AGREEMENT OF SALE
(Ammendale I)
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 29th
day of November, 1996, by and between WRIT LIMITED PARTNERSHIP ("Purchaser")
and AMMENDALE LIMITED PARTNERSHIP ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Eight Million Seventy-Eight Thousand and no/100 Dollars
($8,078,000.00) ("Purchase Price"), and on the terms and conditions hereinafter
set forth, the property commonly known as ▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇, Maryland, consisting of the following:
1.1 All of Seller's right, title and interest in the real property
("Land") and all buildings and other improvements ("Improvements") situated on
the Land, as more particularly described on Exhibit A attached hereto and made
a part hereof (the Land, the Improvements and the other property described
below in this Paragraph 1 are sometimes referred to herein together as the
"Property"), together with all easements and appurtenances thereunto belonging
and all of Seller's right, title and interest in and to all streets, alleys and
public ways adjacent thereto, if any, and together with all of Seller's right,
title and interest in and to all strips and gores located on or adjacent to the
Property or located between any parcels constituting the Land, if any;
1.2 The personal property set forth on Exhibit B attached hereto
("Personal Property"), but shall in all events exclude the personal property
described on Exhibit B under the heading "Excluded Personal Property";
1.3 The tenant leases described in the rent roll set forth on Exhibit C
attached hereto and made a part hereof together with such other tenant leases
of the Property as may be made prior to Closing (as hereinafter defined) in
accordance with the terms of this Agreement ("Leases");
1.4 If and to the extent assignable and to the extent of Seller's
interest therein, if any: (a) all guarantees, warranties and indemnifications,
if any, received from suppliers, contractors, materialmen or subcontractors
arising out of, or in connection with, the installation, construction or
maintenance of the Property including, without limitation, the right to ▇▇▇ any
obligor for any breach of any covenant, agreement, representation, warranty or
guarantee contained therein; (b) all licenses, permits, certificates of
occupancy and franchises issued by any federal, state, county or municipal
authority relating to the use, maintenance or operation of the Property running
to or in favor of Seller or pertaining to the Property; (c) all trade styles,
and trade names, including, without limitation, the name "Ammendale I", and all
contract rights, brochures, manuals, lists of prospective tenants, advertising
material, books and records, utility contracts and telephone numbers; (d) the
plans and specifications for the Improvements and all unexpired claims and
sureties, if any, received in connection with the construction, improvement or
equipment of the Improvements; and (e) the service and maintenance contracts
set forth in Exhibit D which Purchaser elects to assume ("Service Contracts").
1.5 Notwithstanding anything contained in this Agreement to the contrary,
Seller is not conveying or assigning to Purchaser the items described in
Paragraph 15.3 hereof.
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1 Upon the execution of this Agreement, the sum of One Hundred Fifty
Thousand Dollars ($150,000) ("▇▇▇▇▇▇▇ Money"), by check payable to the escrow
agent, to be held in escrow by and in accordance with the provisions of the
Escrow Agreement ("Escrow Agreement") attached hereto as Exhibit E; and
2.2 On the Closing Date (as hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 2:00 p.m. Chicago time. Any
provisions herein providing for the delivery of the ▇▇▇▇▇▇▇ Money to either
party hereof are intended to mean the ▇▇▇▇▇▇▇ Money plus any interest earned
thereon and less all escrow and investment fees.
3. TITLE COMMITMENT AND SURVEY.
3.1 Attached hereto as Exhibit F is a copy of a title commitment for an
owner's standard title insurance policy issued by Lawyers Title Insurance
Corporation, dated August 17, 1996 for the Property ("Title Commitment"). For
purposes of this Agreement, "Permitted Exceptions" shall mean: (a) general ad
valorem real estate taxes which are not yet due and payable; (b) association
assessments, special district taxes and related charges not yet due and
payable; (c) matters shown on the Survey (as hereinafter defined); (d) matters
caused by the action or inaction of Purchaser or its agents; (e) the title
exceptions set forth in Schedule B Section 2 of the Title Commitment except for
items numbered 1 and 4 thereof; (f) the rights of tenants under leases; and
(g) liens or encumbrances of a definite or ascertainable amount which may be
removed or insured over by the payment of money or other security at the
Closing Date, and which Seller removes or causes to be insured over at the
Closing Date in accordance with Paragraph 5 hereof. All other exceptions to
title shall be referred to as "Unpermitted Exceptions". It shall be a
condition of Purchaser's obligation to close hereunder that on the Closing
Date, Chicago Title Insurance Company ("Title Insurer") shall deliver to
Purchaser a standard title policy in conformance with the Title Commitment
subject only to Permitted Exceptions (excluding, however, the Permitted
Exceptions described in subclause (g) above) and Unpermitted Exceptions waived
in writing by Purchaser ("Title Policy"). The Title Policy shall insure that
title is vested in Purchaser and shall not be subject to any equitable
interests of Balcor Equity Pension Investors III. The Title Policy shall be
conclusive evidence of good title as therein shown as to all matters to be
insured by the Title Policy, subject only to the exceptions and requirements
therein stated. Purchaser shall pay for the costs of the Title Commitment and
Title Policy and Purchaser shall pay for the cost of any endorsements to, or
extended coverage on, the Title Policy as requested by Purchaser or Purchaser's
lender.
3.2 Purchaser has received a survey of the Property prepared by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ under Job Number J-83072 ("Survey"). Purchaser shall pay the cost of
the most recent update to the Survey. Purchaser hereby acknowledges that all
matters disclosed by the Survey are acceptable to Purchaser and are Permitted
Exceptions for purposes of Paragraph 3.1 above.
3.3 The obligations of Purchaser and Seller to pay various costs set
forth in Paragraphs 3.1 and 3.2 shall survive the termination of this
Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1 In addition to the costs set forth in Paragraphs 3.1 and 3.2,
Purchaser and Seller shall equally share the State of Maryland and Prince
George's County transfer taxes and the other costs of the documentary or
transfer stamps to be paid with reference to the Deed (as hereinafter defined)
and all other stamps, intangible, transfer, documentary, recording, sales tax
and surtax imposed by law with reference to any other sale documents delivered
in connection with the sale of the Property to Purchaser.
5. CONDITION OF TITLE.
5.1 If, prior to Closing (as hereinafter defined), a date-down to the
Title Commitment discloses any Unpermitted Exceptions which can be removed for
a cost which does not, in the aggregate, exceed $25,000 (each, a "Minor
Unpermitted Exception"), Seller shall, at Seller's expense, bond over, cure
and/or have such Minor Unpermitted Exceptions removed so that they will not
appear in the Title Policy, or have the Title Insurer commit to insure against
loss or damage that may be occasioned by such Minor Unpermitted Exceptions.
Notwithstanding the foregoing, if such date down to the Title Commitment
discloses any Unpermitted Exceptions which can be removed for a cost which
does, in the aggregate, equal or exceed $25,000 (each, a "Major Unpermitted
Exception"), Seller shall have the right, but not the obligation, to bond over,
cure and/or have such Major Unpermitted Exceptions removed so that they do not
appear in the Title Policy, or have the Title Insurer commit to insure against
loss or damage that may be occasioned by such Major Unpermitted Exceptions. If
Purchaser does not object to a Major Unpermitted Exception in a notice sent to
Seller within five (5) business days from the date of the date down of the
Title Commitment, Purchaser shall be deemed to have elected to take title to
the Property subject to said Major Unpermitted Exception, without any reduction
in or set off against the Purchase Price as a result thereof. If (i) Purchaser
does object to a Major Unpermitted Exception within five (5) business days from
the date of the date down of the Title Commitment, and (ii) Seller fails to
bond over, cure or have such Major Unpermitted Exception removed or to have the
Title Insurer commit to insure as specified above within ten (10) business days
from the date of the date down to the Title Commitment, Purchaser may either
(a) elect to take title to the Property subject to said Major Unpermitted
Exception, without any reduction in or setoff against the Purchase Price as a
result thereof; or (b) terminate this Agreement upon written notice to Seller
within three (3) days after the expiration of such ten (10) business day
period. If Purchaser terminates this Agreement in accordance with the terms of
this Paragraph 5.1, this Agreement shall terminate without further action of
the parties and all ▇▇▇▇▇▇▇ Money theretofore deposited into the escrow by
Purchaser, together with any interest accrued thereon, shall be returned to
Purchaser, and neither party shall have any further liability to the other,
except for those covenants and obligations that specifically survive
termination of this Agreement.
5.2 Seller agrees to convey fee simple title to the Property to Purchaser
by special warranty deed ("Deed") (in the form attached hereto as Exhibit G) in
recordable form subject only to the Permitted Exceptions and any Unpermitted
Exceptions not objected to by Purchaser in accordance with Paragraph 5.1 above.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1 Except as provided in the indemnity provisions contained in Paragraph
7.1 of this Agreement, Seller shall bear all risk of loss with respect to the
Property through the Closing. Seller agrees to maintain its existing "all risk"
replacement cost casualty insurance and rent loss insurance in place until the
Closing Date. Notwithstanding the foregoing, in the event of damage to the
Property by fire or other casualty prior to the Closing Date, repair of which
would cost less than or equal to $150,000 (as determined by Seller in good
faith), Purchaser shall not have the right to terminate its obligations under
this Agreement by reason thereof, but Seller shall have the right to elect to
either repair and restore the Property if such repair or restoration may be
completed prior to the Closing Date or to assign and transfer to Purchaser on
the Closing Date all of Seller's right, title and interest in and to all
insurance proceeds paid or payable to Seller on account of such fire or
casualty plus the amount of Seller's insurance deductible. Notwithstanding the
foregoing, if the cost to repair any such damage would be less than or equal to
$150,000, but the aggregate of such insurance proceeds assigned to Purchaser
and insurance deductible paid to Purchaser would be less than 100% of the cost
of repairing such damage, and if Seller does not agree to adjust the Purchase
Price by the difference between the insurance proceeds (including any paid
deductible) and the repair cost, then Purchaser shall have the right to
terminate this Agreement in accordance with the following provisions of this
Paragraph 6.1. Seller shall promptly notify Purchaser in writing of any such
fire or other casualty and Seller's estimate of the cost to repair the damage
caused thereby. In the event of damage to the Property by fire or other
casualty prior to the Closing Date, repair of which would cost in excess of
$150,000 (as determined by Seller in good faith), then this Agreement may be
terminated at the option of Purchaser, which option shall be exercised, if at
all, by Purchaser's written notice thereof to Seller within ten (10) business
days after Purchaser receives written notice of such fire or other casualty
from Seller and Seller and Purchaser agree upon the cost to repair any such
damage, and upon the exercise of such option by Purchaser this Agreement shall
terminate without further action by the parties, the ▇▇▇▇▇▇▇ Money deposited by
Purchaser shall be returned to Purchaser together with interest thereon, and
neither party shall have any further liability or obligations hereunder, except
for those covenants and obligations which expressly survive termination of this
Agreement. In the event that Purchaser does not exercise the option to
terminate in accordance with this Paragraph 6.1, the Closing shall take place
on the Closing Date and Seller shall assign and transfer to Purchaser on the
Closing Date all of Seller's right, title and interest in and to all insurance
proceeds paid or payable to Seller on account of the fire or casualty and shall
pay to Purchaser the amount of Seller's insurance deductible. Notwithstanding
anything contained herein to the contrary, Seller's obligation to transfer all
insurance proceeds paid to Seller as set forth more fully in this Paragraph 6.1
shall survive the Closing and the recording of the Deed.
6.2 If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event of any such taking or threatened taking, Purchaser
shall have the right to:
6.2.1 terminate this Agreement by written notice to Seller, in
which event the ▇▇▇▇▇▇▇ Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease,
except for those covenants and obligations hereunder which expressly survive
termination of this Agreement; or
6.2.2 proceed with the Closing, in which event Seller shall
assign to Purchaser all of Seller's right, title and interest in and to any
award made or to be made in connection with such condemnation or eminent domain
proceedings. Notwithstanding anything contained herein to the contrary,
Seller's obligation to transfer Seller's interest in such award as set forth
more fully in this Paragraph 6.2.2 shall survive the Closing and the recording
of the Deed.
Purchaser shall then notify Seller, within five (5) business days after
Purchaser's receipt of Seller's notice, whether Purchaser elects to exercise
its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be delayed,
if necessary, until Purchaser makes such election. If Purchaser fails to make
an election within such five (5) business day period, Purchaser shall be deemed
to have elected to proceed with Closing in accordance with Paragraph 6.2.2.
7. INSPECTION AND AS-IS CONDITION.
7.1 During the period commencing on the date hereof and ending on the
Closing Date, Purchaser and the agents, engineers, employees, contractors and
surveyors retained by Purchaser may enter upon the Property to inspect the
Property and to conduct and prepare such studies, tests and surveys as
Purchaser may deem reasonably necessary and appropriate, including, without
limitation, a review of the Leases, and to conduct tenant interviews, provided
that Purchaser notifies Seller of its intent to conduct such interviews and
allows Seller to be present for any such interviews. In connection with
Purchaser's review of the Property, Seller has delivered to Purchaser copies of
the current rent roll for the Property, the most recent tax and insurance
bills, copies of the Leases, utility account numbers, a personal property
inventory, the Service Contracts, an aged receivables report, unaudited annual
operating statements from 1993-1995 and unaudited operating statements for 1996
(the "Operating Statements"). Seller shall make reasonable efforts to make
other information within the possession and control of Seller or its property
manager available to Purchaser. Between the date of this Agreement and the
Closing Date, Purchaser shall have the right to inspect all books, records and
other documents in the possession or control of Seller and its agents which
pertain to the construction, ownership, use, operation, occupancy, maintenance,
operation or leasing of the Property ("Seller's Books and Records"). Seller
shall allow such inspections to be conducted during normal business hours upon
reasonable notice to Seller and shall make Seller's Books and Records available
to Purchaser at the Property or at Seller's (or Seller's agent's) office.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be subject to the following:
(i) Such tests, inspections and investigations shall take place
during normal business hours upon reasonable notice to Seller or its designated
agents;
(ii) Except as may be required by Purchaser to complete its due
diligence or to obtain financing in order to close this transaction, all
information set forth in the documents to be reviewed hereunder by Purchaser,
its employees and agents shall be held in strict confidence until Closing and
thereafter in the event that the Closing does not occur;
(iii) In the event the Closing does not occur, Purchaser shall
promptly return to Seller any documents obtained from Seller or Seller's
agents;
(iv) Purchaser shall not suffer or permit any lien, claim or
charge of any kind whatsoever to attach to the Property or any part thereof;
and
(v) such tests, investigations and studies shall be at
Purchaser's sole cost and expense, and in the event of any damage to the
Property caused by Purchaser, its agents, engineers, employees, contractors or
surveyors (including, without limitation, pavement, landscaping and surface
damage), Purchaser shall pay the cost to restore the Property to the condition
existing prior to the performance of such tests, investigations or studies.
Purchaser shall defend, indemnify and hold Seller and any affiliate or parent
of Seller, and all shareholders, employees, officers, directors and partners of
Seller or Seller's affiliate or parent (hereinafter collectively referred to as
"Affiliates of Seller") harmless from any and all liability, cost and expense
(including without limitation, reasonable attorneys' fees, court costs and
costs of appeal) suffered or incurred by Seller or Affiliates of Seller for
injury to persons or property caused by Purchaser's investigations, tests,
studies and inspections of the Property. Purchaser shall undertake its
obligation to defend set forth in the preceding sentence using attorneys
selected by Purchaser and reasonably acceptable to Seller. Prior to commencing
any such tests, studies and investigations, Purchaser shall furnish to Seller a
certificate of insurance evidencing comprehensive general public liability
insurance insuring the person, firm or entity performing such tests, studies
and investigations and listing Seller and Purchaser as additional insureds
thereunder.
If Purchaser, in its sole discretion, is dissatisfied with the results of
the tests, studies or investigations performed or information received pursuant
to this Agreement, or otherwise, Purchaser shall have the right to terminate
this Agreement by giving written notice of such termination to Seller at any
time prior to 5:00 p.m. on January 6, 1997. The period between the date hereof
and 5:00 p.m. on January 6, 1997 is herein referred to as the "Inspection
Period". If written notice is not given by Purchaser pursuant to this
Paragraph 7.1 prior to the expiration of the Inspection Period, then the right
of Purchaser to terminate this Agreement pursuant to this Paragraph 7.1 shall
be waived. If Purchaser terminates this Agreement by written notice to Seller
prior to the expiration of the Inspection Period: (i) Purchaser shall promptly
deliver to Seller copies of all studies, reports and other investigations
obtained by Purchaser in connection with its due diligence during the
Inspection Period; and (ii) the ▇▇▇▇▇▇▇ Money deposited by Purchaser shall be
immediately paid to Purchaser, together with any interest earned thereon, less
the sum of One Hundred and No/100 Dollars ($100.00), which shall be paid to
Seller in consideration for such period of inspection, and neither Purchaser
nor Seller shall have any right, obligation or liability under this Agreement,
except for those covenants and obligations which expressly survive the
termination of this Agreement. Notwithstanding anything contained herein to
the contrary, Purchaser's obligation to indemnify Seller and pay the costs of
restoring the Property, as more fully set forth in this Paragraph 7.1, shall
survive Closing and recording of the Deed and the termination of this
Agreement, as applicable.
7.2 Except for the express representations and warranties of Seller set
forth herein, (i) Purchaser acknowledges and agrees that it will be purchasing
the Property, including the Personal Property, based solely upon its
inspections and investigations of the Property, including the Personal
Property, and that Purchaser will be purchasing the Property, including the
Personal Property, "AS IS" and "WITH ALL FAULTS", based upon the condition of
the Property, including the Personal Property as of the date of this Agreement,
ordinary wear and tear and loss by fire or other casualty or condemnation
excepted, and (ii) that Seller makes no warranty or representation, express or
implied, or arising by operation of law, including, but not limited to, any
warranty of condition, habitability, merchantability or fitness for a
particular purpose, in respect of the Property. Without limiting the
foregoing, Purchaser acknowledges that, except as may otherwise be specifically
set forth elsewhere in this Agreement, neither Seller nor its consultants,
brokers or agents have made any representations or warranties of any kind upon
which Purchaser is relying as to any matters concerning the Property or the
Personal Property, including, but not limited to: (i) the condition of the Land
or any improvements comprising the Property; (ii) the existence or
non-existence of any pollutant, toxic waste and/or any hazardous materials or
substances; (iii) economic projections or market studies concerning the
Property, or the income to be derived from the Property; (iv) any development
rights, taxes, bonds, covenants, conditions and restrictions affecting the
Property; (v) the nature and extent of any right of way, lease, lien,
encumbrance, license, reservation or other title matter; (vi) water or water
rights, topography, geology, drainage, soil or subsoil of the Property;
(vii) the utilities serving the Property; (viii) the suitability of the
Property for any and all activities and uses which Purchaser may elect to
conduct thereon; or (ix) the compliance of the Property with any zoning,
environmental, building or other laws, rules or regulations affecting the
Property. Except as otherwise set forth in this Agreement, Seller makes no
representation or warranty that the Property complies with the Americans with
Disabilities Act or any fire code or building code. Except for claims arising
out of a breach of any representation or warranty by Seller set forth in
Paragraphs 17.2 (m), (n) or (o), Purchaser hereby releases Seller and the
Affiliates of Seller from any and all liability in connection with any claims
which Purchaser may have against Seller or the Affiliates of Seller, and
Purchaser hereby agrees not to assert any claims for contribution, cost
recovery or otherwise, against Seller or the Affiliates of Seller relating
directly or indirectly to the existence of asbestos or hazardous materials or
substances on, or environmental conditions of, the Property, whether known or
unknown. As used herein, the term "hazardous materials or substances" means
(i) hazardous wastes, hazardous substances, hazardous constituents, toxic
substances or related materials, whether solids, liquids or gases, including
but not limited to substances defined as "hazardous wastes," "hazardous
substances," "toxic substances," "pollutants, "contaminants," "radioactive
materials," or other similar designations in, or otherwise subject to
regulation under, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq.; the Toxic
Substance Control Act, 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802; the Resource Conservation and
Recovery Act, 42 U.S.C. Section 9601. et seq.; the Clean Water Act, 33 U.S.C.
Section 1251; the Safe Drinking Water Act, 42 U.S.C. Section 30Of et seq; the
Clean Air Act, 42 U.S.C. Section 7401 et seq.; and in any permits, licenses,
approvals, plans, rules, regulations or ordinances adopted, or other criteria
and guidelines promulgated pursuant to the preceding laws or other similar
federal, state or local laws, regulations, rules or ordinance now or hereafter
in effect relating to environmental matters (collectively, "Environmental
Laws"); and (ii) any other substances, constituents or wastes subject to any
applicable federal, state or local law, regulation or ordinance, including any
Environmental Law, now or hereafter in effect, including but not limited to (A)
petroleum, (B) refined petroleum products, (C) waste oil, (D) waste aviation or
motor vehicle fuel and (E) asbestos. Purchaser acknowledges that, except as
otherwise expressly set forth herein, having been given the opportunity to
inspect the Property, Purchaser is relying solely on its own investigation of
the Property and not on any information provided or to be provided by Seller.
Purchaser further acknowledges that the information provided and to be provided
with respect to the Property was obtained from a variety of sources, and that
Seller (x) has not made any independent investigation or verification of such
information and (y) makes no representations as to the accuracy or completeness
of such information, except as provided herein.
7.3 Seller has provided to Purchaser the following existing reports: (i)
Phase I Environmental Site Assessment dated June 7, 1991 prepared by Law
Associates, Inc.; and (ii) ACM Survey dated March 9, 1993 prepared by Law
Associates, Inc. ("Existing Reports"). Seller makes no representation or
warranty concerning the accuracy or completeness of the Existing Reports.
Purchaser hereby releases Seller and the Affiliates of Seller from any
liability whatsoever with respect to the Existing Reports, including, without
limitation, the matters set forth in the Existing Reports, and the accuracy
and/or completeness of the Existing Reports. Furthermore, Purchaser
acknowledges that it will be purchasing the Property with all faults disclosed
in the Existing Reports. Seller represents and warrants that, to its
knowledge, that except for the Existing Reports, there are no reports in
existence regarding the environmental condition of the Property or the
Property's compliance with Environmental Law.
7.4 Notwithstanding anything contained herein to the contrary, the
acknowledgements, agreements, waivers and releases of Purchaser set forth in
this Paragraph 7 shall survive Closing and recording of the Deed and the
termination of this Agreement as applicable.
8. CLOSING. The closing of this transaction ("Closing") shall be on January
13, 1997 as such date may be extended pursuant to the provisions hereof
("Closing Date"), at the office of Purchaser's counsel in Washington D.C., at
which ▇▇▇▇ ▇▇▇▇▇▇ shall deliver possession of the Property to Purchaser. This
transaction shall be closed in accordance with the provisions of the Escrow
Agreement . All deed and money escrow fees (including, so-called "New York
style" closing fees) shall be divided equally between the parties.
9. CLOSING DOCUMENTS.
9.1 On the Closing Date, Seller and Purchaser shall execute and deliver
to one another a joint closing statement. In addition, Purchaser shall deliver
to Seller the balance of the Purchase Price, an assumption of the documents set
forth in Paragraph 9.2.3 and 9.2.4, counterparts of any transfer tax
declarations and such other documents as may be reasonably required by the
Title Insurer and not inconsistent with the terms of this Agreement in order to
consummate the transaction as set forth in this Agreement.
9.2 On the Closing Date, Seller shall deliver to Purchaser the following:
9.2.1 the Deed, subject to Permitted Exceptions and those Unpermitted
Exceptions waived by Purchaser in writing or not objected to by Purchaser in
accordance with Paragraph 5.1 hereof;
9.2.2 a special warranty ▇▇▇▇ of sale conveying the Personal Property
(in the form of Exhibit H attached hereto);
9.2.3 assignment and assumption (with respect to periods from and
after the Closing) of intangible property (in the form attached hereto as
Exhibit I);
9.2.4 an assignment and assumption (with respect to periods from and
after the Closing) of Leases and security deposits (in the form attached hereto
as Exhibit J);
9.2.5 non-foreign affidavit (in the form of Exhibit K attached
hereto);
9.2.6 originals, and/or copies of (in the case that originals are not
available to Seller), the Leases and Service Contracts that Purchaser elects to
assume (unless Seller and Purchaser agree to leave such documents in the
on-site management office);
9.2.7 all documents and instruments reasonably required by the Title
Insurer to issue the Title Policy;
9.2.8 possession of the Property to Purchaser, subject to the Leases
and the Permitted Exceptions;
9.2.9 evidence of the termination of the management and leasing
agreements, along with a lien waiver executed by the property manager, if
applicable;
9.2.10 notice to the tenants of the Property of the transfer of title
and assumption by Purchaser of the landlord's obligation under the Leases and
the obligation to refund the refundable security deposits (in the form of
Exhibit L);
9.2.11 an updated rent roll certified by Seller to be true and
correct, subject to the provisions of Paragraph 17.1 and Paragraph 18 hereof;
9.2.12 a Broker's Lien Waiver signed by Insignia Mortgage and
Investment Company ("Insignia") and ▇▇▇▇▇▇ Partners, Inc. ("▇▇▇▇▇▇");
9.2.13 an Owner's Title Affidavit or ALTA extended coverage statement
in form reasonably acceptable to Seller and Title Insurer;
9.2.14 such formative and authorization documents of Seller as may be
reasonably required by Title Insurer;
9.2.15 an updated aged receivables report for the Property;
9.2.16 a statement recertifying that the representations and
warranties contained in Paragraph 17.2 below are still true and correct in all
material respects;
9.2.17 copies of all books, files, statements and records of Seller
regarding the Property, including, without limitation, those statements
necessary to calculate tenant escalations and reconciliations (unless Seller
and Purchaser agree to leave such documents in the on-site management office);
and
9.2.18 The Closing Escrow Agreement (as hereinafter defined).
10. ESTOPPEL CERTIFICATES.
10.1 Seller agrees to use reasonable efforts to obtain tenant estoppel
certificates in the form of Exhibit M-1 ("Tenant Certificates") for tenants
listed on the rent roll attached hereto as Exhibit C. Seller shall attempt to
deliver to Purchaser prior to Closing, Tenant Certificates for tenants at the
Property (and Purchaser hereby acknowledges that a Tenant may respond on the
form of certificate, if any, required under its Lease) occupying at least 90%
of all leased office space at the Property ("Required Amount"). If Seller is
unable to obtain the Required Amount of Tenant Certificates prior to Closing,
Seller covenants to deliver to Purchaser, not less than five (5) days prior to
Closing, a Seller Tenant Certificate for those tenants who fail to execute and
return a Tenant Certificate, to the extent necessary to achieve the Required
Amount. As used herein, "Seller Tenant Certificate" shall mean a Tenant
Certificate in the form of Exhibit M-2 signed by Seller with respect to a
particular tenant which failed to execute and deliver a Tenant Certificate,
containing terms which are consistent with the information regarding such
tenant contained in Exhibit C. If a tenant submits a certificate containing
terms which are not consistent with the information regarding such tenant set
forth in Exhibit C in all material respects, such certificate shall not be
considered a Tenant Certificate under the provisions of this Paragraph, and
such certificate shall not be counted in determining whether the Required
Amount has been achieved.
10.2 Notwithstanding anything contained herein to the contrary, the
representations and warranties contained in any Seller Tenant Certificate
executed by Seller shall be subject to the provisions of Paragraph 18 hereof.
10.3 Upon receipt after Closing by Purchaser of a Tenant Certificate
containing the information herein required from a tenant under a Lease
(consistent in all material respects with the information regarding such Tenant
contained in Exhibit C) for whom Seller has executed and delivered a Seller
Tenant Certificate at Closing, or from any other tenant or tenants which would,
in computing the Required Amount, negate the need for any or all of the Seller
Tenant Certificates, any Seller Tenant Certificate executed and delivered by
Seller at Closing which is no longer needed in achieving the Required Amount
shall become null and void, and the Tenant Certificates received from the
tenant or tenants shall be substituted therefor.
11. SERVICE CONTRACTS. Except for the Service Contracts Purchaser has elected
not to assume under the terms of this Paragraph 11, Seller shall assign to
Purchaser on the Closing Date the Service Contracts, and Purchaser shall assume
in writing responsibility of the obligations arising from and after the Closing
Date under such Service Contracts. Seller shall use reasonable efforts to
obtain any required consent with respect to the assignment of such Service
Contracts; provided, however, that Seller's inability to obtain such approval
shall not be a default hereunder or a condition precedent to Purchaser's
obligations to close hereunder. Purchaser shall notify Seller in writing of
the Service Contracts that Purchaser elects not to assume prior to Closing
Date. If such notice is delivered thirty-five (35) days or more prior to the
Closing Date, Seller shall cause all Service Contracts identified in such
notice to be terminated as of the Closing Date. If such notice is given less
than thirty-five 35 days prior to the Closing Date, Seller shall promptly
deliver notice of such termination to the service provider; provided, however,
Purchaser agrees to assume such Service Contract at the Closing if the
termination can not be effectuated prior to the Closing Date.
12. LEASING OF PROPERTY. Prior to the expiration of the Inspection Period,
Seller shall at least five (5) days prior to Seller's execution thereof,
deliver to Purchaser a copy of any new leases or modifications or extensions to
be executed by Seller during the Inspection Period, together with information
as to any tenant improvement obligations and leasing commissions, and such
other information as Purchaser may reasonably require. Any such new leases or
lease modifications and extensions executed by Seller during the Inspection
Period shall be included in the definition of Leases and Purchaser shall be
responsible to pay for all leasing commissions and tenant improvement costs to
be paid by Seller with respect to such leases if Purchaser closes the
transaction contemplated by this Agreement. After the expiration of the
Inspection Period, Seller shall not enter into any lease for any portion of the
Property or any modification of any Lease without first obtaining the prior
written consent of Purchaser in each case, which consent shall not be
unreasonably withheld. If Purchaser has not responded within five (5) business
days of receipt of a request by Seller, Purchaser's consent shall be deemed
given. If Purchaser closes the transaction contemplated by this Agreement,
Purchaser shall be responsible to pay for all leasing commission or tenant
improvement costs incurred or to be incurred by Seller with respect to any such
lease or lease modification approved by Purchaser. Seller agrees to pay any
outstanding brokerage commissions now or hereafter due or payable with respect
to the existing term of any Lease. Further, between the end of the Inspection
Period and the Closing Date, Seller agrees that it shall not, without the prior
written consent of Purchaser in each case, (i) renew or extend any Lease in any
respect, or enter into an agreement with any tenant in the Property ("Tenant")
in respect of the rent to be paid by such Tenant during any period of renewal
or extension of such Tenant's Lease, except, in the case of any renewal or
extension of a Lease, if (A) such renewal or extension is contained in such
Lease and is described in the rent roll attached hereto as Exhibit C, and (B)
the rent to be paid by such Tenant during the renewal or extension period is
fixed by a formula in such Tenant's Lease and is not subject to negotiation
between Seller and such Tenant, (ii) terminate any Lease, or accept a surrender
of the leased premises thereunder, or (iii) agree to any request by a Tenant
for permission to assign its Lease or sublet the leased premises thereunder.
Except for any Seller Tenant Certificate executed by Seller and delivered to
Purchaser, Seller does not represent or warrant that any particular Lease will
be in effect at Closing or that the tenant will have performed the tenant's
obligations thereunder. The termination of any Lease prior to Closing by
reason of a tenant's default will not affect the obligations of Purchaser under
this Agreement in any manner, or entitle Purchaser to an abatement of or credit
against the Purchase Price, or give rise to any other claim by Purchaser, and
if any space in the Improvements is vacant on the Closing Date, Purchaser will
accept the Premises subject to the vacancy. Notwithstanding anything contained
in this Paragraph 12 or elsewhere in this Agreement, (i) Seller shall have no
obligation to conduct any ongoing leasing activity for the Property through the
Closing Date and (ii) Purchaser shall be responsible for the costs set forth on
Exhibit Q attached hereto.
13. DEFAULT BY PURCHASER. ALL ▇▇▇▇▇▇▇ MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT PURCHASER FAILS TO CLOSE ON THE PURCHASE OF
THE PROPERTY AS REQUIRED UNDER THIS AGREEMENT OR THAT CERTAIN AGREEMENT OF SALE
OF EVEN DATE HEREWITH BY AND BETWEEN AMMENDALE II LIMITED PARTNERSHIP AND
PURCHASER FOR PROPERTY COMMONLY KNOWN AS AMMENDALE II, BELTSVILLE, MARYLAND
(THE "AMMENDALE II CONTRACT") SELLER SHALL RETAIN ALL OF THE ▇▇▇▇▇▇▇ MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT WITH RESPECT TO DAMAGES OR ANY
OTHER REMEDY. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES WOULD BE
EXTREMELY DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR
INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE ▇▇▇▇▇▇▇ MONEY HAS BEEN AGREED
UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S
DAMAGES. IF CLOSING OCCURS HEREUNDER BUT, AT THE TIME OF CLOSING, PURCHASER IS
IN DEFAULT OF ONE OR MORE OBLIGATIONS UNDER THIS AGREEMENT SELLER SHALL HAVE
ALL RIGHTS AND REMEDIES AT LAW OR AT EQUITY, WITHOUT LIMITATION, UPON CONDITION
THAT SUCH RIGHTS ARE EXERCISED WITHIN NINE (9) MONTHS AFTER CLOSING, PROVIDED,
HOWEVER, THAT IN NO EVENT SHALL PURCHASER'S LIABILITY UNDER THIS AGREEMENT
AND/OR UNDER THE AMMENDALE II CONTRACT EXCEED, IN THE AGGREGATE, THE SUM OF
$400,000. PURCHASER AND SELLER AGREE THAT THIS AGREEMENT SHALL BE CROSS
DEFAULTED WITH THE AMMENDALE II CONTRACT, AND THAT ANY WRONGFUL FAILURE TO
CLOSE BY PURCHASER UNDER THE AMMENDALE II CONTRACT SHALL BE DEEMED A WRONGFUL
FAILURE TO CLOSE UNDER THIS AGREEMENT.
14. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL ▇▇▇▇▇▇▇ MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND UPON THE RETURN OF THE ▇▇▇▇▇▇▇
MONEY THIS AGREEMENT SHALL TERMINATE WITHOUT FURTHER ACTION OF THE PARTIES AND
THE PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY,
EXCEPT FOR THOSE COVENANTS AND OBLIGATIONS WHICH EXPRESSLY SURVIVE TERMINATION
OF THIS AGREEMENT. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY,
IF SELLER'S DEFAULT RESULTS FROM (i) ITS (AND NOT AN UNRELATED THIRD PARTY'S)
AFFIRMATIVE ACTION DONE WITH THE INTENTION OF PREVENTING THE SALE WHICH RESULTS
IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE PROPERTY AND WHICH GIVES RISE TO
PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO PARAGRAPH 5 HEREOF;
OR (ii) ITS REFUSAL TO DELIVER THE DEED OR FULFILL ITS OBLIGATIONS UNDER THIS
AGREEMENT, THEN PURCHASER WILL BE ENTITLED TO ▇▇▇ FOR SPECIFIC PERFORMANCE. IN
NO EVENT SHALL SELLER BE LIABLE FOR ANY ACTUAL, PUNITIVE, SPECULATIVE OR
CONSEQUENTIAL DAMAGES RESULTING FROM ANY DEFAULT BY SELLER LEADING TO A
TERMINATION OF THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, BUT SUBJECT TO THE LIMITATIONS ON LIABILITY PROVIDED IN
PARAGRAPH 18, IN THE EVENT THE CLOSING OCCURS AND IN THE EVENT OF A BREACH BY
SELLER OF ANY REPRESENTATION, WARRANTY, COVENANT, AGREEMENT, PRORATION OR
REPRORATION OBLIGATION OR INDEMNITY WHICH SURVIVES CLOSING, PURCHASER SHALL
HAVE ALL RIGHTS AND REMEDIES AT LAW OR AT EQUITY, WITHOUT LIMITATION; PROVIDED,
HOWEVER, THAT IN NO EVENT SHALL SELLER'S LIABILITY UNDER ANY REPRESENTATION,
WARRANTY, COVENANT, AGREEMENT, PRORATION, REPRORATION OBLIGATION OR INDEMNITY
MADE HEREUNDER OR UNDER ANY CLOSING DOCUMENTS, UNDER THE AMMENDALE II CONTRACT
AND/OR ANY CLOSING DOCUMENTS UNDER THE AMMENDALE II CONTRACT EXCEED, IN THE
AGGREGATE THE SUM OF $400,000 ("SELLER'S MAXIMUM LIABILITY"). PURCHASER AND
SELLER AGREE THAT THIS AGREEMENT SHALL BE CROSS DEFAULTED WITH THE AMMENDALE II
CONTRACT AND THAT IF PURCHASER TERMINATES THE AMMENDALE II CONTRACT BY REASON
OF A BREACH BY SELLER OF ANY OF THE REPRESENTATIONS OR WARRANTIES MADE BY
SELLER IN THE AMMENDALE II CONTRACT OR THE FAILURE OF SELLER TO PERFORM ANY OF
THE COVENANTS OR AGREEMENTS TO BE PERFORMED BY SELLER UNDER THE AMMENDALE II
CONTRACT, PURCHASER SHALL ALSO IN SUCH EVENT HAVE THE RIGHT TO TERMINATE THIS
AGREEMENT AND ▇▇▇ TO RECOVER ANY DAMAGES ARISING OUT OF ANY SUCH TERMINATION,
BUT IN NO EVENT IN AN AGGREGATE AMOUNT EXCEEDING SELLER'S MAXIMUM LIABILITY.
15. PRORATIONS.
15.1 Rent, additional rent, water and other utility charges; fuels;
operating expenses; real and personal property taxes (adjusted for all tenants'
liabilities, if any, for such items); and all other items of expense and income
shall be adjusted ratably as of 12:01 a.m. on the Closing Date ("Proration
Date"). Seller shall be entitled to a credit for all transferable utility
deposits transferred hereunder, if any, and all other utility deposits, if any,
may be withdrawn by and refunded to Seller and Purchaser shall make its own
replacement deposits for utilities as may be required by the respective
utilities involved. Assessments, excluding regular ad valorem real estate
taxes, payable in installments which are due prior to the Closing Date shall be
paid by Seller. Assessments, excluding regular ad valorem real estate taxes,
payable in installments which are due subsequent to the Closing Date shall be
paid by Purchaser. If the amount of any of the items to be prorated is not
then ascertainable, the adjustments thereof shall be on the basis of the most
recent ascertainable data. If any ongoing real estate tax contest has not been
finalized as of the Closing Date, Purchaser and Seller agree that the tax ▇▇▇▇
existing prior to the contest shall be the most recent data for the tax year
being contested, and (i) Purchaser agrees to re-prorate such amount as it
relates to the real estate tax proration for the current tax year to the extent
such tax contest is successful. All other prorations will be adjusted finally
pursuant to Paragraph 15.4 below. Purchaser shall be credited with and Seller
shall be charged with an amount equal to the sum of (i) all Tenant security
deposits and interest thereon required under the Leases, and (ii) the amount of
any other credits due to Tenants as of the Closing Date in accordance with the
terms of the Leases, including prepaid rent. Seller shall be entitled to
retain all Tenant security deposits, interest thereon, or other such credits
due Tenants for which Purchaser receives credit and Seller is charged pursuant
to this Paragraph. At the Closing, Seller shall give Purchaser credit for an
amount, determined on an accrual basis, equal to the abatement of rent for any
period on and after the Closing Date to which Tenants are entitled under Leases
in effect on the Closing Date. Subject to the other terms of this Agreement,
Purchaser shall assume the performance of all terms, covenants and conditions
of the Leases with respect to the period from and after the Closing Date.
15.2 Delinquent Rent (i.e., rent which is due and payable by a Tenant on
or before the Closing Date but which has not been paid by the Closing Date)
shall be prorated between Seller and Purchaser as of the Closing Date but not
until it is actually collected by Purchaser after the Closing, it being
understood and agreed that Purchaser shall have no obligation to collect
Delinquent Rent on behalf of Seller. Purchaser shall pay to Seller all
Delinquent Rent collected by Purchaser after the Closing Date. After the
Closing, without the express written consent of Purchaser, Seller shall not
take any action against a Tenant owing Delinquent Rent which would affect such
Tenant's right to occupy the premises leased under its Lease. Rent collected
by Purchaser after the Closing, net of the costs of collection (including
reasonable attorneys' fees and costs), shall be applied first to unpaid rent
accruing after the Closing Date, and then to Delinquent Rent. If Seller
mistakenly receives any rent after the Closing Date, Seller shall promptly
deliver such rent to Purchaser. Upon receipt of any such rent from Seller,
Purchaser shall apply such rent first to unpaid rent accruing after the Closing
Date, and then to Delinquent Rent.
15.3 All refunds in connection with any ongoing real estate tax protests
for the Property initiated by Seller prior to the Closing shall remain the
property of Seller and are not being assigned by Seller to Purchaser pursuant
to this Agreement except to the extent such refunds relate to periods after the
Closing. In the event any such refunds are paid to Purchaser, Purchaser agrees
to promptly remit all such sums to Seller after paying Tenants or retaining any
portion of such refunds as may be owed to Tenants or Purchaser, as the case may
be, in respect of periods following the Closing Date. In the event that any
such refunds are paid to Seller, Seller agrees to promptly remit to Purchaser
any portion of such refunds relating to periods after the Closing Date, and
Purchaser shall pay to Tenants any part of such Seller remittance as may be
owed to Tenants relating to periods after the Closing Date. Purchaser agrees,
at no cost or expense to Purchaser, to execute any documents reasonably
requested by Seller in connection with such tax protests. If any proceeding to
determine the assessed value of the Property or the real estate taxes payable
with respect to the Property has been commenced before the date of this
Agreement and shall be continuing as of the Closing Date, Purchaser shall be
entitled to control the prosecution of such proceeding or proceedings to
completion and to settle or compromise any claim therein. Seller agrees to
cooperate with Purchaser and to execute any and all documents reasonably
requested by Purchaser in furtherance of the foregoing.
15.4 No later than April 30, 1997, Seller and Purchaser shall make a final
adjustment to the prorations made pursuant to this Paragraph (the "Final
Closing Adjustment"). The Final Closing Adjustment shall be made in the
following manner:
(a) General. All adjustments or prorations which could not be
determined at the Closing because of the lack of actual statements, bills or
invoices for the current period, the year-end adjustment of additional rent, or
any other reason shall be made as a part of the Final Closing Adjustment. Any
net adjustment in favor of Purchaser shall be paid in cash by Seller to
Purchaser no later than 30 days after the Final Closing Adjustment. Any net
adjustment in favor of Seller shall be paid in cash by Purchaser to Seller no
later than 30 days after the Final Closing Adjustment. The parties shall
correct any manifest error in the prorations and adjustments made at Closing
promptly after such error is discovered.
(b) Additional Rent Adjustment. Seller and Purchaser shall prorate
the actual amount of additional rent paid by each Tenant for such Tenant's
applicable fiscal year ("Tenant's Fiscal Year"), as follows:
(1) Seller shall be entitled to the portion of the actual
amount of additional rent paid by the Tenant equal to the product obtained by
multiplying such amount by a fraction, the numerator of which is the number of
days in the Tenant's Fiscal Year preceding the Closing Date and the denominator
of which is the total number of days in the Tenant's Fiscal Year; and
(2) Purchaser shall be entitled to the balance of the
additional rent paid by the Tenant.
If the sum of all interim payments of additional rent collected and retained by
Seller from each Tenant for the Tenant's Fiscal Year exceeds the amount of such
additional rent to which Seller is entitled with respect to such Tenant
pursuant to paragraph (1) above, Seller shall pay such excess to Purchaser. If
the sum of all interim payments of such additional rent collected and retained
by Purchaser from each Tenant for the Tenant's Fiscal Year exceeds the amount
of additional rent to which Purchaser is entitled with respect to such Tenant
pursuant to paragraph (2) above, Purchaser shall pay the excess to Seller. The
adjustment of interim payments received and actual additional rent paid shall
be made separately for each Tenant and for each type of additional rent.
(c) Except for: (i) additional or supplemental real estate taxes,
real estate tax credits or rebates, or other adjustments to real estate taxes
due to back assessments, corrections to previous tax bills or real estate tax
appeals or contests, (ii) any item of additional rent which may be contested by
a Tenant or (iii) manifest errors, the Final Closing Adjustment shall be
conclusive and binding upon Seller and Purchaser, and Seller and Purchaser
hereby waive any right to contest, after the Final Closing Adjustment, any
prorations, apportionments or adjustments to be made pursuant to this
paragraph.
16. BROKER. The parties hereto represent and warrant to the other that no
broker commission or finder fee is due and payable in connection with this
transaction, by reason of their respective actions, other than to Insignia and
▇▇▇▇▇▇, all in accordance with Seller's listing agreement with Insignia (to be
paid by Seller). Seller's commission to Insignia and ▇▇▇▇▇▇ shall be payable
only out of the proceeds of the sale of the Property in the event the
transaction set forth herein closes. Purchaser and Seller shall indemnify,
defend and hold the other party hereto harmless from any claim whatsoever
(including without limitation, reasonable attorneys' fees, court costs and
costs of appeal) from anyone claiming by or through the indemnifying party any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated other than to Insignia and ▇▇▇▇▇▇. Seller
shall indemnify, defend and hold Purchaser harmless from any claim (including,
without limitation, reasonable attorneys' fees, court costs and costs of
appeal) for any claim by Insignia or ▇▇▇▇▇▇ (to the extent such claim is based
on the listing agreement) for any fee, commission or compensation on account of
this Agreement, its negotiation or the sale hereby contemplated. The
indemnifying party shall undertake its obligations set forth in this Paragraph
16 using attorneys selected by the indemnifying party and reasonably acceptable
to the indemnified party. The provisions of this Paragraph 16 will survive the
Closing and delivery of the Deed.
17. REPRESENTATIONS, WARRANTIES AND COVENANTS.
17.1 Any reference herein to Seller's knowledge or notice of any matter or
thing shall only mean such knowledge of, or notice that has actually been
received by, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇ (Seller's asset manager)
(collectively, "Seller's Representative"), and any representation or warranty
of Seller made to Seller's knowledge is based upon those matters of which
Seller's Representative, or either of them, has actual knowledge. Seller agrees
that Seller's Representative has discussed the terms of the representations and
warranties contained in this Section 17 with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ prior to the
execution of this Agreement. Any knowledge or notice given, had or received by
any of Seller's agents, servants or employees shall not be imputed to Seller,
the general partner or limited partners of Seller, the subpartners of the
general partner or limited partners of Seller or Seller's Representative.
17.2 Subject to the limitations set forth in Paragraph 17.1, Seller hereby
makes the following representations and warranties, which representations and
warranties shall survive Closing for a period of nine (9) months: (a) Seller is
a limited partnership duly formed and validly existing under the laws of the
State of Maryland; (b) the requisite number of the general partners of Seller
required by Seller's Limited Partnership Agreement has authorized the execution
and delivery of this Agreement and the transactions contemplated hereby; (c)
the execution and delivery by Seller of, and the performance and compliance by
Seller with the terms and provisions of, this Agreement do not violate any of
the terms, conditions or provisions of (i) Seller's Limited Partnership
Agreement, (ii) any judgment, order, injunction, decree, regulation or ruling
of any court or other governmental authority to which Seller is subject, or
(iii) any agreement or contract listed on any Schedule to this Agreement or, to
Seller's knowledge, any other agreement or contract to which Seller is a party
or to which it or the Property is subject; (d) Seller has no employees; (e) to
the best of Seller's knowledge, Seller has not received from a governmental
authority notice of any, and there is no, pending or contemplated condemnation
proceedings affecting the Property, or any part hereof; (f) Seller is a "United
States person" within the meaning of Sections 1445(f)(3) and 7701(a)(30) of the
Internal Revenue Code of 1986, as amended; (g) neither Seller nor any general
partner of Seller has commenced a voluntary case, consented to the entry of an
order for relief against it in an involuntary case, or consented to the
appointment of a custodian of it or for all or any substantial part of its
property, under any bankruptcy law, nor has a court of competent jurisdiction
entered an order or decree under any bankruptcy law that is for relief against
Seller or any of its general partners in an involuntary case or appoints a
custodian of Seller or any of its general partners or for all or any
substantial part of its or their property; (h) except as listed on Exhibit N,
Seller has no knowledge of any pending or threatened litigation, claim, cause
of action or administrative proceeding concerning the Property; (i) the rent
rolls attached hereto as Exhibit C and updated as of the Closing Date are
accurate in all material respects as of the date set forth therein; (j) to the
best of Seller's knowledge, except for the leases, modifications and agreements
disclosed in the rent rolls attached hereto or otherwise noted in the estoppel
letters delivered pursuant to this Agreement, there are no other agreements in
place between Seller and any tenant for use of space on the Property; (k)
Seller has not given or suffered any assignment, pledge or encumbrance with
respect to any of the Leases or its interests thereunder; (l) to the best of
Seller's knowledge, the list of Service Contracts attached hereto as Exhibit D
is accurate as of the date hereof; (m) except as disclosed in the Existing
Reports, to the best of Seller's knowledge, Seller has received no written
notice or claim from any governmental authority having jurisdiction over the
Property relating to an uncured breach or violation of any Environmental Laws
or other laws in connection with the Property; (n) except as disclosed in the
Existing Reports, to the best of Seller's knowledge, there neither are nor have
been any underground storage tanks on the Property; (o) except as disclosed in
the Existing Reports, to the best of Seller's knowledge, the only hazardous
materials or substances on the Property are those used in the ordinary course
of the use, operation and management of the Property in compliance with
Environmental Laws; (p) to the best of Seller's knowledge, Seller has received
no notice of any uncured landlord default from any tenant in connection with
any Lease; (q) on the Closing Date, there will be no contract or agreement in
effect for the management or leasing of the Property; and (r) all Operating
Statements have been prepared in the ordinary course of business and have not
been altered for Purchaser.
17.3 Purchaser hereby represents and warrants to Seller that Purchaser has
the full right, power and authority to execute this Agreement and that it will
have, as of the Closing Date, the power and authority to consummate the
transactions contemplated herein.
17.4 Seller covenants and agrees as follows:
(a) Between the date of this Agreement and the Closing Date, Seller
agrees that it will:
(1) manage and operate the Property only in the ordinary and
usual manner, and use all reasonable efforts to keep available the services of
its present property manager and preserve its relations with Tenants, suppliers
and others having business dealings with it;
(2) at its expense, maintain the Property in its present order
and condition, reasonable wear and tear and damage by fire or other casualty
excepted, and deliver the Property on the Closing Date in substantially the
same condition it is in on the date of this Agreement, reasonable wear and tear
and damage by fire or other casualty excepted;
(3) give prompt notice of any fire or other casualty affecting
the Property after the date of this Agreement;
(4) deliver to Purchaser, promptly after receipt by Seller
after the date of this Agreement, a copy of (i) all notices from Tenants, (ii)
notices from the service providers under any Service Contracts and (iii)
notices of violation issued by governmental authorities with respect to the
Property. If Seller receives a notice of violation from a governmental
authority respecting the Property prior to Closing, Seller shall, at its sole
cost and expense, remedy such violation before the Closing Date (any such cost
of remedy being herein referred to as a "Cost of Violations") or credit
Purchaser with the Cost of Violations at the Closing if such remedy cannot be
effectuated prior to the Closing, to the extent the Cost of Violations does not
exceed $25,000. If the Cost of Violations is $25,000 or more, but is less than
$50,000, Seller shall grant Purchaser a $25,000 credit against the Purchase
Price, and Purchaser shall be responsible for the payment of such Cost of
Violations and/or correction of such violation in excess of $25,000. If the
Cost of Violations is $50,000 or more, neither Purchaser nor Seller shall be
obligated to pay such Cost of Violations and Purchaser shall have the right to
accept the Property subject to such violation or terminate this Agreement. If
the Purchaser terminates this Agreement, all ▇▇▇▇▇▇▇ Money, together with any
interest accrued thereon, shall be returned to Purchaser, and neither party
shall have any further liability to the other, except for those covenants an
obligations that specifically survive termination of this Agreement;
(5) notify Purchaser, promptly after Seller acquires knowledge
thereof, of any facts or events which would cause any of Seller's
representations and warranties to be untrue or incorrect in any material
respect;
(6) perform, observe and comply with all terms and provisions
of all easement agreements affecting the Property to be performed, observed or
complied with by Seller as owner of the Property;
(7) maintain in full force and effect all licenses which are in
effect during the Inspection Period and timely apply for renewals of all
licenses which will expire before the Closing Date; and
(8) furnish Purchaser with a correct and complete list of all
utilities servicing the Property and the account numbers for each.
(b) Between the date of this Agreement and the Closing Date, Seller
agrees that, without Purchaser's written consent in each case, it will not:
(1) alter or amend any of the Service Contracts or become a
party to any new Service Contract unless the new Service Contract is terminable
without penalty to the then-owner of the Property upon not more than 30 days'
notice;
(2) remove any Personal Property from the Property unless the
same is replaced with similar items of equal or better quality before the
Closing Date.
(3) offer the Property for sale to any other person, consider
unsolicited offers from any other person for the purchase of the Property or
enter into a contract for the sale of the Property to any other person, whether
or not such contract is contingent on the termination of this Agreement.
(c) Seller shall cancel, as of the Closing Date, all Service
Contracts designated for cancellation by Purchaser in a notice given to Seller
in accordance with Paragraph 11.
Notwithstanding anything contained in this Paragraph 17.4 or elsewhere in this
Agreement, Seller shall have no obligation to conduct any efforts to enter into
leases with regard to the Property.
17.5 The representations, warranties and covenants set forth herein and in
any Closing Document shall survive Closing for a period of nine (9) months
after the Closing Date ("Survival Period"). All rights of Purchaser hereunder
with respect to any such surviving representation, warranty or covenant shall
be deemed waived if Purchaser does not, by notice to Seller, advise Seller of
any alleged breach of representation, warranty or covenant prior to the
expiration of the Survival Period. Notwithstanding anything herein to the
contrary, Seller's liability under any representation, warranty or covenant
made hereunder in any closing document hereunder, under the Ammendale II
Contract and/or any closing document thereunder shall in no event exceed, in
the aggregate, Seller's Maximum Liability. On the Closing Date, Seller shall
deposit the aggregate amount of $400,000 into one escrow applicable to both
this Agreement and the Ammendale II Contract in accordance with an escrow
agreement mutually acceptable to the parties hereto (the "Closing Escrow
Agreement"), in order to secure Seller's obligations under any such surviving
representations, warranties or covenants under this Agreement and the Ammendale
II Contract and the related closing documents. Such escrow shall provide that
the escrowed funds shall be disbursed to Seller automatically at the end of the
Survival Period without notice to or consent from either party hereto unless
Purchaser makes a claim against Seller in accordance with this Agreement or the
Ammendale II Contract prior to the expiration of the Survival Period and so
notifies the escrowee within such time period. The Closing Escrow Agreement
shall be attached hereto as Exhibit O prior to the end of the Inspection
Period.
18. LIMITATION OF LIABILITY. None of Seller's beneficiaries, shareholders,
partners, officers, agents, employees, heirs, successors or assigns shall have
any personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to ▇▇▇ or recover on account of any such
alleged personal liability.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: ▇/▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
TO PURCHASER: Washington Real Estate Investment Trust
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
with copies to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Arent Fox
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be deemed
to be delivered or made on the next business day if sent by overnight courier,
or the same day as given if sent via facsimile transmission and received by
5:00 p.m. Chicago time, or on the fourth (4th) business day after the same is
deposited in the United States Mail as registered or certified mail, addressed
as above provided, with postage thereon fully prepaid. Any such notice, demand
or document not given, delivered or made by registered or certified mail or by
overnight courier or by facsimile transmission as aforesaid shall be deemed to
be given, delivered or made upon receipt of the same by the party to whom the
same is to be given, delivered or made. Copies of all notices shall be served
upon the escrow agent. All time periods for responses by either party set forth
in this Agreement shall commence upon the receipt of notice as set forth
hereinabove.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution, accompanied by the ▇▇▇▇▇▇▇ Money payable
to the escrow agent set forth in the Escrow Agreement. Seller will forward one
(1) copy of the executed Agreement to Purchaser and will forward to the escrow
agent the ▇▇▇▇▇▇▇ Money, along with three (3) copies of the Escrow Agreement
signed by the parties with a direction to execute two (2) copies of the Escrow
Agreement and deliver a fully executed copy to each of Purchaser and Seller.
21. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. The obligations of
Purchaser to purchase the Property from Seller and to perform the other
covenants and obligations to be performed by it on the Closing Date shall be
subject to the following conditions (all or any of which may be waived, in
whole or in part, by Purchaser):
(a) The representations and warranties made by Seller in
Paragraph 17.2 shall be true and correct on the date of this Agreement and
shall be true and correct on and as of the Closing Date in all material
respects with the same force and effect as if such representations had been
made on and as of such date, and Seller shall have executed and delivered to
Purchaser a certificate, dated as of the Closing Date, to the foregoing effect.
(b) Seller shall have performed in all material respects all
covenants and obligations required by this Agreement to be performed by it on
or before the Closing Date.
(c) Seller shall be prepared on the Closing Date, to transfer the
Property to Purchaser subject only to Permitted Exceptions and those
Unpermitted Exceptions not objected to by Purchaser (or removed by Seller)
under the provisions of Paragraph 5 hereof.
(d) Purchaser shall have received Tenant Certificates executed by
the Tenants listed on Exhibit P attached hereto.
This Agreement may be terminated by Purchaser if any one of the conditions
precedent to Purchaser's obligations to close set forth in Paragraph 21 above
is not satisfied on the Closing Date. If Purchaser terminates this Agreement
as aforesaid, all ▇▇▇▇▇▇▇ Money theretofore deposited into escrow by Purchaser,
together with any interest accrued thereon, shall be returned to Purchaser, and
neither party shall have any further liability to the other, except for those
covenants and obligations that specifically survive termination of this
Agreement.
22. MISCELLANEOUS
(a) Time is of the essence of each provision of this Agreement.
(b) This Agreement and all provisions hereof shall extend to and be
obligatory upon and inure to the benefit of the respective heirs, legatees,
legal representatives, successors and assigns of the parties hereto.
(c) The section and paragraph headings of this Agreement are for
convenience only and in no way define, limit or enlarge the scope or meaning of
the language hereof. The terms "hereby," "herein," "hereof," "hereto,"
"hereunder" and any similar terms used in this Agreement refer to this
Agreement. The term "including" shall not be construed in a limiting nature,
but shall be construed to mean "including, without limitation." Words
importing persons shall include firms, associations, partnerships, trusts,
corporations and other legal entities, including public bodies, as well as
natural persons. Words importing the singular shall include the plural and
vice versa. Words of the masculine gender shall be deemed to include
correlative words of the feminine and neuter genders.
(d) This Agreement contains the entire agreement between the parties
relating to the transactions contemplated hereby, and all prior or
contemporaneous agreements, understandings, representations and statements,
oral or written, are merged herein. No representations, warranties,
undertakings or promises (whether oral or written, express or implied), can be
made or have been made by Seller or its agents, representatives or brokers to
Purchaser or any other person unless expressly stated herein. No modification
or amendment of this Agreement or any waiver of any provision hereof shall be
effective unless the same is in writing signed by the party against whom
enforcement of such modification, amendment or waiver is sought.
(e) This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland. If any of the provisions of this
Agreement or the application thereof to any persons or circumstances shall, to
any extent, be deemed invalid or unenforceable, the remainder of this Agreement
and the application of such provisions to persons or circumstances other than
those as to whom or which it is held invalid or unenforceable shall not be
affected thereby, and every provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
(f) This Agreement and any document or instrument executed pursuant
hereto may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
(g) The submission by Seller of this Agreement to Purchaser for
examination does not constitute an offer by Seller to sell, or a reservation of
or option to purchase the Property. This Agreement shall not become a contract
until executed and delivered by Purchaser and Seller in the manner set forth
herein.
(h) Purchaser shall not record this Agreement or any memorandum
hereof, and any such recording shall be a default hereunder.
(i) At all times through the Closing Date, Purchaser and Seller
shall jointly prepare and issue all releases of information relating to the
sale of the Property, and any inquiries regarding the transaction contemplated
hereby shall be responded to only after consultation with the other party
hereto.
(j) If either party institutes a legal action against the other
relating to this Agreement or any default hereunder, the unsuccessful party to
such action will reimburse the successful party for the reasonable expenses of
prosecuting or defending such action, including without limitation, reasonable
attorneys fees and disbursements and court costs.
(k) This Agreement shall not be construed more strictly against one
party than against the other merely by virtue of the fact that the Agreement
may have been prepared primarily by counsel for one of the parties, it being
recognized that both Purchaser and Seller have contributed substantially and
materially to the preparation of this Agreement.
(l) Purchaser shall not have the right to assign its interest in
this Agreement without the prior written consent of Seller. Any assignment or
transfer of, or attempt to assign or transfer, Purchaser's interest in this
Agreement shall be an act of default hereunder by Purchaser and subject to the
provisions of Paragraph 13 hereof. Notwithstanding the foregoing, Purchaser
may make one (1) assignment of its interest in this Agreement without the
consent of Seller to any entity affiliated with or controlled by Purchaser
("Assignee"), provided that Purchaser remains liable for and the Assignee
assumes the obligations of Purchaser hereunder. If the Assignee petitions or
applies for relief under any bankruptcy laws or is adjudicated as a bankrupt or
insolvent, or if Assignee files any petition, application for relief or
answer-seeking or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under any
present or future federal, state or other statute, law, code or regulation
relating to bankruptcy, insolvency, or other relief for debtors (collectively,
a "Bankruptcy Filing") on or before the Closing Date, said Bankruptcy Filing
shall be a default under this Agreement and Purchaser shall indemnify Seller
for all costs, attorney's fees and expenses of Seller resulting from Seller's
efforts to obtain the ▇▇▇▇▇▇▇ Money as liquidated damages and to clear title to
the Property with respect to any encumbrance resulting from the Bankruptcy
Filing.
(m) Seller and Purchaser waive trial by jury in any action,
proceeding or counterclaim brought by either of them against the other on any
matter arising out of or in any way connected with this Agreement.
(o) The provisions of this Agreement, in addition to the
representations and warranties of Seller set forth in Paragraph 17.2 hereof,
shall survive Closing and the delivery of the Deed for a period of nine (9)
months, and shall not be merged therein.
(p) If required by rules of the Securities and Exchange Commission,
Seller grants Purchaser the right, at Purchaser's sole expense, to prepare an
audited income statement of the Property for the most recent fiscal year(s) as
specified by Rule 3-14 of Regulation S-X under the Securities Act of 1933 and
the Securities Exchange Act of 1934, and Seller shall provide and/or fully
cooperate in obtaining any and all such other data and financial information
which shall be available to Seller (including, without limitation, data and
information obtainable from Seller's management agent for the Property) and as
advisable in connection with fulfilling Purchaser's disclosure obligations as a
public company subject to the rules and regulations of the Securities and
Exchange Commission.
23. AMMENDALE II CONTRACT. The parties hereto understand and agree that this
Agreement and the Ammendale II Contract are being executed and delivered
simultaneously, and that the parties intend that there will be a simultaneous
closing under this Agreement and the Ammendale II Contract. Accordingly,
Purchaser and Seller agree as follows:
(a) If Purchaser terminates this Agreement during the Inspection
Period under the provisions of Paragraph 7.1 hereof, such termination shall not
be effective unless simultaneously therewith Purchaser also terminates the
Ammendale II Contract.
(b) Any termination of this Agreement other than pursuant to the
provisions of Paragraph 7.1 hereof (for example, under the provisions of
Paragraph 6 hereof resulting from a casualty or condemnation) shall
automatically result in the simultaneous termination of the Ammendale II
Contract, even though there may be no separate grounds for termination of the
Ammendale II Contract.
(c) In general, (i) Seller shall not be required to sell the
Property to Purchaser unless at the same ▇▇▇▇ ▇▇▇▇▇▇ is able to sell to
Purchaser the property the subject of the Ammendale II Contract, and (ii)
Purchaser shall not be required to purchase the Property from Seller unless at
the same time Purchaser is able to purchase from Seller the property the
subject of the Ammendale II Contract.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
PURCHASER:
WRIT LIMITED PARTNERSHIP
By: Washington Real Estate Investment Trust,
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------------------
Its: President and Chief Executive Officer
-------------------------------------------
SELLER:
AMMENDALE LIMITED PARTNERSHIP
By: Ammendale Partners, Inc.,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Its: Vice President and Secretary
--------------------------------------
Insignia Mortgage and Investment Company ("Broker") executes this Agreement in
its capacity as a real estate broker and acknowledges that the fee or
commission ("Fee") due to it as a result of the transaction described in this
Agreement is the amount as set forth in the listing agreement between Broker
and Seller. Broker also acknowledges that payment of the aforesaid Fee is
conditioned upon the Closing and the receipt of the Purchase Price by Seller.
Broker agrees to deliver a receipt to Seller at the Closing for the Fee and a
release stating that no other fees or commissions are due to Broker from Seller
or Purchaser.
INSIGNIA MORTGAGE AND
INVESTMENT COMPANY
By:
--------------------------------------
LIST OF EXHIBITS
A. Legal Description
B. Personal Property
[Excluded Personal Property]
C. Leases/Rent Roll
D. Service and Maintenance Contracts
E. Escrow Agreement
F. Copy of Title Commitment
G. Limited Warranty Deed
H. Special Warranty ▇▇▇▇ of Sale
I. Assignment and Assumption of Intangible Property
J. Assignment and Assumption of Leases and Security Deposits
K. FIRPTA
L. Tenant Notice Letter
M-1. Tenant Estoppel Certificate
M-2. Seller Estoppel Certificate
N. Disclosures
O. Closing Escrow Agreement
P. List of Required Tenant Certificates
Q. Pending Lease Costs