EXHIBIT 99.1
PURCHASE AND SALE AGREEMENT
SELLER:
AETNA LIFE INSURANCE COMPANY
C/O UBS REALTY INVESTORS LLC
000 XXXXXXXX XXXXXX, XXXXXXXX XX 00000
PURCHASER:
COPT ACQUISITIONS, INC.
0000 XXXXXX XXXX XXXXX
XXXXXXXX XX 00000
PROPERTY:
XXXXXXX XXXXXX
000, 000, 000, 000, 000 XXX 000 XXXXXXXX XXXXXXX XXXX
XXXXXXXXX, XXXXXXXX
FEBRUARY 28, 2001
INDEX
Page
1. The Property...............................................................1
1.1. Description.....................................................1
1.2 "As-Is" Purchase.................................................2
1.3 Agreement to Convey..............................................3
2. Price and Payment..........................................................3
2.1 Purchase Price...................................................3
2.2 Payment..........................................................3
2.3 Closing..........................................................4
2.4 Airport One Closing Condition....................................4
2.5 General Closing Condition........................................5
3. Inspections and Approvals..................................................5
3.1 Inspections......................................................5
3.2 Title and Survey.................................................6
3.3 Contracts........................................................7
3.4 Purchaser's Right to Terminate...................................7
3.5 Confidentiality..................................................8
4. Prior to Closing...........................................................8
4.1 Insurance........................................................8
4.2 Operation........................................................8
4.3 New Contracts....................................................8
4.4 New Leases.......................................................8
4.5 Certain Acknowledgments..........................................9
4.6 Tenant Estoppel Certificates.....................................9
5. Representations and Warranties.............................................9
5.1 By Seller........................................................9
5.2 By Purchaser....................................................11
5.3 Mutual..........................................................12
6. Costs and Prorations......................................................12
6.1 Purchaser's Costs...............................................12
6.2 Seller's Costs..................................................13
6.3 Prorations......................................................13
6.4 Mutual Indemnity................................................15
7. Damage, Destruction or Condemnation.......................................16
7.1 Material Event..................................................16
7.2 Immaterial Event................................................16
7.3 Termination and Return of Deposit...............................16
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8. Notices...................................................................16
9. Closing and Escrow........................................................17
9.1 Escrow Instructions.............................................17
9.2 Seller's Deliveries.............................................17
9.3 Purchaser's Deliveries..........................................18
9.4 Possession......................................................18
9.5 Insurance.......................................................18
9.6 Utility Service and Deposits....................................19
9.7 Notice Letters..................................................19
10. Default; Failure of Condition............................................19
10.1 Purchaser Default..............................................19
10.2 Seller Default.................................................19
10.3 Failure of Condition...........................................19
11. Miscellaneous............................................................20
11.1 Entire Agreement...............................................20
11.2 Severability...................................................20
11.3 Applicable Law.................................................20
11.4 Assignability..................................................20
11.5 Successors Bound...............................................21
11.6 Breach.........................................................21
11.7 No Public Disclosure...........................................21
11.8 Captions.......................................................21
11.9 Attorney's Fees................................................21
11.10 No Partnership................................................21
11.11 Time of Essence...............................................21
11.12 Counterparts..................................................22
11.13 Recordation...................................................22
11.14 Proper Execution..............................................22
11.15 Tax Protest...................................................22
11.16 Best Knowledge; Received Written Notice.......................22
11.17 Survival and Limitation of Representations and Warranties.....22
11.18 Time to Execute and Deliver...................................23
11.19 Limitation of Liability.......................................23
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LIST OF EXHIBITS
Exhibit 1.1.1 Legal Description
Exhibit 1.1.3 Personal Property
Exhibit 1.1.6 Rent Roll
Exhibit 2.4 Form of Arbros Tenant Estoppel Certificate
Exhibit 3.1.1 Form of Access Agreement
Exhibit 3.3 Schedule of Contracts
Exhibit 4.4 Existing Leases for Which Purchaser is Responsible for
Build-Out Costs and Commissions
Exhibit 5.1.7 Notices of Condemnation, Pending Lawsuits and Violations
of Laws
Exhibit 5.1.11 Schedule of Leasing Commissions or Brokerage Commissions
Exhibit 5.1.12 Notices of Violations of Environmental Law
Exhibit 9.2.1 Form of Assignment of Membership Interests
Exhibit 9.2.4 Form of FIRPTA Affidavit
Exhibit 9.2.5 Form of Corporate Authorization
Exhibit 9.2.6 Form of Incumbency Affidavit
Exhibit 9.3 ERISA Certificate
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Term Sheet
Purchaser: COPT ACQUISITIONS, INC.
Notice Address: 0000 XXXXXX XXXX XXXXX
XXXXXXXX, XXXXXXXX 00000
BALA XXXXXXX XX 00000-0000
ATTENTION: XXXX XXXXXX, ESQ.
PHONE: (000) 000-0000
FAX: (000) 000-0000
Seller: AETNA LIFE INSURANCE COMPANY
Notice Address: C/O UBS REALTY INVESTORS LLC
000 XXXXXXXX XXXXXX
XXXXXXXX XX 00000-0000
ATTENTION: XXXXX X. XXXXX
PHONE: (000) 000-0000
FAX: (000) 000-0000
Property: XXXXXXX XXXXXX
000, 000, 000, 000, 000 XXX 000 XXXXXXXX XXXXXXX XXXX
XXXXXXXXX, XXXXXXXX
Price: $44,250,000
Approval Date: MARCH 14, 2001
Closing Date: MARCH 15, 2001 (SUBJECT TO THE AGREEMENT OF THE PARTIES
TO USE THEIR BEST EFFORTS TO CLOSE BY MARCH 2, 2001, AND
SUBJECT TO THE LATER CLOSING DATE FOR AIRPORT I, ALL AS
PROVIDED IN SECTION 2)
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT") dated as of the 28th
day of February, 2001, is made by and between AETNA LIFE INSURANCE COMPANY, a
Connecticut corporation with an office c/o UBS Realty Investors LLC, 000
Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("SELLER") and COPT ACQUISITIONS,
INC., a Delaware corporation ("PURCHASER"), with an office 0000 Xxxxxx Xxxx
Xxxxx, Xxxxxxxx, Xxxxxxxx 00000.
R E C I T A L S :
Seller owns and/or controls the legal and beneficial interests in the
property commonly known 000 Xxxxxxxx Xxxxxxx Xxxx ("AIRPORT I PROPERTY"), 000
Xxxxxxxx Xxxxxxx Xxxx ("AIRPORT III PROPERTY"), 938 and 940 Elkridge Landing
Road ("AIRPORT VI AND VII PROPERTY"), 891 Elkridge Landing Road ("AIRPORT VIII
PROPERTY"), and 000 Xxxxxxxx Xxxxxxx Xxxx ("AIRPORT IX PROPERTY"), and in each
case certain related personal and intangible property. Seller desires to sell,
and Purchaser desires to purchase, the entire membership interests
(individually, an "INTEREST", and collectively, the "INTERESTS") in each of the
separate limited liability companies (individually, an "LLC", and collectively,
the "LLCS") owning the fee simple title to each of such properties as of the
date of sale.
NOW, THEREFORE, in consideration of the foregoing, of the covenants,
promises and undertakings set forth herein, and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Seller and Purchaser agree as follows:
1. THE PROPERTY.
1.1. DESCRIPTION. Subject to the terms and conditions of this Agreement,
and for the consideration herein set forth, Seller agrees to sell and transfer,
and Purchaser agrees to purchase and acquire, the Interests, and thereby to
acquire all of Seller's right, title, and interest in and to the following
(collectively, "PROPERTY"):
1.1.1. Certain land ("LAND") more specifically described in EXHIBIT
1.1.1 attached hereto;
1.1.2. The buildings, parking areas, improvements, and fixtures now
situated on the Land (the "IMPROVEMENTS");
1.1.3. All furniture, personal property, machinery, apparatus, and
equipment currently used in the operation, repair and maintenance of the
Land and Improvements and situated thereon (collectively, the "PERSONAL
PROPERTY"), generally described on EXHIBIT 1.1.3 attached hereto. The
Personal Property is subject to depletions, replacements and additions in
the ordinary course of business and subject to contractual and legal
transfer and use restrictions;
1.1.4. All easements, hereditaments, and appurtenances belonging to or
inuring to the benefit of the LLCs and pertaining to the Land, if any;
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1.1.5. Any street or road abutting the Land to the center lines
thereof;
1.1.6. All leases, licenses, or other rights of occupancy or grants or
claims of right, title or interest to possession of any portion of the
Property listed on the rent roll attached hereto as Exhibit 1.1.6 (the
"RENT ROLL"), and any new leases entered into pursuant to Section 4.4,
which as of the Closing (as hereinafter defined) affect all or any portion
of the Land or Improvements (collectively the "LEASES") and any security
deposits actually held directly or indirectly by any of the LLCs with
respect thereto as of the Closing (as hereinafter defined) with respect to
any such Leases;
1.1.7. Subject to Section 3.3, all contracts and agreements relating
to the operation, repair or maintenance of the Land, Improvements or
Personal Property the terms of which extend beyond midnight of the day
preceding the Date of Closing (as hereinafter defined);
1.1.8. The name "Airport Square" but only as it relates to the
Property;
1.1.9. Assignable warranties and guaranties issued in connection with
the Improvements or Personal Property; and
1.1.10. All transferable consents, authorizations, variances or
waivers, licenses, permits and approvals from any governmental or
quasi-governmental agency, department, board, commission, bureau or other
entity or instrumentality solely in respect of the Land, Improvements or
Personal Property (collectively, "APPROVALS").
1.2. "AS-IS" PURCHASE. Except as otherwise expressly provided in this
Agreement, the Interests, and indirectly thereby the Property, are being sold in
an "AS IS" condition and "WITH ALL FAULTS" as of the date of this Agreement and
as of the Closing. Except as expressly set forth in this Agreement, no
representations or warranties have been made or are made and no responsibility
has been or is assumed by Seller or by any partner, officer, person, firm, agent
or representative acting or purporting to act on behalf of Seller as to the
Interests, or the assets or liabilities of the LLCs, or the condition or repair
of the Property or the value, expense of operation, or income potential thereof
or as to any other fact or condition which has or might affect the Property or
the condition, repair, value, expense of operation or income potential of the
Property or any portion thereof. The parties agree that all understandings and
agreements heretofore made between them or their respective agents or
representatives are merged in this Agreement and the Exhibits hereto annexed,
which alone fully and completely express their agreement, and that this
Agreement will only be consummated by Purchaser after full investigation, and
entered into with the parties satisfied with the opportunity afforded for
investigation, neither party relying upon any statement or representation by the
other unless such statement or representation is specifically embodied in this
Agreement or the Exhibits annexed hereto. Except as otherwise expressly provided
in this Agreement, Seller makes no representations or warranties as to whether
the Property contains asbestos or harmful or toxic substances or pertaining to
the extent, location or nature of same. Further, to the extent that Seller has
provided or hereafter may provide to Purchaser information from any inspection,
engineering or environmental reports concerning asbestos or harmful or toxic
substances, Seller makes no representations or warranties with respect to the
accuracy or completeness, methodology of preparation or otherwise concerning the
contents of such reports except as
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expressly provided in this Agreement. Purchaser acknowledges that Seller has
requested Purchaser to inspect fully the Property and investigate all matters
relevant thereto, and to the Interests and the LLCs, and to rely solely upon the
results of Purchaser's own inspections and investigations or other information
obtained or otherwise available to Purchaser, rather than any information that
may have been provided by Seller to Purchaser. Purchaser waives and releases
Seller from any present or future claims arising from or relating to the
presence or alleged presence of asbestos or harmful or toxic substances in, on,
under or about the Property including, without limitation, any claims under or
on account of (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as the same may have been or may be amended from time to
time, and similar state statutes, and any regulations promulgated thereunder,
(ii) any other federal, state or local law, ordinance, rule or regulation, now
or hereafter in effect, that deals with or otherwise in any manner relates to,
environmental matters of any kind, or (iii) this Agreement or the common law,
provided, however, that if any third party unaffiliated with Purchaser
(including a governmental entity, but excluding any remote transferees of
Purchaser) shall file suit against Purchaser asserting an Environmental Claim
which is alleged to have arisen prior to the Date of Closing (hereinafter
defined), the foregoing waiver and release shall not preclude Purchaser from
joining or otherwise naming Seller as a party defendant in such action, but
provided further that in no event shall Purchaser assert on behalf of itself or
any affiliate any Environmental Claim against Seller in such an action or
otherwise. The terms and provisions of this paragraph shall survive Closing or
any termination of this Agreement.
1.3. AGREEMENT TO CONVEY. Seller agrees to assign and convey, and Purchaser
agrees to accept, the Interests by an Assignment of Membership Interests without
representation or warranty except as expressly provided herein.
2. PRICE AND PAYMENT.
2.1. PURCHASE PRICE. The purchase price for the Interests the LLCs owning
the Airport III Property, the Airport VI and VII Property, the Airport VIII
Property and the Airport IX Property (such LLCs, the "MAIN LLCS", such
properties, the "MAIN PROPERTIES", and such price, the "FIRST PURCHASE PRICE")
is Thirty-Two Million Nine Hundred Fifty Thousand Dollars ($32,950,000). The
purchase price for the Interest in the LLC owning the Airport I Property (such
LLC, the "AIRPORT I LLC", and such price, the "AIRPORT I PURCHASE PRICE") is
Eleven Million Three Hundred Thousand Dollars ($11,300,000).
2.2. PAYMENT. Payment of the Purchase Price is to be made in cash as
follows:
2.2.1 (a) Purchaser has made an xxxxxxx money deposit of Six Hundred
Sixty-Three Thousand Seven Hundred Fifty Dollars ($663,750) ("DEPOSIT")
prior to or contemporaneously with the execution of this Agreement. Four
Hundred Ninety-Four Thousand Two Hundred Fifty Dollars ($494,250) of the
Deposit ("MAIN DEPOSIT") is on account of the First Purchase Price, and the
balance of One Hundred Sixty-Nine Thousand Five Hundred Dollars ($169,500)
of the Deposit ("AIRPORT I DEPOSIT") is on account of the Airport I
Purchase Price.
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(b) The Deposit, as installments of same are paid, will be placed
and held in escrow by Xxxxx XxXxxxxx & Xxxxx, LLP ("ESCROW AGENT") in
an interest-bearing account at a mutually acceptable banking
institution. Any interest earned on the Deposit shall be considered as
part of the Deposit. Except as otherwise provided in this Agreement,
the Main Deposit will be applied to the First Purchase Price at the
First Closing (defined below), and the Airport I Deposit will be
applied to the Airport I Purchase Price at the Airport I Closing
(defined below).
2.2.2. At the First Closing, the Purchaser shall pay Seller the First
Purchase Price, inclusive of the Main Deposit and subject to adjustments as
provided herein, to a bank account designated by Seller via wire transfer
in immediately available funds. At the Airport I Closing, the Purchaser
shall pay Seller the Airport I Purchase Price, inclusive of the Airport I
Deposit and subject to adjustments as provided herein, to a bank account
designated by Seller via wire transfer in immediately available funds.
2.3. CLOSING. Payment of the First Purchase Price and the closing hereunder
of the sale of the entire Interest in each of the Main LLCs ("FIRST CLOSING")
will take place pursuant to an escrow closing on or before March 15, 2001
(provided that Purchaser and Seller agree to use their best efforts to cause the
First Closing to occur on or prior to March 2, 2001), at the offices of Anchor
Title Company, Hawthorne Executive Center, 00000 Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxx 00000 (the "TITLE COMPANY") at 10:00 a.m. local time or at
such other time and place as may be agreed upon in writing by Seller and
Purchaser (the aforesaid date, or such other agreed date, being referred to in
this Agreement as the "DATE OF FIRST CLOSING"). Payment of the Airport I
Purchase Price and the closing hereunder of the sale of the entire Interest in
the Airport I LLC ("AIRPORT I CLOSING", and such Interest, the "AIRPORT I
INTEREST") will take place pursuant to an escrow closing at the offices of the
Title Company at 10:00 a.m. local time on the fifteenth (15th) day following the
satisfaction of the Airport I Closing Condition (defined below) or at such other
time and place as may be agreed upon in writing by Seller and Purchaser (such
date, or such other agreed date, being referred to in this Agreement as the
"DATE OF AIRPORT I CLOSING").
2.4 AIRPORT ONE CLOSING CONDITION. It shall be a condition to the Airport I
Closing (the "AIRPORT I CLOSING CONDITION") that ARBROS Communications, Inc. (i)
shall have taken possession of, and be in operation in, the premises in the
Airport I Property which is leased to it and its parent under their Lease
Agreement with Airport 1 dated October 16, 2000 (the "ARBROS LEASE"), and (ii)
shall have delivered to Purchaser a tenant estoppel certificate satisfactory to
Purchaser in all respects and in its reasonable discretion, substantially in the
form of EXHIBIT 2.4 attached hereto, and specifically stating, howsoever
phrased, that the landlord under the lease has performed the obligations to have
been performed by it to date, including its construction obligations, and that
the premises are satisfactory to tenant in accordance with the terms of the
Arbros Lease. Seller agrees that it shall complete, or cause Airport I LLC to
complete, the Landlord's Work, and pay, or cause Airport I LLC to pay, the
allowances required to be paid by the landlord, in accordance with the terms of
Exhibit B of the Arbros Lease, and pay, or cause Airport I LLC to pay, any
leasing commission payable on account of the Arbros Lease. Seller further agrees
not cause or suffer the Airport I LLC to fail to perform its obligations under
the Arbros Lease so as to cause the failure of the Airport I Closing Condition;
provided, however, that Seller shall not be in default hereunder provided the
Airport I LLC, as landlord, performs in a good faith and commercially reasonable
manner. In the event that the
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Airport I Closing Condition has not been satisfied on or before July 15, 2001,
Purchaser shall have the right, by written notice (the "AIRPORT I TERMINATION
NOTICE") to Seller given on or before July 27, 2001, to terminate its obligation
to purchase the Airport I Interest and in such event the Airport I Deposit shall
be returned to Purchaser. If Purchaser fails to give an Airport I Termination
Notice on or before July 27, 2001, the Airport I Closing shall occur on July 31,
2001, and Seller shall have no obligation to Purchaser for any matter set forth
in any Arbros estoppel certificate or otherwise relating to the Arbros Lease.
2.5 GENERAL CLOSING CONDITION. It shall be a condition, for the benefit of
Purchaser, (i) to the First Closing that the Main LLCs shall own good and
marketable fee simple absolute title to the Main Properties (each of such LLCs
owning its respective portion thereof); and (ii) to the Airport I Closing that
Airport I LLC shall own good and marketable fee simple absolute title to the
Airport I Property.
3. INSPECTIONS AND APPROVALS.
3.1. INSPECTIONS.
3.1.1. Prior to execution of this Agreement, Purchaser received or had
access to the items and materials which Purchaser desired to receive and
review in connection with its due diligence investigations of the Property,
and was provided or afforded access to all such items and materials in the
possession or control of the property manager. Purchaser received
satisfactory assurances from the Department of Planning and Code
Enforcement, Xxxx Arundel County, Maryland, of recorded building code
violations with respect to the Property, and of the zoning applicable to
the Property.
3.1.2. Purchaser acknowledges and agrees that it has completed its due
diligence, that it has determined on such basis to proceed to purchase the
Property (subject, with respect to the Airport I Property, to the Airport I
Closing Condition), and that it there is no further due diligence period or
condition other than, with respect to the Airport I Property, the Airport I
Closing Condition. Nonetheless, Seller agrees to allow Purchaser or
Purchaser's agents or representatives reasonable further access to the
Property (during business hours) for purposes of further inspection of the
Property and review of the Leases, expenses and other matters that
Purchaser desires. Purchaser shall not conduct or allow any physically
intrusive testing of, on or under the Property without first obtaining
Seller's written consent, which consent shall not unreasonably be withheld,
as to the timing and scope of work to be performed and, upon request of
Seller, entering into an Access Agreement in the form attached hereto as
Exhibit 3.1.1. Purchaser's breach of the foregoing prohibition shall be a
material breach.
3.1.3. Purchaser agrees that, in making any non-intrusive physical or
environmental inspections of the Property, Purchaser or Purchaser's agents
have carried and will carry not less than One Million Dollars ($1,000,000)
comprehensive general liability insurance with contractual liability
endorsement which insures Purchaser's indemnity obligations hereunder, and,
upon request of Seller, will provide Seller with written evidence of same,
will not interfere with the activity of tenants or any persons occupying or
providing service at the Property, will not reveal to any third party other
than the Purchaser Parties (as defined in Section 3.5) and persons not
approved by Seller
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the results of its inspections, and will restore promptly any physical
damage caused by the inspections. Purchaser shall give Seller reasonable
prior notice of its intention to conduct any further inspections, and
Seller reserves the right to have a representative present. Purchaser
agrees to provide Seller with a copy of any inspection report upon Seller's
written request, which agreement shall survive Closing. Purchaser agrees
(which agreement shall survive Closing or termination of this Agreement) to
indemnify, defend, and hold Seller free and harmless from any loss, injury,
damage, claim, lien, cost or expense, including reasonable attorney's fees
and costs, arising out of a breach of the foregoing agreements by Purchaser
in connection with any previous or further inspection of the Property, or
otherwise from the exercise by Purchaser or its agents or representatives
of the right of access under this Section 3.1, including any access
previously afforded (collectively, "PURCHASER'S INDEMNITY OBLIGATIONS").
All inspections were and shall be at Purchaser's expense.
3.1.4. Except as expressly provided in this Agreement, Seller makes no
representations or warranties as to the truth, accuracy or completeness of
any materials, data or other information supplied to Purchaser in
connection with Purchaser's inspection of the Property (e.g., that such
materials are complete, accurate or the final version thereof, or that all
such materials are in Seller's possession). It is the parties' express
understanding and agreement that such materials were and are provided only
for Purchaser's convenience in having made its own examination and
determination to purchase the Interests, and, in doing so, Purchaser has
relied and shall rely exclusively on its own independent investigation and
evaluation of every aspect of the LLCs and the Property and not on any
materials supplied by Seller. Purchaser expressly disclaims reliance or any
intent to rely on any such materials provided to it by Seller in connection
with its inspection and agrees that it has relied and shall rely solely on
its own independently developed or verified information.
3.2. TITLE AND SURVEY.
3.2.1. Purchaser has, at its cost, obtained an as-built ALTA/ACSM
survey for the Land and Improvements or update of Seller's existing
as-built survey in accordance with ALTA/ACSM Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted by ALTA
and ACSM in 1999, including those Table A requirements as requested of the
surveyor by Purchaser (the "SURVEY").
3.2.2. Purchaser, at its cost, has ordered and received one or more
preliminary title reports and commitments for the Property issued by
Chicago Title Insurance Company (the "UNDERWRITING TITLE COMPANY"),
together with copies of all instruments and documents referred to therein
(the preliminary title report together with such other instruments are
herein collectively referred to as the "PTR").
3.2.3. Purchaser shall approve or disapprove in writing (any such
written disapproval, a "TITLE OBJECTION") any title or survey matter on or
before the Approval Date (defined in Section 3.4 below), subject to
Purchaser's right to order continuation searches up to and including the
Closing Date. The determination as to whether or not title or matters shown
by a survey are acceptable shall be in Purchaser's sole and absolute
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discretion. Purchaser's failure to timely disapprove title or matters shown
by a survey shall be deemed Purchaser's approval thereof.
3.2.4. If Purchaser disapproves a title or survey matter within the
time period set forth in Section 3.2.3 hereof, Seller shall have the right
but not (except as expressly provided in the following sentence) the
obligation, prior to the Approval Date, to agree in writing (such a
writing, a "TITLE RESPONSE") to remove, correct or otherwise cure any
disapproved items prior to the Closing, at Seller's sole cost and expense,
and, in such event, Seller shall cause the same to be accomplished prior to
the date of Closing. Notwithstanding the preceding sentence, Seller shall
in all events cause any mortgages, mechanics' liens, or judgment liens of a
definite or ascertainable amount which can be removed by the payment of
money to be removed at or prior to Closing, except for those liens,
easements and encumbrances appearing on the PTR which Purchaser fails
expressly to disapprove. Any matter which exists (whether or not shown on
the PTR or Survey, the accuracy of which, as between Seller and Purchaser,
shall be Purchaser's responsibility and risk) and which Purchaser does not
expressly disapprove shall be deemed a "PERMITTED ENCUMBRANCE". If Seller
does not agree in a Title Response to remove such disapproved items (other
than the matters which Seller must remove in accordance with the preceding
sentence), Purchaser's sole right shall be to terminate this Agreement at
the time and in the manner provided in Section 3.4 below, and if Purchaser
fails timely to give a Termination Notice as provided therein, Purchaser
shall be deemed to have waived Purchaser's objection to the disapproved
matters.
3.2.5 Any matter which is not a Permitted Encumbrance and of which
Purchaser, through a title update or otherwise becomes aware of prior to
Closing shall be governed by Section 10.3 hereof.
3.2.6 Seller agrees to pay any and all applicable charges, fees and
assessments due under any reciprocal easement agreement or covenant
affecting all or any portion of the Property which is due for the period
prior to Closing, and that any such charge, fee and assessment relating to
a period in which the Date of Closing occurs shall be prorated as provided
in Section 6.3.
3.3. CONTRACTS. On or before the Approval Date, Purchaser shall notify
Seller in writing if Purchaser elects to assume at Closing any of the service,
maintenance, supply or other contracts relating to the operation of the Property
which are identified on EXHIBIT 3.3 attached hereto. If Purchaser does not
exercise its right to terminate this Agreement on or before the Approval Date,
Seller shall give notice of termination of the contract(s) which Purchaser does
not elect to assume. Seller shall be responsible for terminating at Seller's
expense the duties of its leasing agent, and any on-site duties of its
management company.
3.4. PURCHASER'S RIGHT TO TERMINATE. If Purchaser issues a Title Objection
and Purchaser and Seller fail to enter into a Title Response, Purchaser shall
have the right by giving Seller written notice ("TERMINATION Notice") on or
before March 14, 2001 ("APPROVAL DATE") to terminate its obligation to purchase
the Interests and in such event the deposit shall be returned to Purchaser.
If the Termination Notice is timely given, Seller shall direct the Escrow Agent
promptly to return the Deposit to Purchaser, and neither party shall have any
further liability hereunder except for Purchaser's Indemnity Obligations set
forth in Section 3.1.2 hereof.
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3.5. Confidentiality. Unless Seller specifically and expressly otherwise
agrees in writing, Purchaser agrees that all information regarding the
Interests, the LLCs and the Property of whatsoever nature made available to it
by Seller or Seller's agents or representatives ("PROPRIETARY INFORMATION") is
confidential and shall not be disclosed to any other person except those
assisting Purchaser with the transaction, or Purchaser's lender, if any
(collectively, the "PURCHASER PARTIES") and then only upon Purchaser making such
person aware of the confidentiality restriction and procuring such person's
agreement to be bound thereby. In the event the purchase and sale contemplated
hereby fails to close for any reason whatsoever, Purchaser agrees to return to
Seller, or cause to be returned to Seller all Proprietary Information. Further,
Purchaser agrees not to use or allow to be used any Proprietary Information for
any purpose other than to determine whether to proceed with the contemplated
purchase, or if same is consummated, in connection with the operation of the
Property post-Closing. Notwithstanding any other term of this Agreement, the
provisions of this Section 3.5 shall survive Closing and any termination of this
Agreement.
4. PRIOR TO CLOSING.
Until the First Closing with respect to the Main Properties, and until the
Airport I Closing with respect to the Airport I Property, Seller shall cause
each of the Main LLCs or the Airport I LLC, as the case may be, itself or
through its property management company, to:
4.1. INSURANCE. Keep the Property insured against fire and other hazards
covered by extended coverage endorsement and comprehensive public liability
insurance against claims for bodily injury, death and property damage occurring
in, on or about the Property.
4.2. OPERATION. Operate and maintain the Property in a businesslike manner
and substantially in accordance with each owner's past practices with respect to
the Property, and make any and all repairs and replacements reasonably required
so that at Closing (hereinafter defined) the Property is in its present
condition, normal wear and tear excepted, provided that in the event of any loss
or damage to the Property as described in Section 7, Seller shall have an
obligation to Purchaser to cause the repair the Property only if Seller so
elects and then shall be obligated only to the extent of available insurance
proceeds.
4.3. NEW CONTRACTS. Enter into only those third party contracts which are
necessary to carry out its obligations under Section 4.2 and which shall be
cancelable on thirty (30) days written notice. Prior to the execution of any
such contract, Seller shall promptly provide written notice thereof to Purchaser
and unless Purchaser, within seven (7) days thereafter, notifies Seller in
writing of its intention to assume such contract, it shall be treated as a
contract disapproved by Purchaser under Section 3.3 hereof.
4.4. NEW LEASES. Continue its present rental program and efforts at the
Property to rent vacant space, provided that Seller will not approve the
execution of any new leases or tenant improvement contracts or amendment,
termination or acceptance of the surrender of any existing tenancies or approve
any subleases without the prior consent of Purchaser, which consent shall not be
unreasonably withheld, conditioned or delayed, except that the Seller is
authorized to accept the termination of leases at the end of their existing
terms. Failure of Purchaser to consent or expressly withhold its consent stating
with specificity the basis of its objection within five (5) business days after
written request for such consent shall be deemed to
8
constitute consent. In the event that any leases recently entered into and not
considered by Purchaser in determining the price to be paid for the Property are
identified on EXHIBIT 4.4 hereto, or that any new lease is executed after the
date of this Agreement with Purchaser's approval, and in either event such lease
requires the construction of tenant fixtures or improvements or the payment of
leasing or brokerage commission(s) at the expense of the landlord, Purchaser
agrees to assume the obligation to pay and/or at Closing to reimburse Seller for
the paid portion of Purchaser's share of the cost of such improvements and
leasing or brokerage commission(s) unless Seller and Purchaser expressly agree
in writing that Seller shall be responsible for any such costs. The
determination of Seller's and Purchaser's share of such costs shall be based
upon the respective portions of the fixed or base rents and additional rents
payable during the applicable term of any such Lease which shall be attributable
to the time periods before and after Closing (for example, the applicable term
of a new Lease would be the initial term, while the applicable term of a lease
renewal would be the exercised renewal term). The provisions of this section
with respect to payment of costs shall survive Closing.
4.5. CERTAIN ACKNOWLEDGMENTS. Each of Purchaser and Seller shall pay
one-half (1/2) of any recordation or transfer tax, however identified or
designated, now or hereafter owing in connection with the consummation of the
transactions described herein, including any such taxes asserted against Seller
or any affiliate of Seller in connection with any transfer or recording made
prior to the Closing in order to permit Purchaser to purchase the fee simple
interest in each of the Airport I Property, Airport III Property, Airport VI and
VII Property, Airport VIII Property and Airport IX Property in a separate LLC.
Seller shall provide to Purchaser copies of any documents to be recorded in
consummating the transactions described herein prior to the date of recordation
thereof, and the parties shall consult with one another regarding such
documents. The parties shall also consult with one another and cooperate in the
determination and payment of any such taxes.
4.6 TENANT ESTOPPEL CERTIFICATEs. Subject to satisfaction of the Airport I
Closing Condition, Purchaser acknowledges that it and its lender have received
such tenant estoppels and other agreements and assurances from tenants as it
requires, and there is no condition other than the Airport I Closing Condition
relating to tenant estoppels or such other agreements or assurances.
5. REPRESENTATIONS AND WARRANTIES.
5.1. BY SELLEr. Seller represents and warrants to Purchaser that as of the
date hereof:
5.1.1. Each of the Main LLCs is, or shall be prior to the Date of
First Closing, and the Airport I LLC is, or shall be prior to the Date of
Airport I Closing, duly organized, validly existing and in good standing
under the laws of the State of Delaware, and authorized to do business in
the State of Maryland.
5.1.2. Seller is duly organized, validly existing and in good standing
under the laws of the State of Connecticut, has duly authorized the
execution and performance of this Agreement, and such execution and
performance will not violate any material term of its certificate of
incorporation or by-laws. This Agreement is a valid and
9
legally binding obligation of Seller and is enforceable against Seller in
accordance with its terms.
5.1.3 Subject to Section 11.20, Seller is the owner of each of the
Interests free of any encumbrances.
5.1.4 A true and complete copy of the Articles of Organization and
Operating Agreement of each LLC, along with all amendments thereto and
modifications thereof, has been or promptly following execution of this
Agreement will be delivered to Purchaser, and the same are or will be prior
the Date of First Closing in full force and effect.
5.1.5 Each LLC has or will by the date of the applicable Closing have
the necessary internal authority to carry on its business as it is then
being conducted and to own, maintain, lease and operate its portion of the
Property. No LLC has engaged in any business other than the ownership,
maintenance, leasing and operation of the Property. No LLC has any direct
or indirect ownership interest in any other real or personal property,
firm, corporation, joint venture, partnership, business entity or other
enterprise and neither owns, leases nor has any tangible property other
than the Property
5.1.6 The LLCs have no employees.
5.1.7 Neither Seller, for itself and as sole member of each of the
LLCs, nor the LLCs (a) have received notice (by notice specific to Seller,
the LLC or the Property, as opposed to in newspapers or other general
notice) of any pending condemnation or eminent domain proceedings with
regard to any part of the Property, and to Seller's actual knowledge, no
such proceedings are proposed, and/or (b) have received notice (by notice
specific to Seller, the LLC, or the Property, as opposed to in newspapers
or other general notice) of any pending claims, lawsuits or proceedings,
and to the Seller's actual knowledge, there are no claims, lawsuits or
proceedings pending or threatened against or relating to the Property, to
Seller, or to the LLCs in connection with the Property, the ownership of
the Property by the LLCs, or the Interest of Seller in and to the LLCs,
and/or (c) have received any uncured notice of any violation of any
applicable requirement of Federal, State or local law, rule or ordinance,
or any applicable requirements of governmental bodies or agencies having
jurisdiction over the Property in connection with the Property and the
operation and use of the Property, in each instance except as set forth on
Exhibit 5.1.7.
5.1.8 To Seller's knowledge, each LLC has paid or shall pay all Taxes
(as defined herein) due and payable and required to be paid by it to any
governing authority, and has timely filed all requisite returns or other
reportings in connection with such Taxes to each applicable governmental
authority. "Taxes" shall mean any and all taxes (including, without
limitation, income, receipts, franchise, ad valorem or excise taxes,
transfer or gains taxes or fees, use taxes, withholding, payroll or minimum
taxes (other than any real or personal property taxes) imposed on, or
otherwise payable by, or for which responsibility for payment, withholding
or collection lies with the LLC, by any governmental authority, federal,
state or other.
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5.1.9 The rent roll attached as Exhibit 1.1.6 is true and correct as
of its date.
5.1.10 Seller has not entered into any currently effective or
prospectively effective contract in connection with the maintenance, repair
or operation of the Property or Improvements other than as set forth on
EXHIBIT 3.3.
5.1.11 Except with respect to the GSA Leasing Commission (as described
and defined in Section 6 below), no brokerage, leasing commission or other
compensation is now, or will at Closing, or thereafter be due or payable to
any person, firm, corporation or other entity with respect to or on account
of any of the Leases or extensions or renewals thereof or premises
expansions thereunder other than as listed specifically on EXHIBIT 5.1.11
attached hereto.
5.1.12 Except as set forth on EXHIBIT 5.1.12 attached hereto, or as
set forth in any environmental site assessment or other report delivered to
or made available to Purchaser, Seller has no actual knowledge that the
Property or any portion thereof is in violation of any environmental law.
5.1.13 Other than as set forth in this Agreement, there are no
currently or prospectively effective agreements, options, rights of first
refusal to purchase, right of first offer to purchase, or conditional sales
agreement regarding to purchase and sale of the Property.
5.1.14 The documents delivered to Purchaser by Seller, to Seller's
actual knowledge, are true copies of documents used and relied upon by
Seller in connection with its ownership of and the operation of the
Property.
5.2. BY PURCHASER. Purchaser represents and warrants to Seller that:
5.2.1. Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of Delaware, is authorized to do business
in the State of Maryland, has duly authorized the execution and performance
of this Agreement, and such execution and performance will not violate any
material term of any of its constitutive documents.
5.2.2. This Agreement is the valid and legally binding obligation of
Purchaser, and in the event of an assignment pursuant to Section 11.4
below, will be the valid and legally binding obligation of the assignee,
enforceable against Purchaser and any such assignee in accordance with its
terms.
5.2.3. No petition in bankruptcy (voluntary or otherwise), assignment
for the benefit of creditors, or petition seeking reorganization or
arrangement or other action under Federal or State bankruptcy laws is
pending against or contemplated by Purchaser.
5.2.4. Purchaser has inspected the Property fully and completely at
its expense and has ascertained to its satisfaction the extent to which the
Property complies
11
with applicable zoning, building, environmental, health and safety and all
other laws, codes and regulations.
5.2.5. Purchaser has reviewed the Leases, contracts, expenses and
other matters relating to the Property and, based upon its own
investigations, inspections, tests and studies, has determined to purchase
the Interests and thereby to assume the leases, contracts and other
obligations with respect to the Property.
5.2.6. Unless otherwise disclosed to Seller in writing, neither
Purchaser nor any affiliate of or principal in Purchaser is other than a
citizen of, or partnership, corporation or other form of legal person
domesticated in the United States of America.
5.2.7. Purchaser will not use the assets of an employee benefit plan
as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") and covered under Title I, Part 4 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended, in the
performance or discharge of its obligations hereunder, including the
acquisition of the Property. Purchaser shall not assign its interest
hereunder to any person or entity which does not expressly make this
covenant and warranty for the benefit of Seller.
5.3. MUTUAL. Each of Seller and Purchaser represents to the other that it
has had no dealings, negotiations, or consultations with any broker,
representative, employee, agent or other intermediary except Colliers Xxxxxxx in
connection with the Agreement or the sale of the Interests. Seller and Purchaser
agree that each will indemnify, defend and hold the other free and harmless from
the claims of any other broker(s), representative(s), employee(s), agent(s) or
other intermediary(ies) claiming to have represented Seller or Purchaser,
respectively, or otherwise to be entitled to compensation in connection with
this Agreement or in connection with the sale of the Interests.
6. COSTS AND PRORATIONS.
6.1. PURCHASER'S COSTS. Purchaser will pay the following costs of closing
this transaction:
6.1.1. The fees and disbursements of its counsel, inspecting architect
and engineer, if any;
6.1.2. One-half (1/2) of any escrow fees;
6.1.3. If Purchaser elects to obtain replacements for or update the
existing owner's title insurance policies for the Property, the cost
thereof;
6.1.4. The cost of the Survey;
6.1.5. Any recording fees; and
6.1.6. Any other expense(s) incurred by Purchaser or its
representative(s) in inspecting or evaluating the Property or closing this
transaction.
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In addition, if any transfer tax is incurred as described in Section 4.5
above, Purchaser shall have paid one half (1/2) thereof.
6.2. SELLER'S COSTS. Seller will pay:
6.2.1. One-half (1/2) of any escrow fees; and
6.2.2. The broker's fee related to this transaction to the extent any
such fee is payable pursuant to Seller's separate agreement with Colliers
Xxxxxxx.
In addition, if any transfer tax is incurred as described in Section 4.5
above, Seller shall have paid one half (1/2) thereof.
In addition, Seller shall retain the obligation to pay, and agrees to
indemnify and hold Purchaser harmless from any loss, damage, claim, action,
cost or expense, including attorneys' fees, arising from Seller's
non-payment of, any leasing commission due under the leasing commission
agreement as and when such becomes due and payable, with respect to the
lease to The United States of America of space in 000 Xxxxxxxx Xxxxxxx
Xxxx, as such leasing commission agreement is in effect as of the date of
this Agreement and as such lease may be renewed on an annual basis to April
30, 2010 as presently provided in such lease. Seller shall not be liable
for any new, increased or changed commission resulting from subsequent
changes thereto. This provision shall survive Closing.
6.3 PRORATIONS. For purposes of calculating prorations and adjustments, the
Purchaser shall be deemed to be the owner of the Property, and therefore
entitled to the income therefrom and responsible for the expenses thereof for
the entire day upon which the "CLOSING" (such term referring to the First
Closing with respect to prorations relating thereto or when used in relation to
such closing, and to the Airport I Closing with respect to prorations related
thereto or when used in relation to such closing) occurs. All prorations shall
be made on the basis of the actual number of days of the month which shall have
elapsed as of the "DATE OF CLOSING" (such term meaning and referring to the Date
of First Closing with respect to matters relating to such Closing, and to the
Date of Airport I Closing with respect to matters relating to such Closing) and
based upon the actual number of days in the month and a 365-day year. The
following shall be prorated and adjusted between Seller and Purchaser as of the
Date of Closing, except as otherwise specified:
6.3.1 general real estate, personal property and ad valorem taxes and
assessments, front foot benefit charges and any improvement or other bonds
encumbering the Property for the current tax year. The foregoing items
shall be assumed and paid by Purchaser for periods commencing with the Date
of Closing.
6.3.2 utility charges, including but not limited to gas, electric,
public telephone or telephone charges related to security, elevator or fire
protection systems serving the Property, and water and sewer charges.
Seller shall use reasonable efforts to obtain meter readings and bills and
charges to and including the day prior to the Date of Closing. If the
actual amounts to be prorated under this subsection are not known as of the
Date of Closing or cannot be conclusively determined, the proration shall
be
13
estimated at Closing on the basis of the most recently issued invoices for
same and shall be readjusted within sixty (60) days after the Date of
Closing. Seller and Purchaser agree to cooperate fully to complete all
post-closing reconciliations and adjustments. Seller shall obtain the
refund of any existing utility deposits, Purchaser agreeing to cooperate in
connection therewith at no expense to Purchaser, and Purchaser shall make
its own arrangements with utility companies from and after Closing.
6.3.3 To the extent practicable, Seller shall pay prior to the Closing
the amount of any liabilities pursuant to the Contracts and shall provide
at Closing satisfactory evidence of payment; provided, however, if
Purchaser has elected to assume any the obligations of any Contract(s)
pursuant to Section 4.4 hereof, then Seller shall pay prior to Closing (if
the same has become payable or has been billed or invoiced) the amount of
liabilities under such Contract(s) for the billing period which shall
include the Date of Closing and such invoice shall be adjusted accordingly
between Seller and Purchaser (Purchaser being responsible for the period
commencing with the Date of Closing). Any item not paid to and including
the day prior to the Date of Closing shall be prorated at Closing. If the
actual amounts to be prorated under this subsection are not known as of the
Date of Closing or cannot be conclusively determined, the proration shall
be estimated at Closing on the basis of the most recently issued invoices
for same and shall be readjusted within sixty (60) days after the date of
Closing. Seller and Purchaser agree to cooperate fully to complete all
post-closing reconciliations and adjustments
6.3.4 rent, additional rent, tenant improvement loans or
reimbursements, and all other charges under the Leases (herein collectively
"RENTS") other than Delinquencies (as hereafter defined). Notwithstanding
any terms of this Agreement to the contrary, Rents that are past due as of
the Date of Closing ("DELINQUENCIES") shall not be prorated. Amounts
collected from tenants who are obligors on Delinquencies by the Purchaser
after Closing shall be applied (i) first, to Rents then most recently due
from the subject tenant; (ii) second, to Rents attributable to any period
after the Date of Closing which are past due on the date of receipt; (iii)
third, and finally, to Delinquencies as of the Date of Closing (Purchaser
shall promptly remit such amounts to Seller by the 15th day of each
calendar month from and after the Date of Closing). Purchaser shall use
commercially reasonable efforts from and after the Date of Closing for the
collection of Delinquencies, but shall have no obligation to file suit
therefor. Seller retains its rights and remedies with respect to
Delinquencies, except that Seller shall not be entitled to terminate any
Lease or evict any tenant. Further, Seller shall promptly endorse over to
and remit to Purchaser by the 15th day of each calendar month after the
Date of Closing all payments of rent, additional rent or other charges
received under the Leases after the Date of Closing to be adjusted in
accordance with the terms of this subsection.
6.3.5 the amount of all unapplied security deposits under the Leases
shall be credited to Purchaser and all security deposits in the form of
letters of credit (if any) shall be endorsed over and delivered to
Purchaser by Seller.
6.3.6 all prepaid rents, pre-paid additional rents and other charges
prepaid and received by Seller ("PREPAID RENTS") whether for operating
expenses, insurance, common area expenses, or real estate taxes under any
Lease for the operating year in which the Closing shall occur shall be
credited to Purchaser at Closing. Seller
14
shall have completed its expense reconciliations for the calendar year 1999
and 2000 (if 2000 reconciliations are not completed by the Date of Closing,
Seller shall cause same to be completed as expeditiously as possible
thereafter, and, to the extent of any required record or information having
been turned over the Purchaser, Purchaser shall cooperate in such regard)
and the real estate tax year commencing July 1, 2000 and expiring June 30,
2001, and Purchaser shall invoice any under payments or refund payments
applicable thereto, as the case may be, to each tenant in accordance with
(but only to the extent in accordance with) the terms of each tenant's
respective Lease. With respect to year-end reconciliations of reimbursable
expenses under the Leases attributable to the calendar year 2001, Purchaser
shall complete such reconciliations, and to that end Seller shall promptly
deliver to Purchaser as soon as practicable following Closing a complete
general ledger statement for the period commencing January 1, 2001 through
the Date of Closing. Seller shall be responsible for the amounts due and
owing to tenants under the Leases, and entitled to amounts payable to the
tenants under the Leases (as the case may be) with respect to periods prior
to the Date of Closing. Purchaser shall be responsible for amounts due and
owing to tenants under the Leases, and entitled to amounts payable to
tenants under the Leases (as the case may be) with respect to periods from
and after the Date of Closing. With respect to any such amounts payable to
Seller, Purchaser agrees to use commercially reasonable efforts to collect
such amounts from tenants and promptly upon collection to remit the amount
thereof to Seller.
6.3.7 in no event will there by any proration of insurance premiums
under Seller's existing policies of insurance relating to the Property.
6.3.8 unless otherwise specifically provided herein, such other items
that are customarily prorated in transactions of this nature shall be
ratably prorated and adjusted between Purchaser and Seller.
The terms of this Section 6.3 shall survive Closing.
6.4 MUTUAL INDEMNITY. Except as expressly provided herein, the purpose and
intent as to the provisions of this Agreement relating to prorations,
adjustments and apportionments is that Seller shall bear all expenses of
ownership and operation of the LLCs and Property and shall receive all income
therefrom accruing through midnight at the end of the day preceding the Closing
and Purchaser shall bear all such expenses and receive all such income accruing
thereafter. In furtherance thereof, the parties agree that the conveyance of the
Interests hereunder will not discharge or relieve Seller, except as otherwise
provided in this Agreement or to the extent that proration or adjustment credit
is provided to Purchaser (to the extent of such credit) under this Agreement
with respect to any item, from any liability or obligation, known or unknown,
contingent or non-contingent, arising out of or related to Seller's ownership of
each Interest prior to Date of Closing. Seller agrees to indemnify and hold
Purchaser harmless from and against such non-discharged and non-released
non-tort liabilities, subject, however, to the aggregate cap on liabilities and
limitation of time set forth in Section 11.17 hereof, and further subject to a
"deductible" such that Purchaser shall have no claim hereunder unless the amount
resulting from the matter or matters exceeds an aggregate of $25,000. In the
event Purchaser is named as a defendant in any cause of action for a tort
alleged to have occurred at the Property prior to such Date of Closing, Seller
shall indemnify and hold Purchaser harmless from any liability, cost or expense
arising from such action; provided, however, that such indemnity and
15
agreement to hold harmless shall be limited to the extent to which Seller is
insured against the underlying occurrence, and shall be further limited by the
aggregate cap on liabilities and limitation of time as set forth in Section
11.17 hereof and the $25,000 "deductible" set forth in the preceding sentence.
Purchaser shall indemnify and hold Seller harmless from and against all
liability, claim of liability or expense arising out of any claims hereafter
brought against Seller in its capacity of a member or former member in the LLC
of which it was a member, on account of any act, omission or obligation of the
LLC arising on or after the Date of Closing, or arising prior to the Date of
Closing to the extent (with respect to pre-Closing matters), and only to the
extent, that under the terms of this Agreement such act, omission or obligation
is or has been assumed by Purchaser to the extent, and only to the extent, that
Purchaser, upon Closing, receives proration or adjustment credit, and then only
to the extent of such credit, with respect to the obligation of the LLC at
issue.
7. DAMAGE, DESTRUCTION OR CONDEMNATION.
7.1 MATERIAL EVENT. If, prior to Closing, there is damage to or destruction
of the building(s) on the Property which is reasonably estimated to cost
$500,000 or more to repair or restore, or there is a taking of parking spaces on
the Property such as to render the relevant parcel of the Property no longer
operable for its present use, or there is a taking of all access to any parcel
of the Property, Purchaser may elect to terminate this Agreement by giving
written notice of its election to Seller within fourteen (14) days after
receiving notice of such destruction or taking. If such event occurs prior to
the First Closing, such termination will be of the entire Agreement (subject to
express provisions for survival of certain obligations), and if such event
occurs thereafter, of the Agreement as it relates to the Airport I Property. If
Purchaser does not give such written notice within such fourteen (14) day
period, this transaction shall be consummated on the date and at the applicable
Purchase Price provided for in Section 2, and Seller will assign to Purchaser
the physical damage proceeds of any insurance policy(ies) payable to Seller, or
Seller's portion of any condemnation award, in both cases, up to the amount of
the applicable Purchase Price, and, if an insured casualty, pay to Purchaser the
amount of any deductible but not to exceed the amount of the loss.
7.2 IMMATERIAL EVENT. If, prior to Closing, there is a casualty occurrence
or taking under power of eminent domain and Section 7.1 does not apply,
Purchaser shall close this transaction on the date and at the Purchase Price
agreed upon in Section 2, and Purchaser shall receive and retain the physical
damage proceeds of any insurance policies payable to the LLC which is the owner
of the affected portion of the Property, or its portion of any condemnation
award, in both cases, up to the amount of the applicable Purchase Price. If the
event is an insured casualty, Seller shall pay to Purchaser the amount of any
deductible but not to exceed the amount of the loss.
7.3 TERMINATION AND RETURN OF DEPOSIT. If either party elects to terminate
this Agreement pursuant to this Section 7, and if Purchaser is not, on the date
of such election, in default of its obligation to have closed under the
Agreement, Seller shall promptly direct the Title Company to return the Deposit
to Purchaser.
8. NOTICES. Any notice required or permitted to be given hereunder shall be
deemed to be given when hand delivered or one (1) business day after pickup by
Xxxxx Air Freight, Airborne, Federal Express, or similar overnight express
service, or when delivered by facsimile
16
transmission with written acknowledgment of receipt, in any case addressed to
the parties at their respective addresses referenced below:
If to Seller: c/o UBS Realty Investors LLC
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxx XxXxxxxx & Xxxxx, LLP
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Purchaser: COPT Acquisitions, Inc.
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
or, in each case, to such other address as either party may from time to time
designate by giving notice in writing to the other party. Telephone numbers are
for informational purposes only. Effective notice will be deemed given only as
provided above.
9. CLOSING AND ESCROW.
9.1. ESCROW INSTRUCTIONS. Upon execution of this Agreement, the parties
shall deliver an executed counterpart of this Agreement to the Title Company to
serve as the instructions to the Title Company as the escrow holder for
consummation of the transaction contemplated herein. Seller and Purchaser agree
to execute such additional and supplementary escrow instructions as may be
appropriate to enable the Title Company to comply with the terms of this
Agreement, provided, however that in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall prevail.
9.2. SELLER'S DELIVERIES. For each of the First Closing and the Airport I
Closing, Seller shall deliver either at the Closing or by making available at
the Property, as appropriate, the following original documents for such Closing,
each executed and, if required, acknowledged:
17
9.2.1. An Assignment of Membership Interests, in the form attached
hereto as EXHIBIt 9.2.1.
9.2.2. Copies of all contracts relating to the Property which
Purchaser has elected to assume or which are not terminable by Seller on or
before the Date of Closing;
9.2.3. All books and records at the Property held by or for the
account of the LLCs, including without limitation, plans and specifications
and lease applications, as available, and such books and records of the
LLCs maintained by Seller as Seller is not required to retain (in such
event, Seller shall afford Purchaser with the ability to make copies of any
retained books and records excepting only valuations of the Property and
any other proprietary materials of Seller).
9.2.4. An affidavit pursuant to the Foreign Investment and Real
Property Tax Act in the form attached hereto as EXHIBIT 9.2.4.
9.2.5. A corporate authorization in the form attached hereto as
EXHIBIT 9.2.5.
9.2.6. An incumbency affidavit in the form attached hereto as EXHIBIT
9.2.6.
9.2.7. The Rent Schedule prepared pursuant to Section 6.3 hereof.
9.2.8 Provided that the form thereof has been delivered to Seller at
least ten (10) days prior to the Date of Closing, and the same has been
approved by Seller's counsel (which approval shall not unreasonably be
withheld, it being agreed that it shall not be unreasonable to withhold
approval of any proposed form requiring individual liability for the
signatory thereto, or making the indemnitor liable for errors of, or lack
of reasonable care by, the Underwriting Title Company or the Title
Company), Seller shall execute and deliver such affidavits and indemnities
as the Underwriting Title Company shall reasonably require to enable
Purchaser to obtain non-imputation coverages to such title insurance as
Purchaser shall elect to purchase at Closing.
9.3. PURCHASER'S DELIVERIES. At the Closing, Purchaser shall (i) pay Seller
the First Purchase Price or the Airport I Purchase Price, as the case may be;
and (ii) execute and deliver to Seller the agreements referred to in Sections
9.2.1 and the ERISA certificate attached hereto as EXHIBIT 9.3.
9.4. POSSESSION. Purchaser shall be entitled to possession of the Main
Properties or the Airport I Property, upon conclusion of the First Closing or
the Airport I Closing, respectively.
9.5. INSURANCE. Seller may terminate any policies of insurance relating to
the Main LLCs or the Main Property, or the Airport I LLC or the Airport I
Property, as the case may be. as of noon on the applicable Date of Closing and
Purchaser shall be responsible for obtaining its own insurance thereafter.
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9.6. UTILITY SERVICE AND DEPOSITS. Seller shall be entitled to a credit in
the amount of any deposit(s) posted by it with any utility company.
9.7. NOTICE LETTERS. At or subsequent to Closing, Seller shall execute and
deliver to Purchaser copies of a letter to accompany and direct compliance with
a notification by Purchaser to tenants of the applicable Property, and/or
contractors and utility companies serving such Property, advising them of the
sale of the applicable Interests to Purchaser and directing to Purchaser all
rents and all bills for the services provided to such Property on and after the
Date of Closing.
10. DEFAULT; FAILURE OF CONDITION.
10.1. PURCHASER DEFAULT. If Purchaser shall become in breach of or default
under this Agreement and the breach or default continues beyond the expiration
of the cure period, if any, provided in Section 11.6 hereof, the Seller's sole
remedy shall be to retain the "DEPOSIT" (prior to the First Closing, such term
referring both to the Main Deposit and the Airport I Deposit, and thereafter to
the Airport I Deposit) as liquidated damages, and both parties shall be relieved
of and released from any further liability hereunder except for Purchaser's
Indemnity Obligations set forth in Section 3.1.2 hereof and confidentiality
obligations under this Agreement, both of which shall be separately remediable.
Seller and Purchaser agree that the Deposit is a fair and reasonable amount to
be retained by Seller as agreed and liquidated damages in light of Seller's
removal of the Property from the market and the costs incurred by Seller and
shall not constitute a penalty or a forfeiture.
10.2. SELLER DEFAULT. If Seller shall refuse or fail to convey the
Interests as herein provided for any reason other than (i) a default by
Purchaser and the expiration of the cure period, if any, provided under Section
11.6 hereof, (ii) the existence of a Pending Default (as defined in and
contemplated by Section 11.6), or (iii) any other provision of this Agreement
which permits Seller to terminate this Agreement or otherwise relieves Seller of
the obligation to convey the Interests, Purchaser shall elect as its sole remedy
hereunder either to terminate the Agreement and recover the Deposit or seek a
specific enforcement remedy to enforce the Seller's obligations to convey the
Interests, provided that no such action in specific performance shall seek to
require the Seller to do any of the following: (a) change the condition of the
Property or restore the same after any fire or other casualty; (b) subject to
Section 10.3 below, expend money or post a bond to remove a title encumbrance or
defect or correct any matter shown on a survey of the Property; or (c) secure
any permit, approval, or consent with respect to the Property or Seller's
conveyance of the Property.
10.3. FAILURE OF CONDITION. If prior to Closing Seller discloses to
Purchaser or Purchaser discovers that (i) title to the Property is subject to
defects, limitations or encumbrances other than Permitted Encumbrances, or (ii)
any representation or warranty of Seller contained in this Agreement is or, as
of the Date of Closing, will be untrue then Purchaser shall promptly give Seller
written notice of its objection thereto. In such event, Seller may elect to
postpone the Closing for thirty (30) days and attempt to cure such objection,
provided that Purchaser may not object to the state of title of the Property on
the basis of any Permitted Encumbrances. The parties acknowledge and agree that
Seller shall have no obligation to cure any objection unless it is required to
do so pursuant to Section 3.2 hereof. If Purchaser fails to waive the objection
within ten (10) days after notice from Seller that Seller will not cure the
objection, this
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Agreement will terminate automatically (subsequent to the First Closing, only
insofar as it affects the Airport I Property) and Seller shall promptly direct
the Title Company to return the Deposit (subsequent to the First Closing, the
Airport I Deposit only) to Purchaser, provided that Purchaser shall not be in
default hereunder, and, except as provided below, neither party shall have any
liability to the other except for Purchaser's Indemnity Obligations set forth in
Section 3.1.2 hereof and confidentiality obligations under this Agreement. For
the purposes of this Agreement, any title defect, limitation or encumbrance
other than a Permitted Encumbrance shall be deemed cured if Chicago Title
Insurance Company or another title company reasonably acceptable to Purchaser
and authorized to do business in Maryland will agree to issue an ALTA owner's
title insurance policy to Purchaser for the applicable Purchase Price, which
policy takes no exception for such defect, limitation or encumbrance and is
issued for no additional premium or for an additional premium if Seller agrees
to pay such additional premium upon Closing. Notwithstanding the foregoing, in
the event prior to Closing Seller discloses to Purchaser or Purchaser discovers
that a representation and warranty set forth in Section 5.1 was materially
untrue when made, and Purchaser can demonstrate that if it were aware of such
material untruth it would not have entered into this Agreement, or that a
reasonable person, as a result of the subject matter of the representation and
warranty and the adverse effect on the use or value of the Property arising from
the inaccuracy of the representation or warranty, would have determined, not to
proceed to consummate this transaction, Purchaser, in addition to terminating
this Agreement as above provided, may recover from Seller its third party
expenses incurred in its due diligence studies and investigations hereunder up
to a maximum amount of Seventy-five Thousand Dollars ($75,000); provided that
after the First Closing such material untruth must relate to the Airport I LLC
or the Airport I Property, and such amount shall be reduced to Nineteen Thousand
One Hundred Fifty Dollars ($19,150).
11. MISCELLANEOUS.
11.1. ENTIRE AGREEMENT. This Agreement, together with the Exhibits attached
hereto, all of which are incorporated by reference, is the entire agreement
between the parties with respect to the subject matter hereof, and no
alteration, modification or interpretation hereof shall be binding unless in
writing and signed by both parties.
11.2. SEVERABILITY. If any provision of this Agreement or application to
any party or circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
11.3. APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Maryland.
11.4. ASSIGNABILITY. Seller acknowledges and agrees that Purchaser shall
have the right, provided it gives written notice of such assignment to Seller at
least seven (7) business days prior to the Date of Closing but without the need
of any approval or consent of Seller, to assign its rights and obligations under
this Agreement to its parent entity, Corporate Office Properties Trust ("COPT"),
Corporate Office Properties, L.P. ("COPLP") or to any entity or affiliate in
which either COPT or CPOLP shall have at least a 10% equity ownership interest
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("PERMITTED ASSIGNMENT"). Other than for a Permitted Assignment, Purchaser may
not assign this Agreement without first obtaining Seller's written consent. Any
assignment in contravention of this provision shall be void. No assignment,
whether or not permitted, shall release the Purchaser herein named from any
obligation or liability under this Agreement. The Purchaser herein named and any
permitted assignee shall be jointly and severally liable for all such
obligations and liabilities. Any permitted assignee shall be deemed to have made
any and all representations and warranties made by Purchaser hereunder, as if
the assignee were the original signatory hereto.
11.5. SUCCESSORS BOUND. This Agreement shall be binding upon and inure to
the benefit of Purchaser and Seller and their respective successors and
permitted assigns.
11.6. BREACH. Should either party be in breach of or default under or
otherwise fail to comply with any of the terms of this Agreement, except as
otherwise provided in this Agreement, the complying party shall have the option
to cancel this Agreement (prior to the First Closing as to the entire Property,
and thereafter as to the Airport I Property) upon ten (10) days written notice
to the other party of the alleged breach and failure by such other party to cure
such breach within such ten (10) day period. The non-defaulting party shall
promptly notify the defaulting party in writing of any alleged default upon
obtaining knowledge thereof. The applicable Date of Closing shall be extended to
the extent necessary to afford the defaulting party the full ten-day period
within which to cure such default; provided, however, that the failure or
refusal by a party to perform on the scheduled Date of Closing (except in
respect of a Pending Default by the other party) shall be deemed to be an
immediate default without the necessity of notice; and provided further, that if
the Date of Closing shall have been once extended as a result of default by a
party, such party shall be not be entitled to any further notice or cure rights
with respect to that or any other default. For purposes of this Section 11.6, a
"PENDING DEFAULT" shall be a default for which (i) written notice was given by
the non-defaulting party, and (ii) the cure period extends beyond the scheduled
Date of Closing.
11.7. NO PUBLIC DISCLOSURE. Except as required by its reporting obligations
under applicable law, Purchaser shall make no public disclosure of the terms of
this transaction prior to Closing without the prior written consent of Seller,
except that Purchaser may discuss the transaction in confidence with proposed
joint venturers or prospective mortgagees.
11.8. CAPTIONS. The captions in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope of this Agreement or the scope or content of any of its provisions.
11.9. ATTORNEYS' FEES. In the event of any litigation arising out of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees
and costs.
11.10. NO PARTNERSHIP. Nothing contained in this Agreement shall be
construed to create a partnership or joint venture between the parties or their
successors in interest.
11.11. TIME OF ESSENCE. Time is of the essence for all purposes of this
Agreement.
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11.12. COUNTERPARTS. This Agreement may be executed and delivered in any
number of counterparts, each of which so executed and delivered shall be deemed
to be an original and all of which shall constitute one and the same instrument.
11.13. RECORDATION. Purchaser and Seller agree not to record this Agreement
or any memorandum hereof.
11.14. PROPER EXECUTION. The submission by Seller to Purchaser of this
Agreement in unsigned form shall be deemed to be a submission solely for
Purchaser's consideration and not for acceptance and execution. Such submission
shall have no binding force and effect, shall not constitute an option, and
shall not confer any rights upon Purchaser or impose any obligations upon Seller
irrespective of any reliance thereon, change of position or partial performance.
The submission by Seller of this Agreement for execution by Purchaser and the
actual execution and delivery thereof by Purchaser to Seller shall similarly
have no binding force and effect on Seller unless and until Seller shall have
executed this Agreement and the Deposit shall have been received by the Title
Company and a counterpart thereof shall have been delivered to Purchaser.
11.15. TAX PROTEST. If, as a result of any tax protest or otherwise, any
refund or reduction of any real property or other tax or assessment relating to
the Property during the period for which, under the terms of this Agreement,
Seller is responsible, Seller shall be entitled to receive or retain such refund
or the benefit of such reduction, less equitable prorated costs of collection.
11.16. BEST KNOWLEDGE; RECEIVED WRITTEN NOTICE. Whenever a representation,
warranty or other statement is made in this Agreement or in any document or
instrument to be delivered at Closing pursuant to this Agreement, on the basis
of the best of knowledge, the actual knowledge or the knowledge of Seller, or is
qualified by Seller having received written notice, such representation,
warranty or other statement is made with the exclusion of any facts disclosed to
or otherwise known by Purchaser, and is made solely on the basis of the actual,
as distinguished from implied, imputed and constructive, knowledge on the date
that such representation or warranty is made, without inquiry or investigation
or duty thereof, of Xxxx Xxxxxxx, Xxxxx Xxxxx and Xxxxxx Xxxxxxxxx (the officers
of UBS Realty Investors LLC, Seller's investment advisor and agent, having
responsibility for the management and sale of, and the accounting function with
respect to, the Property), without attribution to such specific officers of
facts and matters otherwise within the personal knowledge of any other officers
or employees of Seller or third parties, including but not limited to tenants
and property managers of the Property, and excluding, whether or not actually
known by such specific officers, any matter known to Purchaser or its agents at
the time of Closing.
11.17. SURVIVAL AND LIMITATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Seller set forth in Section 5.1 and 11.20
shall survive the Closing, but written notification of any claim arising
therefrom must be received by Seller within twelve (12) months after the Date of
First Closing for claims relating to the Main Properties or Main LLCs, or the
Date of Airport I Closing for claims relating to the Airport I Property or
Airport I LLC, or such claim shall be forever barred and Seller shall have no
liability with respect thereto. The aggregate liability of the Seller with
respect to all claims hereunder shall not exceed Five Hundred Fifty-Eight
Thousand Five Hundred Dollars ($558,500) for the Main
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Properties and Main LLCs and One Hundred Ninety-One Thousand Five Hundred
Dollars ($191,500) for the Airport I LLC and Airport I Property.
11.18. TIME TO EXECUTE AND DELIVER. This Agreement shall be voidable at
Seller's election if one fully executed copy is not received by Seller, along
with confirmation that the Deposit has been received by the Title Company, on or
before 5:00 p.m. E.S.T. on March 2, 2001.
11.19. LIMITATION OF LIABILITY. Seller is entering into this Agreement
solely on behalf of Aetna Life Insurance Company Separate Account 050. Separate
Account 050 is a separate account as defined in Section 3(17) of ERISA. Only the
assets of Separate Account 050 shall be bound for the obligations of Separate
Account 050, and Purchaser shall have no resort to any other assets of Aetna
Life Insurance Company for the obligations of Seller hereunder, or under any
agreement, document or instrument executed and delivered pursuant to this
Agreement. Seller represents and warrants to Purchaser that the aggregate assets
of Separate Account 050, exclusive of its interest in the Property, are and at
Closing will be in excess of One Hundred Million Dollars ($100,000,000). This
provision shall survive Closing or any termination of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Purchaser and Seller have executed this Agreement as of
the date set forth above.
SELLER: AETNA LIFE INSURANCE COMPANY
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------
Printed name: Xxxxxxxx Xxxxxxx
-----------------
Its: Ass't Vice President
--------------------------
PURCHASER: COPT ACQUISTIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------------
Printed name:
---------------------
Its:
------------------------------
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AN ORIGINAL, FULLY EXECUTED COPY OF THIS AGREEMENT, TOGETHER WITH THE
DEPOSIT, HAS BEEN RECEIVED BY XXXXX XXXXXXXX & XXXXX, LLP THIS 5TH DAY OF MARCH,
2001.
XXXXX, XXXXXXXX & XXXXX, LLP
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------
Printed name: Xxxxxxx Xxxxxxxxx
--------------------
Its: Partner
------------------------------
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