties and Buyer shall execute, acknowledge and
deliver an Agreement (prepared by counsel for Buyer) in recordable form,
providing, INTER ALIA, as follows:
(a) SELLER. The term "Seller" shall mean T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
the children and grandchildren of T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, any partnership,
corporation, limited liability company or other entity in which T. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or the children or grandchildren of T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has (have) a
controlling interest; and all subsidiaries and affiliates of any such
partnership, corporation, limited liability company or other entity.
(b) SUBJECT PROPERTY. The term "Subject Property" shall mean
any real property situate within the State of South Carolina owned or controlled
by any of the Seller Parties on which any building or other improvements now or
hereafter exist which are intended to be used for manufacturing, warehouse, or
other industrial purposes.
(c) RIGHT OF FIRST REFUSAL. The Seller agrees that during the
period of three (3) years from the Closing Date, the Seller will not sell,
assign, transfer or convey all or any portion of the Subject Property except in
accordance with the following right of first refusal. If at any time during the
period of three (3) years from the Closing Date, Seller desires to sell, assign,
transfer or otherwise convey all or any portion of the Subject Property
("Offered Property"), Seller shall obtain a bona fide written offer ("Offer")
from an unrelated third party ("Offeror") setting forth the terms and provisions
pursuant to which the Offeror will purchase the Offered Property. The Offer must
contain the purchase price, the terms on which the purchase price is payable,
and the condition pursuant to which title to the Offered Property is to be
conveyed. Buyer shall have the right to purchase the Offered Property (in
accordance with the terms of the Offer) by giving to Seller written notice
within ten (10) days after the date on which Buyer shall have received the Offer
from Seller. If Buyer elects to purchase the Offered Property pursuant to the
terms of the Offer, Buyer shall thereafter have a 30-day Inspection Period; and
26
Buyer shall have the right to elect not to purchase the Offered Property by
giving written notice of such election to Seller on or prior to the expiration
of the 30-day Inspection Period. If Buyer does not elect not to purchase the
Property by the end of the 30-day Inspection Period, then Seller and Buyer shall
complete closing on the sale and purchase of the Offered Property within thirty
(30) days after the expiration of the 30-day Inspection Period.
(d) NONCOMPETITION.
(i) The term "Property" shall mean the real property
conveyed as of this date by Seller to Buyer; and the term "Prospect" shall mean
any party which is an occupant or user of any space within the Property (whether
as a tenant or subtenant).
(ii) Seller and the Seller Parties agree that neither
Seller nor any of the Seller Parties, shall, at any time during the period of
three years from the date of this Agreement, negotiate to lease, or enter into
any lease, for any space within the Subject Property with any Prospect.
Notwithstanding the foregoing, during the period of three years from the date of
this Agreement the Seller Parties shall have the right to negotiate to lease or
enter into a lease for space within the Subject Property: (A) with any Prospect
if Buyer has previously given to such Prospect written notice that Buyer does
not intend to enter into a lease with such Prospect for space within the
Property; and (B) with any Prospect, if such Prospect has given to Buyer written
notice that such Prospect desires to remain in possession of its premises in the
Property and to expand into additional space in the Property and such additional
space is not available to the Prospect in the Property.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns; and shall run with and burden and benefit,
respectively, the Subject Property and the Property.
(g) DESCRIPTIONS. To the extent then identifiable, legal
descriptions of the Subject Property and of the Property shall be attached as
Exhibits to the Agreement.
(h) NOTICES. The Agreement will specify addresses for notices
and the method for the giving of notices; in a manner similar to the provisions
of Section 21 above.
IN WITNESS WHEREOF, intending to be legally bound, the parties have
executed this Agreement as a sealed instrument as of the day and year first
above written.
Witness/Attest: SELLER:
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ /S/ T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------- ----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------- ---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(signatures continued on next page)
27
Witness/Attest: SELLER (signatures continued):
HOPEWELL PROPERTIES, INC.
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ By:/S/ T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------- -------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
TTT PARTNERSHIP
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------- --------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
Title: General Partner
STONELEDGE, INC.
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /S/ T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------- --------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------- ---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ /S/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------- ----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Witness/Attest SELLER (signatures continued):
KIDCO
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------- --------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Partner
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
----------------- ------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------- -------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ /S/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------- ----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
BUYER:
AMERICAN REAL ESTATE
INVESTMENT, L.P.
By: American Real Estate Investment
Corporation, its General Partner
By:/S/ ▇▇▇▇▇▇▇ ▇. BUTTE
----------------------
Name: ▇▇▇▇▇▇▇ ▇. Butte
Title: Vice President