EXHIBIT 10.8
PURCHASE AND SALE AGREEMENT
(Phase 1)
THIS AGREEMENT is made and entered into this 24TH DAY OF DECEMBER, 2003,
by and between BPD PARKERSBURG, LLC, a Delaware limited liability company
("SELLER"), and GEN-NET LEASE INCOME TRUST, INC., a Michigan corporation
("BUYER").
W I T N E S S E T H:
1. AGREEMENT TO SELL AND PURCHASE. For and in consideration of the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
Seller and Buyer, Seller hereby agrees to sell and convey to Buyer, and Buyer
hereby agrees to purchase and take from Seller, subject to and in accordance
with all of the terms and conditions of this Agreement, the following:
(A) All that certain lot, tract or parcel of real estate more
particularly described on EXHIBIT "A" attached hereto, together with all plants,
shrubs and trees located thereon, and together with all rights, ways and
easements appurtenant thereto (collectively, the "LAND"); and
(B) Seller's right, title and interest in and to all buildings,
structures and other improvements located on the Land (including, without
limitation, any parking facilities located within the easement area described in
the Parking Easement Agreement (as hereinafter defined) or other portions of the
Land), and all fixtures attached or affixed, actually or constructively, to the
Land or to any such buildings, structures or other improvements, as of the
Closing Date (collectively, the "IMPROVEMENTS") (including, without limitation,
the building shell, tenant improvements, and parking spaces to be constructed
and installed by Seller under the BPD Lease (as hereinafter defined)); and
(C) All of the right, title and interest of Seller as "lessor" or
"landlord" in, to and under that certain U.S. Government Lease for Real Property
dated June 13, 2003 by and between Seller, as "lessor" or "landlord", and the
United States of America, as "lessee" or "tenant" (GSA Lease No. GS-03B-03382),
as supplemented by that certain Supplemental Lease Agreement No. 1 dated August
4, 2003 (the "BPD LEASE"); and
(D) All of the right, title and interest of Seller in, to and under
those management, service and other contracts and agreements, if any, scheduled
and identified on EXHIBIT "B" attached hereto (collectively, the "SERVICE
AGREEMENTS").
The Land and the Improvements are herein sometimes collectively referred to as
the "PROPERTY".
2. PURCHASE PRICE; METHOD OF PAYMENT; ▇▇▇▇▇▇▇ MONEY.
(A) Purchase Price. The purchase price for the Property shall be TWENTY
MILLION TWO HUNDRED SEVENTY THOUSAND AND NO/100 DOLLARS ($20,270,000.00) (the
"PURCHASE PRICE"). In the event that, prior to Closing, the BPD Tenant exercises
any rights under the BPD Lease that would increase the annual rent thereunder
(by way of example, and without limitation, by increasing the tenant improvement
allowance), then the Purchase Price shall be adjusted to account for such
increased rent, using a cap rate equal to 8.25%.
(B) Method of Payment. At the Closing, the remaining balance of the
Purchase Price, after crediting the ▇▇▇▇▇▇▇ Money, subject to the prorations and
adjustments herein described, shall be paid by Buyer to Seller by wire delivery
of good and immediately available funds through the Federal Reserve System to an
account designated in writing by Seller.
(C) ▇▇▇▇▇▇▇ Money.
(I) Within three (3) business days after the execution and delivery
of this Agreement by Seller and Buyer, Buyer shall deliver to Chicago Title
Company, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, as escrow agent (herein called "ESCROW AGENT"), the sum of TWO HUNDRED
THOUSAND AND NO/100 DOLLARS ($200,000.00) (which sum, together with all interest
actually earned thereon during the term of this Agreement, is herein called the
"INITIAL ▇▇▇▇▇▇▇ MONEY"). On or before the date three (3) business days after
the Secondary Offering Completion Date (as defined in SECTION 22, below), Buyer
shall deliver to Escrow Agent the additional sum of THREE HUNDRED THOUSAND AND
NO/100 DOLLARS ($300,000.00) (which sum, together with all interest actually
earned thereon during the term of this Agreement, is herein called the
"ADDITIONAL ▇▇▇▇▇▇▇ MONEY"). The Initial ▇▇▇▇▇▇▇ Money and the Additional
▇▇▇▇▇▇▇ Money are herein sometimes collectively called the "▇▇▇▇▇▇▇ MONEY".
(II) If Buyer shall fail to deliver any ▇▇▇▇▇▇▇ Money deposit to
Escrow Agent on or before the date herein required, then, at Seller's option,
Seller may terminate this Agreement by giving written notice to Buyer on or
before the date on which such ▇▇▇▇▇▇▇ Money deposit is actually delivered to
Escrow Agent; in the event of any such termination by Seller, the ▇▇▇▇▇▇▇ Money
theretofore deposited shall be paid to Seller as consideration for Seller's
execution of and entry into this Agreement, all rights and obligations of the
parties under this Agreement shall expire, and this Agreement shall become null
and void. All deposits by Buyer required pursuant to this SECTION 2(C) shall be
in the form of a certified or cashier's check, payable to Escrow Agent, or
deposited via wire transfer through the Federal Reserve system pursuant to wire
transfer instructions heretofore provided to Buyer by Seller, and no such
deposit shall be deemed timely unless actually received by the date therefor set
forth in this SECTION 2.
(III) Throughout the term of this Agreement, Escrow Agent shall hold
and disburse the ▇▇▇▇▇▇▇ Money in accordance with the terms and conditions of
this Agreement,
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including, without limitation, the terms and conditions set forth on EXHIBIT "C"
attached hereto, and to invest the ▇▇▇▇▇▇▇ Money with a national bank whose
depositors are insured by the Federal Deposit Insurance Corporation or other
financial institutions located in the Irvine, California metropolitan area as
are reasonably acceptable to Buyer.
(IV) On the Closing Date, the ▇▇▇▇▇▇▇ Money will be applied as part
payment of the Purchase Price.
3. CONSTRUCTION HOLDBACK.
(A) The parties acknowledge that the Phase 1 Substantial Completion
Date (as hereinafter defined) may occur notwithstanding that certain portions of
the Improvements may not have been finally completed as of such date, and that,
in such event, it is anticipated that the BPD Tenant will compile a punch list
of work to be completed pursuant to Section 3.24 of the BPD Lease (the "BPD
TENANT PUNCH LIST") and give such list to Seller. In the event that the BPD
Tenant so gives the BPD Punch List to Seller and any items thereon have not been
completed on or before the date THIRTY (30) DAYS prior to the Closing Date, then
Seller shall give written notice to Buyer ("SELLER'S PUNCH LIST NOTICE") of the
remaining items to be completed and of the amount (as reasonably determined by
Seller and Seller's Architect, as such term is hereinafter defined) (the
"CONSTRUCTION HOLDBACK AMOUNT") as may be necessary to (A) satisfactorily
complete such remaining BPD Tenant Punch List items that will not be finally
completed as of the Closing Date, other than the Seasonal Punch List Work
referred to below (the "REGULAR PUNCH LIST WORK"); (B) satisfactorily complete
any landscaping required by the Plans and Specifications which cannot be
completed, or which it is not practical to complete, prior to the Closing Date
on account of weather or the season (the "SEASONAL PUNCH LIST WORK") (the
Regular Punch List Work and the Seasonal Punch List Work are herein collectively
referred to as the "PUNCH LIST WORK").
In such event, if Buyer's Architect (as hereinafter defined) disagrees
with the Construction Holdback Amount (as so determined by Seller and Seller's
Architect) for the Punch List Work, Buyer shall promptly give written notice
thereof to Seller, together with the amount of the Construction Holdback Amount
(as determined by Buyer's Architect) for such remaining Punch List Work and
reasonable supporting calculations with respect thereto ("BUYER'S DISPUTE
NOTICE"); if Seller does not actually receive Buyer's Dispute Notice on or
before the date TWENTY-THREE (23) DAYS prior to the Closing Date, then Buyer and
Buyer's Architect shall be deemed to have accepted and agreed to such
Construction Holdback Amount, as so determined by Seller and Seller's Architect.
In the event Seller does actually receive Buyer's Dispute Notice on or before
the date TWENTY-THREE (23) DAYS prior to the Closing Date, however, then Seller,
Seller's Architect, Buyer, and Buyer's Architect shall thereafter attempt to
agree upon the Construction Holdback Amount for the Punch List Work. In the
event the Construction Holdback Amount is not so agreed upon on or before the
date SIXTEEN (16) DAYS prior to the Closing Date, then the Construction Holdback
Amount shall be determined as follows:
(I) if the greater of the two Construction Holdback Amounts (i.e.,
the amounts set forth in Seller's Punch List Notice and in Buyer's Dispute
Notice) is not more than
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five percent (5%) greater than the lower, then, for the purposes hereof, the
Construction Holdback Amount shall be the average of the two amounts; or
(II) if the greater of the two Construction Holdback Amounts (i.e.,
the amount set forth in Seller's Punch List Notice and in Buyer's Dispute
Notice) is more than five percent (5%) greater than the lower, then, on or
before the date SIXTEEN (16) DAYS prior to the Closing Date, each of the two
architects shall submit to the Third Architect (as hereinafter defined) the two
Construction Holdback Amounts (i.e., the amounts set forth in Seller's Punch
List Notice and in Buyer's Dispute Notice), together with reasonable supporting
calculations and information and a description of the Punch List Work. The Third
Architect may consult such contractors and other persons as the Third Architect
may elect in connection with the Construction Holdback Amounts, and, on or
before the date FIVE (5) BUSINESS DAYS prior to the Closing Date, the Third
Architect shall select one of the two submittals as the more reasonable and give
written notice of such selection to Seller and Buyer, and the amount so selected
shall be the Construction Holdback Amount. The cost of the Third Architect shall
be borne and paid by the party whose submittal (i.e., the submittal of such
party's architect) was not so selected.
The Construction Holdback Amount, as such amount shall be reduced
for any Punch List Work included therein which is actually completed prior to
Closing, shall be deducted from the amount of the Purchase Price to be disbursed
to Seller at the Closing. The Construction Holdback Amount shall be deposited in
an escrow account (the "CONSTRUCTION HOLDBACK ESCROW") with Escrow Agent or
another escrow agent reasonably satisfactory to Seller and Buyer to be released
in accordance with the provisions hereinafter set forth. As used herein, the
following terms shall have the indicated meanings: (I) "SELLER'S ARCHITECT"
shall mean Studios Architecture or, in the event Seller, at its option, replaces
any such architect, the replacement architect; (II) "BUYER'S ARCHITECT" shall
mean an architect selected by Buyer and reasonably acceptable to Seller; and
(III) the "THIRD ARCHITECT" shall mean an architect selected by Seller's
Architect, and reasonably acceptable to Buyer's Architect and Buyer, for
purposes of resolving any dispute regarding the Construction Holdback Amount, as
set forth in this SECTION 2(D); without limiting the foregoing, each of Seller's
Architect, Buyer's Architect, and the Third Architect shall be licensed in the
State of West Virginia or licensed in at least ten (10) other States, have at
least ten (10) years' experience in designing buildings and improvements similar
to the Improvements, and be a reputable architectural firm consisting of not
less than ten (10) licensed architects.
Seller agrees that if the Construction Holdback Amount is less than
the amount of the costs and expenses of completing the Punch List Work, Seller
shall be solely responsible to fund such deficiency, thereby increasing the
Construction Holdback Amount to the reasonable amount of such costs and
expenses.
(B) As expeditiously and prudently as reasonably practical after the
Closing Date, Seller shall promptly complete, or cause to be promptly completed,
all of the Punch List Work. From time to time after the Closing Date (but in no
event more frequently than monthly) amounts on deposit in the Construction
Holdback Escrow shall be disbursed to Seller, or at the direction of Seller to
contractors employed by Seller in connection with the construction and
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installation of the Improvements, at such time as (i) the portion of the Punch
List Work for which the respective funds have been withheld and deposited in the
Construction Holdback Escrow has been completed without material deviation from
the Plans and Specifications and (in the reasonable opinion of Seller's
Architect and Buyer's Architect) in a good and workmanlike manner and invoiced
(it being agreed that such portion of the Punch List Work shall be deemed to
have been so completed upon acceptance thereof by the BPD Tenant); (ii) all
costs and expenses in connection therewith have been paid by Seller (or
instructed by Seller to be paid directly to the contractor from the Construction
Holdback Escrow), and Seller has provided Buyer with invoices and lien waivers
therefor. The amount to be disbursed shall be an amount equal to the actual
costs of the Punch List Work as to which the disbursement is being made. Any
amount remaining in the Construction Holdback Escrow upon final completion of
all Punch List Work shall be disbursed to Seller. Any interest earned on the
Construction Holdback Escrow shall be for the account of Seller and may be
disbursed from time to time as earned. Amounts deposited in the Construction
Holdback Escrow shall, for all purposes, be deemed to have been paid by Buyer as
part of the Purchase Price on the Closing Date.
(C) In the event any Punch List Work is not completed in substantial
accordance with the BPD Lease within sixty (60) days after the Closing Date or
such shorter period of time within which such Punch List Work is required to be
completed under the BPD Lease (the "INITIAL PUNCH LIST PERIOD") (or, with
respect to any Punch List Work that, whether by its nature or as a result of
materials required or otherwise, is not of the type that would reasonably be
expected to be so completed within the Initial Punch List Period, then within
such longer period of time as may be reasonable for such completion, so long as
Seller commences such items of Punch List Work within the Initial Punch List
Period and thereafter prosecutes same with reasonable diligence), and such Punch
List Work is not thereafter completed within ten (10) days after Buyer gives
written notice thereof to Seller, then Buyer may so complete same and charge the
reasonable third-party costs incurred by Buyer in connection therewith against
the Construction Holdback Escrow.
4. CLOSING. The closing of the purchase and sale of the Property (the
"CLOSING"), shall occur on the date ten (10) business days after the Phase 1
Substantial Completion Date (as hereinafter defined) (the "CLOSING DATE");
PROVIDED, HOWEVER, that the Closing Date shall be not later than 10:00 a.m.,
Washington, D.C. time, on December 15, 2004 (the "FINAL CLOSING DATE"). The
parties acknowledge and agree that they intend to conduct Closing via overnight
courier or similar delivery method, using the Washington, D.C. office of
Seller's counsel (i.e., ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. 20005) as the closing and escrow agent, but if so
conducting Closing in such a manner is impractical, then Closing shall be held
at 10:00 a.m., Eastern time, on the Closing Date at such Washington, D.C. office
of Seller's counsel. If any of the conditions set forth in SECTION 21, below,
shall not have been satisfied or performed or waived in writing by Buyer on or
as of the Closing Date, then Seller may extend the Closing Date (and the Final
Closing Date) for up to sixty (60) days by giving written notice of such
extension to Buyer on or before the then-scheduled Closing Date.
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5. ACCESS AND INSPECTION; EXAMINATION BY BUYER; APPROVAL BY BUYER'S BOARD
OF DIRECTORS.
(A) Between the date of this Agreement and the Closing Date, Buyer and
Buyer's agents, employees, contractors, representatives and other designees
(collectively, "BUYER'S DESIGNEES") shall have the right to enter the Property
for the purposes of inspecting the Property, conducting soil tests, conducting
surveys, mechanical and structural engineering studies, and conducting any other
investigations, examinations, tests and inspections as Buyer may reasonably
require to assess the condition of the Property; PROVIDED, HOWEVER, that (I) any
activities by or on behalf of Buyer, including, without limitation, the entry by
Buyer or Buyer's Designees onto the Property, or the other activities of Buyer
or Buyer's Designees with respect to the Property (collectively, "BUYER'S
ACTIVITIES") shall not damage the Property in any manner whatsoever or disturb
or interfere with the rights or possession of any tenant of the Property and
shall not result in, and Buyer shall not permit, any lien or other encumbrance
with respect to the Property or any portion thereof, (II) in the event the
Property is altered or disturbed in any manner in connection with any Buyer's
Activities, Buyer shall immediately return the Property to the condition
existing prior to Buyer's Activities, and (III) Buyer shall indemnify, defend
and hold Seller harmless from and against any and all claims, liabilities,
damages, losses, costs and expenses of any kind or nature whatsoever (including,
without limitation, attorneys' fees and expenses and court costs) suffered,
incurred or sustained by Seller as a result of, by reason of, or in connection
with any Buyer's Activities. Notwithstanding any provision of this Agreement to
the contrary, Buyer shall not have the right to undertake any environmental
studies or testing beyond the scope of a standard "Phase 1" evaluation without
the prior written consent of Seller, which consent shall not be unreasonably
withheld.
(B) Buyer shall have until JANUARY 5, 2004 (the "DUE DILIGENCE DATE"),
to perform such investigations, examinations, tests and inspections as Buyer
shall deem necessary or desirable to determine whether the Property is suitable
and satisfactory to Buyer and to request and obtain from Seller such documents
and records in Seller's possession that are necessary for Buyer to satisfy any
disclosure obligations that must be satisfied by Buyer pursuant to applicable
law as a result of Buyer being a public company. In the event Buyer shall
determine that the Property is not suitable and satisfactory to Buyer or that
all such documents and records have not been obtained by Buyer, Buyer shall have
the right to terminate this Agreement by: (I) giving written notice to Seller on
or before the Due Diligence Date; and (II) delivering to Seller, on or before
Due Diligence Date, the items required by SUBPARAGRAPH (D) of this SECTION 4 and
SECTION 15(B) of this Agreement. In the event Buyer gives Seller the notice and
delivers to Seller the items required by the immediately preceding sentence, all
rights and obligations of the parties under this Agreement shall expire, and
this Agreement shall become null and void. If Buyer does not terminate this
Agreement in accordance with this SECTION 4 on or before the Due Diligence Date,
then Buyer shall have no further right to terminate this Agreement pursuant to
this SECTION 4 and, subject to SECTIONS 13(B), 14(A), 14(B), 21 AND 22 of this
Agreement, the Initial ▇▇▇▇▇▇▇ Money shall become nonrefundable to Buyer.
(C) Prior to any entry by Buyer or any of Buyer's Designees onto the
Property, Buyer shall: (I) if Buyer does not then have such a policy in force,
procure a policy of
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commercial general liability insurance, issued by an insurer reasonably
satisfactory to Seller, covering all Buyer's Activities, with a single limit of
liability (per occurrence and aggregate) of not less than $1,000,000.00; and
(II) deliver to Seller a Certificate of Insurance, evidencing that such
insurance is in force and effect, and evidencing that Seller has been named as
an additional insured thereunder with respect to any Buyer's Activities (such
Certificate of Insurance shall be delivered to Seller, at the address for
notices set forth below Seller's execution of this Agreement). Such insurance
shall be written on an "occurrence" basis, and shall be maintained in force
until the earlier to occur of (I) the termination of this Agreement and the
conclusion of all Buyer's Activities, or (II) the Closing.
(D) Buyer acknowledges that Seller may have heretofore delivered, or
may hereafter deliver, to Buyer certain documents and information in Seller's
possession with regard to the Property (collectively, the "DUE DILIGENCE
MATERIALS"). The Due Diligence Materials will be provided to Buyer without any
representation or warranty of any kind or nature whatsoever and are merely
provided to Buyer for Buyer's informational purposes. Until Closing, Buyer and
Buyer's Designees shall maintain all Due Diligence Materials as confidential
information. If the purchase and sale of the Property is not consummated in
accordance with this Agreement, regardless of the reason or the party at fault,
Buyer shall immediately re-deliver to Seller all copies of the Due Diligence
Materials delivered by Seller and shall use all reasonable good faith efforts to
obtain and deliver to Seller any duplicate copies of the Due Diligence Materials
made by Buyer or Buyer's Designees. If Buyer terminates this Agreement pursuant
to any provision of this Agreement permitting such termination by Buyer, no
portion of any ▇▇▇▇▇▇▇ Money to be refunded to Buyer as a result of such
termination shall be so refunded unless and until Buyer shall have substantially
complied with the preceding sentence.
(E) Seller acknowledges that Buyer has executed and delivered this
Agreement prior to the approval of the transaction that is the subject hereof by
Buyer's Board of Directors. Buyer anticipates that its Board of Directors will
approve this Agreement and such transaction, if at all, or on or before the Due
Diligence Date. If Buyer's Board of Directors does not so approve this Agreement
and such transaction on or before the Due Diligence Date, Buyer may terminate
this Agreement pursuant to the terms and provisions of this SECTION 4 on or
before the Due Diligence Date; if Buyer does not so terminate this Agreement in
accordance with this SECTION 4 on or before the Due Diligence Date, then Buyer
shall have no further right to terminate this Agreement by reason of the failure
of its Board of Directors to approve this Agreement and the transaction that is
the subject hereof.
6. PRORATIONS AND ADJUSTMENTS TO PURCHASE PRICE. The following prorations
and adjustments shall be made between Buyer and Seller at the Closing, or
thereafter if Buyer and Seller shall agree:
(A) All city, state and county ad valorem taxes and similar impositions
levied or imposed upon or assessed against the Property (collectively, herein
referred to as the "TAXES"), for the year in which the Closing occurs shall be
prorated as of the Closing Date. In the event that Seller has heretofore
protested or appealed, or, prior to the Closing Date, protests or appeals, the
Taxes for the tax billing period in which the Closing occurs, and such protest
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results in a reduction in the Taxes payable, Buyer shall reimburse Seller for
its pro rata share of the reasonable and actual costs incurred by Seller in
pursuing such protest or appeal. Buyer acknowledges and agrees that any
"rollback" or similar Taxes imposed because of a change in use or ownership of
the Property shall be the sole and exclusive responsibility of Buyer, and that
Seller shall have no obligation in connection therewith.
(B) All utility charges for the Property (including, without
limitation, telephone, water, storm and sanitary sewer, electricity, gas,
garbage and waste removal) shall be prorated as of the Closing Date, transfer
fees required with respect to any such utility shall be paid by or charged to
Buyer, and Seller shall be credited with any deposits transferred to the account
of Buyer; PROVIDED, HOWEVER, that at either party's election any one or more of
such utility accounts shall be closed as of the Closing Date, in which event
Seller shall be liable and responsible for all charges for service through the
Closing Date and shall be entitled to all deposits theretofore made by Seller
with respect to such utility, and Buyer shall be responsible for reopening and
reinstituting such service in Buyer's name, and shall be responsible for any
fees, charges and deposits required in connection with such new account.
(C) All rents (including base rent, percentage rent and all other
rentals), payments for taxes, payments for insurance, payments for common area
maintenance charges, payments for operating expenses and other payments on
account of financial obligations of the BPD Tenant under the BPD Lease (herein
called the "TENANT FINANCIAL OBLIGATIONS") which have actually been paid as of
the Closing Date shall be prorated as of the Closing Date. In the event that, at
the time of the Closing, there are any past due or delinquent Tenant Financial
Obligations, Buyer shall be charged and Seller shall be credited therefor at
Closing (not to exceed one month's past due or delinquent Tenant Financial
Obligations), and, after Closing, Buyer shall undertake such efforts as it may
elect to collect such past due or delinquent Tenant Financial Obligations from
the BPD Tenant, up to the amount thereof so charged to Buyer and credited to
Seller; Seller shall be entitled to exercise all rights or remedies available at
law or in equity to collect any such past due or delinquent Tenant Financial
Obligations in excess of such amount so charged and credited at Closing, and
Seller shall retain such rights and remedies, notwithstanding the assignment of
the BPD Lease to Buyer at Closing. In the event that any Tenant Financial
Obligations paid by the BPD Tenant under the BPD Lease shall be based upon
estimates of actual amounts due and are subject to subsequent adjustment with
the BPD Tenant, Seller and Buyer shall make between themselves any equitable
adjustment required by reason of any such subsequent adjustment with the BPD
Tenant at the time of such subsequent adjustment. In the event that any Tenant
Financial Obligations payable by the BPD Tenant under the BPD Lease shall be
payable after the Closing for periods prior to the Closing, Seller and Buyer
shall make between themselves any equitable adjustment required by reason of
such payments at the time of actual payment. Further, in the event that,
subsequent to the Closing, Seller receives any payments of Tenant Financial
Obligations due under the BPD Lease for periods of time after the Closing,
Seller shall properly endorse such payments to Buyer, and shall promptly forward
such payments to Buyer.
(D) Notwithstanding the foregoing, the following shall be paid by
Buyer: (I) any construction of alterations, improvements, or additions or the
provision of any tenant
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improvement allowances, free, reduced or abated rent, and any other concessions
(such commissions, construction, allowances, free, reduced, or abated rent, and
other concessions are herein collectively referred to as the "CONCESSIONS") for
any renewals or extensions of the term of the BPD Lease; (II) any Concessions
for any expansion of the "premises" under the BPD Lease (including, without
limitation, any Concessions payable in connection with any exercise by the BPD
Tenant of its option for the Phase 2 Expansion Building, as set forth in the BPD
Lease); and (III) any Concessions payable with respect to periods of time after
the Closing.
(F) All amounts payable under any of the Service Agreements shall be
prorated as of the applicable Closing Date.
(G) Any other items which are customarily prorated in connection with
the purchase and sale of properties similar to the Property shall be prorated as
of the applicable Closing Date.
In the event that the amount of any item to be prorated is not determinable at
the time of the Closing, such proration shall be made on the basis of the best
available information, and the parties shall re-prorate such item promptly upon
receipt of the bills therefor and shall make between themselves any equitable
adjustment required by reason of any difference between the estimated amount
used as a basis for the proration at Closing and the actual amount subject to
proration. In the event any prorated item is due and payable at the time of
Closing, the same shall be paid at Closing. If any prorated item is not paid at
Closing, Seller shall deliver to Buyer the bills therefor promptly upon receipt
thereof and Buyer shall be responsible for the payment in full thereof within
the time fixed for payment thereof and before the same shall become delinquent.
In making the prorations required by this SECTION 6, the economic burdens and
benefits of ownership of the Land and the Improvements for the Closing Date
shall be allocated to Buyer.
7. TITLE.
(A) For the purposes of this Agreement, "GOOD AND MARKETABLE FEE SIMPLE
TITLE" shall mean such title as is insurable by Escrow Agent, in its capacity as
a title insurance company, or by another title insurance company licensed to do
business in West Virginia, under its standard form of ALTA owner's policy of
title insurance, 1992 Form B, at its standard rates, subject only to the
following (collectively, the "PERMITTED EXCEPTIONS"): (I) the standard or
printed exclusions in the form of owner's policy of title insurance referenced
above; (II) such matters as would be disclosed by a current and accurate survey
and inspection of the Property; (III) the lien for Taxes not due and payable on
or before the Closing Date; (IV) zoning ordinances affecting the Property; (V)
all easements, covenants, restrictions, reservations, rights-of-way and other
similar matters of record as of the date of Seller's execution of this Agreement
(including, without limitation, that certain Parking Easement and Declaration of
Covenants dated September 12, 2003, and recorded in Deed Book 1057, Page 859,
real estate records of Wood County, West Virginia (the "PARKING EASEMENT
AGREEMENT")); (VI) the state of compliance or non-compliance of the Property, as
of the date of Seller's execution of this Agreement, with any laws, codes,
ordinances, rules, regulations or private restrictive covenants applicable to or
affecting the
9
Property; (VII) the BPD Lease and the rights of the BPD Tenant thereunder;
(VIII) any land use covenant or other restriction that may be required under the
VRA (as hereinafter defined); (IX) that certain Memorandum of Understanding
dated June 26, 2002 by and between the Urban Renewal Authority of the City of
Parkersburg (the "URA") and the United States of America with respect to the
construction of a municipal parking facility and any easements, agreements, or
instruments entered into in connection therewith (the "MOU"); (X) the Phase 2
Purchase Agreement and Ground Lease, as such terms are hereinafter defined; and
(XI) all matters set forth in EXHIBIT "D" hereto; and (XII) all matters, if any,
waived by Buyer pursuant to this SECTION 7.
(B) Buyer shall have until DECEMBER 31, 2003 in which to examine title
to the Property and in which to give Seller written notice of any objections
(including survey matters) which render Seller's title less than good and
marketable fee simple title. Buyer may reexamine title to the Property up to and
including the Closing Date and give Seller written notice of any additional
objections appearing of record, together with any additional survey matters
appearing, subsequent to the date of Buyer's initial examination, but Buyer's
failure to specify in its initial notice of title objections any objection
appearing of record, or any survey matter existing, as of the date of such
initial notice shall be deemed to be, and shall constitute, a waiver of any such
objection (including such survey matters), and such objection (including such
survey matters) shall thereafter constitute a Permitted Exception under this
Agreement; and, if Buyer shall fail so to examine title to the Property
(including obtaining a survey) or to give Seller such initial notice of title
and survey objections, Buyer shall be deemed to have waived all objections
appearing of record or, with respect to survey matters, existing, as of THE DUE
DILIGENCE DATE, and all such objections shall thereafter constitute Permitted
Exceptions under this Agreement.
(C) Seller shall have until THAT DATE ONE (1) DAY PRIOR TO THE DUE
DILIGENCE DATE (I.E., JANUARY 4, 2004) in which to review Buyer's initial notice
of title objections and, if Seller elects, in which to give Buyer written notice
of any valid objections specified therein which Seller does not intend to
attempt to satisfy. If Seller gives Buyer such written notice with respect to
any objection specified in Buyer's initial notice of title objections, and if
Buyer thereafter does not elect to terminate this Agreement pursuant to SECTION
4 hereof, Buyer shall be deemed to have waived any objection specified in
Buyer's initial notice of title objections as to which Seller has given Buyer
such notice, and any such objection shall thereafter constitute a Permitted
Exception under this Agreement.
(D) Seller shall have until the date THREE (3) MONTHS prior to the
Final Closing Date to satisfy all valid objections other than those waived by
Buyer pursuant to SUBPARAGRAPHS (B) AND (C) of this SECTION 7, and, if Seller
fails to so satisfy any such valid objections which have a material adverse
affect on the BPD Tenant's use and occupancy of the Property and would
constitute a breach under the BPD Lease, then, at the option of Buyer, and as
its sole and exclusive alternatives and remedies, Buyer may either: (I)
terminate this Agreement in which event all rights and obligations of the
parties under this Agreement shall expire, and this Agreement shall become null
and void; or (II) waive such satisfaction and performance and elect to
consummate the purchase and sale of the Property, in which event all unsatisfied
objections shall constitute Permitted Exceptions under this Agreement. The
remedies of Buyer as set forth in clauses (I) and (II) of this SUBPARAGRAPH (D)
shall be Buyer's sole and exclusive remedies in
10
the event Seller fails to satisfy any valid objections, notwithstanding anything
to the contrary contained herein.
8. SURVEY. In the event Seller has not done so prior to the Effective
Date, Seller shall cause a surveyor properly licensed under the laws of the
State of West Virginia to prepare a survey of the Property (the "SURVEY") and to
deliver same to Buyer. The Survey shall be certified to both Buyer and Seller.
At Buyer's option, the Survey will be utilized as the basis for the preparation
of a legal description of the Property to be included in the quitclaim deed to
be delivered by Seller to Buyer at the Closing. Not later than ninety (90) days
prior to the Final Closing Date, Seller shall cause the surveyor to update and
re-certify the Survey and to deliver same to Buyer.
9. PROCEEDINGS AT CLOSING. On the Closing Date, the Closing shall take
place as follows:
(A) Seller shall deliver to Buyer the following documents and
instruments, duly executed by or on behalf of Seller:
(I) a limited or special warranty deed, in recordable form,
conveying the Property, subject to the Permitted Exceptions;
(II) an Assignment of Tenant Leases, whereby Seller transfers and
assigns to Buyer all of Seller's right, title and interest as "landlord" or
"lessor" in, to and under the BPD Lease and Buyer assumes and agrees to perform
the duties and obligations of the "landlord" or "lessor" under the BPD Lease
arising from and after the Closing Date;
(III) a letter notifying the BPD Tenant under the BPD Lease of the
sale of the Property, and the assignment of the BPD Lease, to Buyer;
(IV) an Assignment of all of Seller's right, title and interest in,
to and under the following (collectively, the "ASSIGNED CONTRACTS"): (i) any
Service Agreements; (ii) all contracts, warranties and guaranties relating to
the construction of the Improvements; (iii) the contracts or agreements with (a)
Seller's construction manager, but only with respect to rights and remedies of
enforcement with respect to the construction and installation of the
Improvements, and (b) Seller's Architect and Seller's general contractor
relating to the Improvements; each assignment of any contract to be assumed by
Buyer shall provide that (A) Seller shall assume and be, and shall remain,
responsible for all obligations of the owner of the Property required to be
performed thereunder prior to the Closing Date not theretofore performed, (B)
Buyer shall assume and be responsible for all other obligations of the owner of
the Property, and (C) each of Buyer and Seller shall indemnify, defend and
forever hold the other harmless from, against and in respect of any and all
liabilities, damages, losses, costs and expenses (including reasonable
attorneys' fees and disbursements) suffered, incurred or sustained by the
indemnified party as a result of or by reason of the nonperformance or
nonsatisfaction of any obligation that has been assumed by and is the
responsibility of the indemnifying party in accordance with clauses (A) or (B)
of this sentence; and (iv) the Parking
11
Easement Agreement, subject to the rights of Seller with respect thereto to be
set forth in the Ground Lease (as hereinafter defined);
(V) a Certificate and Affidavit of Non-Foreign Status;
(VI) a completed 1099-S request for taxpayer identification number
and certification, and acknowledgment;
(VII) if requested by Buyer, a quitclaim deed conveying all of
Seller's right, title and interest in and to the Land in accordance with the
legal description prepared from the Survey;
(VIII) if not previously executed, a Purchase and Sale Agreement
(Phase 2) (the "PHASE 2 PURCHASE AGREEMENT") with respect to the improvements to
be constructed as "Phase 2" under the BPD Lease in the event the BPD Tenant
exercises its "Phase 2" expansion option under the BPD Lease, which Purchase
Agreement shall be substantially in the form of, and on the terms and conditions
set forth in, this Agreement, except that the purchase price thereunder will be
equal to the net operating income with respect to such "Phase 2" improvements
during the first full twelve (12) months after commencement of the payment of
annual rent for such "Phase 2" improvements divided by a capitalization rate
equal to 8.75%. As used herein, "net operating income" means the annual rent
payable with respect to such "Phase 2" improvements (as set forth in page 7 of
the Rider to the BPD Lease) less the amounts described in lines 27 and 33 of the
"Phase 2" Form 1217 with respect to the BPD Lease (i.e., Lessor's Annual Cost
Statement). By way of illustration only, if such annual rent were in the amount
of $1,202,205.95 and the amounts so described in said lines 27 and 33 were
$87,433.00 and $189,611.00, respectively, then the purchase price under the
Phase 2 Purchase Agreement would be $10,573,279.00. The Phase 2 Purchase
Agreement shall also provide, among other things, that it shall be conditioned
on the BPD Tenant exercising such expansion option on or before the final date
on which such option may be exercised under the BPD Lease, as the same may be
hereafter modified or amended;
(IX) a Ground Lease (the "GROUND LEASE") whereunder Buyer, as
landlord, will lease to Seller, as tenant, those portions of the Land and
related Improvements reasonably necessary for Seller to construct the "Phase 2"
Improvements in the event the BPD Tenant exercises its "Phase 2" expansion
option under the BPD Lease, which Ground Lease shall, among other things,
provide for a nominal rent (e.g., $100 annually) to be paid by Seller, as tenant
thereunder, shall provide for construction easements and similar rights as may
be reasonably necessary for Seller to construct the "Phase 2" Improvements, and
shall be conditioned on the BPD Tenant exercising such expansion option on or
before the final date on which such option may be exercised under the BPD Lease,
as the same may be hereafter modified or amended; and
(X) an Agreement Regarding Development (Phase 3) (the "PHASE 3
AGREEMENT") with respect to the improvements to be constructed as "Phase 3"
under the BPD Lease in the event the BPD Tenant exercises its "Phase 3"
expansion option under the
12
BPD Lease, which agreement shall provide, among other things, that, in such
event, Buyer shall negotiate in good faith with Seller as a fee developer to
develop the Phase 3 improvements on the following terms and conditions, among
other terms and conditions: (I) a fee structure as follows: (A) Buyer's payment
to Seller of a development management fee equal to three percent (3%) of total
Phase 3 project costs, a construction management fee equal to one percent (1%)
of such total costs, and a general and administrative cost reimbursement of
$10,000 for each calendar month (prorated for partial months) during the Phase 3
project; and (B) Buyer's payment to The Albermarle Group, LLC of a leasing fee
equal to three percent (3%) of the aggregate rental payable under the BPD Lease
with respect to the Phase 3 improvements; (II) a developer incentive arrangement
whereby Seller and Buyer will equally share, on a 50% / 50% basis, any "profit"
from the development of the Phase 3 improvements, with such "profit" meaning the
difference between the fair market value of the completed Phase 3 improvements
at the time of completion of the Phase 3 improvements (which fair market value,
if not then agreed upon by Seller and Buyer, shall be determined by appraisal
pursuant to terms and provisions to be set forth in the Phase 3 Agreement) and
the total Phase 3 project costs.
The form of each of the foregoing closing documents shall be agreed upon by
Seller and Buyer, in writing, prior to the Due Diligence Date; in the event
Seller and Buyer have not so agreed, in writing, on the form of such closing
documents on or before the Due Diligence Date, the then most recent forms of
such documents given to Seller by Buyer or Buyer's counsel at least three (3)
business days prior to the Due Diligence Date shall be deemed approved and
agreed upon by Seller.
(B) Seller shall also deliver to Buyer, if the same has not been
theretofore delivered by Seller to Buyer, (A) evidence in form and substance
reasonably satisfactory to Buyer's title insurer that Seller has the power and
authority to execute and enter into this Agreement and to consummate the
purchase and sale of the Property, and that any and all actions required to
authorize and approve the execution of and entry into this Agreement by Seller,
the performance by Seller of all of Seller's duties and obligations under this
Agreement, and the execution and delivery by Seller of all documents and other
items to be executed and delivered to Buyer at the Closing, have been
accomplished, and (B) if and to the extent in Seller's possession, the executed
originals of the BPD Lease and any Service Agreements.
(C) Seller shall deliver to Buyer's title insurer a title affidavit
regarding the Property in form and substance reasonably acceptable to Seller and
Buyer's
title insurer.
(D) Buyer shall deliver to Seller the Assignment described in clause
(a)(iv) of this Section, the Phase 2 Purchase Agreement, the Ground Lease, and
the Phase 3 Agreement, each duly executed by or on behalf of Buyer:
(E) Buyer shall pay the Purchase Price to Seller in accordance with
the provisions of this Agreement.
10. COSTS OF CLOSING. Seller will bear its specific costs associated with
the transaction, including the Survey, its own legal costs, transfer taxes
payable in connection with
13
the deed to be executed and delivered by Seller at Closing, one-half of any
escrow fee payable to Escrow Agent in connection with the transaction that is
the subject of this Agreement, and recording costs on corrective title
instruments obtained by Seller and releases of the Deed of Trust executed by
Seller in favor of Seller's Construction Lender (as hereinafter defined). Buyer
will bear its specific costs associated with the transaction, including due
diligence, its own legal costs, one-half of any escrow fee payable to Escrow
Agent, as described above, transfer, intangibles, and similar taxes payable in
connection with Buyer's mortgages and notes, recording and filing costs on
Buyer's mortgages and financing statements and on the deed to be executed and
delivered by Seller at Closing, premiums, examination fees, and other costs of
any owner or mortgagee title commitments or policies, any other costs or
expenses incurred or payable in connection with any loan or financing obtained
by Buyer, and any costs of updating the Survey. Buyer and Seller shall share
equally the fees of any escrow closing. All other related closing costs shall be
borne by the respective parties in a manner customary to local real estate
transfers.
11. DISCLAIMER OF WARRANTIES. EXCEPT FOR ANY REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN SECTION 25, BELOW, SELLER DOES NOT, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, AND SELLER SHALL NOT, BY THE EXECUTION
AND DELIVERY OF ANY DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED IN CONNECTION
WITH CLOSING, MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY
KIND OR NATURE WHATSOEVER, WITH RESPECT TO THE PROPERTY, AND ALL SUCH WARRANTIES
ARE HEREBY DISCLAIMED. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER
MAKES, AND SHALL MAKE, NO EXPRESS OR IMPLIED WARRANTY AS TO MATTERS OF TITLE
(OTHER THAN SELLER'S LIMITED OR SPECIAL WARRANTY OF TITLE SET FORTH IN THE
LIMITED OR SPECIAL WARRANTY DEED TO BE DELIVERED AT CLOSING), ZONING, TAX
CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL CONDITION (INCLUDING, WITHOUT
LIMITATION, (I) LAWS, RULES, REGULATIONS, ORDERS AND REQUIREMENTS PERTAINING TO
THE USE, HANDLING, GENERATION, TREATMENT, STORAGE OR DISPOSAL OF ANY TOXIC OR
HAZARDOUS WASTE OR TOXIC, HAZARDOUS OR REGULATED SUBSTANCE, AND (II) THE
DISCLOSED ENVIRONMENTAL CONTAMINATION (AS HEREINAFTER DEFINED)), VALUATION,
GOVERNMENTAL APPROVALS, GOVERNMENTAL REGULATIONS OR ANY OTHER MATTER OR THING
RELATING TO OR AFFECTING THE PROPERTY, (COLLECTIVELY, THE "DISCLAIMED MATTERS").
BUYER AGREES THAT, WITH RESPECT TO THE PROPERTY, BUYER HAS NOT RELIED UPON
AND WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR
WARRANTY OF SELLER. BUYER WILL CONDUCT SUCH INSPECTIONS AND INVESTIGATIONS OF
THE PROPERTY (INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL
CONDITION THEREOF) AND RELY UPON SAME AND, UPON CLOSING, SHALL ASSUME THE RISK
THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, THE DISCLAIMED MATTERS, MAY
NOT HAVE BEEN REVEALED BY BUYER'S INSPECTIONS AND INVESTIGATIONS. SUCH
INSPECTIONS AND INVESTIGATIONS OF BUYER SHALL
14
BE DEEMED TO INCLUDE AN ENVIRONMENTAL AUDIT OF THE PROPERTY, AN INSPECTION OF
THE PHYSICAL COMPONENTS AND GENERAL CONDITION OF ALL PORTIONS OF THE PROPERTY,
SUCH STATE OF FACTS AS AN ACCURATE SURVEY AND INSPECTION OF THE PROPERTY WOULD
SHOW, PRESENT AND FUTURE ZONING AND LAND USE ORDINANCES, RESOLUTIONS AND
REGULATIONS OF THE CITY, COUNTY AND STATE WHERE THE PROPERTY IS LOCATED AND THE
VALUE AND MARKETABILITY OF THE PROPERTY. SELLER SHALL SELL AND CONVEY TO BUYER,
AND BUYER SHALL ACCEPT, THE PROPERTY "AS IS", "WHERE IS", AND WITH ALL FAULTS,
AND THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO
OR AFFECTING THE PROPERTY BY SELLER.
WITHOUT IN ANY WAY LIMITING ANY PROVISION OF THIS PARAGRAPH 11, BUYER
SPECIFICALLY ACKNOWLEDGES AND AGREES THAT IT HEREBY WAIVES, RELEASES AND
DISCHARGES ANY CLAIM IT HAS, MIGHT HAVE HAD OR MAY HAVE AGAINST SELLER WITH
RESPECT TO (I) THE DISCLAIMED MATTERS, (II) THE CONDITION OF THE PROPERTY,
EITHER PATENT OR LATENT, (III) THE PAST, PRESENT OR FUTURE CONDITION OR
COMPLIANCE OF THE PROPERTY WITH REGARD TO ANY ENVIRONMENTAL PROTECTION,
POLLUTION CONTROL OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS,
INCLUDING, WITHOUT LIMITATION, CERCLA, AND (IV) ANY OTHER STATE OF FACTS THAT
EXISTS WITH RESPECT TO THE PROPERTY. THE TERMS AND CONDITIONS OF THIS PARAGRAPH
11 SHALL EXPRESSLY SURVIVE THE CONSUMMATION OF THE PURCHASE AND SALE OF THE
PROPERTY ON THE CLOSING DATE, THE DELIVERY OF THE DEED AND THE PAYMENT OF THE
PHASE 1 PURCHASE PRICE, AND THE PHASE 2 CLOSING AND THE PAYMENT OF THE PHASE 2
PURCHASE PRICE, WITHOUT REGARD TO ANY LIMITATIONS UPON SURVIVAL SET FORTH IN
THIS AGREEMENT.
12. POSSESSION AT CLOSING. Seller shall surrender possession of the Land
and the Improvements to Buyer on the Closing Date, subject to the Permitted
Exceptions.
13. REMEDIES.
(A) If the purchase and sale of the Property contemplated hereby is
not consummated in accordance with the terms and provisions of this Agreement
due to circumstances or conditions which constitute a default by Buyer under
this Agreement, the ▇▇▇▇▇▇▇ Money shall be delivered to and retained by Seller
as Seller's full liquidated damages for such default. The parties acknowledge
that Seller's actual damages in the event of a default by Buyer will be
difficult to ascertain, that such liquidated damages represent the parties' best
estimate of such damages, and that Seller and Buyer believe such liquidated
damages are a reasonable estimate of such damages. The parties expressly
acknowledge that the foregoing liquidated damages are intended not as a penalty,
but as full liquidated damages, in the event of a default. Such liquidated
damages shall be the sole and exclusive remedy of Seller by reason of a default
by Buyer, and Seller hereby waives and releases any right to ▇▇▇ Buyer for
specific performance of this Agreement or to prove that Seller's actual damages
exceed the amount which
15
is herein provided to Seller as full liquidated damages; PROVIDED, HOWEVER, that
the foregoing liquidated damages shall not apply to any duty, obligation,
liability or responsibility which Buyer may have under the indemnification
provisions of this Agreement (including, without limitation, the indemnification
provisions set forth in SECTIONS 4 AND 16 of this Agreement), as to which Seller
shall have all rights and remedies provided for or allowed by law or in equity.
Notwithstanding the foregoing, this SECTION 13(A) shall not be deemed to limit
or waive in any manner whatsoever any rights or remedies of any party of any
Tri-Party Agreement (as hereinafter defined) that may be hereafter executed as
contemplated in SECTION 19, below, in the event of any breach or default by
Buyer thereunder, which rights and remedies may include, without limitation, the
enforcement of rights or remedies related to any security interest or other
interest in or to any Lender's Collateral (as hereinafter defined) in accordance
with the terms and provisions of such Tri-Party Agreement.
(B) In the event that Seller defaults in its obligations under this
Agreement, Buyer shall have the right: (I) to terminate this Agreement, in which
event all rights and obligations of the parties under this Agreement shall
expire, and this Agreement shall become null and void; (II) if, and only if,
Seller's default is a refusal by Seller to convey any portion of the Property to
Buyer as required by this Agreement, then Buyer shall have the right to ▇▇▇
Seller for specific performance of this Agreement, or (III) to ▇▇▇ Seller to
collect actual monetary damages; PROVIDED, HOWEVER, that in the event that Buyer
elects to seek to recover damages from Seller on account of any default by
Seller under this Agreement, Seller's liability to Buyer for all damages, of any
nature whatsoever, shall not exceed the Buyer's actual out-of-pocket costs and
expenses incurred by Buyer in connection with its proposed acquisition of the
Property, and Buyer shall not claim, ▇▇▇ for or accept an award for more than
the maximum amount of damages hereinabove set forth on account of or in
connection with this Agreement or any default by Seller under this Agreement. In
no event shall Buyer have the right to recover from Seller any special or
consequential damages. The inability of Seller to convey good and marketable fee
simple title to the Property on the Closing Date shall not constitute a default
by Seller under this Agreement unless such inability is caused by a defect in
Seller's title to the Property which is not a Permitted Exception under this
Agreement, which arises subsequent to the date of Seller's execution of this
Agreement, and which arises solely by reason of an affirmative act of Seller.
Seller shall have no other liability to Buyer under this Agreement; PROVIDED,
HOWEVER, that this sentence shall not affect any right of Buyer to terminate
this Agreement on account of such inability, as set forth in SECTION 7, above.
14. CASUALTY AND CONDEMNATION.
(A) Casualty. If, prior to the Closing Date, the Improvements are
damaged by any casualty and, as a result of such damage, the BPD Tenant has the
right to terminate, and does terminate, the BPD Lease, then either Seller or
Buyer shall have the right, by giving notice to the other party within thirty
(30) days after receipt of notice of such termination of the BPD Lease, to
terminate this Agreement, in which event this Agreement shall terminate. If,
prior to the Closing Date, the Improvements are damaged by any casualty and
neither party has the right to terminate this Agreement as provided in the
preceding sentence, or if Seller and Buyer have the right to terminate this
Agreement pursuant to said sentence but neither party exercises such right, then
16
this Agreement shall remain in full force and effect and, if the purchase and
sale of the Property contemplated by this Agreement is thereafter actually
consummated: (A) the Purchase Price shall be reduced by the total of any
insurance proceeds actually received by Seller on or before the Closing Date
with respect to such casualty and not expended by Seller prior to the Closing
for the repair or restoration of the Property; and (B) at the Closing, Seller
shall assign to Buyer all rights of Seller in and to any insurance proceeds
payable thereafter by reason of such casualty. Seller shall give notice to Buyer
immediately after the occurrence of any damage to the Improvements by any
casualty prior to the Closing Date.
(B) Condemnation. If, prior to the Closing Date, proceedings are
commenced for the taking by exercise of the power of eminent domain of all or
any part of the Land or the Improvements, and, as a result thereof, the BPD
Tenant has the right to terminate, and does terminate, the BPD Lease, then
either Seller or Buyer shall have the right, by giving notice to the other party
within thirty (30) days after receipt of notice of such termination of the BPD
Lease, to terminate this Agreement, in which event this Agreement shall
terminate. If, prior to the Closing Date, proceedings are commenced for the
taking by exercise of the power of eminent domain of all or any part of the Land
or the Improvements and neither party has the right to terminate this Agreement
as provided in the preceding sentence, or if Seller and Buyer have the right to
terminate this Agreement pursuant to said sentence but neither party exercises
such right, then this Agreement shall remain in full force and effect and, if
the purchase and sale of the Land and the Improvements contemplated by this
Agreement is thereafter actually consummated: (i) the Purchase Price shall be
reduced by the total of any awards or other proceeds actually received by Seller
on or before the Closing Date with respect to any taking and not expended by
Seller prior to Closing for the repair or restoration of the Property; and (ii)
at Closing, Seller shall assign to Buyer all rights of Seller in and to any
awards or other proceeds payable thereafter by reason of such taking. Seller
shall give notice to Buyer immediately after Seller's receipt of notice of the
commencement of any proceedings for the taking by exercise of the power of
eminent domain of all or any part of the Land and the Improvements prior to the
Closing Date.
Nothing contained in this SECTION 14 shall be deemed to modify or otherwise
affect SECTION 21, below (including, without limitation, the condition set forth
in subparagraph (b) thereof).
15. OWNERSHIP OF INFORMATION; CONFIDENTIALITY OBLIGATION.
(A) Any studies, data, reports, analyses, investigations,
examinations, tests, inspections or writings of or with respect to the Property
produced or obtained on behalf of or at the instance of Buyer shall be deemed
the sole, confidential property of Seller as owner of the Property prior to the
Closing Date, but shall become the sole, confidential property of Buyer from and
after the Closing Date.
(B) If the purchase and sale of the Property is not consummated in
accordance with this Agreement, regardless of the reason or the party at fault,
Buyer shall immediately, at Buyer's cost and expense and at no cost or expense
to Seller: (I) deliver to Seller a list setting forth the names of all persons
or entities who conducted investigations, examinations, tests or inspections of
or with respect to the Property on behalf of or at the instance of Buyer; (II)
deliver
17
to Seller all reports, studies, surveys, site plans and other written or graphic
material of any kind or nature whatsoever generated, collected, prepared or
compiled in connection with such investigations, examinations, tests or
inspections to the extent delivered to Buyer, and Buyer shall use all reasonable
good faith efforts to obtain and deliver to Seller any such materials not
theretofore delivered to Buyer; and (III) deliver an instrument in form and
substance reasonably satisfactory to Seller transferring and assigning to Seller
all of Buyer's rights, title and interest in or to the materials described in
CLAUSE (II), above. If Buyer terminates this Agreement pursuant to any provision
of this Agreement permitting such termination by Buyer, no portion of any
▇▇▇▇▇▇▇ Money to be refunded to Buyer as a result of such termination shall be
so refunded unless and until Buyer shall have substantially complied with the
terms and provisions of this SUBPARAGRAPH (B).
(C) No information or contents of any environmental reports, nor the
results of any investigation of the Property, including, but not limited to, the
contents of the report issued in connection therewith, shall be disclosed by
Buyer or its agents, consultants or employees to any third party without
Seller's prior written approval, unless and until Buyer is legally compelled to
make such disclosure under applicable laws or until Buyer consummates its
purchase of the Property pursuant to this Agreement. Notwithstanding the
foregoing, Buyer may disclose such matters to Buyer's consultants and Buyer's
directors, officers, employees, legal counsel and lenders or prospective lenders
(collectively, the "RELATED PARTIES", the specific identities of which shall be
supplied to Seller prior to any permitted disclosure to such party by Buyer)
who, in Buyer's reasonable opinion, must know such information for the purpose
of evaluating the same for Buyer as a potential purchaser of the Property. Buyer
shall take all necessary actions to ensure that any Related Parties to whom such
documents, items or information are furnished not make the same available or
disclose the contents thereof to any person. If this Agreement is terminated for
any reason, Buyer shall immediately use all reasonable good faith efforts to
obtain and deliver to Seller any and all documents, plans and other items
furnished to Buyer or any Related Parties pursuant to this SUBPARAGRAPH (C)
without retaining copies thereof. The provisions of this SUBPARAGRAPH (C) shall
survive the consummation of the purchase and sale of the Property on the Closing
Date hereunder or any termination or cancellation of this Agreement.
(D) All studies, data, reports, analyses, writings and
communications, including, without limitation, any environmental reports, shall
be generated by any consultant for the use of Buyer's and Seller's attorneys
and, to the fullest extent permitted by law, shall be the work product of both
Buyer's and Seller's respective attorneys and shall constitute confidential
attorney/client communications, and each party shall use its best efforts to
ensure that such confidence and privilege is maintained.
16. BROKERS AND COMMISSION.
(A) All negotiations relative to this Agreement and the purchase and
sale of the Property as contemplated by and provided for in this Agreement have
been conducted by and between Seller and Buyer without the intervention of any
person or other party as agent or broker, with the exception of CB ▇▇▇▇▇▇▇ ▇▇▇▇▇
("BROKER"). Seller, Buyer and Broker warrant and represent to each other that,
other than with regard to Broker, Seller and Buyer have not
18
entered into any agreement or arrangement and have not received services from
any broker or broker's employees or independent contractors which would give
rise to any claim of lien or lien against the Property pursuant to applicable
law, and there are and will be no broker's commissions or fees payable in
connection with this Agreement or the purchase and sale of the Property by
reason of their respective dealings, negotiations or communications except the
commission payable to Broker by Seller in accordance with the terms and
provisions of SUBPARAGRAPH (B), below (provided, however, that Seller has
engaged the Albermarle Group, LLC with respect to the leasing of the Property,
and Seller will pay the Albermarle Group, LLC a commission with respect
thereto). If the purchase and sale of the Property is consummated in accordance
with this Agreement, payment of the commission specified in SUBPARAGRAPH (B),
below, shall constitute full and complete payment and satisfaction of any and
all commissions, fees, charges and claims of Broker and Broker's agents,
employees, representatives and affiliates arising from, in connection with or
with respect to this Agreement and the purchase and sale of the Property. Broker
agrees that, notwithstanding anything to the contrary contained in this
Agreement, if the purchase and sale of the Property is not consummated in
accordance with this Agreement, regardless of the reason or the party at fault,
and regardless of whether such failure results from the misconduct, bad faith
act or breach or default of a party under this Agreement, no commission, fee or
other charge shall have been earned by or be payable to Broker, and neither
Seller nor Buyer shall be obligated or liable to Broker for any commission, fee
or other charge of any kind in regard to this Agreement or the purchase and sale
of the Property. Broker acknowledges that it is a party to this Agreement for
the sole purpose of setting forth its covenants as contained in this Section.
Broker agrees that it has no other rights with respect to the payment of a
commission or fee in connection with this Agreement or the purchase and sale of
the Property except as specifically set forth in this Section. Seller, Buyer and
Broker shall and do each hereby indemnify, defend and hold harmless each of the
others from and against the claims, demands, actions and judgments of any and
all brokers, agents and other intermediaries alleging a commission, fee or other
payment to be owing by reason of their respective dealings, negotiations or
communications in connection with this Agreement or the purchase and sale of the
Property.
(B) Broker has acted as agent for Buyer in this transaction and is
to be paid a commission in the amount of one percent (1%) of the Purchase Price
at Closing by Seller, with one-half of such commission payable to Broker's
Pittsburgh, Pennsylvania office and the remaining one-half of such commission
payable to Broker's Kansas City, Missouri office. Broker agrees to provide at
the Closing a sworn affidavit with respect to the payment of the compensation
due Broker in connection with the transactions contemplated by this Agreement
and waiving and releasing any and all lien rights under applicable law with
respect to the entire Property and running in favor of Buyer, Seller and Buyer's
title insurer.
17. BPD LEASE; IMPROVEMENTS. Buyer hereby acknowledges and agrees
that the plans and specifications and drawings described on EXHIBIT "E" attached
hereto and incorporated herein (collectively, the "PLANS AND SPECIFICATIONS")
are acceptable to Buyer. The Plans and Specifications may be modified or revised
by Seller or the BPD Tenant, or both, (i) in the event the BPD Tenant is
entitled to make or require such modifications or revisions pursuant to the BPD
Lease or otherwise in connection with any change to the Improvements that the
BPD
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Tenant is entitled to make or require pursuant to the BPD Lease, (ii) to make
changes to the Improvements that are necessary, in the reasonable judgment of
Seller, Seller's Architect, or the BPD Tenant to comply with applicable law, and
(iii) to make changes to the Improvements or otherwise modify or revise the
Plans and Specifications that are not material changes or material modifications
or revisions. The modifications or revisions to the Plans and Specifications or
changes to the Improvements described in the preceding sentence are herein
referred to as "PERMITTED MODIFICATIONS AND CHANGES". For purposes hereof,
changes to the Improvements or modifications or revisions to the Plans and
Specifications shall be deemed to be "material changes" or "material
modifications or revisions" only if such change, modification, or revision (i)
decreases or increases the rentable square footage of the Improvements by more
than five percent (5%) less than or more than 80,657 rentable square feet and
(ii) requires the consent of the BPD Tenant and the "lessor" or "landlord" under
the BPD Lease. In connection with any changes to the Improvements or
modifications or revisions to the Plans and Specifications submitted to Buyer
for its consent, such consent shall not be unreasonably withheld, conditioned,
or delayed, and Buyer shall act reasonably and in good faith in connection
therewith; Buyer shall be deemed to have consented to any such changes or
modifications or revisions submitted to Buyer unless Buyer gives Seller written
notice of Buyer's reasonable objections thereto, which objections shall be
specified in reasonable detail in such written notice, such that Seller actually
receives such written notice within ten (10) business days after Buyer's receipt
or deemed receipt of such proposed changes or modifications or revisions. In the
event Buyer does not terminate this Agreement pursuant to SECTION 4 hereof on or
before the Due Diligence Date, then changes to the Improvements and
modifications or revisions to the Plans and Specifications submitted to Buyer
prior to the Due Diligence Date shall be deemed consented to by Buyer and shall
be deemed to be an additional Permitted Modification and Change.
18. DISCLOSED ENVIRONMENTAL CONTAMINATION. Buyer acknowledges that Seller
has disclosed to Buyer that the Property may be contaminated by certain
hazardous substances, as referenced or described in that certain Voluntary
Remediation Agreement for Investigation and Remediation Activities dated as of
November 8, 2002, as amended by that certain Modification No. 1 dated as of
January 7, 2003 (the "VRA") and Work Plan attached hereto as EXHIBIT "F" and as
identified in those certain site assessment reports prepared under and
referenced in the VRA.
19. SELLER'S CONDITIONS TO CLOSING; SELLER'S CONSTRUCTION LOAN. Buyer
acknowledges that certain rights, benefits, and privileges, and the scope and
extent of certain obligations, of Seller under the construction loan obtained by
Seller ("SELLER'S CONSTRUCTION LOAN") from Bank One, N.A. ("SELLER'S
CONSTRUCTION LENDER") in connection with the acquisition of the Land and the
construction of the Improvements are contingent upon the commencement of the
"Covered Period" thereunder. The relevant loan documents provide that such
"Covered Period" will occur upon (i) Seller, as borrower, and a "Take-Out
Lender" entering into a "Permanent Loan Commitment" and a "Tri-Party Agreement"
(the "TRI-PARTY AGREEMENT"), or (ii) Seller, as borrower, and a "Forward
Purchaser" entering into a "Purchase Agreement" and such a Tri-Party Agreement.
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Seller's obligation to consummate the purchase and sale of the Property on
the Closing Date shall be subject to Seller's Construction Lender confirming to
Buyer, in writing, that the Covered Period has commenced, such that Buyer
actually receives such written confirmation on or before FEBRUARY 7, 2004 (the
"COVERED PERIOD SATISFACTION DEADLINE").
In preliminary discussions with Seller's Construction Lender, Seller and
Borrower anticipate that satisfying and performing such condition may include
the following: (i) Buyer obtaining a permanent loan commitment from an
institutional lender with a Standard & Poor's investment grade of "A" or higher
and otherwise satisfactory to each of Seller and Seller's Construction Lender,
in each such entity's sole and absolute discretion, with a loan closing date not
later than the Final Closing Date and with the only condition to the closing of
such loan remaining to be satisfied, as of the Covered Period Satisfaction
Deadline, being the BPD Tenant accepting the Improvements pursuant to Sections
3.23 through 3.25 of the Solicitation of Offers attached to and made a part of
the BPD Lease and any other applicable provisions of the BPD Lease, thereby
acknowledging its obligation to commence the payment of rent under the BPD Lease
(the parties currently anticipate that such permanent loan commitment will be in
the approximate amount of $15,000,000.00); (ii) Buyer obtaining an irrevocable
letter of credit in favor of Seller's Construction Lender, as beneficiary
thereunder, or Buyer depositing with, and pledging to, Seller's Construction
Lender cash, in an amount equal to the difference between the principal amount
referenced in such permanent loan commitment (if such commitment is obtained by
Buyer) and the maximum "Loan Amount" (currently $17,325,000.00) under Seller's
Construction Loan (which letter of credit or cash deposit is herein referred to
as "LENDER'S COLLATERAL"); and (iii) Seller, Buyer, Seller's Construction
Lender, and Buyer's lender entering into an agreement similar to the "Tri-Party
Agreement" contemplated by the loan documents entered into in connection with
Seller's Construction Loan. Such Tri-Party Agreement may provide, among other
things, that Buyer may substitute a permanent loan commitment for a portion of
the Lender's Collateral (which portion would, subject to the terms and
conditions of the Tri-Party Agreement, be in the same amount as the principal
amount referenced in the permanent loan commitment being so substituted),
subject to the prior written approval of Seller and Seller's Construction
Lender, which approval may be granted or denied in each such entity's sole and
absolute discretion. In all events, any such loan commitment(s) and the lender
issuing same, either such letter of credit and the lender issuing same or the
depository for such pledged cash and the pledge agreement and related documents
and agreements, as the case may be, and such agreement similar to the "Tri-Party
Agreement" must be satisfactory to each of Seller and Seller's Construction
Lender, in each such entity's sole and absolute discretion. The foregoing
description of the items, agreements, and documents that the parties presently
anticipate may be required to satisfy Seller's Construction Lender and cause the
"Covered Period" to commence shall in no event, however, limit or otherwise
affect the condition set forth in the preceding paragraph or the other terms and
conditions of this Section. Buyer shall use reasonable and good faith efforts to
and obligations satisfy said condition on or before the Covered Period
Satisfaction Deadline.
If (i) the foregoing condition has not been satisfied or performed or
waived in writing by Seller on or as of the Covered Period Satisfaction
Deadline, then Seller shall have the right, at Seller's option, to terminate
this Agreement by giving written notice to Buyer (A) on or before
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the date that is one hundred eighty (180) days after the Covered Period
Satisfaction Deadline or (B) prior to the satisfaction or performance of such
condition, whichever is earlier (provided, however, that if such the failure of
such condition to be satisfied or performed on or as of the Covered Period
Satisfaction Deadline results in cost, expense, or liability of Seller or
entitles Seller's Construction Lender to exercise any remedies against or with
respect to Seller or Seller's Construction Loan (including, without limitation,
any liability of Seller or any remedy of Seller's Construction Lender to cause
the repayment of any sums advanced under Seller's Construction Loan or for an
increase in the interest rate payable thereunder) (collectively, "SELLER
LIABILITY"), then such termination shall be effective if Seller gives such
written notice to Buyer on or before the date set forth in clause (A) of this
sentence without regard to clause (B)), or (ii) such condition is satisfied or
performed but thereafter the Covered Period lapses, Buyer breaches the Tri-Party
Agreement, or any Seller Liability arises by reason of or in connection with any
act or omission of Buyer or its agents or representatives or of the lender under
the aforesaid permanent loan commitment(s) or of the issuer or depository with
respect to any Lender's Collateral, then Seller shall have the right, at
Seller's option, to terminate this Agreement by giving written notice on or
before the earlier of the Closing Date or the date one hundred eighty (180) days
after Seller actually receives from Buyer written notice of such lapse, breach,
or Seller Liability; in any such event, upon any such termination, the ▇▇▇▇▇▇▇
Money shall be delivered to and retained by Seller and all rights of Seller and
Buyer under this Agreement shall expire and this Agreement shall become null and
void. The satisfaction of the foregoing condition shall not be deemed to limit
or waive in any manner whatsoever any rights or remedies of any party of any
Tri-Party Agreement that may be hereafter executed as contemplated in this
SECTION 19, in the event of any breach or default of Buyer thereunder
(including, without limitation, the lapse or expiration of the aforesaid
permanent loan commitment or other failure of Buyer to satisfy the conditions to
the making of the loan to be described in such permanent loan commitment), which
rights and remedies may include, without limitation, the enforcement of rights
or remedies related to any security interest or other interest in or to any
Lender's Collateral in accordance with the terms and provisions of such
Tri-Party Agreement.
20. ADDITIONAL SELLER'S CONDITIONS TO CLOSING. Seller's obligation to
consummate the purchase and sale of the Property on the Closing Date shall be
subject to the satisfaction or performance of the following terms and
conditions, any one or more of which may be waived in writing by Seller, in
whole or in part, on or as of the Closing Date:
(A) Buyer shall have, in all material respects, kept, observed,
performed, satisfied and complied with all terms, covenants, conditions,
agreements, requirements, restrictions and provisions of this Agreement. The
representations and warranties of Buyer set forth in this Agreement (and the
substantive facts contained in any representations and warranties limited to
such Buyer's knowledge and belief) shall be true and correct, on and as of the
Closing Date.
(B) The BPD Lease shall be in full force and effect and shall not
have been terminated or become null and void as of the Closing Date.
22
If any of the foregoing conditions have not been satisfied or performed or
waived in writing by Seller on or as of the Closing Date, Seller shall have the
right, at Seller's option, either: (i) to terminate this Agreement by giving
written notice to Buyer on or before the Closing Date, in which event all rights
and obligations of Seller and Buyer under this Agreement shall expire and this
Agreement shall become null and void; or (ii) if such failure of condition
constitutes a breach of representation or warranty by Buyer, constitutes a
failure by Buyer to perform any of the terms, covenants, conditions, agreements,
requirements, restrictions or provisions of this Agreement, or otherwise
constitutes a default by Buyer under this Agreement, to exercise such rights and
remedies as may be provided for in SECTION 13 of this Agreement.
21. BUYER'S CONDITIONS TO CLOSING. Buyer's obligation to consummate the
purchase and sale of the Property on the Closing Date shall be subject to the
satisfaction or performance of the following terms and conditions, any one or
more of which may be waived in writing by Buyer, in whole or in part, on or as
of the Closing Date:
(A) Seller shall have, in all material respects, kept, observed,
performed, satisfied and complied with all material terms, covenants,
conditions, agreements, requirements, restrictions and provisions of this
Agreement to be kept, observed, performed, satisfied and complied with prior to
the Closing.
(B) The BPD Tenant shall have accepted the Improvements pursuant to
Sections 3.23 through 3.25 of the Solicitation of Offers attached to and made a
part of the BPD Lease and all other relevant provisions of the BPD Lease,
thereby acknowledging its obligation to commence the payment of rent under the
BPD Lease (the date of such acceptance is herein referred to as the "PHASE 1
SUBSTANTIAL COMPLETION DATE").
(C) The Plans and Specifications shall not have been modified or
revised, except for Permitted Modifications and Changes, without Buyer's consent
or deemed consent, as set forth in SECTION 17.
(D) There shall have been delivered to Buyer, at or prior to the
Closing Date, a Tenant Statement of Lease by the BPD Tenant which does not set
forth any fact or circumstance which would permit the BPD Tenant to withhold or
set off against rent payable under the BPD Lease with respect to the
Improvements.
If any of the foregoing conditions have not been satisfied or performed or
waived in writing by Buyer on or as of the Closing Date, Buyer shall have the
right, at Buyer's option, either: (i) to terminate this Agreement by giving
written notice to Seller on or before the Closing Date, in which event all
rights and obligations of Seller and Buyer under this Agreement shall expire and
this Agreement shall become null and void; or (ii) if such failure of condition
constitutes a failure by Seller to perform any of the terms, covenants,
conditions, agreements, requirements, restrictions or provisions of this
Agreement, or otherwise constitutes a default by Seller under this Agreement, to
exercise such rights and remedies as may be provided for in SECTION 13 of this
Agreement.
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22. SECONDARY OFFERING. For purposes of this Agreement, the term
"SECONDARY OFFERING COMPLETION DATE" shall mean the earlier of (I) February 2,
2004, or (II) the date that is ten (10) days after the date on which Government
Properties Trust, Inc. ("GPTI"), which is an affiliate of Buyer, has complied
with applicable U.S. securities laws and regulations such that it may lawfully
conduct a public offering of at least 11,500,000 shares of common stock. Buyer
hereby represents and warrants to Seller that an appropriate and complete Form
S-11 Registration Statement was filed with the U.S. Securities and Exchange
Commission on October 8, 2003 by or on behalf of GPTI in connection with such
public offering. Buyer shall, in good faith and with reasonable diligence, use
all commercially reasonable efforts to comply with, and to cause GPTI to comply
with, applicable U.S. securities laws and regulations such that GPTI may
lawfully conduct such public offering on or before February 2, 2004. If the
Secondary Offering Completion Date has not occurred on or before FEBRUARY 2,
2004, Buyer shall have the right to terminate this Agreement by giving written
notice to Seller on or before FEBRUARY 4, 2004, in which event all rights and
obligations of Seller and Buyer under this Agreement shall expire and this
Agreement shall become null and void. If Buyer does not so terminate this
Agreement in accordance with this SECTION 22 such that Seller actually receives
such written termination notice on or before FEBRUARY 4, 2004, then: (I) Buyer
shall deliver to Escrow Agent the Additional ▇▇▇▇▇▇▇ Money in accordance with
SECTION 2(C)(I); (II) Buyer shall have no further right to terminate this
Agreement pursuant to this SECTION 22; and (III) subject to SECTIONS 13(B),
14(A), 14(B), AND 21 of this Agreement, the entirety of the ▇▇▇▇▇▇▇ Money shall
become nonrefundable to Buyer.
23. CONFIDENTIAL TRANSACTION - NO PUBLIC ANNOUNCEMENTS. Neither Seller nor
Buyer shall make any public announcement with respect to the purchase and sale
of the Property, and neither the existence of this Agreement, the pendency of
the transaction described herein, nor any terms or provisions hereof shall be
disclosed by Seller or Buyer (or their respective agents, consultants or
employees) to any third party, without the prior written consent of the other
party, unless and until either party is legally compelled to make such
disclosure under applicable laws (including, without limitation, disclosure
requirements of the U.S. Securities and Exchange Commission that are applicable
to Buyer and other disclosures required to comply with applicable law in
connection with the "secondary offering" contemplated in SECTION 22, above) or
until Buyer consummates its purchase of the Property pursuant to this Agreement.
Notwithstanding the foregoing, Seller and Buyer may disclose such matters to
their respective consultants, directors, officers, employees, legal counsel and
lenders or prospective lenders, in which event the disclosing party shall take
reasonable actions to ensure that any such persons or entities do not make the
same available or disclose the contents thereof to any other person or entity.
24. SURVIVAL. The provisions of SECTIONS 5, 11, AND 18 of this Agreement,
the provisions of CLAUSES (I), (II) AND (III) of SECTION 4(A) of this Agreement,
the indemnification provisions of SECTION 16 of this Agreement, and the
representations and warranties expressly set forth in SECTION 25, below (to the
extent such survival is provided for in said Section), shall survive the
consummation of the purchase and sale of the Property on the Closing Date, the
delivery of the deed and the payment of the Purchase Price. Notwithstanding
anything to the contrary set forth in this Agreement, the provisions of SECTIONS
4(D), 15 AND 23 of this
24
Agreement, the provisions of CLAUSES (I), (II) AND (III) of SECTION 4(A) of this
Agreement, and the indemnification provisions of SECTION 16 of this Agreement
shall also survive any termination of this Agreement in accordance with its
terms.
25. SELLER'S REPRESENTATIONS. Seller represents the following to Buyer as
of the Closing Date, to the best of Seller's actual knowledge:
(I) Seller has not generated, stored, treated, or disposed of any
hazardous waste or toxic or hazardous substance on the Property in violation of
applicable environmental laws (provided, however, that the foregoing shall apply
only to the actions of Seller and not to actions of any third party, including,
without limitation, any contractor of Seller).
(II) Seller has no knowledge of any generation, storage, treatment,
or disposal of any hazardous waste or toxic or hazardous substance on the
Property in violation of applicable environmental laws since the date on which
Seller acquired the Property, except as disclosed in SECTION 19, as referenced
and described in the VRA or in any environmental reports delivered to Buyer or
any other Due Diligence Materials, and as otherwise disclosed to Buyer.
(Neither subparagraph (i) nor subparagraph (ii), above, shall apply to materials
used or installed on the Property in connection with the development of the
Property or the construction and installation of the Improvements so long as
such use and installation is in compliance, in all material respects, with
applicable environmental laws and such materials are of the type customarily
used and installed in connection with the development of properties similar to
the Property and the construction of improvements similar to the Improvements.)
(III) Seller's execution of each of the following has been duly
authorized by applicable organizational or corporate documents or appropriate
organizational or corporate action: the BPD Lease and the principal agreements
to be assigned to Buyer at Closing pursuant to SECTION 9(A)(IV).
(IV) The Improvements leased to the BPD Tenant under the BPD Lease
are, in all material respects, constructed (a) in accordance with the Plans and
Specifications (as the same may be modified by any Permitted Modifications and
Change and any other modifications or changes thereto made pursuant to ▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇), (▇) in compliance with the BPD Lease requirements pertaining to such
construction, and (c) in a good and workmanlike manner which is consistent with
customary construction practices for buildings of the same nature as the
Improvements and which are to be used for general office purposes as
contemplated by the BPD Lease. The representation set forth in this subparagraph
(iv) shall not apply to any of the following:
(A) Any Punch List Work completed after Closing;
(B) Any title or survey defects (it being understood that any such
items are governed by SECTION 7, above);
25
(C) Any alteration, change, improvement or modification in or to
the Plans and Specifications or the Improvements after the Closing Date;
(D) Any defects with respect to the Improvements or breaches of
the representation set forth in this subparagraph (iv) to the extent that either
(1) the same is disclosed to the BPD Tenant and the BPD Tenant agrees in writing
to waive the same and, in the event such defect would reasonably be expected to
result in materially increased maintenance or operational expenses of Buyer with
respect to the Improvements, materially diminish rights or remedies that Buyer
would have against third parties in the absence of such defect (e.g., by
affecting the duration of any roof warranty or other manufacturer or installer
warranties with respect to the Improvements), or materially reduce the value of
the Improvements, the same is disclosed to Buyer and Buyer agrees in writing to
waive the same, or (2) the same is disclosed to Buyer or Buyer's Designees prior
to Closing and Buyer nonetheless proceeds to Closing; and
(E) any "Phase 2" or "Phase 3" improvements.
In the event of any breach of the representations set forth in the
foregoing subparagraph (iv), Seller shall only have liability therefor to the
extent that (1) as a result of such breach, the BPD Tenant is entitled under the
BPD Lease to set-off, and actually does set-off, against any of the Tenant
Financial Obligations to recover any cost incurred by the BPD Tenant to cure or
repair such breach, (2) such breach constitutes a material breach of the
foregoing representations, and (3) the cure or correction of such breach is not
covered by any covenants, agreements, or warranties under any of the Assigned
Contracts and the contractor or other parties to such Assigned Contracts fails
to commence to correct or cure such breach within one hundred twenty (120) days
after receipt of Buyer's written demand therefor, so long as Buyer uses
reasonable diligence in attempting to cause such contractor or such other
party(ies) so to correct and cure such breach. In the event of any such set-off
by the BPD Tenant against the Tenant Financial Obligations, as aforesaid, Seller
shall be liable to reimburse Buyer for the amount of such set-off, except for
any portion of such set-off with respect to any Tenant Financial Obligation
accruing on or after that date which is twelve (12) months after the Closing
Date. In all events, the aggregate liability of Seller for any breach of the
representations set forth in subparagraph (iv), above, shall not exceed the
lesser of the amount of any such set-off for which Seller is to reimburse Buyer
pursuant to the foregoing sentence or the sum of $200,000.00.
Buyer shall immediately deliver to Seller written notice of any assertion
or claim by Buyer or the BPD Tenant of any breach of the representations set
forth in subparagraph (iv), above, and shall allow Seller to control the
response to and defense against such assertion or claim. Buyer shall also
re-assign to Seller upon request all Assigned Contracts, warranties and
guaranties relating to the design, construction and installation of the
Improvements (including, but not limited to, the contracts or agreements with
Seller's Architect and Seller's general contractor relating to the Improvements)
to the extent Seller deems such re-assignment necessary to institute any action,
proceeding or suit to enforce the terms thereof (including, but not limited to,
any representation, covenant, or indemnity contained therein) or to recover any
damages for breach thereof, with regard to any such breach. Buyer further agrees
not to alter, amend, modify,
26
release or terminate any or all of such Assigned Contracts, warranties, or
guaranties, in whole or part, without Seller's prior written consent. Buyer may,
in lieu of such re-assignment, grant to Seller the right to institute any such
action, proceeding or suit in Buyer's name, but in such event all damages
recovered under or in connection with any such Assigned Contracts, warranties,
or guaranties with regard to the breach in question shall, after such breach is
cured, first inure to the benefit of (and be paid by Buyer to) Seller, until
Seller has recovered all costs, expenses and fees incurred in such action,
proceeding or suit, plus all amounts paid or incurred by Seller in connection
with such breach of the foregoing subparagraph (iv).
The provisions of this SECTION 25 shall survive the consummation of the purchase
and sale of the Property on the Closing Date, the delivery of the deed and the
payment of the Purchase Price, for a period of twelve (12) months after the
Closing Date. In the event of any breach of the representations set forth in
this SECTION 25, Buyer shall give written notice thereof to Seller on or before
the date thirty (30) days after the expiration of such twelve-month period or
such breach shall be deemed waived by Buyer.
26. SELLER'S TAX DEFERRED EXCHANGE. Seller may convey the Property or any
portion thereof or interest therein as part of one or more Internal Revenue Code
Section 1031 Tax Deferred Exchanges for its benefit. In such event, Seller shall
be assigning all contract rights and obligations hereunder to a qualified
intermediary, as a part of, and in furtherance of, such tax deferred exchange.
Buyer agrees to assist and cooperate in any such exchange, and Buyer further
agrees to execute any and all documents as are reasonably necessary in
connection with any such exchange. Buyer shall not be obligated to incur any
cost or expense in connection with any such exchange, other than that which
Buyer elects to incur to have its counsel review the documents and instruments
incident thereto. As part of any such exchange, Seller shall convey the real
property described herein directly to Buyer and Buyer shall not be obligated to
acquire or convey any other property as part of any such exchange.
27. GENERAL PROVISIONS.
(A) NOTICES. Whenever any notice, demand or request is required or
permitted under this Agreement, such notice, demand or request shall be in
writing and shall be delivered by hand, be sent by registered or certified mail,
postage prepaid, return receipt requested, or be sent by nationally recognized
commercial courier for next business day delivery, to the addresses set forth
below their respective executions hereof, or to such other addresses as are
specified by written notice given in accordance herewith; notices, demands or
requests may also be transmitted by facsimile to the number for each party set
forth below their respective executions hereof, or to such other numbers as are
specified by written notice given in accordance herewith, so long as such notice
is also concurrently given by one of the other delivery methods provided above.
All notices, demands or requests, whether delivered by hand, given by mailing,
sent by nationally recognized commercial courier, or transmitted by facsimile,
as hereinabove provided, shall be deemed given on the date on which such notice
is received or deemed received by Seller or Buyer, as the intended recipient, as
the case may be. Any notice, demand or request not received because of changed
address or facsimile number of which no notice was given as hereinabove provided
or because of refusal to accept delivery shall be deemed received by the
27
party to whom addressed on the date of hand delivery, on the date of facsimile
transmittal, on the first calendar day after deposit with commercial courier, or
on the third calendar day following deposit in the United States Mail, as the
case may be.
(B) FACSIMILE AS WRITING. The parties expressly acknowledge and
agree that, notwithstanding any statutory or decisional law to the contrary, the
printed product of a facsimile transmittal shall be deemed to be "written" and a
"writing" for all purposes of this Agreement.
(C) ASSIGNMENT. This Agreement may not be assigned by Buyer, in
whole or in part, without the prior written consent of Seller and Seller's
construction lender, which consent of Seller shall not be unreasonably withheld,
and any such assignment without the consent of Seller and Seller's construction
lender shall be null and void and of no force or effect; provided, however, that
Buyer may assign all of its right, title and interest in and to this Agreement
at Closing to (i) GPTI, (ii) a single member limited liability company having as
its single member either Gen-Net Lease Income Trust or GPTI, or (iii) another
single purpose entity which is wholly owned by Gen-Net Lease Income Trust or
GPTI and is acceptable to Seller, in Seller's sole and absolute judgment and
discretion. Subject to the foregoing, this Agreement shall be binding upon and
enforceable against, and shall inure to the benefit of, Buyer, Seller and Broker
and their respective legal representatives, successors and permitted assigns. No
assignment shall relieve the assigning Buyer of liability for the performance of
the duties and obligations of "Buyer" under this Agreement.
(D) HEADINGS. The use of headings, captions and numbers in this
Agreement is solely for the convenience of identifying and indexing the various
provisions in this Agreement and shall in no event be considered otherwise in
construing or interpreting any provision in this Agreement.
(E) EXHIBITS. Each and every exhibit referred to or otherwise
mentioned in this Agreement is attached to this Agreement and is and shall be
construed to be made a part of this Agreement by such reference or other mention
at each point at which such reference or other mention occurs, in the same
manner and with the same effect as if each exhibit were set forth in full and at
length every time it is referred to or otherwise mentioned.
(F) DEFINED TERMS. Capitalized terms used in this Agreement shall
have the meanings ascribed to them at the point where first defined,
irrespective of where their use occurs, with the same effect as if the
definitions of such terms were set forth in full and at length every time such
terms are used.
(G) PRONOUNS. Wherever appropriate in this Agreement, personal
pronouns shall be deemed to include the other genders and the singular to
include the plural.
(H) SEVERABILITY. If any term, covenant, condition or provision of
this Agreement, or the application thereof to any person or circumstance, shall
ever be held to be invalid or unenforceable, then in each such event the
remainder of this Agreement or the application of such term, covenant, condition
or provision to any other person or any other
28
circumstance (other than those as to which it shall be invalid or unenforceable)
shall not be thereby affected, and each term, covenant, condition and provision
hereof shall remain valid and enforceable to the fullest extent permitted by
law.
(I) NON-WAIVER. Failure by any party to complain of any action,
non-action or breach of any other party shall not constitute a waiver of any
aggrieved party's rights hereunder. Waiver by any party of any right arising
from any breach of any other party shall not constitute a waiver of any other
right arising from a subsequent breach of the same obligation or for any other
default, past, present or future.
(J) RIGHTS CUMULATIVE. Except to the extent otherwise provided
herein, all rights, remedies, powers and privileges conferred under this
Agreement on the parties shall be cumulative of and in addition to, but not
restrictive of or in lieu of, those conferred by law.
(K) TIME OF ESSENCE; DATES. TIME IS OF THE ESSENCE OF THIS
AGREEMENT. Anywhere a day certain is stated for payment or for performance of
any obligation, the day certain so stated enters into and becomes a part of the
consideration for this Agreement. If any date set forth in this Agreement shall
fall on, or any time period set forth in this Agreement shall expire on, a day
which is a Saturday, Sunday, federal or state holiday, or other non-business
day, such date shall automatically be extended to, and the expiration of such
time period shall automatically be extended to, the next day which is not a
Saturday, Sunday, federal or state holiday or other non-business day. The final
day of any time period under this Agreement or any deadline under this Agreement
shall be the specified day or date, and shall include the period of time through
and including such specified day or date. All references to the "EFFECTIVE DATE"
shall be deemed to refer to the later of the date of Buyer's or Seller's
execution of this Agreement, as indicated on the signature pages of this
Agreement.
(L) APPLICABLE LAW. This Agreement shall be governed by, construed
under and interpreted and enforced in accordance with the laws of the State of
West Virginia.
(M) ENTIRE AGREEMENT; MODIFICATION. This Agreement supersedes all
prior discussions and agreements between Seller and Buyer with respect to the
purchase and sale of the Property and other matters contained herein, and this
Agreement contains the sole and entire understanding between Seller and Buyer
with respect thereto. This Agreement shall not be modified or amended except by
an instrument in writing executed by or on behalf of Seller and Buyer.
(N) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all of such
counterparts together shall constitute one and the same instrument.
(O) ATTORNEY'S FEES. In the event of any litigation between Buyer
and Seller arising under or in connection with this Agreement, the prevailing
party shall be entitled to recover from the other party the expenses of
litigation (including reasonable attorneys' fees, expenses and disbursements)
incurred by the prevailing party.
29
(P) AUTHORITY. Each party hereto warrants and represents that such
party has full and complete authority to enter into this Agreement and each
person executing this Agreement on behalf of a party warrants and represents
that he has been fully authorized to execute this Agreement on behalf of such
party and that such party is bound by the signature of such representative.
(Q) COUNSEL. Each party hereto warrants and represents that each
party has been afforded the opportunity to be represented by counsel of its
choice in connection with the execution of this Agreement and has had ample
opportunity to read, review, and understand the provisions of this Agreement.
(R) NO CONSTRUCTION AGAINST PREPARER. No provision of this Agreement
shall be construed against or interpreted to the disadvantage of any party by
any court or other governmental or judicial authority by reason of such party's
having or being deemed to have prepared or imposed such provision.
(S) NO LIEN. This Agreement is not and shall not be deemed or
considered to convey or be an interest in or lien against the Property.
(T) NO RECORDING. In no event shall this Agreement or any memorandum
hereof be recorded by Buyer in any public records, and any such recordation or
attempted recordation shall constitute a breach of this Agreement by Buyer.
(U) OFFER AND ACCEPTANCE. This instrument shall be of no force or
effect unless and until this Agreement is executed and delivered by Seller and
Buyer. The submission of an unexecuted draft or copy of this instrument by one
party to the other for review does not constitute an offer by or option to
purchase or sell the Property.
30
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute, seal and deliver this Agreement, all as of the day
and year first written above.
SELLER:
BPD PARKERSBURG, LLC, a Delaware
limited liability company
By: ▇▇▇▇ Enterprises Mid-Atlantic,
Inc.,
Date of Signature: 12/24/03 its Manager
---------
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ (SEAL)
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Title: SVP
----------------------------
Initial address for notices:
BPD Parkersburg, LLC
c/o Lowe Enterprises Mid-Atlantic, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention:
----------------------------
Telephone No: (____)
----------------------------
Telecopy No: (____)
----------------------------
With a copy to each of the following:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇ ▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
and
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
31
BUYER:
GEN-NET LEASE INCOME TRUST, INC., a
Michigan corporation
Date of Signature: 12-24-03 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------- --------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title: President / CEO
---------------------------
[CORPORATE SEAL]
Initial address for notices:
Gen-Net Lease Income Trust, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Lieben, Whitted, Houghton, Slowiaczek
and ▇▇▇▇▇▇▇▇, P.C., L.L.O.
100 Scoular Building
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
32
The undersigned Broker has caused its duly authorized officer or representative
to execute this Agreement under seal and to deliver same to Seller and Buyer for
the sole purpose of consenting to and agreeing to the terms and provisions of
SECTION 16 of the within and foregoing Purchase and Sale Agreement, all as of
the ______ day of ______________, 2003.
BROKER:
CB ▇▇▇▇▇▇▇ ▇▇▇▇▇
By: (SEAL)
-------------------------
Name:
Title:
Initial address for notices:
CB ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CCIM
Senior Associate
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
33
Schedule of Exhibits
Exhibit "A" Legal Description
Exhibit "B" Schedule of Service Agreements
Exhibit "C" ▇▇▇▇▇▇▇ Money Escrow Agreement
Exhibit "D" Schedule of Certain Permitted Exceptions
Exhibit "E" Schedule of Plans and Specifications for the Improvements
Exhibit "F" Copy of VRA
34
EXHIBIT "A"
LEGAL DESCRIPTION OF THE LAND
Exhibit "A"
(Page 1 of __)
EXHIBIT "B"
SCHEDULE OF SERVICE AGREEMENTS
None.
Exhibit "B"
(Page 1 of 1)
EXHIBIT "C"
▇▇▇▇▇▇▇ MONEY ESCROW AGREEMENT
CTC ESCROW NO. ______________
This is an ESCROW AGREEMENT, made as of the ______ day of _____________,
2003, by and among: CHICAGO TITLE COMPANY ("ESCROW AGENT"); BPD PARKERSBURG,
LLC, a Delaware limited liability company ("SELLER"); and GEN-NET LEASE INCOME
TRUST, INC., a Michigan corporation ("BUYER").
WHEREAS, Buyer and Seller are parties under a certain Purchase and Sale
Agreement dated , 2003, regarding certain real property located in the City of
Parkersburg, West Virginia, and more particularly described therein (the
"CONTRACT"); and
WHEREAS, Buyer and Seller have requested Escrow Agent to act as escrow
agent to hold the ▇▇▇▇▇▇▇ money agreed to therein (the "DEPOSIT"), in accordance
with the terms and provisions of this ▇▇▇▇▇▇▇ Money Escrow Agreement.
NOW THEREFORE, in consideration of the promises and undertakings herein
made, and the proposed issuance of a title insurance policy (or policies) by
Escrow Agent, it is agreed that:
1. Buyer and Seller hereby appoint Escrow Agent as escrow agent,
hereunder; and the Deposit is hereby delivered to Escrow Agent, who by signing
below acknowledges its receipt of the sum of $200,000.00, either in the form of
a check, dated ____________________, and payable to Escrow Agent, or wire
transfer; such receipt is made subject to Conditions of Escrow attached hereto.
Escrow Agent shall receive a fee in accordance with Escrow Agent's Schedule of
Fees which will be for serving as Escrow Agent under this agreement, which fee
shall be deducted from the Deposit when return of the Deposit is requested.
2. Escrow Agent shall hold the Deposit until written release disbursement
instructions are received from Buyer and Seller.
3. Escrow Agent is hereby authorized to and directed to invest the Deposit
in the name of Buyer, by Chicago Title Insurance Company as Escrow Agent, as
follows:
(A) Deposits will be invested in one or more FDIC insured Money
Market Accounts (such that the full amount of each deposit is $100,000 or
less and, accordingly, fully insured by the FDIC) selected at the
discretion of Escrow Agent upon receipt of Escrow Agent's Investment Form,
unless otherwise requested.
(B) Other types of investments will be considered by Seller and
Buyer upon written request from Buyer directed to Escrow Agent and subject
to possible additional fees payable to the Escrow Agent as negotiated;
however, any such additional fees shall be the obligation of Buyer.
Exhibit "C"
(Page 1 of 5)
(C) IF NO INVESTMENT IS REQUESTED PLEASE CHECK HERE .
4. Interest shall be payable at the time the Deposit is disbursed in
accordance with the terms of the Escrow Agreement and written
release/disbursement instructions.
5. All investments will be made in the regular course of business. To be
entitled to same day investment (assuming good grounds are provided) the Deposit
must be received by noon; otherwise, such funds will be deposited on the next
business day.
6. Escrow Agent shall have NO OBLIGATION TO INVEST the Deposit unless and
until a satisfactory federal tax identification number is provided the Escrow
Agent, in writing or in the space below:
FEDERAL TAX I.D. NO. -
----------------
TAXPAYER NAME - BPD Parkersburg, LLC, a Delaware limited liability company
7. The investment shall be subject to the rules, regulations, policies and
procedures of said Depository.
[REMAINDER OF THIS PAGE IS BLANK; CONDITIONS OF ESCROW FOLLOW]
Exhibit "C"
(Page 2 of 5)
CONDITIONS OF ESCROW
Escrow Agent accepts this undertaking subject to these Conditions of
Escrow:
1. The Deposit may be processed for collection in the normal course of
business by Escrow Agent, who may commingle funds received by it with escrow
funds of others in its regular escrow account at Wachovia Bank, N.A. (hereafter
the "DEPOSITORY"). Escrow Agent shall not be accountable for any incidental
benefit which may be attributable to the funds so deposited.
2. Escrow Agent shall not be liable for any loss caused by the failure,
suspension, bankruptcy or dissolution of the Depository.
3. Escrow Agent shall not be liable for loss or damage resulting from:
(A) any good faith act or forbearance of Escrow Agent;
(B) any default, error, action or omission of any party, other than
Escrow Agent;
(C) any defect in the title to any property unless such loss is
covered under a policy of title insurance issued by the Escrow Agent;
(D) the expiration of any time limit or other delay which is not
solely caused by the failure of Escrow Agent to proceed in its ordinary
course of business, and in no event where such time line is not disclosed
in writing to the Escrow Agent;
(E) the lack of authenticity of any writing delivered to Escrow
Agent or of any signature thereto, or the lack of authority of the
signatory to sign such writing;
(F) Escrow Agent's compliance with all attachments, writs, orders,
judgments, or other legal process issued out of any court;
(G) Escrow Agent's assertion or failure to assert any cause of
action or defense in any judicial or administrative proceeding; or
(H) any loss or damage which arises after the Deposit has been
disbursed in accordance with the terms of this Agreement.
4. Escrow Agent shall be fully indemnified by the parties hereto for all
its expenses, costs, and reasonable attorney's fees incurred in connection with
any interpleader action which Escrow Agent may file, in its sole discretion, to
resolve any dispute as to the Deposit, or which may be filed against the Escrow
Agent. Such costs, expenses or attorney's fees, as well as the fees of Escrow
Agent described below, may be deducted from the Deposit.
5. If Escrow Agent is made a party to any judicial, non-judicial or
administrative action, hearing or process based on acts of any of the other
parties hereto and not on the malfeasance and/or negligence of Escrow Agent in
performing its duties hereunder, the expenses, costs and reasonable attorney
fees incurred by Escrow Agent in responding to such action, hearing or process
may
Exhibit "C"
(Page 3 of 5)
be deducted from the funds held hereunder and the party/parties whose alleged
acts are a basis for such proceedings shall indemnify, save and hold Escrow
Agent harmless from said expenses, costs and fees so incurred.
6. The Company's fee for acting as Escrow Agent is shown on its Schedule
of Escrow Services and Fees which is available upon request. These fees, which
will be deducted from the account upon disbursement, are the joint and several
obligation of each party to any agreement, sales contract or other writing
forming the basis for this escrow undertaking.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Exhibit "C"
(Page 4 of 5)
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute, seal and deliver this Agreement, all as of the day
and year first written above.
SELLER: BUYER:
BPD PARKERSBURG, LLC, a Delaware GEN-NET LEASE INCOME TRUST, INC., a
limited liability company Michigan corporation
By: ▇▇▇▇ Enterprises Mid-Atlantic,
Inc.,
its Manager
By:
---------------------------------
By: Name:
---------------------------- ----------------------------
Name: Title:
----------------------- ----------------------------
Title:
-----------------------
ESCROW AGENT:
CHICAGO TITLE COMPANY
By:
---------------------------------
Name:
---------------------------
Title:
---------------------------
Exhibit "C"
(Page 5 of 5)
EXHIBIT "D"
SCHEDULE OF CERTAIN PERMITTED EXCEPTIONS
Exhibit "D"
(Page 1 of 1)
EXHIBIT "E"
SCHEDULE OF PLANS AND SPECIFICATIONS FOR THE IMPROVEMENTS
(Refer to attached schedule)
Exhibit "E"
(Page 1 of 6)
EXHIBIT "F"
COPY OF VRA
(Refer to attached copy of the VRA)