EXHIBIT 10.1
AGREEMENT OF SALE AND PURCHASE
LOWER XXXXX DISTRIBUTION CENTER LAND
THIS AGREEMENT is made as of the 31st day of January, 1998 by and
between XXXX X. XXXXXXXX and XXXXXX X. GRASS, trading as DOUBLE M DEVELOPMENT
COMPANY, a Partnership, having an address at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Seller") and AMERICAN REAL ESTATE INVESTMENT,
L.P., a Delaware Limited Partnership, having an address at Plymouth Meeting
Executive Campus, 000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, XX
00000 ("Buyer").
W I T N E S S E T H :
1. AGREEMENT TO SELL AND PURCHASE. Seller agrees to sell to Buyer, and
Buyer agrees to purchase from Seller, subject to the terms and conditions of
this Agreement, certain property consisting of the following:
(a) REAL PROPERTY. All that certain tract of land containing
15.5115 acres ("Lower Xxxxx Distribution Center Land") which is described by
metes and bounds on the ALTA/ACSM Land Title Survey for 2400, 2404 and 0000
Xxxxxxxxxx Xxxx prepared by Xxxxxxx and Associates, Inc., dated 12/10/97,
situate in the Township of Lower Xxxxx, Cumberland County, Commonwealth of
Pennsylvania (the Lower Xxxxx Distribution Center Land is sometimes herein
referred to as the "Land"); together with all improvements on the Land,
including, without limitation, three buildings located on the Lower Xxxxx
Distribution Center Land containing 24,311 square feet, 33,600 square feet and
124,092 square feet; together with all appurtenances thereto (including, without
limitation, all easements, rights-of-way, and other rights and benefits
belonging to, running with the owner of, or relating to the Land); and together
with all rights, title and interest of Seller in and to all land lying in the
bed of any street, opened or proposed, abutting the Land and all right, title
and interest of Seller in an to any unpaid award for the taking by eminent
domain of any part of the Land or for damages to the Land by reason of a change
of grade of any street (all of the property, rights and privileges described in
this Section 1(a) herein being collectively called the "Real Property").
(b) PERSONAL PROPERTY. All fixtures, equipment and other
personal property attached or appurtenant to the Real Property; all furniture,
supplies, and other unattached items of personal property located in or on, or
used in connection with, the Real Property which are owned by Seller; and all
intangible personal property used in the ownership, operation or maintenance of
the Real Property, which is owned by Seller (all of the foregoing items of
property being herein collectively called "Personal Property").
(c) PROPERTY. The Real Property and the Personal Property are
sometimes herein collectively called "Property".
2. PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Property, subject to adjustments as provided in this Agreement, shall be Six
Million Five Hundred Fifty Thousand Dollars ($6,550,000), and shall be paid as
follows:
(a) Fifty Thousand Dollars ($50,000) (such sum, plus all
interest which accrues thereon, being herein called "the Deposit") shall be paid
by Buyer to First American Title Insurance Company ("Title Company") on the date
of the execution of this Agreement. The Deposit shall be held by the Title
Company in one or more federally-insured money market accounts acceptable to
both Seller and Buyer, or in short-term United States Government obligations
having a maturity date which is not later than the Closing Date (as defined
below).
(b) The balance of the Purchase Price shall be paid at Closing
by wire transfer of immediately available funds.
3. DISPOSITION OF DEPOSIT; DEFAULTS.
(a) The Deposit shall be held in escrow and disbursed by the
Title Company in accordance with the terms of this Agreement. Seller and Buyer
each agrees, upon request, to execute the Title Company's customary form of
escrow agreement with respect to the Deposit.
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(b) If Buyer, without the right to do so and in default of its
obligations under this Agreement fails to complete Closing, Seller shall have
the right to be paid the Deposit as liquidated damages and not as a penalty.
Buyer and Seller acknowledge that the damages which may be incurred by Seller in
the event of Buyer's default are difficult to quantify as of the date of this
Agreement; the Deposit represents the parties' reasonable estimate of Seller's
probable future damages in the event of Buyer's default; and that the Deposit
represents fair and reasonable compensation to Seller in the event of Buyer's
default. The right of Seller to be paid the Deposit shall be Seller's exclusive
and sole remedy, and Seller waives any right to recover the balance of the
Purchase Price, or any part thereof, and the right to pursue any other remedy
permitted by law or in equity against Buyer.
(c) If Closing is completed hereunder, the Title Company shall
pay the Deposit to Seller on account of the Purchase Price.
4. CLOSING. The closing of this transaction ("Closing") shall take place
at the offices of Wolf, Block, Xxxxxx and Xxxxx-Xxxxx, Twelfth Floor Packard
Building, 15th and Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000. Closing
shall commence at 10:00 a.m. on February 18, 1998 ("Closing Date").
5. CONDITION OF TITLE.
(a) Title to the Property shall be good and marketable and free
and clear of all liens, restrictions, easements, encumbrances, leases, tenancies
and other title objections, except for the Permitted Encumbrances (as defined
below) and the Tenant Leases (as defined below), and shall be insurable as such
and as provided in this Agreement at ordinary rates by the Title Company
pursuant to an ALTA Owner's Policy of Title Insurance, 1970 Form B, amended
October 17, 1970 and October 17, 1984 (the "Owner's Policy of Title Insurance").
The premium (at ordinary rates) for the Owner's Policy of Title Insurance will
be paid by Buyer.
(b) If Seller is unable to convey title to the Property to Buyer
at Closing in accordance with the requirements of Section 5(a), Buyer shall have
the right (i) of taking such title as Seller is able to convey with abatement of
the Purchase Price in the amount (fixed or ascertainable) of any Monetary
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Liens (as defined below) on the Property, or (ii) of terminating this Agreement.
(c) Promptly after the execution of this Agreement, Buyer shall
order from the Title Company a Commitment for Title Insurance ("Title
Commitment") with respect to the Real Property. Prior to the expiration of the
Inspection Period, Buyer shall give to Seller Notice ("Exception Notice") of any
exceptions to title set forth in the Title Commitment which are not acceptable
to Buyer ("Unacceptable Exceptions"). Seller shall, within ten business (10)
days from the date of Seller's receipt of the Exception Notice, deliver to Buyer
an endorsement to the Title Commitment issued by the Title Company stating
which, if any, of the Unacceptable Exceptions the Title Company has or will
commit to remove from the Title Commitment; and if the Title Company has not
issued an endorsement to the Title Commitment removing (or committing to remove)
all of the Unacceptable Exceptions from the Title Commitment within ten (10)
business days from the date of Seller's receipt of the Exception Notice, Buyer
shall have the right to terminate this Agreement. If Buyer does not terminate
this Agreement pursuant to the provisions of this Section 5(c), then the
exceptions remaining on Schedule B, Section 2 of the Title Commitment which are
not liens securing payment of monetary sums ("Monetary Liens") shall be the
"Permitted Encumbrances". Seller agrees to pay all Monetary Liens and cause all
Monetary Liens to be released and satisfied of record prior to the completion of
Closing.
(d) If Seller, without the right to do so and in the default of
its obligations under this Agreement fails to complete Closing, or otherwise
defaults under or breaches this Agreement, Buyer shall have the right, at
Buyer's sole election, either (A) to be returned the Deposit plus Buyer's
reimbursable costs as hereinafter defined, up to a maximum amount of $25,000.00
as liquidated damages for Seller's breach, or (B) to specific performance and
injunctive relief without monetary damages against Seller. Reimbursable
expenses are defined to include the cost of all charges incurred by Buyer for
securing title, the cost of any plans, surveys and environmental studies ordered
by Buyer, all loan commitment fees paid by Buyer and all the fees, costs and
expenses reasonably incurred by Buyer in connection with the property and
Buyer's intended acquisition thereof.
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6. POSSESSION. Possession of the Property shall be given to Buyer at
Closing, subject only to the rights of occupancy of the Tenants (as defined
below) under the Tenant Leases by delivery of Seller's special warranty deeds
(the "Deeds") and bills of sale (the "Bills of Sale"), duly executed and
acknowledged by Seller and in proper form for recording. If Buyer causes
surveys of the Real Property to be made, then at Buyer's option the descriptions
of the Real Property contained in the Deeds shall be based upon those survey.
7. APPORTIONMENTS; TRANSFER TAXES; SECURITY DEPOSITS.
(a) (i) Real estate taxes on the Real Property; personal
property taxes (if any) on the Personal Property; minimum water and sewer
rentals; base, minimum and/or fixed rental, additional rental and other sums
paid by the Tenants to the Seller prior to Closing under the Tenant Leases;
payments due under the Service Agreements (as defined below) which are to be
assigned to Buyer, if any, shall be apportioned pro rata between Seller and
Buyer on a per diem basis as of the Closing Date; provided, however, that there
shall be no apportionment between Buyer and Seller at Closing with respect to
utility charges paid by the Tenants directly to utility companies pursuant to
the Tenant Leases.
(ii) If the Closing Date is not the first day of a
calendar month and if as of the Closing Date and of the Tenants has not paid the
monthly installment of base, minimum and/or fixed rental ("Delinquent
Installment") due under its Tenant Lease with respect to the month in which
Closing occurs, then at Closing Buyer shall receive a credit against the
Purchase Price in an amount equal to the portion of the Delinquent Installment
applicable to the period of time from and after the Closing Date and through the
balance of the applicable month; and upon Buyer's receipt of the Delinquent
Installment from such Tenant, Buyer shall pay the full amount thereof to Seller.
For the purpose of this subparagraph, "Delinquent Installment" shall mean only
one that has not been paid by the applicable Tenant within the applicable grace
period, if any, in its Tenant Lease.
(b) At Closing, each of Buyer and Seller shall pay one-half
(1/2) of all realty transfer taxes imposed by the Commonwealth of Pennsylvania
and all other governmental
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authorities upon the Deeds and the conveyance of the Real Property from Seller
to Buyer.
(c) At Closing, Seller shall deliver to Buyer a certified check
in the amount of all Security Deposits paid under the Tenant Leases, and all
interest which has (or was required to) accrued thereon.
8. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller makes the following
representations and warranties to Buyer, which representations and warranties
are true and correct as of the date of this Agreement, and shall be true and
correct at and as of the Closing Date in all respects as though such
representations and warranties were made both at and as of the date of this
Agreement, and at and as of the Closing Date:
(a) The only leases or other agreements (herein collectively
called the "Tenant Leases"; and each respective tenant under each of the
Tenant Leases is herein sometimes individually called "Tenant" and
collectively "Tenants") with respect to rights of use and occupancy of the
Property in effect are as set forth on the Charts attached hereto as Schedule 1.
(b) The Tenant Leases are valid and existing and in full force
and effect; the Tenants are in actual possession of the Property; and neither
the Tenants nor the Seller are in default of their respective obligations under
the Tenant Leases.
(c) The copies of the Tenant Leases previously delivered by
Seller to Buyer are true and complete copies of the Tenant Leases; the Tenant
Leases have not been amended, modified, or supplemented; and the Tenants do not
have any right to extend or renew the terms of their respective Tenant Leases
except as expressly set forth in the Tenant Leases.
(d) None of the Tenants has asserted any claim which could
adversely affect the right of the landlord to collect base, minimum or fixed
rental or additional rental from the Tenants; and no notice of default or breach
on the part of landlord under the Tenant Leases has been received by Seller from
any of the Tenants which has not been cured.
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(e) All construction, painting, repairs, alterations,
improvements and other work required to be performed by the landlord under the
Tenant Leases, and all of the other obligations of the landlord required to be
performed under the Tenant Leases as of the Closing Date, have been completed
fully performed and paid for in full by Seller.
(f) The terms of the Tenant Leases commenced and will end on the
dates specified in the Charts attached hereto as Schedule 1.
(g) The rents and other payments set forth in the Tenant Leases
are the actual rents, income and charges presently being collected by Seller
under the Tenant Leases; all minimum rent payable under the Tenant Leases is
payable monthly in advance of rent control laws, ordinances, or regulations, or
by virtue of existing agreements or regulations.
(h) Except as set forth in the Tenant Leases, none of the
Tenants is entitled to any concession, allowance, rebate or refund.
(i) None of the Tenants has prepaid any base rental, minimum
rental, fixed rental or additional rental or other charges for more than the
current month under its Tenant Lease.
(j) Neither the Tenant Leases nor the rental or other amounts
payable under the Tenant Leases have been assigned, pledged or encumbered other
than to the holder of any existing mortgage as collateral security, which
assignment shall be terminated at Closing; and the Tenant Leases may be assigned
by Seller to Buyer at Closing.
(k) No security deposit has been paid by any of the Tenants
under the Tenant Leases, except as set forth on the Charts attached hereto as
Schedule 1.
(l) The Chart attached hereto as Schedule 2 sets forth the only
brokerage or leasing commissions or other compensation which are or will be due
and payable to any party ("Lease Broker") with respect to or on account of the
Tenant Leases or any extensions or renewals thereof or any other actions by the
Tenants thereunder; the copies of the agreements between Seller and each Lease
Broker delivered by Seller to Buyer are
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true and complete and there are no other such agreements; Seller shall fully pay
(and shall provide to Buyer at Closing evidence of such payment) all
installments on account of the existing leasing commissions due or payable with
respect to any rental due or payable in connection with any period prior to the
Closing Date and/or otherwise due and payable prior to the Closing Date; and
Buyer shall, at Closing, accept the assignment of the Tenant Leases subject to
the obligation to pay all of the existing leasing commissions to the Lease
Brokers with respect to periods occurring from and after the Closing Date.
Pursuant to the preceding sentence, there shall be an apportionment at Closing
of prepaid or accrued leasing commissions.
(m) Except as expressly set forth in the Tenant Leases, the
Tenants do not have any right or option to acquire to the Property or any
portion thereof.
(n) Seller has not received any written notice ("Defect Notice")
from any insurance company which has issued a policy with respect to the
Property or from any board of fire underwriters (or other body exercising
similar functions) claiming any defects or deficiencies in the Property or
suggesting or requesting the performance of any repairs, alterations or other
work to the Property.
(o) There are no management, service, equipment, supply,
security, maintenance, construction, concession or other agreements with respect
to or affecting the Property, except for any agreements under which only a
Tenant is bound and except for the agreements listed on Exhibit B to this
Agreement (collectively, the "Service Agreements"); Seller is not in default
under the Service Agreements; the copies of the Service Agreements previously
delivered by Seller to Buyer are true and complete copies of such Service
Agreements and the same have not been amended, modified or supplemented; and
each of the Service Agreements designated on Exhibit B to be terminated shall be
terminated by Seller at or prior to Closing and all sums due thereunder paid in
full by Seller.
(p) No employee of Seller who performs services at or in
connection with the Property is covered by an employment agreement or union
contract; no demand has been made upon Seller for recognition of a union or
collective bargaining agent for the employees of Seller at the Property; and
none of the employment
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arrangements with respect to Seller's employees will be binding upon Buyer or
any subsequent owner of the Property after Closing.
(q) There are no outstanding uncured written notices received by
Seller of any violation ("Violation") of any applicable law, ordinance, code,
rule, order, regulation or requirement of any governmental authority with
respect to the Property.
(r) Exhibit C to this Agreement sets forth the only fire and
extended coverage insurance policies ("Policy") maintained by Seller with
respect to the Property; the Policy is in full force and effect and all premiums
due thereunder has been paid; and neither Seller nor (to Seller's knowledge) any
of the Tenants have received any notice from the insurance companies which
issued the Policy, indicating that the Policy will not be renewed or will be
renewed at a higher premium than is presently payable therefor.
(s) There is no action, suit or proceeding pending or, to the
knowledge of Seller, threatened against or affecting Seller or the Property or
any portion thereof or the Tenant Leases or relating to or arising out of the
ownership, management or operation of the Property, in any court or before or by
any federal, state, county or municipal department, commission, board, bureau or
agency or other governmental instrumentality.
(t) Seller has not received any notice of any condemnation
proceeding or other proceedings in the nature of eminent domain ("Taking") in
connection with the Property, and to Seller's knowledge no Taking has been
threatened.
(u) All of the books, records, information, data and other items
supplied by Seller to Buyer are true, complete and correct in all material
respects, and fairly and accurately presented the results of operations of the
Property.
(v) To the best of Seller's actual knowledge, there is no
presently existing Violation at the Property of any environmental law or
reputation; no contamination is present at the Property; and no underground
storage tanks, asbestos or PCBs are present at the Property.
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9. OPERATIONS PRIOR TO CLOSING. Between the date of this Agreement and
Closing:
(a) Seller shall, at its expense: perform all of its
obligations under the Tenant Leases; and cure all notices of any Violations
and/or Defect Notices issued prior to Closing. Notwithstanding the foregoing
provisions of this Section 9(a), if all such notices of Violation or Defect
Notices require the expenditure by Seller of more than $50,000 in the aggregate,
Seller shall have the right to give to Buyer written notice that Seller has
elected not to cure such notices; and in such event, Buyer shall have the right,
by written notice to Seller, at Buyer's sole option, to terminate this
Agreement.
(b) Seller shall not enter into any agreement to modify, amend
or otherwise alter any of the terms or provisions of the Tenant Leases or any of
the Service Agreements; Seller shall not enter into a new lease ("New Lease") or
other agreement with respect to the use or occupancy of the Real Property and/or
the maintenance thereof, without prior written approval of Buyer. Seller agrees
to execute any New Lease designated by Buyer which is approved by Seller. Each
of Seller and Buyer agrees not unreasonably to untimely withhold or delay its
approval of a New Lease. If Seller shall enter into a New Lease for a portion
of the Real Property after the date of this Agreement and prior to the Closing
Date pursuant to the request or prior written approval of Buyer, then Buyer
shall, at Closing, reimburse to Seller all hard costs paid by Seller pursuant to
a written budget previously approved by Seller and Buyer for capital
improvements to the premises demised under the New Lease; and Buyer shall assume
the obligations of the Seller, as landlord under the New Lease, to perform
capital improvements to the premises demised under the New Lease required by the
terms of the New Lease. Any New Lease entered into by Seller after the date of
this Agreement and prior to the Closing Date pursuant to the request or prior
written approval of Buyer shall be included within the definition of "Tenant
Leases".
(c) Seller shall perform all acts, and shall make all payments,
necessary to cause the representations and warranties of Seller in this
Agreement to be true and correct.
(d) (i) Buyer, its attorneys, accountants, architects,
engineers and other representatives shall be afforded access to the Property and
to all books, records and files
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relating thereto from time to time prior to Closing for the purposes of
inspections, preparation of plans, taking of measurements, making of surveys,
making of appraisals, and generally for the ascertainment of the condition of
the Property, including but not limited to the physical and financial condition
of the Property; and there shall be furnished to Buyer all plans and
specifications, engineering reports, feasibility studies, operating statements,
governmental permits and approvals, contracts, leases, surveys, title
information and other documentation concerning the Property in the possession of
Seller and/or Seller's management agent for the Property.
(ii) Buyer, its attorneys, accountants and other
representatives, shall be permitted to make and are authorized to make any
searches of governmental records as they deem necessary with respect to the
Property; and Seller agrees fully to cooperate with Buyer and its attorneys and
other representatives in this regard and to issue any consents or authorizations
required therefor.
(iii) Buyer agrees to indemnify, defend and reimburse
Seller for all costs, expenses (including, without limitation, attorney's fees,
consultant and expert fees and court costs) loss and liabilities suffered or
incurred by Seller as the result of any injuries to persons or properties caused
by Buyer's entry upon the Property prior to Closing pursuant to the provisions
of this Section 9(d) and Section 14.
(e) Promptly after receipt thereof by Seller, Seller shall
deliver to Buyer the following:
(i) a copy of any notice of default given or received
under the Tenant Leases or the Service Agreements;
(ii) a copy of any tax xxxx, notice or statement of
value, or notice of change in a tax rate affecting or relating to the Property;
(iii) a copy of any notice of an actual or alleged
Violation; and
(iv) a copy of any notice of Taking.
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(f) Seller shall deliver for execution by each of the Tenants a
written certification which shall be prepared by Buyer's counsel (utilizing the
form attached to this Agreement as Exhibit D, but modified and supplemented by
Buyer's counsel to reflect the terms and provisions of each of the respective
Tenant Leases) (each such certification being herein called a "Tenant Estoppel
Certificate"); and Seller shall obtain an executed Tenant Estoppel Certificate
(dated no more than fifteen (15) days prior to the Closing Date) from each of
the Tenants. Seller shall deliver to Buyer a copy of each of the executed
Tenant Estoppel Certificates obtained by Seller, promptly after Seller's receipt
thereof.
(g) Seller shall deliver for execution by each of the Tenants a
Subordination, Non-Disturbance and Attornment agreement in the form required by
Buyer's lender ("SNDA"); and Seller shall use its best efforts to obtain an
executed SNDA from each of the Tenants. Seller shall deliver to Buyer a copy of
each of the executed SNDAs delivered to Seller promptly after receiving such
SNDA.
10. TAX FREE EXCHANGE. Buyer shall cooperate with Seller in effecting an
exchange described in Section 1031 of the internal Revenue Code ("Tax Free
Exchange"), provided, that: (a) the Tax Free Exchange shall not impose upon
Buyer additional financial or legal obligations in addition to those set forth
elsewhere in this Agreement; (b) Buyer shall have no obligation to take title to
any exchange property; (c) Seller shall indemnify, defend and save and hold
Buyer harmless of an from all expenses, liabilities, claims, losses or actions
as a result of Buyer's participation in the Tax Free Exchange; (d) Buyer shall
have no obligation to modify any of the provisions of this Agreement to effect
the Tax Free Exchange; (e) any Agreement of Sale to be entered into by Buyer for
an exchange property shall provide that any liability of Buyer thereunder shall
be limited and restricted in enforcement to any deposit monies paid by Buyer;
and (f) Seller shall provide to Buyer any deposit monies required under any
Agreement of Sale for an exchange property.
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11. CASUALTY.
(a) Seller shall maintain the Policy in effect until the time of
Closing, and shall deliver to Buyer, within ten (10 ) days after the date of
this Agreement, an endorsement to the Policy issued by each insurance company
issuing the Policy evidencing that the Policy is in effect, and that the Policy
will not be canceled or materially modified without at least thirty (30) days
prior written notice to Buyer. If Closing is not completed under this
Agreement, Buyer agrees to deliver to Seller, upon request, a written direction
to each insurance company which has issued the Policy, directing that Buyer's
name as an additional insured party be deleted therefrom. If Closing is
completed under this Agreement, Seller shall be entitled to all rebates and
refunds of any prepaid premiums under the Policy.
(b) If at any time prior to the Closing Date any portion of the
Property is destroyed or damaged as a result of fire or any other casualty
("Casualty"), Seller shall promptly give written notice ("Casualty Notice")
thereof to Buyer. If the Property is the subject of a Casualty, Buyer shall
have the right, at its sole option, of terminating this Agreement (by notice
given within thirty (30) days after receipt of the Casualty Notice from Seller)
unless, (i) the cost fully to repair or restore such damage is less than One
Hundred Thousand Dollars ($100,000) and sufficient insurance proceeds are
available fully to restore such damage, and (ii) the insurance company issuing
the Policy has confirmed in writing prior to the end of such thirty (30) day
period that such Casualty is covered by the Policy and that no defense to
payment of the claim exists, and (iii) such Casualty will not result in any of
the Tenants terminating any of the Tenant Leases or asserting a right to
terminate any of the Tenant Leases, and (iv) any loan commitment obtained by
Buyer for financing to acquire the Property is not canceled or suspended as a
result of such Casualty. If a Casualty Notice is given to Buyer less than
thirty (30) days prior to Closing, at Buyer's option Closing shall be postponed
to a date not later than thirty (30) days after Buyer's receipt of the Casualty
Notice. If Buyer does not terminate this Agreement, the proceeds of any
insurance with respect to the Property paid between the date of this Agreement
and the Closing Date shall be paid to Buyer at the time of Closing and all
unpaid claims and rights in connection with losses to the Property shall be
assigned to Buyer at Closing without in any manner affecting the Purchase Price.
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(c) If the Property is the subject of a Casualty, but Buyer does
not have the right to terminate this Agreement pursuant to the provisions of
Section 11(b) above (or Buyer does not exercise such right), then Seller shall
promptly cause all temporary repairs to be made to the Property as shall be
required to prevent further deterioration and damage to the Property; provided,
however, that any such repairs shall first be approved by Buyer, which approval
shall not be unreasonably or untimely withheld. Seller shall have the right to
be reimbursed from the proceeds of any insurance with respect to the Property
paid between the date of this Agreement and the Closing Date for the cost of all
such repairs made pursuant to this Section 11(c). Except for the obligation of
Seller to repair the Property set forth in this Section 11(c), Seller shall have
no other obligation to repair any Casualty damage in the event Buyer does not
elect to terminate this Agreement pursuant to the provisions of Section 11(b),
and in such event, Buyer shall accept the Property at Closing as damaged or
destroyed by the Casualty and Buyer shall have the right to enter the Real
Property prior to Closing for the purpose of performing such repairs thereto as
are reasonably necessary to protect the Property against further damage prior to
the Closing Date.
12. EMINENT DOMAIN. If at any time prior to the Closing Date: a Taking
affects all or any part of the Property, or if any proceeding for a Taking is
commenced, or if notice of the contemplated commencement of a Taking is given,
Seller shall promptly give written notice ("Taking Notice") thereof to Buyer.
Buyer shall have the right, at its sole option, of terminating this Agreement by
written notice to Seller within thirty (30) days after receipt by Buyer of the
Taking Notice. If a Taking Notice is given to Buyer less than thirty (30) days
prior to Closing, at Buyer's option Closing shall be postponed to a date not
later than thirty (30) days after Buyer's receipt of the Taking Notice. If
Buyer does not terminate this Agreement, the Purchase Price shall be reduced by
the total of any awards or damages received by Seller and Seller shall, at
Closing, assign to Buyer all of Seller's right, title and interest in and to any
awards or damages to which Seller may have become entitled or may thereafter be
entitled by reason of any exercise of the power of eminent domain or
condemnation with respect to or for the Taking of the Property or any portion
thereof.
13. CONDITIONS OF BUYER'S OBLIGATIONS.
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(a) The obligations of Buyer under this Agreement are subject to
the satisfaction at the time of Closing of each of the following conditions (any
one of which may be waived in whole or in part in writing by Buyer at or prior
to Closing):
(i) all of the representations and warranties by Seller
set forth in this Agreement shall be true and correct in all material respects;
(ii) no representation or warranty by Seller contained in
this Agreement shall contain any materially untrue statement or shall omit a
material fact necessary to make the statement of fact therein recited not
misleading;
(iii) Seller shall have performed all covenants,
agreements and conditions required by this Agreement (and by any other Agreement
between Seller and Buyer) to be performed by Seller prior to or as of the
Closing Date; and
(iv) Buyer shall have received the executed Tenant
Estoppel Certificates and SNDAs from the Tenants under the Tenant Leases. .
(b) In the event any of the conditions set forth in Section
13(a) are not satisfied as of the Closing Date, Buyer shall have the right (in
addition to all other rights and remedies available to Buyer under this
Agreement, at law or equity), at Buyer's sole option to (i) terminate this
Agreement, or (ii) complete Closing notwithstanding the unsatisfied condition.
14. INSPECTION PERIOD.
(a) Buyer shall, during the period ("Inspection Period") which
shall commence as of the date of this Agreement and shall end on January 30,
1998, have the opportunity to examine the Property, the Tenant Leases, the
Service Agreements, the Policy, the Permitted Encumbrances and any items to be
delivered by Seller to Buyer, and to conduct such other inspections of the
Property as Buyer, in its discretion, may elect.
(b) (i) Seller acknowledges that Buyer may commission, prior
to Closing, at Buyer's sole cost and
-15-
expense, an investigation of (without limitation): compliance with
environmental laws, the presence of contaminants on, over, under, migrating from
or affecting the Property including without limitation in connection with the
use and operation of any Personal Property, and the presence of conditions that
may affect Buyer's intended use.
(ii) Seller will cooperate with Buyer and Buyer's agents
in Buyer's investigation, including without limitation: (A) complying with
requests for information and records; (B) assisting Buyer in obtaining
governmental agency or other records and upon Buyer's request communicating
directly with any governmental agencies; (C) granting Buyer access to the
Property including, without limitation, access for collecting surface or
subsurface samples of soil, vegetation or water, or samples from buildings and
other improvements and Personal Property located on the Property, including
samples from walls, floors, ceilings, plenums, paved areas and other areas the
taking of which samples may necessitate some damage to the buildings, other
improvements or the Personal Property, and installing groundwater monitoring
xxxxx; and (D) delivery to Buyer any communications, letters, inquiries or
notices received by Seller from any regulatory body dealing with environmental
matters, water quality, air quality, life safety and OSHA and with all reports
which may have been prepared within the past five years addressing the presence
of PCB emissions, asbestos or other hazardous materials or waste. If Buyer does
not complete Closing, Buyer will repair any invasive testing to the condition
of the Property which had reasonably existed prior to such testing or sampling
(c) Buyer shall have the right, at Buyer's sole option, to
terminate this Agreement (for any reason whatsoever) on or prior to the second
business day to occur after the date on which the Inspection Period ends.
15. ITEMS TO BE DELIVERED AT CLOSING.
(a) At Closing, Seller shall deliver to Buyer the following:
(i) The Deeds.
(ii) The Bills of Sale.
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(iii) Assignments in the form of Exhibits E and F,
respectively, of the Tenant Leases and the Service Agreements designated on
Exhibit B to be assigned to Buyer, duly executed and acknowledged by Seller and
in proper form for recording, assigning to Buyer all of the lessor's and
Seller's rights, title and interest in the Tenant Leases and such Service
Agreements, together with all correspondence between Seller and the Tenants, an
original executed copy of each of the Tenant Leases and each such Service
Agreement and letters, duly executed by Seller, in form satisfactory to Buyer
addressed to each of the Tenants and other parties under the Service Agreements
informing it of the assignments. Seller shall also deliver to Buyer at Closing
evidence of Seller's termination of those Service Agreements not assigned to
Buyer and payment of all sums owing to the parties to such Service Agreements.
(iv) An assignment, duly executed and acknowledged by
Seller, of (and delivery to Buyer of originals or copies of): all certificates
of occupancy and all other licenses, permits, authorizations, consents,
certificates and approvals with respect to the Property; all fees, escrow and/or
security funds, deposits and other sums heretofore paid by Seller to any
governmental authority in connection with the Property; all certificates issued
by the local Board of Fire Underwriters (or other body exercising similar
functions); all plans, specifications and project manuals for the Property in
Seller's possession; and all guarantees, bonds and warranties with respect to
the Property in Seller's possession (together with original counterparts of such
instruments).
(v) An original counterpart of the Tenant Estoppel
Certificates and the SNDAs.
(vi) Such resolutions and certificates as the Title
Company shall require to evidence the due authorization of the execution and
performance of this Agreement and the documents to be delivered pursuant hereto;
and all affidavits, indemnities and other agreements required by the Title
Company to permit it to issue to Buyer the Owner's Policy of Title Insurance
required pursuant to Section 5(a).
(vii) A statement, certified by Seller (and accompanied
with all relevant back-up documentation) setting forth all information necessary
or required to permit Buyer to
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calculate and collect after Closing all payments of additional rent and other
charges due under the Tenant Leases.
(viii) All proper instruments for the conveyance of the
awards referred to in Sections 1(a) and 12.
(ix) Duplicate copies of all books, records and operating
reports in Seller's possession which are necessary to insure continuity of
operation of the Property.
(x) An original executed and acknowledged copy of the
Right of First Refusal Agreement in recordable form as provided in Paragraph 23,
below.
(xi) Any other documents required to be delivered by
Seller pursuant to any other provisions of this Agreement.
(b) At Closing, Buyer shall deliver to Seller the following:
(i) The portion of the Purchase Price payable pursuant
to Section 2(b).
(ii) Assumption agreements, in the form of Exhibits E and
F respectively, of the Tenant Leases and of the Service Agreements designated on
Exhibit B to be assigned to Buyer, duly executed and acknowledged by Buyer and
in proper form for recording.
(iii) Any other document required to be delivered by Buyer
pursuant to any other provisions of this Agreement.
16. TIME. Time is of the essence of this Agreement. In computing the
number of days for purposes of this Agreement, all days shall be counted,
including Saturdays, Sundays and holidays; provided, however, that if the final
day of any time period provided in this Agreement shall end on a Saturday,
Sunday or legal holiday, then the final day shall extend to the next full
business day. For the purposes of this Section 16, the term "holiday" shall
mean a day other than a Saturday or Sunday on which banks in the Commonwealth of
Pennsylvania are or may elect to be closed.
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17. BROKERAGE. Each of Seller and Buyer represents and warrants to the
other that it has dealt with no broker, finder or other intermediary in
connection with this sale, except for Commercial/Industrial Realty Company
("CIR"). Seller agrees to pay all commissions and any other sums due to CIR by
reason of this transaction.
18. NO OTHER REPRESENTATIONS. Buyer acknowledges that neither Seller nor
anyone acting, or purporting to act, on behalf of Seller, has, except as
expressly set forth in this Agreement, made any representation or warranty with
respect to the Property.
19. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns.
20. FIRPTA.
(a) Section 1445 of the Internal Revenue Code of 1986, as
amended (the "Code") provides that a transferee of a United States real property
interest must withhold tax if the transferor is a foreign person. To inform
Buyer that withholding of tax is not required upon the disposition by Seller of
a United States real property interest, the undersigned parties executing this
Agreement on behalf of Seller hereby certify the following on behalf of Seller:
(i) Seller is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Code and Income Tax Regulations);
(ii) Seller's U.S. employer identification number
is ________________; and
(iii) Seller's office address is:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Seller, and the parties executing this Agreement on behalf of Seller, understand
that this certification may be disclosed to the Internal Revenue Service by
Buyer and that any false statement made here could be punished by fine,
imprisonment, or
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both. Under penalties of perjury, the undersigned parties executing this
Agreement on behalf of Seller declare that they have examined this certification
and to the best of their knowledge and belief, it is true, correct and complete;
and they further declare that they have authority to sign this document on
behalf of Seller.
(b) Seller, and the parties executing this Agreement on behalf
of Seller, shall deliver to Buyer at Closing, a restatement of the above
certifications of Seller and of the parties executing this Agreement on behalf
of Seller.
21. NOTICES.
(a) All notices, demands, requests or other communications from
each party to the other required or permitted under the terms of this Agreement
shall be in writing and, unless and until otherwise specified in a written
notice by the party to whom notice is intended to be given, shall be sent to the
parties at the following respective addresses:
if intended for Buyer:
Plymouth Meeting Executive Campus
000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: 000-000-0000
if intended for Seller:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
FAX: 000-000-0000
Notices may be given on behalf of any party by its legal counsel.
(b) Each such notice, demand, request or other communication
shall be given (i) against a written receipt of delivery, or (ii) by registered
or certified mail of the United States Postal Service, return receipt requested,
postage prepaid, or (iii) by a nationally recognized overnight courier service
for next business day delivery, or (iv) via telecopier or facsimile
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transmission to the facsimile number listed above, provided, however, that if
such communication is given via telecopier or facsimile transmission, an
original counterpart of such communication shall concurrently be sent in either
the manner specified in clause (i) or (iii) above.
(c) Each such notice, demand, request or other communication
shall be deemed to have been given upon the earliest of (i) actual receipt or
refusal by the addressee if sent pursuant to Section (b)(i) or (b)(iv), or (ii)
deposit thereof at any main or branch United States post office if sent in
accordance with section (b)(ii) above or (iii) deposit thereof with the courier
if sent pursuant to section (b)(iii) above.
22. MISCELLANEOUS.
(a) CAPTIONS. The captions in this Agreement are inserted for
convenience of reference only; they form no part of this Agreement and shall not
affect its interpretation.
(b) ENTIRE AGREEMENT; GOVERNING LAW. This Agreement contains
the entire understanding of the parties with respect to the subject matter
hereof, supersedes all prior or other negotiations, representations,
understandings and agreements (including, without limitation, the letter of
intent between Seller and Buyer dated September 18, 1997) of, by or among the
parties, express or implied, oral or written, which are fully merged herein.
The express terms of this Agreement control and supersede any course of
performance and/or customary practice inconsistent with any such terms. Any
agreement hereafter made shall be ineffective to change, modify, discharge or
effect an abandonment of this Agreement unless such agreement is in writing and
signed by the party against whom enforcement of such change, modification,
discharge or abandonment is sought. This Agreement shall be governed by and
construed under the laws of the Commonwealth of Pennsylvania.
(c) PROVISIONS SEPARABLE. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other provision may be invalid or unenforceable in whole or in part.
(d) WAIVER OF TENDER OF DEED AND PURCHASE MONIES. The tender of
executed Deeds by Seller and the tender by Buyer
-21-
of the Purchase Price are mutually waived, but nothing in this Agreement shall
be construed as a waiver of Seller's obligation to deliver the Deeds and/or of
the concurrent obligation of Buyer to pay the Purchase Price at Closing.
(e) GENDER, ETC. Words used in this Agreement, regardless of
the number and gender specifically used, shall be deemed and construed to
include any other number, singular or plural, and any other gender, masculine,
feminine or neuter, as the context indicates is appropriate.
(f) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall be binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected on this Agreement as the signatories.
(g) EXHIBITS. All Exhibits and Schedules attached to this
Agreement are incorporated by reference into and made a part of this Agreement.
(h) NO WAIVER. Neither the failure nor any delay on the part of
either party to this Agreement to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of any such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
(i) INTERPRETATION. No provision of this Agreement is to be
interpreted for or against either party because that party or that party's legal
representative or counsel drafted such provision.
(j) ATTORNEY'S FEES. In connection with any litigation arising
out of this Agreement, the prevailing party shall be entitled to recover all
costs incurred, including
-22-
reasonable attorney's fees. However, the provisions of this Section are
expressly subject to the limitation on Buyer's liability specified in Section 3.
(k) BUYER'S EXERCISE OF RIGHT TO TERMINATE. If Buyer desires to
terminate this Agreement pursuant to any of the provisions of this Agreement,
Buyer shall do so by giving written notice of termination to Seller. Upon any
such termination, the Deposit shall be paid to Buyer (and each of Seller and
Buyer shall deliver written instructions to the Title Company to pay the Deposit
to Buyer); and except as otherwise expressly provided in this Agreement, this
Agreement shall be and become null and void and neither party shall have any
further rights or obligations under this Agreement.
(l) SURVIVAL. The representations, warranties and agreements of
Seller set forth in Sections 8 and 9 of this Agreement shall survive a
termination of this Agreement, or Closing for a period of 24 months, and
thereafter shall survive to the extent that Buyer shall have given to Seller
written notice of breach thereof. The obligations of Seller and Buyer pursuant
to Sections 7, 10, 17, 20, 21 and 22(j) this Agreement shall survive Closing.
Except as otherwise provided in the preceding two sentences of this Section
22(l), the agreements of Seller and Buyer set forth in this Agreement shall not
survive Closing and shall merge into the delivery of the Deed at Closing.
23. RIGHT OF FIRST REFUSAL.
(a) For the purpose of this Paragraph 23: the term "Sears
Parcel" shall mean all that certain tract of land which is described by metes
and bounds on Exhibit H hereto, situate in the township of Lower Swatara,
Dauphin County, Commonwealth of Pennsylvania containing 32.82 acres, and the
building located on the rear containing 507,000 square feet; and the term "Right
of First Refusal Term" shall mean the period of time commencing as of the
Closing Date, and terminating two years after the Closing Date.
(b) At Closing, Seller shall execute, acknowledge and deliver to
Buyer for recording, a separate right of first refusal agreement, prepared by
Buyer, acceptable to Seller (and Seller agrees that the right of first refusal
agreement shall be acceptable to it to the extent that its provisions are
substantially the same as those set forth below; and Seller
-23-
further agrees to be reasonable in granting or withholding is acceptance to the
right of first refusal agreement), setting forth the following terms and
provisions:
(i) Seller shall not at any time
during the Right of First Refusal Term sell
or convey or agree to sell or convey all or
any portion of the Sears Parcel without first
having complied with the requirements of this
Agreement.
(ii) If Seller shall during the Right
of First Refusal Term desire to sell or convey
the Sears Parcel, Seller shall obtain from a
third party a bona fide, arms-length written
offer (the "Offer") acceptable to Seller, to
purchase the Sears Parcel, and Seller shall
submit a written copy of the Offer to Buyer.
Buyer shall have fifteen (15) days from receipt
of said Offer in which to elect to meet the
monetary and all other purchase terms of the
Offer, except the time of Closing, and purchase
the Sears Parcel pursuant to the monetary and
all other purchase terms of the Offer and this
paragraph. If Buyer elects to meet the Offer
and purchase the Sears Parcel pursuant to the
terms of the Offer, Buyer shall give to Seller
written notice thereof ("Acceptance Notice")
within said fifteen (15) day period and closing
shall be held within 90 days after the date of
the Acceptance Notice, whereupon Seller shall
convey the Sears Parcel to Buyer. At closing,
Seller shall deliver to Buyer a special warranty
deed, sufficient to convey to Buyer fee simple title
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to the Sears Parcel free and clear of all
liens, restrictions and encumbrances, except for
those subject to which the Sears Parcel was to
have been conveyed to the party making the Offer
in accordance with the terms of the Offer. Realty
transfer tax shall be paid by Buyer and Seller in
the manner prescribed in the Offer.
(iii) This right of first refusal shall
continue until such time as the Sears Parcel shall
have been sold by Seller to a party making the Offer
or the expiration of the term of this right of first
refusal. In the event Buyer shall elect not to meet
any Offer, Seller may thereafter sell the Sears
Parcel only to the party making the Offer and only
strictly in accordance with the terms of the Offer.
(iv) To prevent Seller from defeating the
rights of Buyer pursuant to this Agreement, Seller
agrees that Seller will not during the term of this
right of first refusal accept an offer to purchase
less than all of the Sears Parcel or all or any
portion of the Sears Parcel together with any
other property.
(v) The rights and obligations of Seller
and Buyer pursuant to this Agreement, shall be
binding upon Seller, and its successors and assigns,
and shall inure to the benefit of, Buyer, and Buyer's
successors and assigns.
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24. REPORTS. For the period of time commencing on the date of this
Agreement and continuing through the first anniversary of the Closing Date, and
without limitation of the other document production otherwise required of Seller
hereunder, Seller shall, from time to time, upon reasonable advance written
notice from Buyer, provide to Buyer and its representatives: (i) access to all
financial and other information pertaining to the period of Seller's ownership
and operation of the Property, which information is relevant and reasonably
necessary, in the opinion of Buyer's outside, third party accountants
("Accountants") to enable Buyer and its Accountants to prepare financial
statements in compliance with any and all of (a) Rule 3-05 or Rule 3-14 of
Regulation S-X of the Securities and Exchange Commission (the "Commission"), as
applicable to Buyer; (b) any other rule issued by the Commission and applicable
to Buyer; and (c) any registration statement, report or disclosure statement
filed with the Commission by, or on behalf of Buyer; and (ii) a representation
letter, in form specified by, or otherwise satisfactory to the Accountants,
signed by the individual(s) responsible for Seller's financial reporting, as
prescribed by generally accepted auditing standards promulgated by the Auditing
Standards Division of the American Institute of Certified Public Accountants,
which representation letter may be required by the Accountants in order to
render an opinion concerning Seller's financial statements.
IN WITNESS WHEREOF, intending to be legally bound, the parties have
executed this Agreement as a sealed instrument as of the day and year first
above written.
Witness: DOUBLE M DEVELOPMENT
a/k/a DOUBLE M DEVELOPMENT COMPANY
-------------------
By: /s/ Xxxx X. Xxxxxxxx
------------------- Xxxx X. Xxxxxxxx, Managing Partner
BUYER:
AMERICAN REAL ESTATE INVESTMENT,
L.P.
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By: AMERICAN REAL ESTATE INVESTMENT
CORPORATION - Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
President
-27-
FIRST AMENDMENT TO AGREEMENT OF SALE AND PURCHASE
LOWER XXXXX DISTRIBUTION CENTER LAND
THIS FIRST AMENDMENT is made as of the 9th day of March, 1998, by and
between XXXX X. XXXXXXXX and XXXXXX X. GRASS, trading as DOUBLE M DEVELOPMENT
COMPANY, a partnership ("Seller") and AMERICAN REAL ESTATE INVESTMENT, L.P., a
Delaware limited partnership ("Buyer").
W I T N E S S E T H:
Seller and Buyer have entered into a certain Agreement of Sale and
Purchase dated as of the 31st day of January, 1998 (the "Agreement of Sale") for
the Lower Xxxxx Distribution Center Land (as defined in the Agreement of Sale)
together with the buildings and other improvements thereon.
Seller and Buyer desire to amend the Agreement of Sale to provide for
a deferral of the Closing Date.
Terms which have a defined meaning in the Agreement of Sale shall have
the same meaning when used in this First Amendment.
NOW, THEREFORE, Seller and Buyer, each intending legally to bound
hereby, agree as follows:
1. The second sentence of Section 4 of the Agreement of Sale is modified
to provide as follows:
Closing shall commence at 10:00 A.M. on Tuesday, March 31, 1998,
or on such prior date as shall be designated by at least three
(3) business days' prior written notice from Buyer to Seller
("Closing Date").
Except as modified by the terms and provisions of this First Amendment, the
Agreement of Sale shall remain in full force and effect in accordance with its
terms and provisions.
IN WITNESS WHEREOF, intending legally to be bound hereby, the parties have
executed this Agreement as a sealed instrument as of the day and year first
above written.
SELLER:
DOUBLE M DEVELOPMENT
a/k/a DOUBLE M DEVELOPMENT COMPANY
By:/S/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx, Managing Partner
BUYER:
AMERICAN REAL ESTATE INVESTMENT,
L.P.
By: AMERICAN REAL ESTATE INVESTMENT
CORPORATION - Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
President
AGREEMENT OF SALE AND PURCHASE
AIRPORT INDUSTRIAL PARK-I LAND
THIS AGREEMENT is made as of the 31st day of January, 1998 by and
between XXXX X. XXXXXXXX and XXXXXX X. GRASS, trading as DOUBLE M DEVELOPMENT
COMPANY, a Partnership, having an address at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Seller") and AMERICAN REAL ESTATE INVESTMENT,
L.P., a Delaware Limited Partnership, having an address at Plymouth Meeting
Executive Campus, 000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, XX
00000 ("Buyer").
W I T N E S S E T H :
2. AGREEMENT TO SELL AND PURCHASE. Seller agrees to sell to Buyer, and
Buyer agrees to purchase from Seller, subject to the terms and conditions of
this Agreement, certain property consisting of the following:
(a) REAL PROPERTY. All that certain tract of land containing
18.49 acres being Lot No. 1 as shown on the Plan of Airport Industrial Park,
Recorded in Plan Book C, Volume 5, page 7 ("Plan") and Lot No. 3 on the Plan
containing 2.737 acres and containing an existing Retention Pond (both, "Airport
Industrial Park-I Land"), which are described by metes and bounds on the Plan,
situate in the Township of Lower Swatara, Dauphin County, Commonwealth of
Pennsylvania (the Airport Industrial Park-I Land is sometimes herein referred to
as the "Land"); together with all improvements on the Land, including, without
limitation, two buildings located on the Airport Industrial Park-I Land
containing 132,558 square feet and 152,908 square feet; together with all
appurtenances thereto (including, without limitation, all easements,
rights-of-way, and other rights and benefits belonging to, running with the
owner of, or relating to the Land); and together with all rights, title and
interest of Seller in and to all land lying in the bed of any street, opened or
proposed, abutting the Land and all right, title and interest of Seller in an to
any unpaid award for the taking by eminent domain of any part of the Land or for
damages
to the Land by reason of a change of grade of any street (all of the property,
rights and privileges described in this Section 1(a) herein being collectively
called the "Real Property").
(b) PERSONAL PROPERTY. All fixtures, equipment and other
personal property attached or appurtenant to the Real Property; all furniture,
supplies, and other unattached items of personal property located in or on, or
used in connection with, the Real Property which are owned by Seller; and all
intangible personal property used in the ownership, operation or maintenance of
the Real Property, which is owned by Seller (all of the foregoing items of
property being herein collectively called "Personal Property").
(c) PROPERTY. The Real Property and the Personal Property are
sometimes herein collectively called "Property".
3. PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Property, subject to adjustments as provided in this Agreement, shall be Seven
Million Five Hundred Thousand Dollars ($7,500,000), and shall be paid as
follows:
(a) Fifty Thousand Dollars ($50,000) (such sum, plus all
interest which accrues thereon, being herein called "the Deposit") shall be paid
by Buyer to First American Title Insurance Company ("Title Company") on the date
of the execution of this Agreement. The Deposit shall be held by the Title
Company in one or more federally-insured money market accounts acceptable to
both Seller and Buyer, or in short-term United States Government obligations
having a maturity date which is not later than the Closing Date (as defined
below).
(b) The balance of the Purchase Price shall be paid at Closing
by wire transfer of immediately available funds.
4. DISPOSITION OF DEPOSIT; DEFAULTS.
(a) The Deposit shall be held in escrow and disbursed by the
Title Company in accordance with the terms of this Agreement. Seller and Buyer
each agrees, upon request, to execute the Title Company's customary form of
escrow agreement with respect to the Deposit.
31
(b) If Buyer, without the right to do so and in default of its
obligations under this Agreement fails to complete Closing, Seller shall have
the right to be paid the Deposit as liquidated damages and not as a penalty.
Buyer and Seller acknowledge that the damages which may be incurred by Seller in
the event of Buyer's default are difficult to quantify as of the date of this
Agreement; the Deposit represents the parties' reasonable estimate of Seller's
probable future damages in the event of Buyer's default; and that the Deposit
represents fair and reasonable compensation to Seller in the event of Buyer's
default. The right of Seller to be paid the Deposit shall be Seller's exclusive
and sole remedy, and Seller waives any right to recover the balance of the
Purchase Price, or any part thereof, and the right to pursue any other remedy
permitted by law or in equity against Buyer.
(c) If Closing is completed hereunder, the Title Company shall
pay the Deposit to Seller on account of the Purchase Price.
5. CLOSING. The closing of this transaction ("Closing") shall take place
at the offices of Wolf, Block, Xxxxxx and Xxxxx-Xxxxx, Twelfth Floor Packard
Building, 15th and Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000. Closing
shall commence at 10:00 a.m. on February 18, 1998 ("Closing Date").
6. CONDITION OF TITLE.
(a) Title to the Property shall be good and marketable and free
and clear of all liens, restrictions, easements, encumbrances, leases, tenancies
and other title objections, except for the Permitted Encumbrances (as defined
below) and the Tenant Leases (as defined below), and shall be insurable as such
and as provided in this Agreement at ordinary rates by the Title Company
pursuant to an ALTA Owner's Policy of Title Insurance, 1970 Form B, amended
October 17, 1970 and October 17, 1984 (the "Owner's Policy of Title Insurance").
The premium (at ordinary rates) for the Owner's Policy of Title Insurance will
be paid by Buyer.
(b) If Seller is unable to convey title to the Property to Buyer
at Closing in accordance with the requirements of Section 5(a), Buyer shall have
the right (i) of taking such title as Seller is able to convey with abatement of
the Purchase Price in the amount (fixed or ascertainable) of any Monetary
-32-
Liens (as defined below) on the Property, or (ii) of terminating this Agreement.
(c) Promptly after the execution of this Agreement, Buyer shall
order from the Title Company a Commitment for Title Insurance ("Title
Commitment") with respect to the Real Property. Prior to the expiration of the
Inspection Period, Buyer shall give to Seller Notice ("Exception Notice") of any
exceptions to title set forth in the Title Commitment which are not acceptable
to Buyer ("Unacceptable Exceptions"). Seller shall, within ten business (10)
days from the date of Seller's receipt of the Exception Notice, deliver to Buyer
an endorsement to the Title Commitment issued by the Title Company stating
which, if any, of the Unacceptable Exceptions the Title Company has or will
commit to remove from the Title Commitment; and if the Title Company has not
issued an endorsement to the Title Commitment removing (or committing to remove)
all of the Unacceptable Exceptions from the Title Commitment within ten (10)
business days from the date of Seller's receipt of the Exception Notice, Buyer
shall have the right to terminate this Agreement. If Buyer does not terminate
this Agreement pursuant to the provisions of this Section 5(c), then the
exceptions remaining on Schedule B, Section 2 of the Title Commitment which are
not liens securing payment of monetary sums ("Monetary Liens") shall be the
"Permitted Encumbrances". Seller agrees to pay all Monetary Liens and cause all
Monetary Liens to be released and satisfied of record prior to the completion of
Closing.
(d) If Seller, without the right to do so and in the default of
its obligations under this Agreement fails to complete Closing, or otherwise
defaults under or breaches this Agreement, Buyer shall have the right, at
Buyer's sole election, either (A) to be returned the Deposit plus Buyer's
reimbursable costs as hereinafter defined, up to a maximum amount of $25,000.00
as liquidated damages for Seller's breach, or (B) to specific performance and
injunctive relief without monetary damages against Seller. Reimbursable
expenses are defined to include the cost of all charges incurred by Buyer for
securing title, the cost of any plans, surveys and environmental studies ordered
by Buyer, all loan commitment fees paid by Buyer and all the fees, costs and
expenses reasonably incurred by Buyer in connection with the property and
Buyer's intended acquisition thereof.
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7. POSSESSION. Possession of the Property shall be given to Buyer at
Closing, subject only to the rights of occupancy of the Tenants (as defined
below) under the Tenant Leases by delivery of Seller's special warranty deeds
(the "Deeds") and bills of sale (the "Bills of Sale"), duly executed and
acknowledged by Seller and in proper form for recording. If Buyer causes
surveys of the Real Property to be made, then at Buyer's option the descriptions
of the Real Property contained in the Deeds shall be based upon those survey.
8. APPORTIONMENTS; TRANSFER TAXES; SECURITY DEPOSITS.
(a) (i) Real estate taxes on the Real Property; personal
property taxes (if any) on the Personal Property; minimum water and sewer
rentals; base, minimum and/or fixed rental, additional rental and other sums
paid by the Tenants to the Seller prior to Closing under the Tenant Leases;
payments due under the Service Agreements (as defined below) which are to be
assigned to Buyer, if any, shall be apportioned pro rata between Seller and
Buyer on a per diem basis as of the Closing Date; provided, however, that there
shall be no apportionment between Buyer and Seller at Closing with respect to
utility charges paid by the Tenants directly to utility companies pursuant to
the Tenant Leases.
(ii) If the Closing Date is not the first day of a
calendar month and if as of the Closing Date and of the Tenants has not paid the
monthly installment of base, minimum and/or fixed rental ("Delinquent
Installment") due under its Tenant Lease with respect to the month in which
Closing occurs, then at Closing Buyer shall receive a credit against the
Purchase Price in an amount equal to the portion of the Delinquent Installment
applicable to the period of time from and after the Closing Date and through the
balance of the applicable month; and upon Buyer's receipt of the Delinquent
Installment from such Tenant, Buyer shall pay the full amount thereof to Seller.
For the purpose of this subparagraph, "Delinquent Installment" shall mean only
one that has not been paid by the applicable Tenant within the applicable grace
period, if any, in its Tenant Lease.
(b) At Closing, each of Buyer and Seller shall pay one-half
(1/2) of all realty transfer taxes imposed by the Commonwealth of Pennsylvania
and all other governmental
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authorities upon the Deeds and the conveyance of the Real Property from Seller
to Buyer.
(c) At Closing, Seller shall deliver to Buyer a certified check
in the amount of all Security Deposits paid under the Tenant Leases, and all
interest which has (or was required to) accrued thereon.
9. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller makes the following
representations and warranties to Buyer, which representations and warranties
are true and correct as of the date of this Agreement, and shall be true and
correct at and as of the Closing Date in all respects as though such
representations and warranties were made both at and as of the date of this
Agreement, and at and as of the Closing Date:
(a) The only leases or other agreements (herein collectively
called the "Tenant Leases"; and each respective tenant under each of the Tenant
Leases is herein sometimes individually called "Tenant" and collectively
"Tenants") with respect to rights of use and occupancy of the Property in effect
are as set forth on the Charts attached hereto as Schedule 1.
(b) The Tenant Leases are valid and existing and in full force
and effect; the Tenants are in actual possession of the Property; and neither
the Tenants nor the Seller are in default of their respective obligations under
the Tenant Leases.
(c) The copies of the Tenant Leases previously delivered by
Seller to Buyer are true and complete copies of the Tenant Leases; the Tenant
Leases have not been amended, modified, or supplemented; and the Tenants do not
have any right to extend or renew the terms of their respective Tenant Leases
except as expressly set forth in the Tenant Leases.
(d) None of the Tenants has asserted any claim which could
adversely affect the right of the landlord to collect base, minimum or fixed
rental or additional rental from the Tenants; and no notice of default or breach
on the part of landlord under the Tenant Leases has been received by Seller from
any of the Tenants which has not been cured.
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(e) All construction, painting, repairs, alterations,
improvements and other work required to be performed by the landlord under the
Tenant Leases, and all of the other obligations of the landlord required to be
performed under the Tenant Leases as of the Closing Date, have been completed
fully performed and paid for in full by Seller.
(f) The terms of the Tenant Leases commenced and will end on the
dates specified in the Charts attached hereto as Schedule 1.
(g) The rents and other payments set forth in the Tenant Leases
are the actual rents, income and charges presently being collected by Seller
under the Tenant Leases; all minimum rent payable under the Tenant Leases is
payable monthly in advance of rent control laws, ordinances, or regulations, or
by virtue of existing agreements or regulations.
(h) Except as set forth in the Tenant Leases, none of the
Tenants is entitled to any concession, allowance, rebate or refund.
(i) None of the Tenants has prepaid any base rental, minimum
rental, fixed rental or additional rental or other charges for more than the
current month under its Tenant Lease.
(j) Neither the Tenant Leases nor the rental or other amounts
payable under the Tenant Leases have been assigned, pledged or encumbered other
than to the holder of any existing mortgage as collateral security, which
assignment shall be terminated at Closing; and the Tenant Leases may be assigned
by Seller to Buyer at Closing.
(k) No security deposit has been paid by any of the Tenants
under the Tenant Leases, except as set forth on the Charts attached hereto as
Schedule 1.
(l) The Chart attached hereto as Schedule 2 sets forth the only
brokerage or leasing commissions or other compensation which are or will be due
and payable to any party ("Lease Broker") with respect to or on account of the
Tenant Leases or any extensions or renewals thereof or any other actions by the
Tenants thereunder; the copies of the agreements between Seller and each Lease
Broker delivered by Seller to Buyer are
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true and complete and there are no other such agreements; Seller shall fully pay
(and shall provide to Buyer at Closing evidence of such payment) all
installments on account of the existing leasing commissions due or payable with
respect to any rental due or payable in connection with any period prior to the
Closing Date and/or otherwise due and payable prior to the Closing Date; and
Buyer shall, at Closing, accept the assignment of the Tenant Leases subject to
the obligation to pay all of the existing leasing commissions to the Lease
Brokers with respect to periods occurring from and after the Closing Date.
Pursuant to the preceding sentence, there shall be an apportionment at Closing
of prepaid or accrued leasing commissions.
(m) Except as expressly set forth in the Tenant Leases, the
Tenants do not have any right or option to acquire to the Property or any
portion thereof.
(n) Seller has not received any written notice ("Defect Notice")
from any insurance company which has issued a policy with respect to the
Property or from any board of fire underwriters (or other body exercising
similar functions) claiming any defects or deficiencies in the Property or
suggesting or requesting the performance of any repairs, alterations or other
work to the Property.
(o) There are no management, service, equipment, supply,
security, maintenance, construction, concession or other agreements with respect
to or affecting the Property, except for any agreements under which only a
Tenant is bound and except for the agreements listed on Exhibit B to this
Agreement (collectively, the "Service Agreements"); Seller is not in default
under the Service Agreements; the copies of the Service Agreements previously
delivered by Seller to Buyer are true and complete copies of such Service
Agreements and the same have not been amended, modified or supplemented; and
each of the Service Agreements designated on Exhibit B to be terminated shall be
terminated by Seller at or prior to Closing and all sums due thereunder paid in
full by Seller.
(p) No employee of Seller who performs services at or in
connection with the Property is covered by an employment agreement or union
contract; no demand has been made upon Seller for recognition of a union or
collective bargaining agent for the employees of Seller at the Property; and
none of the employment
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arrangements with respect to Seller's employees will be binding upon Buyer or
any subsequent owner of the Property after Closing.
(q) There are no outstanding uncured written notices received by
Seller of any violation ("Violation") of any applicable law, ordinance, code,
rule, order, regulation or requirement of any governmental authority with
respect to the Property.
(r) Exhibit C to this Agreement sets forth the only fire and
extended coverage insurance policies ("Policy") maintained by Seller with
respect to the Property; the Policy is in full force and effect and all premiums
due thereunder has been paid; and neither Seller nor (to Seller's knowledge) any
of the Tenants have received any notice from the insurance companies which
issued the Policy, indicating that the Policy will not be renewed or will be
renewed at a higher premium than is presently payable therefor.
(s) There is no action, suit or proceeding pending or, to the
knowledge of Seller, threatened against or affecting Seller or the Property or
any portion thereof or the Tenant Leases or relating to or arising out of the
ownership, management or operation of the Property, in any court or before or by
any federal, state, county or municipal department, commission, board, bureau or
agency or other governmental instrumentality.
(t) Seller has not received any notice of any condemnation
proceeding or other proceedings in the nature of eminent domain ("Taking") in
connection with the Property, and to Seller's knowledge no Taking has been
threatened.
(u) All of the books, records, information, data and other items
supplied by Seller to Buyer are true, complete and correct in all material
respects, and fairly and accurately presented the results of operations of the
Property.
(v) To the best of Seller's actual knowledge, there is no
presently existing Violation at the Property of any environmental law or
reputation; no contamination is present at the Property; and no underground
storage tanks, asbestos or PCBs are present at the Property.
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10. OPERATIONS PRIOR TO CLOSING. Between the date of this Agreement and
Closing:
(a) Seller shall, at its expense: perform all of its
obligations under the Tenant Leases; and cure all notices of any Violations
and/or Defect Notices issued prior to Closing. Notwithstanding the foregoing
provisions of this Section 9(a), if all such notices of Violation or Defect
Notices require the expenditure by Seller of more than $50,000 in the aggregate,
Seller shall have the right to give to Buyer written notice that Seller has
elected not to cure such notices; and in such event, Buyer shall have the right,
by written notice to Seller, at Buyer's sole option, to terminate this
Agreement.
(b) Seller shall not enter into any agreement to modify, amend
or otherwise alter any of the terms or provisions of the Tenant Leases or any of
the Service Agreements; Seller shall not enter into a new lease ("New Lease") or
other agreement with respect to the use or occupancy of the Real Property and/or
the maintenance thereof, without prior written approval of Buyer. Seller agrees
to execute any New Lease designated by Buyer which is approved by Seller. Each
of Seller and Buyer agrees not unreasonably to untimely withhold or delay its
approval of a New Lease. If Seller shall enter into a New Lease for a portion
of the Real Property after the date of this Agreement and prior to the Closing
Date pursuant to the request or prior written approval of Buyer, then Buyer
shall, at Closing, reimburse to Seller all hard costs paid by Seller pursuant to
a written budget previously approved by Seller and Buyer for capital
improvements to the premises demised under the New Lease; and Buyer shall assume
the obligations of the Seller, as landlord under the New Lease, to perform
capital improvements to the premises demised under the New Lease required by the
terms of the New Lease. Any New Lease entered into by Seller after the date of
this Agreement and prior to the Closing Date pursuant to the request or prior
written approval of Buyer shall be included within the definition of "Tenant
Leases".
(c) Seller shall perform all acts, and shall make all payments,
necessary to cause the representations and warranties of Seller in this
Agreement to be true and correct.
(d) (i) Buyer, its attorneys, accountants, architects,
engineers and other representatives shall be afforded access to the Property and
to all books, records and files
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relating thereto from time to time prior to Closing for the purposes of
inspections, preparation of plans, taking of measurements, making of surveys,
making of appraisals, and generally for the ascertainment of the condition of
the Property, including but not limited to the physical and financial condition
of the Property; and there shall be furnished to Buyer all plans and
specifications, engineering reports, feasibility studies, operating statements,
governmental permits and approvals, contracts, leases, surveys, title
information and other documentation concerning the Property in the possession of
Seller and/or Seller's management agent for the Property.
(ii) Buyer, its attorneys, accountants and other
representatives, shall be permitted to make and are authorized to make any
searches of governmental records as they deem necessary with respect to the
Property; and Seller agrees fully to cooperate with Buyer and its attorneys and
other representatives in this regard and to issue any consents or authorizations
required therefor.
(iii) Buyer agrees to indemnify, defend and reimburse Seller
for all costs, expenses (including, without limitation, attorney's fees,
consultant and expert fees and court costs) loss and liabilities suffered or
incurred by Seller as the result of any injuries to persons or properties caused
by Buyer's entry upon the Property prior to Closing pursuant to the provisions
of this Section 9(d) and Section 14.
(e) Promptly after receipt thereof by Seller, Seller shall
deliver to Buyer the following:
(i) a copy of any notice of default given or
received under the Tenant Leases or the Service Agreements;
(ii) a copy of any tax xxxx, notice or statement of
value, or notice of change in a tax rate affecting or relating to the Property;
(iii) a copy of any notice of an actual or alleged
Violation; and
(iv) a copy of any notice of Taking.
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(f) Seller shall deliver for execution by each of the Tenants a
written certification which shall be prepared by Buyer's counsel (utilizing the
form attached to this Agreement as Exhibit D, but modified and supplemented by
Buyer's counsel to reflect the terms and provisions of each of the respective
Tenant Leases) (each such certification being herein called a "Tenant Estoppel
Certificate"); and Seller shall obtain an executed Tenant Estoppel Certificate
(dated no more than fifteen (15) days prior to the Closing Date) from each of
the Tenants. Seller shall deliver to Buyer a copy of each of the executed
Tenant Estoppel Certificates obtained by Seller, promptly after Seller's receipt
thereof.
(g) Seller shall deliver for execution by each of the Tenants a
Subordination, Non-Disturbance and Attornment agreement in the form required by
Buyer's lender ("SNDA"); and Seller shall use its best efforts to obtain an
executed SNDA from each of the Tenants. Seller shall deliver to Buyer a copy of
each of the executed SNDAs delivered to Seller promptly after receiving such
SNDA.
11. TAX FREE EXCHANGE. Buyer shall cooperate with Seller in effecting an
exchange described in Section 1031 of the internal Revenue Code ("Tax Free
Exchange"), provided, that: (a) the Tax Free Exchange shall not impose upon
Buyer additional financial or legal obligations in addition to those set forth
elsewhere in this Agreement; (b) Buyer shall have no obligation to take title to
any exchange property; (c) Seller shall indemnify, defend and save and hold
Buyer harmless of an from all expenses, liabilities, claims, losses or actions
as a result of Buyer's participation in the Tax Free Exchange; (d) Buyer shall
have no obligation to modify any of the provisions of this Agreement to effect
the Tax Free Exchange; (e) any Agreement of Sale to be entered into by Buyer for
an exchange property shall provide that any liability of Buyer thereunder shall
be limited and restricted in enforcement to any deposit monies paid by Buyer;
and (f) Seller shall provide to Buyer any deposit monies required under any
Agreement of Sale for an exchange property.
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12. CASUALTY.
(a) Seller shall maintain the Policy in effect until the time of
Closing, and shall deliver to Buyer, within ten (10 ) days after the date of
this Agreement, an endorsement to the Policy issued by each insurance company
issuing the Policy evidencing that the Policy is in effect, and that the Policy
will not be canceled or materially modified without at least thirty (30) days
prior written notice to Buyer. If Closing is not completed under this
Agreement, Buyer agrees to deliver to Seller, upon request, a written direction
to each insurance company which has issued the Policy, directing that Buyer's
name as an additional insured party be deleted therefrom. If Closing is
completed under this Agreement, Seller shall be entitled to all rebates and
refunds of any prepaid premiums under the Policy.
(b) If at any time prior to the Closing Date any portion of the
Property is destroyed or damaged as a result of fire or any other casualty
("Casualty"), Seller shall promptly give written notice ("Casualty Notice")
thereof to Buyer. If the Property is the subject of a Casualty, Buyer shall
have the right, at its sole option, of terminating this Agreement (by notice
given within thirty (30) days after receipt of the Casualty Notice from Seller)
unless, (i) the cost fully to repair or restore such damage is less than One
Hundred Thousand Dollars ($100,000) and sufficient insurance proceeds are
available fully to restore such damage, and (ii) the insurance company issuing
the Policy has confirmed in writing prior to the end of such thirty (30) day
period that such Casualty is covered by the Policy and that no defense to
payment of the claim exists, and (iii) such Casualty will not result in any of
the Tenants terminating any of the Tenant Leases or asserting a right to
terminate any of the Tenant Leases, and (iv) any loan commitment obtained by
Buyer for financing to acquire the Property is not canceled or suspended as a
result of such Casualty. If a Casualty Notice is given to Buyer less than
thirty (30) days prior to Closing, at Buyer's option Closing shall be postponed
to a date not later than thirty (30) days after Buyer's receipt of the Casualty
Notice. If Buyer does not terminate this Agreement, the proceeds of any
insurance with respect to the Property paid between the date of this Agreement
and the Closing Date shall be paid to Buyer at the time of Closing and all
unpaid claims and rights in connection with losses to the Property shall be
assigned to Buyer at Closing without in any manner affecting the Purchase Price.
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(c) If the Property is the subject of a Casualty, but Buyer does
not have the right to terminate this Agreement pursuant to the provisions of
Section 11(b) above (or Buyer does not exercise such right), then Seller shall
promptly cause all temporary repairs to be made to the Property as shall be
required to prevent further deterioration and damage to the Property; provided,
however, that any such repairs shall first be approved by Buyer, which approval
shall not be unreasonably or untimely withheld. Seller shall have the right to
be reimbursed from the proceeds of any insurance with respect to the Property
paid between the date of this Agreement and the Closing Date for the cost of all
such repairs made pursuant to this Section 11(c). Except for the obligation of
Seller to repair the Property set forth in this Section 11(c), Seller shall have
no other obligation to repair any Casualty damage in the event Buyer does not
elect to terminate this Agreement pursuant to the provisions of Section 11(b),
and in such event, Buyer shall accept the Property at Closing as damaged or
destroyed by the Casualty and Buyer shall have the right to enter the Real
Property prior to Closing for the purpose of performing such repairs thereto as
are reasonably necessary to protect the Property against further damage prior to
the Closing Date.
13. EMINENT DOMAIN. If at any time prior to the Closing Date: a Taking
affects all or any part of the Property, or if any proceeding for a Taking is
commenced, or if notice of the contemplated commencement of a Taking is given,
Seller shall promptly give written notice ("Taking Notice") thereof to Buyer.
Buyer shall have the right, at its sole option, of terminating this Agreement by
written notice to Seller within thirty (30) days after receipt by Buyer of the
Taking Notice. If a Taking Notice is given to Buyer less than thirty (30) days
prior to Closing, at Buyer's option Closing shall be postponed to a date not
later than thirty (30) days after Buyer's receipt of the Taking Notice. If
Buyer does not terminate this Agreement, the Purchase Price shall be reduced by
the total of any awards or damages received by Seller and Seller shall, at
Closing, assign to Buyer all of Seller's right, title and interest in and to any
awards or damages to which Seller may have become entitled or may thereafter be
entitled by reason of any exercise of the power of eminent domain or
condemnation with respect to or for the Taking of the Property or any portion
thereof.
14. CONDITIONS OF BUYER'S OBLIGATIONS.
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(a) The obligations of Buyer under this Agreement are subject to
the satisfaction at the time of Closing of each of the following conditions (any
one of which may be waived in whole or in part in writing by Buyer at or prior
to Closing):
(i) all of the representations and warranties by
Seller set forth in this Agreement shall be true and correct in all material
respects;
(ii) no representation or warranty by Seller
contained in this Agreement shall contain any materially untrue statement or
shall omit a material fact necessary to make the statement of fact therein
recited not misleading;
(iii) Seller shall have performed all covenants,
agreements and conditions required by this Agreement (and by any other Agreement
between Seller and Buyer) to be performed by Seller prior to or as of the
Closing Date; and
(iv) Buyer shall have received the executed Tenant
Estoppel Certificates and SNDAs from the Tenants under the Tenant Leases. .
(b) In the event any of the conditions set forth in Section
13(a) are not satisfied as of the Closing Date, Buyer shall have the right (in
addition to all other rights and remedies available to Buyer under this
Agreement, at law or equity), at Buyer's sole option to (i) terminate this
Agreement, or (ii) complete Closing notwithstanding the unsatisfied condition.
15. INSPECTION PERIOD.
(a) Buyer shall, during the period ("Inspection Period") which
shall commence as of the date of this Agreement and shall end on January 30,
1998, have the opportunity to examine the Property, the Tenant Leases, the
Service Agreements, the Policy, the Permitted Encumbrances and any items to be
delivered by Seller to Buyer, and to conduct such other inspections of the
Property as Buyer, in its discretion, may elect.
(b) (i) Seller acknowledges that Buyer may commission,
prior to Closing, at Buyer's sole cost and
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expense, an investigation of (without limitation): compliance with
environmental laws, the presence of contaminants on, over, under, migrating from
or affecting the Property including without limitation in connection with the
use and operation of any Personal Property, and the presence of conditions that
may affect Buyer's intended use.
(ii) Seller will cooperate with Buyer and Buyer's
agents in Buyer's investigation, including without limitation: (A) complying
with requests for information and records; (B) assisting Buyer in obtaining
governmental agency or other records and upon Buyer's request communicating
directly with any governmental agencies; (C) granting Buyer access to the
Property including, without limitation, access for collecting surface or
subsurface samples of soil, vegetation or water, or samples from buildings and
other improvements and Personal Property located on the Property, including
samples from walls, floors, ceilings, plenums, paved areas and other areas the
taking of which samples may necessitate some damage to the buildings, other
improvements or the Personal Property, and installing groundwater monitoring
xxxxx; and (D) delivery to Buyer any communications, letters, inquiries or
notices received by Seller from any regulatory body dealing with environmental
matters, water quality, air quality, life safety and OSHA and with all reports
which may have been prepared within the past five years addressing the presence
of PCB emissions, asbestos or other hazardous materials or waste. If Buyer does
not complete Closing, Buyer will repair any invasive testing to the condition
of the Property which had reasonably existed prior to such testing or sampling
(c) Buyer shall have the right, at Buyer's sole option, to
terminate this Agreement (for any reason whatsoever) on or prior to the second
business day to occur after the date on which the Inspection Period ends.
16. ITEMS TO BE DELIVERED AT CLOSING.
(a) At Closing, Seller shall deliver to Buyer the following:
(i) The Deeds.
(ii) The Bills of Sale.
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(iii) Assignments in the form of Exhibits E and F,
respectively, of the Tenant Leases and the Service Agreements designated on
Exhibit B to be assigned to Buyer, duly executed and acknowledged by Seller and
in proper form for recording, assigning to Buyer all of the lessor's and
Seller's rights, title and interest in the Tenant Leases and such Service
Agreements, together with all correspondence between Seller and the Tenants, an
original executed copy of each of the Tenant Leases and each such Service
Agreement and letters, duly executed by Seller, in form satisfactory to Buyer
addressed to each of the Tenants and other parties under the Service Agreements
informing it of the assignments. Seller shall also deliver to Buyer at Closing
evidence of Seller's termination of those Service Agreements not assigned to
Buyer and payment of all sums owing to the parties to such Service Agreements.
(iv) An assignment, duly executed and acknowledged by
Seller, of (and delivery to Buyer of originals or copies of): all certificates
of occupancy and all other licenses, permits, authorizations, consents,
certificates and approvals with respect to the Property; all fees, escrow and/or
security funds, deposits and other sums heretofore paid by Seller to any
governmental authority in connection with the Property; all certificates issued
by the local Board of Fire Underwriters (or other body exercising similar
functions); all plans, specifications and project manuals for the Property in
Seller's possession; and all guarantees, bonds and warranties with respect to
the Property in Seller's possession (together with original counterparts of such
instruments).
(v) An original counterpart of the Tenant Estoppel
Certificates and the SNDAs.
(vi) Such resolutions and certificates as the Title
Company shall require to evidence the due authorization of the execution and
performance of this Agreement and the documents to be delivered pursuant hereto;
and all affidavits, indemnities and other agreements required by the Title
Company to permit it to issue to Buyer the Owner's Policy of Title Insurance
required pursuant to Section 5(a).
(vii) A statement, certified by Seller (and
accompanied with all relevant back-up documentation) setting forth all
information necessary or required to permit Buyer to
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calculate and collect after Closing all payments of additional rent and other
charges due under the Tenant Leases.
(viii) All proper instruments for the conveyance of the
awards referred to in Sections 1(a) and 12.
(ix) Duplicate copies of all books, records and
operating reports in Seller's possession which are necessary to insure
continuity of operation of the Property.
(x) An original executed and acknowledged copy of
the Right of First Refusal Agreement in recordable form as provided in Paragraph
23, below.
(xi) Any other documents required to be delivered by
Seller pursuant to any other provisions of this Agreement.
(b) At Closing, Buyer shall deliver to Seller the following:
(i) The portion of the Purchase Price payable
pursuant to Section 2(b).
(ii) Assumption agreements, in the form of Exhibits E
and F respectively, of the Tenant Leases and of the Service Agreements
designated on Exhibit B to be assigned to Buyer, duly executed and acknowledged
by Buyer and in proper form for recording.
(iii) Any other document required to be delivered by
Buyer pursuant to any other provisions of this Agreement.
17. TIME. Time is of the essence of this Agreement. In computing the
number of days for purposes of this Agreement, all days shall be counted,
including Saturdays, Sundays and holidays; provided, however, that if the final
day of any time period provided in this Agreement shall end on a Saturday,
Sunday or legal holiday, then the final day shall extend to the next full
business day. For the purposes of this Section 16, the term "holiday" shall
mean a day other than a Saturday or Sunday on which banks in the Commonwealth of
Pennsylvania are or may elect to be closed.
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18. BROKERAGE. Each of Seller and Buyer represents and warrants to the
other that it has dealt with no broker, finder or other intermediary in
connection with this sale, except for Commercial/Industrial Realty Company
("CIR"). Seller agrees to pay all commissions and any other sums due to CIR by
reason of this transaction.
19. NO OTHER REPRESENTATIONS. Buyer acknowledges that neither Seller nor
anyone acting, or purporting to act, on behalf of Seller, has, except as
expressly set forth in this Agreement, made any representation or warranty with
respect to the Property.
20. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns.
21. FIRPTA.
(a) Section 1445 of the Internal Revenue Code of 1986, as
amended (the "Code") provides that a transferee of a United States real property
interest must withhold tax if the transferor is a foreign person. To inform
Buyer that withholding of tax is not required upon the disposition by Seller of
a United States real property interest, the undersigned parties executing this
Agreement on behalf of Seller hereby certify the following on behalf of Seller:
(i) Seller is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Code and Income Tax Regulations);
(ii) Seller's U.S. employer identification number
is ________________; and
(iii) Seller's office address is:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Seller, and the parties executing this Agreement on behalf of Seller, understand
that this certification may be disclosed to the Internal Revenue Service by
Buyer and that any false statement made here could be punished by fine,
imprisonment, or
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both. Under penalties of perjury, the undersigned parties executing this
Agreement on behalf of Seller declare that they have examined this certification
and to the best of their knowledge and belief, it is true, correct and complete;
and they further declare that they have authority to sign this document on
behalf of Seller.
(b) Seller, and the parties executing this Agreement on behalf
of Seller, shall deliver to Buyer at Closing, a restatement of the above
certifications of Seller and of the parties executing this Agreement on behalf
of Seller.
21. NOTICES.
(a) All notices, demands, requests or other communications from
each party to the other required or permitted under the terms of this Agreement
shall be in writing and, unless and until otherwise specified in a written
notice by the party to whom notice is intended to be given, shall be sent to the
parties at the following respective addresses:
if intended for Buyer:
Plymouth Meeting Executive Campus
000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: 000-000-0000
if intended for Seller:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
FAX: 000-000-0000
Notices may be given on behalf of any party by its legal counsel.
(b) Each such notice, demand, request or other communication
shall be given (i) against a written receipt of delivery, or (ii) by registered
or certified mail of the United States Postal Service, return receipt requested,
postage prepaid, or (iii) by a nationally recognized overnight courier service
for next business day delivery, or (iv) via telecopier or facsimile
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transmission to the facsimile number listed above, provided, however, that if
such communication is given via telecopier or facsimile transmission, an
original counterpart of such communication shall concurrently be sent in either
the manner specified in clause (i) or (iii) above.
(c) Each such notice, demand, request or other communication
shall be deemed to have been given upon the earliest of (i) actual receipt or
refusal by the addressee if sent pursuant to Section (b)(i) or (b)(iv), or (ii)
deposit thereof at any main or branch United States post office if sent in
accordance with section (b)(ii) above or (iii) deposit thereof with the courier
if sent pursuant to section (b)(iii) above.
22. MISCELLANEOUS.
(a) CAPTIONS. The captions in this Agreement are inserted for
convenience of reference only; they form no part of this Agreement and shall not
affect its interpretation.
(b) ENTIRE AGREEMENT; GOVERNING LAW. This Agreement contains
the entire understanding of the parties with respect to the subject matter
hereof, supersedes all prior or other negotiations, representations,
understandings and agreements (including, without limitation, the letter of
intent between Seller and Buyer dated September 18, 1997) of, by or among the
parties, express or implied, oral or written, which are fully merged herein.
The express terms of this Agreement control and supersede any course of
performance and/or customary practice inconsistent with any such terms. Any
agreement hereafter made shall be ineffective to change, modify, discharge or
effect an abandonment of this Agreement unless such agreement is in writing and
signed by the party against whom enforcement of such change, modification,
discharge or abandonment is sought. This Agreement shall be governed by and
construed under the laws of the Commonwealth of Pennsylvania.
(c) PROVISIONS SEPARABLE. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other provision may be invalid or unenforceable in whole or in part.
(d) WAIVER OF TENDER OF DEED AND PURCHASE MONIES. The tender of
executed Deeds by Seller and the tender by Buyer
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of the Purchase Price are mutually waived, but nothing in this Agreement shall
be construed as a waiver of Seller's obligation to deliver the Deeds and/or of
the concurrent obligation of Buyer to pay the Purchase Price at Closing.
(e) GENDER, ETC. Words used in this Agreement, regardless of
the number and gender specifically used, shall be deemed and construed to
include any other number, singular or plural, and any other gender, masculine,
feminine or neuter, as the context indicates is appropriate.
(f) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall be binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected on this Agreement as the signatories.
(g) EXHIBITS. All Exhibits and Schedules attached to this
Agreement are incorporated by reference into and made a part of this Agreement.
(h) NO WAIVER. Neither the failure nor any delay on the part of
either party to this Agreement to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of any such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
(i) INTERPRETATION. No provision of this Agreement is to be
interpreted for or against either party because that party or that party's legal
representative or counsel drafted such provision.
(j) ATTORNEY'S FEES. In connection with any litigation arising
out of this Agreement, the prevailing party shall be entitled to recover all
costs incurred, including
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reasonable attorney's fees. However, the provisions of this Section are
expressly subject to the limitation on Buyer's liability specified in Section 3.
(k) BUYER'S EXERCISE OF RIGHT TO TERMINATE. If Buyer desires to
terminate this Agreement pursuant to any of the provisions of this Agreement,
Buyer shall do so by giving written notice of termination to Seller. Upon any
such termination, the Deposit shall be paid to Buyer (and each of Seller and
Buyer shall deliver written instructions to the Title Company to pay the Deposit
to Buyer); and except as otherwise expressly provided in this Agreement, this
Agreement shall be and become null and void and neither party shall have any
further rights or obligations under this Agreement.
(l) SURVIVAL. The representations, warranties and agreements of
Seller set forth in Sections 8 and 9 of this Agreement shall survive a
termination of this Agreement, or Closing for a period of 24 months, and
thereafter shall survive to the extent that Buyer shall have given to Seller
written notice of breach thereof. The obligations of Seller and Buyer pursuant
to Sections 7, 10, 17, 20, 21 and 22(j) this Agreement shall survive Closing.
Except as otherwise provided in the preceding two sentences of this Section
22(l), the agreements of Seller and Buyer set forth in this Agreement shall not
survive Closing and shall merge into the delivery of the Deed at Closing.
23. RIGHT OF FIRST REFUSAL.
(a) For the purpose of this Paragraph 23: the term "Sears
Parcel" shall mean all that certain tract of land which is described by metes
and bounds on Exhibit H hereto, situate in the township of Lower Swatara,
Dauphin County, Commonwealth of Pennsylvania containing 32.82 acres, and the
building located on the rear containing 507,000 square feet; and the term "Right
of First Refusal Term" shall mean the period of time commencing as of the
Closing Date, and terminating two years after the Closing Date.
(b) At Closing, Seller shall execute, acknowledge and deliver to
Buyer for recording, a separate right of first refusal agreement, prepared by
Buyer, acceptable to Seller (and Seller agrees that the right of first refusal
agreement shall be acceptable to it to the extent that its provisions are
substantially the same as those set forth below; and Seller
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further agrees to be reasonable in granting or withholding is acceptance to the
right of first refusal agreement), setting forth the following terms and
provisions:
(i) Seller shall not at any
time during the Right of First Refusal Term
sell or convey or agree to sell or convey
all or any portion of the Sears Parcel
without first having complied with the
requirements of this Agreement.
(ii) If Seller shall during the
Right of First Refusal Term desire to sell
or convey the Sears Parcel, Seller shall
obtain from a third party a bona fide,
arms-length written offer (the "Offer")
acceptable to Seller, to purchase the
Sears Parcel, and Seller shall submit a
written copy of the Offer to Buyer. Buyer
shall have fifteen (15) days from receipt
of said Offer in which to elect to meet
the monetary and all other purchase terms
of the Offer, except the time of Closing,
and purchase the Sears Parcel pursuant to
the monetary and all other purchase terms
of the Offer and this paragraph. If Buyer
elects to meet the Offer and purchase the
Sears Parcel pursuant to the terms of the
Offer, Buyer shall give to Seller written
notice thereof ("Acceptance Notice") within
said fifteen (15) day period and closing
shall be held within 90 days after the date
of the Acceptance Notice, whereupon Seller
shall convey the Sears Parcel to Buyer. At
closing, Seller shall deliver to Buyer a
special warranty deed, sufficient to convey
to Buyer fee simple title
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to the Sears Parcel free and clear of all
liens, restrictions and encumbrances, except
for those subject to which the Sears Parcel
was to have been conveyed to the party making
the Offer in accordance with the terms of the
Offer. Realty transfer tax shall be paid by
Buyer and Seller in the manner prescribed in
the Offer.
(iii) This right of first refusal
shall continue until such time as the Sears
Parcel shall have been sold by Seller to a
party making the Offer or the expiration of
the term of this right of first refusal.
In the event Buyer shall elect not to meet
any Offer, Seller may thereafter sell the
Sears Parcel only to the party making the
Offer and only strictly in accordance with
the terms of the Offer.
(iv) To prevent Seller from
defeating the rights of Buyer pursuant to
this Agreement, Seller agrees that Seller
will not during the term of this right of
first refusal accept an offer to purchase
less than all of the Sears Parcel or all or
any portion of the Sears Parcel together
with any other property.
(v) The rights and obligations
of Seller and Buyer pursuant to this
Agreement, shall be binding upon Seller,
and its successors and assigns, and shall
inure to the benefit of, Buyer, and Buyer's
successors and assigns.
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24. REPORTS. For the period of time commencing on the date of this
Agreement and continuing through the first anniversary of the Closing Date, and
without limitation of the other document production otherwise required of Seller
hereunder, Seller shall, from time to time, upon reasonable advance written
notice from Buyer, provide to Buyer and its representatives: (i) access to all
financial and other information pertaining to the period of Seller's ownership
and operation of the Property, which information is relevant and reasonably
necessary, in the opinion of Buyer's outside, third party accountants
("Accountants") to enable Buyer and its Accountants to prepare financial
statements in compliance with any and all of (a) Rule 3-05 or Rule 3-14 of
Regulation S-X of the Securities and Exchange Commission (the "Commission"), as
applicable to Buyer; (b) any other rule issued by the Commission and applicable
to Buyer; and (c) any registration statement, report or disclosure statement
filed with the Commission by, or on behalf of Buyer; and (ii) a representation
letter, in form specified by, or otherwise satisfactory to the Accountants,
signed by the individual(s) responsible for Seller's financial reporting, as
prescribed by generally accepted auditing standards promulgated by the Auditing
Standards Division of the American Institute of Certified Public Accountants,
which representation letter may be required by the Accountants in order to
render an opinion concerning Seller's financial statements.
IN WITNESS WHEREOF, intending to be legally bound, the parties have
executed this Agreement as a sealed instrument as of the day and year first
above written.
Witness: DOUBLE M DEVELOPMENT
a/k/a DOUBLE M DEVELOPMENT COMPANY
-------------------
By: /s/ Xxxx X. Xxxxxxxx
------------------- Xxxx X. Xxxxxxxx, Managing Partner
BUYER:
AMERICAN REAL ESTATE INVESTMENT,
L.P.
By: AMERICAN REAL ESTATE INVESTMENT
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CORPORATION - Its General Partner
By /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
President
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FIRST AMENDMENT TO AGREEMENT OF SALE AND PURCHASE
AIRPORT INDUSTRIAL PARK - I LAND
THIS FIRST AMENDMENT is made as of the 9th day of March, 1998, by and
between XXXX X. XXXXXXXX and XXXXXX X. GRASS, trading as DOUBLE M DEVELOPMENT
COMPANY, a partnership ("Seller") and AMERICAN REAL ESTATE INVESTMENT, L.P., a
Delaware limited partnership ("Buyer").
W I T N E S S E T H:
Seller and Buyer have entered into a certain Agreement of Sale and
Purchase dated as of the 31st day of January, 1998 (the "Agreement of Sale") for
the Airport Industrial Park - I Land (as defined in the Agreement of Sale)
together with the buildings and other improvements thereon.
Seller and Buyer desire to amend the Agreement of Sale to provide for
a deferral of the Closing Date.
Terms which have a defined meaning in the Agreement of Sale shall have
the same meaning when used in this First Amendment.
NOW, THEREFORE, Seller and Buyer, each intending legally to bound
hereby, agree as follows:
22. The second sentence of Section 4 of the Agreement of Sale is modified
to provide as follows:
Closing shall commence at 10:00 A.M. on Tuesday, March 31, 1998,
or on such prior date as shall be designated by at least three
(3) business days' prior written notice from Buyer to Seller
("Closing Date").
23. Except as modified by the terms and provisions of this First
Amendment, the Agreement of Sale shall remain in full force and effect in
accordance with its terms and provisions.
IN WITNESS WHEREOF, intending legally to be bound hereby, the parties
have executed this Agreement as a sealed instrument as of the day and year first
above written.
SELLER:
DOUBLE M DEVELOPMENT
a/k/a DOUBLE M DEVELOPMENT COMPANY
By: /s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx, Managing Partner
BUYER:
AMERICAN REAL ESTATE INVESTMENT,
L.P.
By: AMERICAN REAL ESTATE INVESTMENT
CORPORATION - Its General Partner
By:/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
President
