PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made as of the 4th day
of February, 1998 (the "Effective Date"), by and between SYLVAN WAY L.L.C., a
Virginia limited liability company, ("Seller"), and ▇▇▇▇ - ▇▇▇▇ REALTY
ACQUISITION CORP., a Delaware corporation ("Purchaser").
WITNESSETH:
In consideration of the mutual covenants and agreements set forth herein the
parties hereto do hereby agree as follows:
ARTICLE 1- SALE OF PROPERTY
Seller agrees to sell, transfer and assign and Buyer agrees to purchase, accept
and assume, subject to the terms and conditions stated herein, all of Seller's
right, title and interest in and to the following (herein collectively called
the "Property"):
1.1 Real Property. That certain parcel of real estate consisting of #'s
1 and ▇ ▇▇▇▇▇▇ ▇▇▇, and a branch bank building, located in ▇▇▇▇▇▇
County Financial Center, Parsippany, New Jersey, and legally
described in Exhibit A attached hereto and incorporated herein by
this reference, together with all buildings, improvements and
fixtures located thereon and all rights, privileges and
appurtenances pertaining thereto including all of Seller's right,
title and interest in and to all rights-of-way, open or proposed
streets, alleys, easements, strips or gores of land adjacent thereto
(herein collectively called the "Real Property"); and
1.2 Personal Property. All tangible personal property owned by Seller
(excluding any computer or computer equipment and software owned by
Seller or Seller's property manager), located on the Real Property,
and used in the ownership, operation and maintenance of the Real
Property as shown on Exhibit Q hereto, and all nonconfidential
books, records and files (excluding appraisals, budgets, Seller's
strategic plans for the Property, internal analyses, marketing
information, submissions relating to Seller's obtaining of corporate
authorization, attorney and accountant work product, or other
information in the possession or control of Seller or Seller's
property manager which Seller deems proprietary) relating to the
Real Property (herein collectively called the "Personal Property");
and
1.3 Other Property Rights. (a) Seller's interest as landlord in all
leases encumbering the Real Property on the Closing Date (as defined
in Section 6.1); (b) if and to the extent assignable by Seller, (i)
all service, supply, maintenance, utility and
commission agreements, all equipment leases, and all contracts,
subcontracts and agreements relating to the construction of any
unfinished tenant improvements, to the extent described in Exhibit B
attached hereto and incorporated herein by this reference, and (ii)
all licenses, permits and other written authorizations necessary for
the use, operation or ownership of the Real Property or Personal
Property and in Seller's possession or control and (c) all rights of
Seller (if any) to the names "One Sylvan Way," "Five Sylvan Way" and
"▇▇▇▇▇▇ County Financial Center", to the extent such rights are
assignable without expense to Seller (it being acknowledged by Buyer
that Seller does not have exclusive rights to use such name and that
Seller has not registered the same in any manner) (the rights and
interests of Seller described in clauses (b) and (c) hereinabove
being herein collectively called the "Other Property"). All of the
Other Property and Personal Property, if any, to the extent that
such items exist and are in the possession of Seller, shall be
conveyed to Buyer by quitclaim ▇▇▇▇ of sale, without any warranty of
title whatsoever. All of the foregoing items purchased under this
Agreement shall be hereinafter sometimes referred to collectively as
the "Property." The Property is being sold in an "AS IS" condition
and "WITH ALL FAULTS" as of the date of this Agreement and of
Closing (as defined herein).
ARTICLE 2 - PURCHASE PRICE
The total purchase price to be paid by Buyer for the purchase of the Property is
the sum of FIFTY TWO MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS
($52,800,000 ) in immediately available funds (the "Purchase Price"). Buyer
understands that Chase Manhattan may possess a right of first refusal to acquire
the branch banking facility and ingress and egress rights (the "Bank Property")
and that Seller intends to give Chase Manhattan notice and an opportunity to
exercise those rights. Buyer and Seller agree that the value of the Bank
Property is $1,250,000 and that if Chase Manhattan elects to acquire the Bank
Property, the Property shall automatically be diminished by the subtraction of
the Bank Property from the whole and the Purchase Price of the so-diminished
Property shall be reduced by $1,250,000. If Chase Manhattan elects to acquire
the Bank Property the Buyer agrees that it will nevertheless Close on the
remainder of the Property for the reduced Purchase Price as aforesaid, subject
of course to Buyer's other rights to terminate this Agreement and not Close.
The Purchase Price shall be paid in the following manner:
2.1 Deposit Money. Upon execution and delivery of this Agreement and as
a condition precedent to the effectiveness of this Agreement, Buyer
shall also deliver a certified or cashier's check in the amount of
ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) payable to the Title
Company identified in paragraph 3.1 hereof, as a deposit (the
"Deposit") whose street address is ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇,▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President, as
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escrow agent ("Escrow Agent"). Concurrently with countersigning this
Agreement, Seller shall forward the check to the Title Company. The
Deposit shall be held and delivered by Escrow Agent in accordance
with the provisions of Article 12. Any interest earned on the
Deposit shall be considered a part of the Deposit. Except as
otherwise set forth herein, the Deposit shall be applied against the
Purchase Price on the Closing Date. Escrow Agent is to deposit the
Deposit in a federally-insured bank. The parties acknowledge that
only $100,000 of the Deposit will be federally insured. (Note: Upon
the Buyer selecting the Title Company described in Section 3.1
hereof, Escrow Agent will transfer the Deposit to the Title Company
provided that the Title Company will concurrently execute a writing
similar to the signature block for Escrow Agent undertaking to hold
the Deposit in accordance with the provisions of this Agreement and
to comply with the provision of Article 12 and Section 14.2.)
2.2 Cash at Closing. On the Closing Date, Buyer shall pay to Seller an
amount equal to the difference between (a) the Purchase Price, and
(b) the amount of the Deposit as of the Closing Date (the
"Balance"), subject to the prorations and adjustments set forth in
Article 5 or as otherwise provided under this Agreement, plus any
other amounts required to be paid by Buyer at Closing, in
immediately available funds by wire transfer as more particularly
set forth in Section 6.2.
ARTICLE 3 - TITLE MATTERS
3.1 Title to Real Property. Buyer shall, when it executes and returns
this Agreement to Seller, identify in writing a title insurance
company to act as Escrow Agent pursuant to the provisions of
paragraph 2.1 hereof, post the Deposit as required in said paragraph
and order at its sole cost and expense within three (3) days of the
Execution Date (a) a commitment from First American Title Insurance
Co. of New York (the "Title Company") to issue an Owner's Policy of
Title Insurance with respect to the Property (the "Title Report"),
(b) copies of all recorded documents referred to on Schedule B of
the Title Report as exceptions to coverage (the "Title Documents"),
and (c) a certified boundary survey of the Property (the "Survey").
Except as provided in Section 3.2, Seller shall convey and Buyer
shall accept title to the Property, subject to (i) applicable zoning
and building ordinances and land use regulations, now and hereafter
in effect, to the extent adopted by any municipal or governmental
authority and applicable to all or any portion of the Property; (ii)
(Intentionally deleted), (iii) such state of facts as disclosed in
the Survey, (iv) such state of facts as would be disclosed by a
physical inspection of the Property, (v) the lien of taxes not yet
due and payable, (vi) any exceptions caused by Buyer, its agents,
representatives or employees, (vii) such other exceptions as the
Title Company shall commit to insure over, without any additional
cost to Buyer, whether such insurance is made available in
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consideration of payment, bonding, indemnity of Seller or otherwise,
and (viii) the rights of tenants in possession as set forth in
Subsection 6.3(c)], (ix) the exceptions set forth in Chicago Title
Insurance Company Policy number 31-901-60-04654, dated 4/13/95; and
(x) such facts as are shown on the as-built survey which was
prepared by ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, drawing number J310-1010, dated
4/6/95at the time of the 1995 acquisition of the Property by Seller,
(the foregoing exceptions described in clauses (i) through (x) being
herein collectively called the "Permitted Exceptions").
3.2 Title Defects.
3.2.1 Certain Exceptions to Title. Buyer shall have the right to
object in writing to any title matters that are not Permitted
Exceptions and that materially adversely affect Buyer's title
to the Real Property which may appear on supplemental title
reports or updates to the Title Report issued at the request
of Buyer after the date hereof (herein collectively called the
"Other Liens") within five (5) days after the receipt thereof
by Buyer. Unless Buyer shall timely object to such Other
Liens, all such Other Liens and any matters which do not
materially adversely affect Buyer's title to the Real Property
which are set forth in any such supplemental reports or
updates shall be deemed to constitute additional Permitted
Exceptions. Any exceptions which are timely objected to by
Buyer shall be herein collectively called the "Title
Objections." Seller may elect (but shall not be obligated) to
remove, or cause to be removed at its expense, any Title
Objections, and shall be entitled to a reasonable adjournment
of the Closing (not to exceed ninety (90) days) for the
purpose of such removal, which removal will be deemed effected
by the issuance of title insurance eliminating or insuring
against the effect of the Title Objections. Seller shall
notify Buyer in writing within five (5) days after receipt of
Buyer's notice of Title Objections whether Seller elects to
remove the same. If Seller is unable to remove or endorse over
any Title Objections prior to the Closing, or if Seller elects
not to remove one or more Title Objections, Buyer may elect to
either (a) terminate this Agreement, in which event the
Deposit shall be paid to Buyer and, thereafter, the parties
shall have no further rights or obligations hereunder except
for obligations which expressly survive the termination of
this Agreement, or (b) waive such Title Objections, in which
event such Title Objections shall be deemed "Permitted
Exceptions" and the Closing shall occur as herein provided
without any reduction of or credit against the Purchase Price.
Unless Buyer elects to terminate within two business days
after receipt of Seller's election to cure a Title Objection
or not, as the case may be, Buyer shall be deemed to have
elected (b) above and to have waived its objections. The
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aforementioned elections shall be evidenced by notice to the
other party pursuant to the notice provisions in this
Agreement.
3.2.2 Discharge of Title Objections. If on the Closing Date there
are any Title Objections which Seller has elected to pay and
discharge, Seller may use any portion of the Balance to
satisfy the same, provided Seller shall deliver to Buyer at
the Closing instruments in recordable form and sufficient to
satisfy such Title Objections of record, together with the
cost of recording or filing such instruments, or provided that
Seller shall cause the Title Company to insure over the same,
without any additional cost to Buyer, whether such insurance
is made available in consideration of payment, bonding,
indemnity of Seller or otherwise.
3.3 Title Insurance. At Closing, the Title Company shall issue to Buyer,
at Buyer's sole cost and expense, an ALTA Owner's Form of title
insurance policy in the form of the Title Report (the "Owner's Title
Policy"), in the amount of the Purchase Price, insuring that fee
simple title to the Real Property is vested in Buyer subject only to
the Permitted Exceptions. Buyer shall be entitled to request that
the Title Company provide, at Buyer's sole cost and expense, such
endorsements (or amendments) to the Owner's Title Policy as Buyer
may reasonably require, provided that (a) such endorsements (or
amendments) shall be at no cost or additional liability to Seller,
(b) Buyer's obligations under this Agreement shall not be
conditioned upon Buyer's ability to obtain such endorsements and, if
Buyer is unable to obtain such endorsements, Buyer shall
nevertheless be obligated to proceed to close the transaction
contemplated by this Agreement (the "Transaction") without reduction
of or set off against the Purchase Price, and (c) the Closing shall
not be delayed as a result of Buyer's request.
ARTICLE 4 - BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY
Buyer acknowledges that commencing prior to the execution of this Agreement and
continuing for a period which will expire at 5:00 PM then-prevailing Eastern
Time on the tenth (10th) business day following the "Effective Date", which for
the purposes of this Agreement is the date upon which the second of Purchaser
and Seller shall execute this Agreement, (the "Due Diligence Period"), Buyer may
continue to conduct, its financial due diligence of and review of title to the
Property. Buyer acknowledges that it has been afforded the opportunity to
conduct examinations, inspections, testing, studies and/or investigations
(herein collectively called the "Due Diligence") of the Property and information
regarding the Property prior to the Execution Date and has completed same, but
for financial due diligence and title review. If Buyer is not satisfied with the
results of its Due Diligence, Buyer may terminate this Agreement by written
notice to Seller given in accordance with the provisions of Section 14.9 hereof
on or before the
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last day of the Due Diligence Period, and, in the event of such termination,
neither Seller nor Buyer shall have any liability hereunder except for those
obligations which expressly survive the termination of this Agreement and Buyer
shall be entitled to the return of the Deposit. In the event Buyer fails to
terminate this Agreement on or before the last day of the Due Diligence Period,
Buyer shall be deemed to have waived its rights to terminate this Agreement in
accordance with this Article 4. Buyer and Seller each acknowledge and agree that
Buyer shall have no additional period after the expiration of the Due Diligence
Period to conduct further physical Due Diligence regarding the Property. At
Closing and as a material inducement for Seller to consummate the Transaction,
Buyer will deliver a certification in the form of Exhibit F attached hereto and
incorporated herein by this reference.
ARTICLE 5 - ADJUSTMENTS AND PRORATIONS
The following adjustments and prorations shall be made at Closing:
5.1 Lease Rentals and Expenses.
5.1.1 Rents. All collected rents and other payments from tenants
under the Leases shall be prorated between Seller and Buyer as
of the Closing Date. Seller shall be entitled to all rents
(including any percentage rent, additional rent and any
accrued tax and operating expense reimbursements and
escalations), charges, and other revenue of any kind
attributable to any period under the Leases to but not
including the Closing Date. Buyer shall be entitled to all
rents (including any percentage rent, additional rent and any
accrued tax and operating expense reimbursements and
escalations), charges and other revenue of any kind
attributable to any period under the Leases on and after the
Closing Date. Rents and expense escalations or other
reimbursements due Landlord under the Leases not collected as
of the Closing Date shall not be prorated at the time of
Closing, but Buyer shall make a good faith effort to collect
the same on Seller's behalf and to tender the same to Seller
upon receipt (which obligation of Buyer shall survive the
Closing and not be merged therein); provided, however, that
all rents, escalations and other reimbursements due landlord
under the Leases collected by Buyer on or after the Closing
Date shall first be applied to all amounts due under the
Leases at the time of collection (i.e., current rents and sums
due Buyer as the current owner and landlord) with the balance
(if any) payable to Seller, but only to the extent of amounts
delinquent and actually due Seller. Buyer shall not have an
exclusive right to collect the sums due Seller under the
Leases and Seller hereby retains its rights to pursue any
tenant under the Leases for sums due Seller for periods
attributable to Seller's ownership of the Property.
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Seller's rights under the immediately preceding sentence shall
survive the Closing and not be merged therein. Buyer shall
receive a credit against the Purchase Price for prepaid
rentals held by Seller covering the period post-Closing.
5.1.2 Lease Expenses. At Closing, Buyer shall reimburse Seller for
the Lease Expenses (as defined in Section 13.2) to the extent
required by the terms of Section 13.2. All Lease Expenses
arising out of or attributable to the initial term of Leases
executed prior to the Effective Date or renewals or expansions
of existing Leases executed prior to the Effective Date shall,
notwithstanding any language to the contrary in Article 5 or
Article 13, be borne and payable by Seller, including, without
limitation, all Lease Expenses due on account of leases,
renewals, extensions or expansions of (i) Diagnostic Retrieval
Services, (ii) Integrated Communications, (iii) Fujitsu, (iv)
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ and (v) Coopers & ▇▇▇▇▇▇▇.
5.2 Real Estate and Personal Property Taxes. Real estate and personal
property taxes shall be prorated on a cash basis for the calendar
year in which the Closing occurs, regardless of the year for which
such taxes are assessed. Such proration shall be calculated based
upon the actual number of days in such calendar year, with Seller
being responsible for that portion of such calendar year occurring
prior to midnight of the day prior to the Closing Date and Buyer
being responsible for that portion of such calendar year occurring
after 12:01 a.m. of the Closing Date. If the real estate and/or
personal property tax rate and assessments have not been set for the
calendar year in which the Closing occurs, then the proration of
such taxes shall be based upon the rate and assessments for the
preceding calendar year, and such proration shall be adjusted
post-closing between Seller and Buyer upon presentation of written
evidence that the actual taxes paid for the calendar year in which
the Closing occurs differ from the amounts used at Closing and in
accordance with the provisions of Section 5.7. This obligation shall
survive Closing and shall not be merged into the Deed.
Seller shall pay all installments of special assessments due and
payable prior to the Closing Date and Buyer shall pay all
installments of special assessments due and payable on and after the
Closing Date; provided, however, that Seller shall not be
responsible for any installments of special assessments which have
not been confirmed or which relate to projects that have not been
completed on the date hereof. Notwithstanding the foregoing terms of
this Section, Seller shall have no obligation to pay (and Buyer
shall not receive a credit at Closing for) any real estate or
personal property taxes or special assessments to the extent that
Buyer is entitled after Closing to reimbursement of taxes and
assessments, or the recovery of any increase in taxes and
assessments, from the tenants under the Leases,
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regardless of whether Buyer actually collects such reimbursement or
increased taxes and assessments from such tenants, it being
understood and agreed by Buyer and Seller that the burden of
collecting such reimbursements shall be solely on Buyer.
5.3 Other Property Operating Expenses. Operating expenses for the
Property shall be prorated as of midnight of the day prior to the
Closing Date. Seller shall pay all utility charges and other
operating expenses attributable to the Property to, but not
including the Closing Date (except for those utility charges and
operating expenses payable by tenants in accordance with the Leases)
and Buyer shall pay all utility charges and other operating expenses
attributable to the Property on or after the Closing Date. To the
extent that the amount of actual consumption of any utility services
is not determined prior to the Closing Date, a proration shall be
made at Closing based on the last available reading and post-closing
adjustments between Buyer and Seller shall be made within twenty
(20) days of the date that actual consumption for such pre-closing
period is determined, which obligation shall survive the Closing and
shall not be merged therein. Seller shall not assign to Buyer any
deposits which Seller has with any of the utility services or
companies servicing the Property. Buyer shall arrange with such
services and companies to have accounts opened in Buyer's name
beginning at 12:01 a.m. on the Closing Date. Notwithstanding the
foregoing terms of this Section, Seller shall have no obligation to
pay (and Buyer shall not receive a credit at Closing for) any
operating expenses to the extent that Buyer is entitled after
Closing to reimbursement of operating expenses, or the recovery of
any increase in operating expenses, from the tenants under the
Leases, regardless of whether Buyer actually collects such
reimbursement or increased operating expenses from such tenants, it
being understood and agreed by Buyer and Seller that the burden of
collecting such reimbursements shall be solely on Buyer.
5.4 Closing Costs. Buyer shall pay all premiums and charges of the Title
Company for the Owner's Title Policy (including endorsements) to be
issued pursuant to the Title Report, the cost of any survey obtained
by Buyer, all recording and filing charges in connection with the
instrument by which Seller conveys the Property, one-half (1/2) of
all escrow or closing charges, if any, all costs of Buyer's Due
Diligence and any other costs customarily paid by the Buyer pursuant
to local practice. Seller shall pay one-half (1/2) of all escrow or
closing charges and all transfer taxes and similar charges, if any,
applicable to the transfer of the Property to Buyer and any other
costs customarily paid by the Seller pursuant to local practice.
Except as otherwise agreed by the parties, each party shall pay its
own attorneys. The obligations of the parties to pay applicable
escrow or closing charges shall survive the termination of this
Agreement.
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5.5 Cash Security Deposits. At Closing, Seller shall give Buyer a credit
against the Balance in the aggregate amount of $43,284.11, the
unapplied cash security deposits held by Seller under the Leases as
of the Effective Date(but not including any interest thereon) less
any applications of such deposits which shall have been approved by
Buyer and any normal and customary administrative or similar charges
to which Seller may be entitled under applicable law.
5.6 Apportionment Credit. In the event the apportionments to be made at
the Closing result in a credit balance (i) to Buyer, such sum shall
be paid at the Closing by giving Buyer a credit against the Balance
in the amount of such credit balance, or (ii) to Seller, Buyer shall
pay the amount thereof to Seller at the Closing by wire transfer of
immediately available funds to the account or accounts to be
designated by Seller for the payment of the Balance.
5.7 Delayed Adjustment. If at any time following the Closing Date, the
amount of an item listed in any section of this Article 5 shall
prove to be incorrect (whether as a result of an error in
calculation or a lack of complete and accurate information as of the
Closing), the party in whose favor the error was made shall promptly
pay to the other party the sum necessary to correct such error upon
receipt of proof of such error, provided that such proof is
delivered to the party from whom payment is requested on or before
one hundred twenty (120) days after Closing, or in accordance with
Section 9.3.3 as to the matters discussed in 9.3.3.. The provisions
of this Section 5.7 shall survive the Closing and not be merged
therein.
ARTICLE 6 - CLOSING
Buyer and Seller hereby agree that the Transaction shall be consummated as
follows:
6.1 Closing Date. This Transaction shall close ("Closing") on the date
(the "Closing Date") which is fifteen (15) business days following
the expiration of the Due Diligence Period. Closing may, at Seller's
election, be either by a so-called "New York style" closing or
through an escrow with the Title Company. The Closing shall take
place at 10:00 a.m. then-prevailing Eastern Time in the offices of
Seller's attorneys or, at Seller's election, at the Title Company,
and Buyer and Seller shall conduct a "pre-closing" on the last
business day prior to the Closing Date with title transfer and
payment of the Purchase Price to be completed on the Closing Date as
set forth in Section 6.2. Time is of the essence with respect to
payment of the Purchase Price and to the Closing Date.
6.2 Title Transfer and Payment of Purchase Price. Provided all
conditions precedent to Seller's obligations hereunder have been
satisfied, Seller agrees to convey title to the Real Property to
Buyer by Bargain & Sale Deed with Covenant Against
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Grantor's Acts upon confirmation of receipt of the Purchase Price by
the Escrow Agent as set forth below. Provided all conditions
precedent to Buyer's obligations hereunder have been satisfied,
Buyer agrees to deliver the payment specified in Section 2.2 by
timely delivering the same to the Escrow Agent no later than 11:00
a.m. then-prevailing Eastern Time on the Closing Date and
unconditionally directing the Escrow Agent to deposit the same in
Seller's designated account by 1:00 p.m. Eastern Time on the Closing
Date. For each full or partial day after the Closing Date that
Seller has not received in its account the payment specified in
Section 2.2, Buyer shall pay to Seller one (1) day's interest on the
unpaid funds at the rate per annum equal to the "prime" lending rate
of interest then in effect as listed by The Wall Street Journal.
6.3 Seller's Closing Deliveries. At the Closing, Seller shall
deliver or cause to be delivered to the Escrow Agent the following:
(a) Deed. A deed in the form specified in paragraph 6.2, and
Exhibit G attached hereto and incorporated herein by this
reference, conveying to Buyer all of Seller's right, title and
interest in and to the Real Property, subject only to the
Permitted Exceptions ("Deed").
(b) ▇▇▇▇ of Sale. A quitclaim ▇▇▇▇ of sale in the form of Exhibit
H attached hereto and incorporated herein by this reference
conveying all of Seller's right, title and interest in and to
the Personal Property.
(c) Assignment of Tenant Leases. An assignment and assumption of
tenant leases, in the form of Exhibit I attached hereto and
incorporated herein by this reference ("Assignment of Leases")
transferring all of Seller's interest in the tenant space
leases for the tenants identified on Exhibit J attached hereto
and incorporated herein by this reference (as updated at
Closing)and any amendments, guarantees and other documents
relating thereto (herein collectively called the "Leases"),
together with all assignable non-cash security deposits
deposited by the tenants thereunder and not applied by Seller
in accordance with the terms of the Leases.
(d) Assignment of Equipment Leases, Commission Agreements and
Service Contracts. An assignment and assumption of the
equipment leases, commission agreements, service contracts,
and other contracts and agreements described on Exhibit B,
warranties and guaranties and the Other Property (to the
extent the same are not transferred by the Deed, ▇▇▇▇ of Sale
or Assignment of Leases) in the form of Exhibit K attached
hereto and incorporated herein by this reference ("Assignment
of Contracts"), transferring, to the extent assignable,
without liability or
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expense to Seller, all of Seller's interest in the equipment
leases and any lease commission agreements in effect at the
Property on the Closing Date, all uncanceled service contracts
encumbering the Property on the Closing Date, all warranties
and guaranties which remain in effect on the Closing Date and
any Other Property Rights not otherwise transferred to Buyer
(all of the foregoing being herein collectively called the
"Contracts"). Seller shall not assign any existing management
agreement or any contracts or policies of insurance for the
Property.
(e) Estoppel Letters. Executed estoppel letters from (a) each of
those tenants identified on Exhibit L-1 attached hereto and
incorporated herein by this reference as "Major Tenants" (the
"Major Tenants"), and (b) other tenants collectively occupying
no less than sixty percent (60 %) of the area leased under the
Leases (excluding the area leased under the Leases with the
Major Tenants) and which are obligated under their respective
Leases to deliver such letters to the landlord (the "Other
Tenants").All of such estoppel letters shall be substantially
in the form which such Major Tenant or Other Tenant is
required to provide pursuant to the terms of such Major
Tenant's or Other Tenant's Lease or, if no form is specified
in any of the Leases, in the form of Exhibit L-2 attached
hereto and incorporated herein by this reference. In the event
Seller cannot for any reason obtain a tenant estoppel letter
from any of the Other Tenants, Seller, at its option, may
deliver to Buyer a Seller's (landlord) estoppel letter in the
form specified in the preceding sentence. If Seller shall
obtain an estoppel certificate from any such tenant after
delivery of such Seller's estoppel letter with respect to such
tenant, Seller's (landlord) estoppel letter shall, as of the
date of such tenant's estoppel letter, be without further
force or effect. Seller shall have no liability or
responsibility for the information set forth in the Tenant
Estoppel Letters delivered by the Tenants.
(f) Notice to Tenants. A single form letter in the form of Exhibit
M attached hereto and incorporated herein by this reference to
each tenant under the Leases, duplicate copies of which would
be sent notifying it of the sale of the Property to Buyer and
advising it that all future payments of rent and other
payments due under the Leases, are to be made to Buyer at an
address designated by Buyer.
(g) Non-Foreign Status Affidavit. A non-foreign status affidavit
in the form of Exhibit N attached hereto and incorporated
herein by this reference, as required by Section 1445 of the
Internal Revenue Code.
(h) Evidence of Authority. Evidence of the approval of the Manager
of Seller
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with respect to the authority to act on behalf of Seller.
(i) Seller's Certificate. The certificate of Seller certifying to
the matters set forth in Section 8.2.
(j) Property Documents. (i) To the extent in the possession of
Seller or the current manager of the Property, (A) the
original (or, if unavailable, a copy) of the existing
certificate or certificates of occupancy for the Property, and
(B) all original (or, if unavailable, copies of) certificates,
licenses, permits, authorizations and approvals issued for or
with respect to the Property by governmental and
quasi-governmental authorities having jurisdiction; and (ii)
all non-proprietary books and records located at the Property
or at the off ice of Seller's building manager relating to the
Property and the ownership and operation thereof (the items
described in clauses (i) and (ii) being herein collectively
called the "Property Documents").
(k) Other Documents. Such other documents as may be reasonably
required by the Title Company or as may be agreed upon by
Seller and Buyer to consummate the Transaction.
(1) Letters of Credit as Tenant Security Deposits. With respect to
any security deposits which are letters of credit, Seller
shall, if the same are assignable, (i) deliver to Buyer at the
Closing such letters of credit,(ii) execute and deliver such
other instruments as the issuers of such letters of credit
shall reasonably require, and (iii) cooperate with Buyer to
change the named beneficiary under such letters of credit to
Buyer so long as Seller does not incur any additional
liability or expense in connection therewith. Notwithstanding
the foregoing to the contrary, Seller can complete after
Closing the requirements of this Section 6.3(1) not completed
thereby, at which point the obligations under this Section
6.3(1) shall survive Closing and not merge into the Deed. If
letters of credit are not assignable, Seller shall undertake
the obligation to obtain a new letter of credit from such
tenant for the benefit of Buyer.
(m) Keys and Original Documents. Keys to all locks on the Real
Property (in Seller's or Seller's building manager's
possession) and originals or, if originals are not available,
copies, of the Leases and Contracts (unless canceled as set
forth herein) encumbering the Property on the Closing Date.
(n) Transfer Taxes. If applicable, duly completed and signed real
estate
12
transfer tax returns.
(o) ISRA. Seller agrees to cooperate (but at no cost or expense to
it) with Buyer in Buyer's applications for a New Jersey ISRA
letter of non-applicability, which application shall be
prepared and diligently prosecuted by Buyer at its sole cost.
(p) Assignment of Rights (as defined in Section 8.3.2) in the form
set forth on Exhibit C.
6.4 Buyer Closing Deliveries. At the Closing, Buyer shall deliver or
cause to be delivered to the Escrow Agent the following:
(a) Balance. The Balance, as adjusted for apportionments and other
adjustments required under this Agreement, plus any other
amounts required to be paid by Buyer at Closing.
(b) Assignment of Leases. The Assignment of Leases executed and
acknowledged by Buyer.
(c) Assignment of Equipment Leases, Commission Agreements and
Service Contracts. The Assignment of Contracts executed and
acknowledged by Buyer.
(d) Buyer's Certificates. The certificate of Buyer required under
Article 4 hereof and a certificate of Buyer certifying as to
the matters set forth in Section 8.1.
(e) Buyer's ERISA Certificate. The certificate of Buyer
substantially in the form of Exhibit O attached hereto and
incorporated herein by this reference and any other
certificate or other information reasonably required by Seller
to satisfy Seller that the Transaction does not constitute a
non-exempt prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")
and that the Transaction complies with ERISA in all respects.
(f) Evidence of Authority. Documentation to establish to Seller's
reasonable satisfaction the due authorization of Buyer's
acquisition of the Property and Buyer's delivery of the
documents required to be delivered by Buyer pursuant to this
Agreement, including, but not limited to, the organizational
documents of Buyer, as they may have been amended from time to
time, resolutions of Buyer and incumbency certificates of
Buyer.
13
(g) Other Documents. Such other documents as may be reasonably
required by the Title Company or may be agreed upon by Seller
and Buyer to consummate the Transaction.
(h) Transfer Taxes. If applicable, duly completed and signed real
estate transfer tax returns.
6.5 Delivery of Deed. Effective upon delivery of the Deed, actual and
exclusive possession (subject only to the Permitted Exceptions) and
risk of loss to the Property shall pass from Seller to Buyer.
ARTICLE 7 - CONDITIONS TO CLOSING
7.1 Seller's Obligations. Seller's obligation to close the Transaction
is conditioned on all of the following, any or all of which may be
waived by Seller by an express written waiver, at its sole option:
(a) Approval. (Intentionally Deleted);
(b) Representations True. Subject to the provisions of Section 8.3
hereof, all representations and warranties made by Buyer in
this Agreement shall be true and correct in all material
respects on and as of the Closing Date, as if made on and as
of such date except to the extent they expressly relate to an
earlier date;
(c) Buyer's Financial Condition. (Intentionally Omitted); and
(d) Buyer's Deliveries Complete. Buyer shall have delivered the
funds required hereunder and all of the documents to be
executed by Buyer set forth in Section 6.4 and shall have
performed all other covenants, undertakings and obligations,
and complied with all conditions required by this Agreement,
to be performed or complied with by Buyer at or prior to the
Closing.
(e) Rights of First Refusal or First Negotiation. Notwithstanding
any other provision of this Agreement to the contrary, Seller
shall not be obligated to Close hereunder unless, by the
Closing Date, it shall either (x) have obtained satisfactory
releases, waivers or declinations, as the case may be, from
two parties, namely, Coopers & ▇▇▇▇▇▇▇ and Dun & Bradstreet
(or their successors) which may possess rights of first
negotiation or rights of first refusal, as the case may be, to
purchase the Property or part of the
14
Property, or (y) have concluded that no such rights currently
exist or if they do exist have been waived, released or
terminated by estoppel. (See Section 2.1 for a discussion of
certain rights of first refusal held by Chase Manhattan as to
the Bank Property.)
(f) Litigation. No litigation shall be pending or threatened
against Seller which, if decided adversely to Seller, could
delay, threaten or stop the transactions contemplated by this
Agreement from being effected.
7.2 Buyer's Obligations. Buyer's obligation to close the Transaction is
conditioned on all of the following, any or all of which may be
expressly waived by Buyer in writing, at its sole option:
(a) Representations True. Subject to the provisions of Section
8.3, all representations and warranties made by Seller in this
Agreement, as the same may be amended as provided in Section
8.3, shall be true and correct in all material respects on and
as of the Closing Date, as if made on and as of such date
except to the extent that they expressly relate to an earlier
date;
(b) Title Conditions Satisfied. At the time of the Closing, title
to the Property shall be as provided in Article 3 of this
Agreement; and
(c) Seller's Deliveries Complete. Seller shall have delivered all
of the documents and other items required pursuant to Section
6.3 and shall have performed all other covenants, undertakings
and obligations, and complied with all conditions required by
this Agreement, to be performed or complied with by Seller at
or prior to the Closing.
(d) Rights of First Refusal or First Negotiation. Buyer shall not
be obligated to Close hereunder unless, by the Closing date,
in the case of Dun & Bradstreet and Coopers & ▇▇▇▇▇▇▇, Buyer
shall have concurred with Seller's conclusion that such rights
of first refusal or first negotiation which they or either or
them may have had have been terminated or waived or terminated
by estoppel, as the case may be. (See Section 2.1 as to
certain rights of first refusal held by Chase Manhattan as to
the Bank Property.)
7.3 Waiver of Failure of Conditions Precedent. At any time or times on
or before the date specified for the satisfaction of any condition,
Buyer or Seller may elect in writing to waive the benefit of any
such condition set forth in Section 7.1 or Section 7.2,
respectively. By closing the Transaction, Buyer shall be
conclusively
15
deemed to have waived the benefit of any remaining unfulfilled
conditions set forth in Section 7.2. In the event any of the
conditions set forth in Sections 7.1 or 7.2 are neither waived nor
fulfilled, Buyer or Seller (as appropriate) may terminate their
obligations to perform at the Closing and otherwise under this
Agreement in accordance with the provisions of Article 10.
ARTICLE 8 - REPRESENTATIONS AND WARRANTIES
8.1 Buyer's Representations. Buyer represents and warrants to, and
covenants with, Seller as follows:
8.1.1 Buyer's Authorization. Buyer is duly organized (or formed),
validly existing and in good standing under the laws of its
State of organization and the State in which the Property is
located, and is authorized to consummate the Transaction and
fulfill all of its obligations hereunder and under all
documents contemplated hereunder to be executed by Buyer and
has all necessary power and capacity to execute and deliver
this Agreement and all documents contemplated hereunder to be
executed by Buyer, and to perform all of its obligations
hereunder and thereunder. This Agreement and all documents
contemplated hereunder to be executed by Buyer, have been duly
authorized by all requisite partnership or corporate action on
the part of Buyer and are the valid and legally binding
obligation of Buyer, enforceable in accordance with their
respective terms. Neither the execution and delivery of this
Agreement and all documents contemplated hereunder to be
executed by Buyer, nor the performance of the obligations of
Buyer hereunder or thereunder will result in the violation of
any law or any provision of the agreement of partnership or
articles of incorporation and by-laws of Buyer or will
conflict with any order or decree of any court or governmental
instrumentality of any nature by which Buyer is bound.
8.1.2 Buyer's Financial Condition. Buyer's financial condition is as
is represented to Seller on any financial statements
previously submitted to Seller by Buyer.
8.2 Seller's Representations. Seller represents and warrants to Buyer as
follows:
8.2.1 Seller's Authorization. Seller is (a) duly organized, validly
existing and in good standing under the laws of its State of
organization and the State in which the Property is located,
(b) subject to obtaining the approvals or waivers, as the case
may be, described in Subsection 7.1(a) and (e), is
16
authorized to consummate the Transaction and fulfill all of
its obligations hereunder and under all documents contemplated
hereunder to be executed by Seller, and (c) has all necessary
power to execute and deliver this Agreement and all documents
contemplated hereunder to be executed by Seller and to perform
its obligations hereunder and thereunder. Subject to obtaining
the approvals described in Subsection 7.1(a), this Agreement
and all documents contemplated hereunder to be executed by
Seller have been duly authorized by all requisite action on
the part of Seller and are the valid and legally binding
obligation of Seller enforceable in accordance with their
respective terms. To the best of Seller's knowledge, neither
the execution and delivery of this Agreement and all documents
contemplated hereunder to be executed by Seller nor the
performance of the obligations of Seller hereunder or
thereunder will result in the violation of any law or any
provision of the operating agreement of Seller or will
conflict with any order or decree of any court or governmental
instrumentality of any nature by which Seller is bound.
8.2.2 Other Seller's Representations. To the best of Seller's
knowledge (as such term is hereinafter defined):
(a) Except as set forth in the Title Report and, to the
extent reviewed by or otherwise available to Buyer, the
documents, investigations or notices delivered to or
otherwise received by Buyer, and as listed in Exhibit P
attached hereto and incorporated herein by this
reference, Seller has not received any written notice of
pending litigation against Seller which, if determined
adversely to Seller, would adversely affect the
Property.
(b) As of the date of this Agreement, Seller has not entered
into any commission agreements, equipment leases,
service, supply, maintenance, union or utility contracts
affecting the Property which will be binding upon Buyer
after the Closing other than the Contracts listed in
Exhibit B attached hereto, provided, however, Exhibit B
may change prior to Closing as new Contracts are
executed by Seller, as set forth in Section 9.2.1
herein.
(c) Seller has not received any written notice of default
under the terms of any of the Contracts except as listed
in Exhibit P attached hereto.
(d) As of the date of this Agreement, the only tenants of
the Property are the tenants listed in Exhibit J
attached hereto and incorporated
17
herein by this reference. Exhibit J may change prior to
Closing, however, should permitted new leases be
executed, as provided in Article 13 of this Agreement,
prior to Closing.
(e) Except as listed in Exhibit P attached hereto or
disclosed in any report or writing delivered to Buyer
from Seller, Seller has not received any written notice
from any governmental authority of any violation of any
zoning, building, fire, or health code, statute,
ordinance, rule or regulation applicable to the
Property. Buyer understands and Seller acknowledges that
Buyer will investigate and satisfy itself with regard to
the environmental condition of the Property and the
presence or absence of Hazardous Materials during its
Due Diligence Period. Seller agrees that it shall
provide Buyer with true copies of any notices it may
receive from and after the Effective Date through and
until the Closing Date of any notices it receives
relating to the environmental condition of the Property
or Hazardous Materials in, at, under or about the
Property.
(f) Seller is not a "foreign person", "foreign partnership",
nor a "foreign corporation" as those terms are defined
in Section 7701 of the Internal Revenue Code of 1986, as
amended.
(g) To the best of Seller's knowledge, no condemnation
proceedings relating to the Real Property are pending or
threatened with regard to the Property.
(h) To the best of Seller's knowledge, Seller has not
received any notice from any insurance company or board
of fire underwriters of any defects or inadequacies in,
on, or about the Property, or any part of component
thereof which would adversely affect the insurability of
the Property or cause an increase in the premiums for
the Property which have not been cured or resolved.
(i) To the best of Seller's knowledge, during the period
between April, 1995, and October, 1997, no spill or
discharge of Hazardous Materials occurred in, on, under
of about the Property. And since October, 1997. no spill
of discharge of Hazardous Materials has occurred in, on,
under or about the Property.
(j) Seller has delivered to Purchaser true, complete and
correct copies of all (1) Leases set forth on Exhibit J;
(2) Contracts set forth on
18
Exhibit B; (3) other documents referred to on Exhibits
to this Agreement.
(k) Seller has not delivered or received a notice of default
pursuant to any of the Leases.
8.3 General Provisions.
8.3.1 No Representation As to Leases. Seller does not represent or
warrant that any particular Lease or Leases will be in force
or effect on the Closing Date or that the tenants will have
performed their obligations thereunder.
8.3.2 Definition of "Seller's Knowledge". All references in this
Agreement to "Seller's knowledge" or words of similar import
shall refer only to the actual knowledge of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (together, the "Designated
Employee"). ▇▇. ▇▇▇▇▇▇▇ was a Vice President of ▇. ▇. ▇▇▇▇▇▇
Investment Management Inc.("▇▇▇▇▇▇"), Seller's investment
manager for the Property. ▇▇. ▇▇▇▇▇▇▇ had primary
responsibility for managing and overseeing the Property from
the time it was acquired by Seller until his retirement from
▇▇▇▇▇▇ in June, 1997. ▇▇. ▇▇▇▇▇▇▇▇▇ is a Vice President of
▇▇▇▇▇▇ who succeeded to the position formerly held by ▇▇.
▇▇▇▇▇▇▇. Neither of them reported or reports to any other
person at ▇▇▇▇▇▇ with respect to operations of the Property.
Seller's knowledge shall not be construed to refer to the
knowledge of any other officer, agent or employee of Seller,
▇▇▇▇▇▇ or any affiliate thereof or to impose or have imposed
upon the Designated Employee any duty to investigate the
matters to which such knowledge, or the absence thereof,
pertains, including, but not limited to, the contents of the
files, documents and materials made available to or disclosed
to Buyer or the contents of files maintained by the Designated
Employee. There shall be no personal liability on the part of
the Designated Employee arising out of any representations or
warranties made herein. Furthermore, at Closing, Seller shall
quitclaim and assign to Buyer, to the extent same are
assignable, any rights and choses in action which Seller may
have against ▇▇▇▇ & Wentworth, Inc. ("Assignment of Rights")
arising out of ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇'▇ failure to disclose to
Seller happenings, conditions, facts or events on or about the
Property which, had the disclosures been made to Seller or the
Designated Employee, would have caused Seller to make
representations and warranties different from those made
herein.
8.3.3 Seller's Representations Deemed Modified. To the extent that
Buyer knows or by virtue of information contained in the
materials delivered to
19
Buyer by Seller, or otherwise, is deemed to know prior to the
expiration of the Due Diligence Period that Seller's
representations and warranties are inaccurate, untrue or
incorrect in any way, such representations and warranties
shall be deemed modified to reflect Buyer's knowledge or
deemed knowledge, as the case may be. For purposes of this
Agreement, Buyer shall be "deemed to know" that a
representation or warranty was untrue, inaccurate or incorrect
to the extent that ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇ ▇. ▇▇▇▇ have or had
actual knowledge of the untruth, inaccuracy or incorrectness
of such representation(s) and/or warranty(s) contained in this
Agreement or in the documents delivered by Seller, any
estoppel certificate executed by any tenant of the Property
and delivered to Buyer, or any studies, tests, reports, or
analyses prepared by or for Buyer or any of its employees,
agents, representatives or attorneys engaged in effecting the
purchase contemplated by this Agreement (all of the foregoing
being herein collectively called the "Buyer's
Representatives") or otherwise obtained by Buyer or Buyer's
Representatives contains information which is materially
inconsistent with any such representation or warranty.
8.3.4 Notice of Breach; Seller's Right to Cure. If after the
Effective Date, but prior to the Closing, Buyer or any Buyer's
Representative obtains actual knowledge that any of the
representations or warranties made herein by Seller are
untrue, inaccurate or incorrect in any material respect, Buyer
shall give Seller written notice thereof within five (5)
business days of obtaining such knowledge (but, in any event,
prior to the Closing). If at or prior to the Closing, Seller
obtains knowledge that any of the representations or
warranties made herein by Seller are untrue, inaccurate or
incorrect in any material respect, Seller shall give Buyer
written notice thereof within five (5) business days of
obtaining such knowledge (but, in any event, prior to the
Closing). In either such event, Seller shall have the right,
but not the obligation, to cure such misrepresentation or
breach and shall be entitled to a reasonable adjournment of
the Closing, not to exceed ninety (90) days) for the purpose
of such cure. If Seller is unable or unwilling to so cure any
misrepresentation or breach, then Buyer, as its sole remedy
for any and all such materially untrue, inaccurate or
incorrect material representations or warranties, shall elect
either (a) to waive such misrepresentations or breaches of
warranties and consummate the Transaction without any
reduction of or credit against the Purchase Price, or (b) to
terminate this Agreement by written notice given to Seller on
the Closing Date, in which event this Agreement shall be
terminated, the Deposit shall be returned to Buyer and,
thereafter, neither party shall have any further rights or
obligations hereunder except as provided in any section hereof
that by its terms expressly provides that it survives any
20
termination of this Agreement. If any such representation or
warranty is untrue, inaccurate or incorrect but is not untrue,
inaccurate or incorrect in any material respect, Buyer shall
be deemed to waive such misrepresentation or breach of
warranty, and Buyer shall be required to consummate the
Transaction without any reuction of or credit against the
Purchase Price, or any right to receive reimbursement from
Seller on account of the misrepresentation or breached
warranty, as the case may be. The untruth, inaccuracy or
incorrectness of a representation or warranty shall be deemed
material only if Buyer's aggregate damages resulting from the
untruth, inaccuracy or incorrectness of any of the
representations or warranties are reasonably estimated by
Buyer to exceed $250,000.00.
8.3.5 Survival; Limitation on Seller's Liability. The
representations and warranties made by Seller in Section 8.2
shall survive the Closing and not be merged therein for a
period of one hundred twenty (120) days and Seller shall only
be liable to Buyer hereunder for a breach of a representation
and warranty made herein or in any of the documents executed
by Seller at the Closing with respect to which a claim is made
by Buyer against Seller on or before the one hundred twentieth
(120th) day after the date of the Closing. Anything in this
Agreement to the contrary notwithstanding, the maximum
aggregate liability of Seller for Seller's breaches of
representations and warranties herein or in any documents
executed by Seller at Closing shall be limited to the lesser
of (i) the amount awarded for actual damages (not
consequential or treble) directly attributable to a material
breach of a representation or warranty by Seller or (ii) the
Maximum Amount (as defined in Section 14.16 hereof).
Notwithstanding the foregoing, however, if the Closing occurs,
Buyer hereby expressly waives, relinquishes and releases any
right or remedy available to it at law, in equity or under
this Agreement to make a claim against Seller for damages that
Buyer may incur, or to rescind this Agreement and the
Transaction, as the result of any of Seller's representations
or warranties being untrue, inaccurate or incorrect if (a)
Buyer knew or is deemed to know that such representation or
warranty was untrue, in-accurate or incorrect at the time of
the Closing, or (b) Buyer's damages as a result of such
representations or warranties being untrue, inaccurate or
incorrect are reasonably estimated to aggregate less than
$250,000.00 (inclusive of damages for pre-Closing beaches of
representations or warranties).
ARTICLE 9 - COVENANTS
21
9.1 Buyer's Covenants. Buyer hereby covenants as follows:
9.1.1 Confidentiality. Buyer acknowledges that any information
furnished to Buyer with respect to the Property is and has
been so furnished on the condition that Buyer maintain the
confidentiality thereof. Accordingly, Buyer shall hold, and
shall cause its directors, officers and other personnel and
representatives to hold, in strict confidence, and not
disclose to any other person without the prior written consent
of Seller until the Closing shall have been consummated, any
of the information in respect of the Property delivered to or
for the benefit of Buyer whether by agents, consultants,
employees or representatives of Buyer or by Seller or any of
its agents, representatives or employees, including, but not
limited to, any information obtained by Buyer or any of
Buyer's Representatives in connection with any studies,
inspections, tests or analyses conducted by Buyer as part of
its Due Diligence. In the event the Closing does not occur and
this Agreement is terminated, Buyer shall promptly return to
Seller all copies of documents containing any of such
information without retaining any copy thereof or extract
therefrom. Notwithstanding anything to the contrary
hereinabove set forth, Buyer may disclose such information (i)
on a need-to-know basis to its employees or members of
professional firms serving it, and (ii) as any governmental
agency may require in order to comply with applicable laws or
regulations. The provisions of this Subsection 9.1.1 shall
survive the Closing (and not be merged therein) or earlier
termination of this Agreement.
9.1.2 Approvals not a Condition to Buyer's Performance. Buyer
acknowledges and agrees that its obligation to perform under
this Agreement is not contingent upon Buyer's ability to
obtain any (a) governmental or quasi-governmental approval of
changes or modifications in use or zoning, or (b) modification
of any existing land use restriction, or (c) consents to
assignments of any service contracts, management agreements or
other agreements which Buyer requests, or (d) endorsements to
the Title Policy.
9.1.3 Buyer's Indemnity; Delivery of Reports. Buyer hereby agrees to
indemnify, defend, and hold Seller and its officers,
directors, employees, agents, attorneys, counsel, broker,
investment manager, or any other party related in any way to
any of the foregoing (collectively, the "Seller Parties"),
each of the other Seller Parties and the Property free and
harmless from and against any and all costs, loss, damages and
expenses, of any kind or nature whatsoever (including
attorneys fees and costs), arising out of or resulting from
the entry and/or the conduct of activities
22
upon the Property by Buyer, its agents, contractors and/or
subcontractors in connection with the inspections,
examinations, tests and investigations of the Property
conducted at any time prior to the Closing, which indemnity
shall survive the Closing (and not be merged therein) or any
earlier termination of this Agreement. Buyer shall deliver
promptly to Seller copies of all third party reports
commissioned by Buyer evidencing the results of tests, studies
or inspections of the Property.
9.1.4 Limit on Government Contacts. Notwithstanding any provision in
this Agreement to the contrary, except in connection with the
preparation of a so-called "Phase I" environmental report with
respect to the Property, Buyer shall not contact any
governmental official or representative regarding Hazardous
Materials on or the environmental condition of the Property
without Seller's prior written consent thereto, which consent
shall not be unreasonably withheld. In addition, if Seller's
consent is obtained by Buyer, Seller shall be entitled to
receive at least five (5) days prior written notice of the
intended contact and to have a representative present when
Buyer has any such contact with any governmental official or
representative.
9.2 Seller's Covenants. Seller hereby covenants as follows:
9.2.1 Service Contracts. Without Buyer's prior consent, which
consent shall not be unreasonably withheld, between the date
hereof and the Closing Date Seller shall not extend, renew,
replace or modify any Contract unless such contract (as so
extended, renewed, replaced or modified) can be terminated by
the owner of the Property without penalty on not more than
thirty (30) days' notice.
9.2.2 Maintenance of Property. Except to the extent Seller is
relieved of such Obligations by Article 11 hereof, between the
date hereof and the Closing Date Seller shall maintain and
keep the Property in a manner consistent with Seller's past
practices with respect to the Property; provided, however,
that Buyer hereby agrees that it shall accept the Property
subject to, and Seller shall have no obligation to cure, (i)
all violations of law or municipal ordinances, orders or
requirements and (ii) all physical conditions which would give
rise to violations existing, which, with respect to both
clauses (i) and (ii), exist on the last day of the Due
Diligence Period or which arise between the last day of the
Due Diligence Period and the Closing Date. Between the date
hereof and the Closing Date, Seller will advise Buyer of any
written notice Seller receives after the date hereof from any
governmental authority relating to the violation
23
of any law or ordinance regulating the condition or use of the
Property.
9.2.3 Access to Property. Between the date hereof and the expiration
of the Due Diligence Period Seller shall allow Buyer or
Buyer's representatives access to the Property upon reasonable
prior notice at reasonable times provided (a) such access does
not interfere with the operation of the Property or the rights
of tenants; (b) Buyer shall not contact any tenant without
Seller's prior written consent; (c) after the expiration of
the Due Diligence Period Buyer shall not be permitted to
perform any further testing or other physical evaluation of
the Property prior to Closing; (d) Seller or its designated
representative shall have the right to pre-approve and be
present during any physical testing of the Property; and (e)
Buyer shall return the Property to the condition existing
prior to such tests and inspections. Prior to such time as
Buyer or any of Buyer's Representatives enter the Property,
Buyer shall (i) obtain policies of general liability insurance
which name Seller as an additional insured and which are with
such insurance companies, provide such coverages and carry
such limits as Seller shall reasonably require and (ii)
provide Seller with certificates of insurance evidencing that
Buyer has obtained the aforementioned policies of insurance.
9.2.4 Other Covenants. At any time after the Closing for up to one
year thereafter, upon request by Buyer, Seller shall assist
(but at no cost to Seller) Buyer in its preparation of audited
financial statements, statements of income and expense and
such other related financial documentation as Buyer may
reasonably request, covering the period of Seller's ownership
of the Property.
9.2.5 Termination of Management Agreement. Seller agrees that it
will terminate the Management and Leasing Agreement, dated as
of May 1, 1995, between it and ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Inc., and
such termination shall be effective as of the Closing.
24
9.3 Mutual Covenants.
9.3.1 Publicity. Seller and Buyer each hereby covenant that (a)
prior to the Closing neither Seller nor Buyer shall issue any
press release or public statement (a "Release") with respect
to the Transaction without the prior consent of the other,
except to the extent required by law. If either Seller or
Buyer is required by law to issue a Release, such party shall,
at least two (2) business days prior to the issuance of the
same, deliver a copy of the proposed Release to the other
party for its review. Notwithstanding the foregoing, Buyer
acknowledges that Seller and Seller's sole shareholder, the
Virginia Retirement System, are bound by the provisions of the
Virginia Freedom of Information Act and may, therefore, be
obligated to disclose the contents of this Agreement.
9.3.2 Broker. Seller and Buyer expressly acknowledge that Eastdil
Realty Company, L.L.C. ("Broker") has acted as the exclusive
broker with respect to the Transaction and with respect to
this Agreement, and that Seller shall pay any brokerage
commission due to Broker in accordance with the separate
agreement between Seller and Broker. Seller and Buyer each
represents and warrants to the other that it has not dealt
with any other broker in the Transaction and each agrees to
hold harmless the other and indemnify the other from and
against any and all damages, costs or expenses (including, but
not limited to reasonable attorneys' fees and disbursements)
suffered by the indemnified party as a result of acts of the
indemnifying party that would constitute a breach of its
representation and warranty in this section.
9.3.3 Tax Refunds and Credits. All real estate and personal property
tax refunds and credits with respect to the Property shall be
apportioned between Buyer and Seller as follows:
(a) with respect to any refunds or credits attributable to
real estate and personal property taxes due and payable
in the calendar year in which the Closing occurs
(regardless of the year for which such taxes are
assessed), such refunds and credits shall be apportioned
between Buyer and Seller in proportion to the number of
days in such calendar year that each party owned the
Property (with title to the Property being deemed to
have passed as of 12:01 a.m. on the Closing Date);
(b) with respect to any refunds or credits attributable to
real estate and personal property taxes due and payable
during any period prior to
25
the calendar year in which the Closing occurs
(regardless of the year for which such taxes are
assessed), Seller shall be entitled to the entire
refunds and credits;
(c) with respect to any refunds or credits attributable to
real estate and personal property taxes due and payable
during any period after the calendar year in which the
Closing occurs (regardless of the year for which such
taxes are assessed), Buyer shall be entitled to the
entire refunds and credits; and
(d) with respect to all of the above debits and credits, as
well as the prorations made as of Closing, the parties
agree to conduct a retrospective reconciliation of same
by the end of the fourth month following Closing, to
take into account the differences, if any, between
estimates and what in fact turned out to be the precise
dollar amounts of same and to settle with one another
accordingly.
9.3.4 Survival. The provisions of this Section 9.3 shall survive the
Closing (and not be merged therein) or earlier termination of
this Agreement.
ARTICLE 10 - FAILURE OF CONDITIONS
10.1 Seller's Obligations and Remedies. If, on or before the Closing
Date, (i) Buyer is in default of any of its obligations hereunder,
or (ii) any of Buyer's material representations or warranties are
untrue in any material respect, or (iii) the Closing otherwise fails
to occur by reason of Buyer's failure or refusal to perform its
obligations hereunder in a prompt and timely manner, then Seller's
sole remedy shall be to terminate this Agreement by written notice
to Buyer and to retain the Deposit as liquidated damages, and may
request the Escrow Agent, pursuant to a written notice, executed
solely by Seller, without the joinder, consent or approval of Buyer,
to deliver the Deposit, plus all accrued interest thereon, to
Seller. Seller and Buyer acknowledge and agree that delivery of the
Deposit, including all accrued interest thereon, shall be deemed
liquidated damages for Buyer's breach of this Agreement, it being
further agreed that the actual damages to Seller in the event of
such breach or other event are impractical to ascertain and the
amount of the Deposit, plus accrued interest thereon, is a
reasonable estimate thereof. There-after, neither party to this
Agreement shall have any further rights or obligations hereunder
other than any arising under any section herein which expressly
provides that it survives the termination of this Agreement.
10.2 Buyer's Obligations and Remedies. If, prior to the Closing, (i)
Seller is in default
26
of any of its material obligations hereunder and, after having
received written notice of such default from Buyer, Seller has
nevertheless failed to cure such default within a reasonable period
of time, or (ii) any of Seller's material representations or
warranties are untrue in any material respect and, after having
received written notice of such misrepresentation from Buyer, Seller
has nevertheless failed to cure same within a reasonable period of
time, or (iii) the Closing otherwise fails to occur by reason of
Seller's willful failure or refusal to perform its obligations
hereunder in a prompt and timely manner ("Seller's Closing
Default"), Buyer shall have the right, to elect, as its sole and
exclusive remedy, to (a) terminate this Agreement by written notice
to Seller, promptly after which the Deposit shall be returned to
Buyer and Buyer's actual Due Diligence and other transactional
expenses, such as, by way of example, title insurance premiums,
reasonable legal fees, etc. up to a maximum of $250,000.00 in the
aggregate and shall be reimbursed by Seller, or (b) waive the
condition(s) and proceed to close the Transaction, or (c) if Seller
has wrongfully declined to close, to seek specific enforcement of
this Agreement. Except as specifically set forth herein, Buyer shall
have no right to ▇▇▇ for or seek, whether at law, in equity or
otherwise, any monetary award or judgment and/or any consequential,
punitive, treble, actual, out-of-pocket, incidental or other damages
against Seller and its officer, directors, employees, investment
manager or agents, or against employees, officers, members, or
Trustees of the Seller's or its corporate member or the shareholder
of such corporate member, or any of their respective successors and
assigns all of which are hereby knowingly, voluntarily and
intentionally waived, released and discharged by Buyer.
ARTICLE 11- CONDEMNATION/CASUALTY
11.1 Condemnation.
11.1.1 Right to Terminate. If, prior to the Closing Date, all or any
significant portion (as hereinafter defined) of the Property
is taken by eminent domain (or is the subject of a pending
taking which has not yet been consummated), Seller shall
notify Buyer in writing of such fact promptly after obtaining
knowledge thereof, Buyer shall have the right to terminate
this Agreement by giving written notice to the other no later
than ten (10) days after the giving of Seller's notice, and
the Closing Date shall be extended, if necessary, to provide
sufficient time for Buyer or Seller to make such election. The
failure by Buyer to so elect in writing to terminate this
Agreement within such ten (10) day period shall be deemed an
election not to terminate this Agreement. For purposes hereof,
a "significant portion" of the Property shall mean such a
portion as shall have a value, as reasonably determined by
Seller, in excess of One Million
27
Dollars ($1,000,000.00). If either party elects to terminate
this Agreement as aforesaid, the provisions of Section 11.4
shall apply.
11.1.2 Assignment of Proceeds. If (a) Buyer elects not to terminate
this Agreement as aforesaid if all or any significant portion
of the Property is taken, or if (b) a portion of the Property
not constituting a significant portion of the Property is
taken or becomes subject to a pending taking, by eminent
domain, there shall be no abatement of the Purchase Price;
provided, however, that, at the Closing, Seller shall pay to
Buyer the amount of any award for or other proceeds on account
of such taking which have been actually paid to Seller prior
to the Closing Date as a result of such taking (less all
reasonable costs and expenses, including attorneys' fees and
costs, incurred by Seller as of the Closing Date in obtaining
payment of such award or proceeds) and, to the extent such
award or proceeds have not been paid, Seller shall assign to
Buyer at the Closing (without recourse to Seller) the rights
of Seller to, and Buyer shall be entitled to receive and
retain, all awards for the taking of the Property or such
portion thereof.
11.2 Destruction or Damage. In the event any of the Property is damaged
or destroyed prior to the Closing Date, Seller shall notify Buyer in
writing of such fact promptly after obtaining knowledge thereof. If
any such damage or destruction (a) is an insured casualty and (b)
would cost less than Five Million Dollars ($5,000,000.00 ) to repair
or restore, then this Agreement shall remain in full force and
effect and Buyer shall acquire the Property upon the terms and
conditions set forth herein. In such event, Buyer shall receive a
credit against the Purchase Price equal to the deductible amount
applicable under Seller's casualty policy (less all costs and
expenses, including attorneys' fees and costs, incurred by Seller as
of the Closing Date in connection with the negotiation and/or
settlement of the casualty claim with the insurer (the "Realization
Costs")), and Seller shall assign to Buyer all of Seller's right,
title and interest in and to all proceeds of insurance on account of
such damage or destruction. In the event the Property is damaged or
destroyed prior to the Closing Date and the cost of repair would
equal or exceed Five Million Dollars ($5,000,000.00) or the casualty
is an uninsured casualty, then, notwithstanding anything to the
contrary set forth above in this section, Buyer shall have the
right, at its respective election, to terminate this Agreement.
Buyer shall have ten (10) days after Seller notifies Buyer that a
casualty has occurred to make such election by delivery to the other
of a written election notice (the "Election Notice") and the Closing
Date shall be extended, if necessary, to provide sufficient time for
Buyer to make such election. The failure by Buyer to deliver the
Election Notice within such ten (10) day period shall be deemed an
election not to terminate this Agreement. In the event neither party
28
elects to terminate this Agreement as set forth above, this
Agreement shall remain in full force and effect, Seller shall assign
to Buyer all of Seller's right, title and interest in and to any and
all proceeds of insurance on account of such damage or destruction,
if any, and, if the casualty was an insured casualty, Buyer shall
receive a credit against the Purchase Price equal to the deductible
amount (less the Realization Costs) under Seller's casualty
insurance policy.
11.3 Insurance. Seller shall maintain the property insurance coverage
currently in effect for the Property until Closing.
11.4 Effect of Termination. If this Agreement is terminated pursuant to
Section 11.1 or Section 11.2, Seller shall promptly direct that the
Deposit be refunded to Buyer. Upon such refund, this Agreement shall
terminate and neither party to this Agreement shall have any further
rights or obligations hereunder other than any arising under any
section herein which expressly provides that it shall survive the
termination of this Agreement.
11.5 Waiver. The provisions of this Article 11 supersede the provisions
of any applicable statutory or decisional law with respect to the
subject matter of this Article 11.
ARTICLE 12 - ESCROW
The Deposit and any other sums which the parties agree shall be held in escrow
(herein collectively called the "Escrow Deposits"), together with all interest
earned thereon, shall be held by the Escrow Agent, in trust, and disposed of
only in accordance with the following provisions:
(a) The Escrow Agent shall invest the Escrow Deposits in government
insured interest-bearing instruments satisfactory to both Buyer and
Seller, shall not co-mingle the Escrow Deposits with any funds of
the Escrow Agent or others, and shall promptly provide Buyer and
Seller with confirmation of the investments made. The parties
acknowledge that only $100,000 will be federally insured.
(b) If the Closing occurs, the Escrow Agent shall deliver the Escrow
Deposits to, or upon the instructions of, Seller on the Closing
Date.
(c) If for any reason the Closing does not occur, the Escrow Agent shall
deliver the Escrow Deposits and all interest earned thereon to
Seller or Buyer only upon receipt of a written demand therefor from
such party, subject to the following provisions of this Subsection
12.1(c). If for any reason the Closing does not occur and either
party makes a written demand upon the Escrow Agent for payment of
the Escrow Deposits and the interest earned thereon, the Escrow
Agent shall give
29
written notice to the other party of such demand. If the Escrow
Agent does not receive a written objection from the other party to
the proposed payment within ten (10) days after the giving of such
notice, the Escrow Agent is hereby authorized to make such payment.
If the Escrow Agent does receive such written objection within such
period, the Escrow Agent shall continue to hold such amount until
otherwise directed by written instructions signed by Seller and
Buyer or a final judgment of a court.
(d) The parties acknowledge that the Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that the
Escrow Agent shall not be deemed to be the agent of either of the
parties, and that the Escrow Agent shall not be liable to either of
the parties for any action or omission on its part taken or made in
good faith, and not in disregard of this Agreement, but shall be
liable for its negligent acts and for any loss, cost or expense
incurred by Seller or Buyer resulting from the Escrow Agent's
mistake of law respecting the Escrow Agent's scope or nature of its
duties. Buyer shall indemnify and hold the Escrow Agent harmless
from and against and Seller shall reimburse Escrow Agent for all
costs, claims and expenses, including reasonable attorneys' fees,
incurred in connection with the performance of the Escrow Agent's
duties hereunder, except with respect to actions or omissions taken
or made by the Escrow Agent in bad faith, in disregard of this
Agreement or involving negligence on the part of the Escrow Agent.
(e) Buyer shall be paid the interest earned on the Deposit and shall pay
any income taxes on any interest earned on the Deposit. Buyer
represents and warrants to the Escrow Agent that its taxpayer
identification number is set forth next to its signature below.
(f) The Escrow Agent has executed this Agreement in the place indicated
on the signature page hereof in order to confirm that the Escrow
Agent has received and shall hold the Escrow Deposits and the
interest earned thereon, in escrow, and shall disburse the Escrow
Deposits, and the interest earned thereon, pursuant to the
provisions of this Article 12.
(g) The escrow fee, if any, charged by the Title Company in its capacity
as Escrow Agent shall be shared equally by Seller and Buyer.
ARTICLE 13 - LEASING MATTERS
13.1 New Leases. From and after the Effective Date, Seller shall not,
without Buyer's prior written consent in each instance, which
consent shall not be unreasonably withheld or delayed and shall be
given or denied, with the reasons for such denial
30
specified in reasonable detail, within three (3) business days after
receipt by Buyer of the information referred to in the next
sentence, enter into a new lease for space in the Property or renew
or extend any Lease (except pursuant to the exercise by a tenant of
a renewal, extension or expansion option contained in such tenant's
Lease). Seller shall furnish Buyer with all information regarding
any proposed new leases, renewals and extensions reasonably
necessary to enable Buyer to make informed decisions with respect to
the advisability of the proposed action. If Buyer fails to object in
writing to any such proposed new lease, renewal or extension, as the
case may be, within three (3) business days after receipt of the
aforementioned information, Buyer shall be deemed to have approved
the proposed new lease, renewal or extension, as the case may be. If
Buyer rejects the proposed action, Seller nevertheless retains full
right, power and authority to execute such documents as are
necessary to effect such action, and Seller shall promptly advise
Buyer of the same. The foregoing notwithstanding, in the event Buyer
has rejected the proposed action but Seller nonetheless proceeds to
effect it, Buyer shall have the right, within three (3) business
days after receipt of Seller's notice that Seller has taken such
action, to elect to terminate this Agreement by the delivery to
Seller of a written notice of termination, in which case the Deposit
shall be paid to Buyer and, thereafter, the parties shall have no
further rights or obligations hereunder other than any arising under
any section herein which expressly provides that it shall survive
the termination of this Agreement. If Buyer fails to notify Seller
within such time period, Buyer shall be deemed to have fully waived
any rights to terinate this Agreement pursuant to this Section 13.1.
Seller shall deliver to Buyer a true and complete copy of each such
new lease, renewal and extension agreement, if any, Promptly after
the execution and delivery thereof.
13.2 Lease Expenses. At Closing, Buyer shall reimburse Seller for any and
all fees paid by Seller prior to Closing or costs and expenses
incurred by Seller prior to Closing (such fees, costs and expenses
being herein collectively called the "Lease Expenses"), arising out
of or in connection with:
(a) any extensions, renewals or expansions under the Leases
exerciseable and exercised by any tenant between the Effective
Date and the Closing Date; and
(b) any lease for space at the Property entered into between the
Effective Date and the Closing Date, or any extension, renewal
or expansion of a Lease where such Lease does not provide for
its extension, renewal or expansion, entered into on or after
the Effective Date which have been entered into in accordance
with Section 13.1 (a "New Lease"). Lease Expenses shall
include, without limitation, (i) brokerage commissions and
fees to effect
31
any such leasing transaction, (ii) expenses incurred for space
planning and design, repairs, improvements, equipment,
painting, decorating, partitioning and other items to satisfy
the tenant's requirements with regard to such leasing
transaction, (iii) legal fees for services in connection with
the preparation of documents and other services rendered in
connection with the effectuation of the leasing transaction,
(iv) if there are any rent concessions covering any period
that the tenant has the right to be in possession of the
demised space, the rents that would have accrued during the
period of such concession prior to the Closing Date as if such
concession were amortized over (A) with respect to any
extension or renewal, the term of such extension or renewal,
(B) with respect to any expansion, that portion of the term
remaining under the subject Lease after the date of any
expansion, or (C) with respect to any New Lease, the entire
initial term of any New Lease, and (v) expenses incurred for
the purpose of satisfying or terminating the obligations of a
tenant under a New Lease to the landlord under another lease
(whether or not such other lease covers space in the
Property). At the Closing, Buyer shall assume Seller's
obligations to pay, when due (whether on a stated due date or
accelerated) any Lease Expenses unpaid as of the Closing, and
Buyer hereby agrees to indemnify and hold Seller harmless from
and against any and all claims for such Lease Expenses which
remain unpaid for any reason at the time of Closing, which
obligations of Buyer shall survive the Closing and shall no be
merged therein. Each party shall make available to the other
all records, bills, vouchers and other data in such party's
control verifying Lease Expenses and the payment thereof.
13.3 Other Lease Activity. Except as provided in this Section 13.3,
without the prior consent of Buyer, which shall not be unreasonably
withheld (a) no Lease shall be modified or amended except as
provided in Section 13.1 with respect to extensions, renewals or
expansions of Leases and the execution of New Leases, (b) Seller
shall not consent to any assignment or sublease in connection with
any Lease or New Lease and (c) Seller shall not remove any tenant
under any Lease or New Lease, whether by summary proceedings or
otherwise, except by reason of a material default of the tenant
under the Lease or New Lease. In furtherance of the fore-going,
Seller shall deliver to Buyer a written notice of each proposed
action of the type described in clauses (a) through (c) above which
Seller has been asked or proposes to take, stating, if applicable,
whether Buyer is willing to consent to such action and setting forth
the relevant information therefor. Buyer shall notify Seller in
writing whether or not it approves such action within three (3)
business days after delivery to Buyer of Seller's notice containing
the aforementioned information. If Buyer notifies Seller that it
disapproves such action, Buyer's notice shall state with specificity
the reasons for such disapproval. If Buyer shall not
32
give written notice of its disapproval of such action within such
three (3) business day period, Buyer shall be deemed to have
approved such action. If any Lease requires that the landlord's
consent be given under the applicable circumstances (or not be
unreasonably withheld), then Buyer shall be deemed ipso facto to
have approved such action. Subject to its reimbursement rights
pursuant to Section 13.2, Seller shall perform all of the
obligations of the landlord under the Leases and New Leases which
under the terms of such Leases and New Leases are required to be
performed by the landlord prior to the Closing Date.
13.4 Lease Enforcement. Subject to the provisions of Section 13.3 above,
prior to the Closing Date, Seller shall have the right, but not the
obligation (except to the extent that Seller's failure to act shall
constitute a waiver of such rights or remedies), to enforce the
rights and remedies of the landlord under any Lease or New Lease, by
summary proceedings or otherwise, and to apply all or any portion of
any security deposits then held by Seller toward any loss or damage
incurred by Seller by reason of any defaults by tenants.
13.5 Lease Termination Prior to Closing. The termination of any Lease or
New Lease or the removal of any tenant by reason of a default by
such tenant (by summary proceedings or otherwise) prior to the
Closing shall not affect the obligations of Buyer under this
Agreement in any manner or entitle Buyer to a reduction in, or
credit or allowance against, the Purchase Price or give rise to any
other claim on the part of Buyer, unless such termination is of a
Major Tenant, in which event the Buyer shall have the election (if
exercised in writing within three (3) business days after written
notice of any such termination is provided to Buyer by Seller) to
terminate this Agreement and receive the Deposit.
ARTICLE 14 - MISCELLANEOUS
14.1 Buyer's Assignment. Buyer shall not assign this Agreement or its
rights hereunder to any individual or entity without the prior
written consent of Seller, which consent Seller may grant or
withhold in its sole discretion, and any such assignment shall be
null and void. To the extent that Buyer assigns this Agreement,
Buyer shall not be released of any of its obligations hereunder and
Buyer shall continue to remain fully liable hereunder. Buyer shall
be permitted, however, to assign this Agreement to ▇▇▇▇-▇▇▇▇ Realty,
L.P., which is organized as a limited partnership under the laws of
the State of Delaware or any entity under common control of the
Buyer. Nevertheless, under no circumstances shall Buyer have the
right to assign this Agreement to any entity owned or controlled by
an employee benefit plan if Seller's sale of the Property to such
entity would, in the reasonable opinion of Seller's ERISA advisor,
create or otherwise cause a "prohibited transaction" under the
Employee Retirement Income Security Act of
33
1974, as amended ("ERISA"). In the event Buyer assigns this
Agreement to any entity with the actual intent to create a
"prohibited transaction" under ERISA so as to necessitate the
termination of this Agreement, then Seller shall have the right to
pursue the rights and remedies set forth in this Agreement. This
Agreement and all rights hereunder shall inure to and be binding
upon the respective heirs, executors, successors and permitted
assigns of Seller and Buyer. Buyer shall not have the right to
assign this Agreement in part.
14.2 Designation Agreement. Section 6045(e) of the United States Internal
Revenue Code and the regulations promulgated thereunder (herein
collectively called the "Reporting Requirements") require an
information return to be made to the United States Internal Revenue
Service, and a statement to be furnished to Seller, in connection
with the Transaction. "Escrow Agent" is either (i) the person
responsible for closing the Transaction (as described in the
Reporting Requirements) or (ii) the disbursing title or escrow
company that is most significant in terms of gross proceeds
disbursed in connection with the Transaction (as described in the
Reporting Requirements). Accordingly:
(a) Escrow Agent is hereby designated as the "Reporting Person"
(as defined in the Reporting Requirements) for the
Transaction. Agent shall perform all duties that are required
by the Reporting Requirements to be performed by the Reporting
Person for the Transaction.
(b) Seller and Buyer shall furnish to Escrow Agent, in a timely
manner, any information requested by Escrow Agent and
necessary for Escrow Agent to perform its duties as Reporting
Person for the Transaction.
(c) Escrow Agent hereby requests Seller to furnish to it Seller's
correct taxpayer identification number. Seller acknowledges
that any failure by Seller to provide Escrow Agent with
Seller's correct taxpayer identification number may subject
Seller to civil or criminal penalties imposed by law.
Accordingly, Seller hereby certifies to Escrow Agent, under
penalties of perjury, that Seller's correct taxpayer
identification number is ▇▇-▇▇▇▇▇▇▇.
(d) Each of the parties hereto shall retain this Agreement for a
period of four(4) years following the calendar year during
which Closing occurs.
14.3 Survival/Merger. Except for the provisions of this Agreement which
are explicitly stated to survive the Closing or those which by their
terms cannot be fulfilled until after Closing, (a) none of the terms
of this Agreement shall survive the Closing, and (b) the delivery of
the Deed and any other documents and
34
instruments by Seller and the acceptance thereof by Buyer shall
effect a merger, and be deemed the full performance and discharge of
even obligation on the part of Buyer and Seller to be performed
hereunder.
14.4 Integration; Waiver. This Agreement, together with the Schedules and
Exhibits hereto, embodies and constitutes the entire understanding
between the parties with respect to the Transaction and any and all
prior agreements, understandings, representations and statements,
oral or written, are merged into this Agreement. Neither this
Agreement nor any provision hereof may be waived, modified, amended,
discharged or terminated except by an instrument signed by the party
against whom the enforcement of such waiver, modification,
amendment, discharge or termination is sought, and then only to the
extent set forth in such instrument. No waiver by either party
hereto of any failure or refusal by the other party to comply with
its obligations hereunder shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.
14.5 Governing Law. This Agreement shall be construed and interpreted
under the laws of the Commonwealth of Virginia except that the
obligations set forth in Articles 3, regarding Title Matters, and
Article 6, regarding Closing, of this Agreement shall be construed
and interpreted under the laws of the state of New Jersey.
14.6 Captions Not Binding; Schedules and Exhibits. The captions in this
Agreement are inserted for reference only and in no way define,
describe or limit the scope or intent of this Agreement or of any of
the provisions hereof. All Schedules and Exhibits attached hereto
shall be incorporated by reference as if set out herein in full.
14.7 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors
and permitted assigns.
14.8 Severability. If any term or provision of this Agreement or the
application thereof to any persons or circumstances shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement
or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
14.9 Notices. Any notice, request, demand, consent, approval and other
communications under this Agreement shall be in writing, and shall
be deemed duly given or made at the time and on the date when
personally delivered as shown on a receipt therefor (which shall
include delivery by a nationally
35
recognized overnight delivery service) or three (3) business days
after being mailed by prepaid registered or certified mail, return
receipt requested, to the address for each party set forth below.
Any party, by written notice to the other in the manner herein
provided, may designate an address different from that set forth
below.
IF TO BUYER:
▇▇▇▇-▇▇▇▇ Realty Acquisition Corp.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, CEO and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Exec. V.P.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
COPY TO:
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO SELLER:
Sylvan Way L.L.C.
c/o ▇. ▇. ▇▇▇▇▇▇ Investment Management Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
COPY TO:
Hirschler, Fleischer, ▇▇▇▇▇▇▇▇, ▇▇▇
& ▇▇▇▇▇, P.C.
The Federal Reserve Bank Building
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: L. ▇▇▇▇▇▇▇ ▇▇▇▇, Jr.
Telephone:(▇▇▇) ▇▇▇-▇▇▇▇
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
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14.10 Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original and all of which counterparts taken
together shall constitute one and the same agreement.
14.11 No Recordation. Seller and Buyer each agrees that neither this
Agreement nor any memorandum or notice hereof shall be recorded,
unless required by law, and Buyer agrees (a) not to file any notice
of pendency or other instrument (other than a judgment) against the
Property or any portion thereof in connection herewith unless Seller
has willfully failed or refused to close hereunder and (b) to
indemnify Seller against all costs, expenses and damages, including,
without limitation, reasonable attorneys' fees and disbursements,
incurred by Seller by reason of any unpermitted filing by Buyer of
such notice of pendency or other instrument.
14.12 Additional Agreements; Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto shall execute
and deliver such documents as the other party shall reasonably
request in order to consummate and make effective the Transaction;
provided, however, that the execution and delivery of such documents
by such party shall not result in any additional liability or cost
to such party.
14.13 Construction. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendment, Schedule or
Exhibit hereto.
14.14 ERISA. To satisfy compliance with ERISA, Buyer represents and
warrants to Seller that:
(a) Neither Buyer nor any of its affiliates (within the meaning of
Part V(c) of Prohibited Transaction Exemption 84-14 granted by
the U.S. Department of Labor ("PTE 84-14") has, or during the
immediately preceding year has exercised, the authority to
appoint or terminate Seller as investment manager of any
assets of the employee benefit plans whose assets are held by
Seller or to negotiate the terms of any management agreement
with Seller on behalf of any such plan;
(b) The Transaction is not specifically excluded by Part I(b) of
PTE 84-14;
(c) Buyer is not a related party of Seller (as defined in Part
V(h) of PTE 84)-14); and
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(d) The terms of the Transaction have been negotiated and
determined at arm's length, as such terms would be negotiated
and determined by unrelated parties.
Buyer hereby agrees to execute such documents or provide such
information as Seller may require in connection with the
Transaction or to otherwise assure Seller that: (i) this is
not a prohibited Transaction under ERISA, (ii) that the
Transaction is otherwise in full compliance with ERISA and
(iii) that Seller is not in violation of ERISA by compliance
with this Agreement and by closing the Transaction. Seller
shall not be obligated to consummate the Transaction unless
and until the Transaction complies with ERISA and Seller is
satisfied that the Transaction complies in all respects with
ERISA. The obligations of Buyer under this section shall
survive the Closing and shall not be merged therein.
14.15 Business Day. As used herein, the term "business day" shall mean any
day other than a Saturday, Sunday, or any Federal or Commonwealth of
Virginia or State of New Jersey holiday.
14.16 Seller's Maximum Aggregate Liability. Notwithstanding any provision
to the contrary contained in this Agreement or any documents
executed by Seller pursuant hereto or in connection herewith, the
maximum aggregate liability of Seller, and the maximum aggregate
amount which may be awarded to and collected by Buyer, under this
Agreement (including, without limitation, the breach of any
covenants, representations and warranties contained herein) and any
and all documents executed pursuant hereto or in connection herewith
(including, without limitation, any Seller's estoppel letter
provided in accordance with the terms of Section 6.3(e) hereof), for
which a claim is timely made by Buyer shall not exceed One Million
Dollars ($1,000,000.00 ) (the "Maximum Amount"). The provisions of
this section shall survive the Closing and shall not be merged
therein. The provisions of this paragraph shall not, however, relate
to Buyer's remedies in the event of Seller's Closing Default and
Closing does not occur; such remedies are prescribed in paragraph
10.2, which prescribes Buyer's sole remedies in such event.
14.17 Facsimile Signatures. The parties hereto agree that facsimile
signatures by any party shall be fully binding upon and enforceable
against such party provided a hard copy of the originals are sent
the same day via a reputable, national overnight courier service.
14.18 Seller Approval. The transactions described in and contemplated by
this
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Agreement are subject to the approval of the Board of Directors of
System Realty Nineteen, Inc., one of the Members of Sylvan Way LLC.
Seller agrees to submit these transactions for such approval
promptly after execution of the Agreement. If Seller fails to secure
such approval on or before 5:00 p.m. then prevailing Eastern time on
the fifth (5th) business day after the Effective Date, then this
Agreement shall automatically terminate and the Deposit will be
returned by the Escrow Agent to Buyer; provided, however, Buyer may
extend such approval period as it deems necessary.
14.19 Time of Essence. Time is of the essence to both Seller and Buyer in
the performance of this Agreement by the other party, and they have
agreed that strict compliance by both of them is required as to any
date and/or time set out herein. If the final day of any period of
time set out in any provision of this Agreement falls upon a
Saturday, Sunday or a holiday observed by federally insured banks in
the Commonwealth of Virginia or by the United States Postal Service,
then and in such event, the time of such period shall be extended to
the next day which is not a Saturday, Sunday or holiday. Unless
otherwise specified, in computing any period of time described in
this Agreement, the day of the act or event after which the
designated period of time begins to run is not to be included and
the last day of the period so computed is to be included unless such
last day is a Saturday, Sunday or holiday in which event the period
shall run until the end of the next day which is neither a Saturday,
Sunday or holiday.
WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed on its behalf on the day and year first above written.
SELLER: SYLVAN WAY L.L.C., a Virginia
limited liability company, by its
Managers
Execution Date: February __, 1998
SYSTEM REALTY NINETEEN,
INC., a Virginia corporation
By:___________________________
Name: ________________________
Title: _________________________
and
VIRGINIA RETIREMENT
SYSTEM, a body corporate of the
Commonwealth of Virginia
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By:___________________________
Name: ________________________
Title: _________________________
BUYER: ▇▇▇▇-▇▇▇▇ Realty Acquisition Corp.
Execution Date: February __, 1998 a Delaware corporation
By:___________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
BUYER'S FEDERAL TAX IDENTIFICATION NUMBER: ▇▇-▇▇▇▇▇▇▇
EXECUTION BY ESCROW AGENT:
The undersigned has executed this Agreement solely to confirm its agreement to
(i) hold the Escrow Deposits in escrow in accordance with the provisions hereof
and (ii) comply with the provisions of Article 12 and Section 14.2.
FIRST AMERICAN TITLE
INSURANCE CO. OF NEW YORK
Escrow Agent
Execution Date: February ___, 1998 By:___________________________
Name: ________________________
Title: _________________________
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