PURCHASE OPTION AGREEMENT
THIS PURCHASE OPTION AGREEMENT (this "Agreement") is made and entered into
this 3rd day of February, 1997, by and between NATIONAL LIFE INSURANCE COMPANY,
a Vermont corporation ("Seller") and RADIO ONE, INC., a Delaware corporation
("Purchaser").
RECITALS
WHEREAS, on this date, Purchaser, as Tenant, and Seller, as Landlord, have
entered into that certain Standard Office Lease dated of even date herewith (the
"Lease") for certain premises located in the building known by street address as
0000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx;
WHEREAS, as a condition of entering into the Lease, Purchaser has requested
that Landlord grant to Purchaser an option to purchase the improved real
property described on Exhibit A attached hereto (the "Property");
NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
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Radio One, Inc.
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1. GRANT OF PURCHASE OPTION. Seller hereby grants to Purchaser the exclusive
right and option (the "Purchase Option") to purchase the Property, which
Property includes the interest of Seller (presently or to be acquired) in and to
(i) any easements, covenants, licenses and other rights appurtenant to said
Property, (ii) any land lying in the bed of any street or alley (opened or
closed) in front of or adjoining said Property, (iii) any and all feasibility,
engineering, architectural or other studies, reports or drawings, including soil
borings and test drillings, which Seller has in its possession with respect to
said Property, and (iv) any improvements located on said Property. Purchaser's
right to exercise the Purchase Option and Seller's obligation to sell the
Property are subject to the terms and conditions as set forth in this Agreement.
2. TERM OF PURCHASE OPTION. The term of the Purchase Option granted herein
during which Purchaser shall have the right to exercise said right to purchase
the Property shall begin on the date hereof and shall expire at 5:00 p.m. on
June 30, 1997, unless sooner terminated in accordance with the terms of this
Agreement ("Option Expiration Date").
3. EXERCISE OF PURCHASE OPTION. Provided Tenant is not in default under the
terms of the Lease (beyond any applicable notice and cure period), Purchaser may
exercise its right to purchase the Property at any time prior to the Option
Expiration Date, by delivering to Seller an unconditional written notice of its
exercise of the
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Radio One, Inc.
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Purchase Option. Upon delivery of such notice (the "Option Exercise Date"),
Purchaser shall be deemed to have exercised the Purchase Option and Purchaser
shall be unconditionally and irrevocably obligated to purchase, and Seller shall
be unconditionally and irrevocably obligated to sell, the Property, subject to
and in accordance with the terms and conditions set forth herein.
4. TERMS OF SALE. The terms of the sale and purchase of the Property shall be
as follows:
(a) PURCHASE PRICE. The aggregate consideration to be paid by Purchaser to
Seller for the Property shall be Three Million Seven Hundred Fifty Thousand and
00/100 Dollars ($3,750,000.00), subject to the adjustments set forth in
subsections (i), (ii) and (iii) below and the adjustments required by Section
13, and said sum (as so adjusted) shall be defined for all purposes hereof as
the "Purchase Price". The Purchase Price shall be payable to Seller on the date
of Closing (as hereafter defined) by wire transfer of immediately available
funds.
(i) The Purchase Price shall be reduced by an amount equal to the documented
expenditures of Tenant for Tenant's Improvements to the Premises (as such term
is defined in the Lease) in accordance with Section 7.3 of the Lease, up to $15
per square foot of rentable area in the Premises (computed in accordance with
the Lease), but in no event shall said adjustment exceed the sum of Two Hundred
Forty Thousand and no/100 Dollars ($240,000.00).
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Radio One, Inc.
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(ii) The Purchase Price shall be reduced further by an amount equal to the
actual amount of rents collected by Seller from Tenant prior to the date of
Closing after subtracting therefrom Tenant's pro rata share (as calculated on a
square foot basis) of all of the operating expenses of the Property allocable to
the period after the date hereof and prior to Closing (the "Option Period"),
provided that in no event shall said reduction exceed the sum of Forty-Eight
Thousand and no/100 Dollars ($48,000.00). For all purposes hereof, the
"operating expenses of the Property" shall be equal to all of the costs and
expenses of any kind or nature relating to the Property, and allocable to the
Option Period, in managing, operating, equipping, policing, protecting,
lighting, repairing, replacing and maintaining the Property, and any personal
property therein or thereon, including, but not limited to, any and all real
estate taxes, insurance premiums (whether elective or required), maintenance and
repairs to the common area utilities, water and sewer, management fees,
landscaping, irrigations systems, cleaning, snow removal, lighting, pest
control, security costs, supplies, trash removal, parking lot sweeping, personal
property taxes, maintenance of and replacement of equipment, exterior painting,
roof repairs, parking lot repairs, seal coating, striping, plumbing repairs, and
compensation and benefits of employees of Seller or its agents involved in such
work. Excluded from such operating expenses are net income or franchise taxes,
financing costs (including interest, principal, late payment or other fees),
ground rent, if any, capital expenditures (including rentals in lieu of capital
expenditures), leasing commissions and other costs of leasing space,
depreciation, advertising expenses,
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Radio One, Inc.
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compensation of officers and directors of Seller not directly relating to the
operation, management or repair of the Property, renovation of space for new
tenants (including painting and decorating), payments to affiliates of Seller in
excess of arms-length fees, base management fees in excess of three percent (3%)
of the gross rents, and renovation costs as a result of casualty from causes
against which Seller carries insurance.
(iii) The Purchase Price shall be increased by an amount which is determined
by computing Purchaser's pro rata share of all costs paid by Seller subsequent
to the date hereof, in connection with the entering into of each lease for a
portion of the Property (or the renewal or extension of any existing lease for a
portion of the Property), as approved by Purchaser, which approval shall not be
unreasonably withheld or delayed. The allowable "costs for each lease" shall
include but not be limited to broker commissions and any tenant improvement or
procurement costs incurred in renovating or improving leasehold space for a
tenant, and in the case of the new lease for TenSalon, a two percent (2%)
construction management fee. Purchaser's pro rata share of such costs for each
lease, or the renewal or extension of any existing lease, for a portion of the
Property shall be computed by multiplying said costs of a lease by a fraction,
the numerator of which is the aggregate Base Rent due under the Leases to
Purchaser (as the new owner of the Property) after the date of Closing, and the
denominator of which is the aggregate Base Rent due during the entire initial
term of
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said tenant's lease. FOR EXAMPLE ONLY: If (i) a new tenant's lease provides for
$1,000,000.00 of Base Rent in the aggregate, during the initial term, (ii)
$800,000.00 of such Base Rent is due after the date of Closing, and (iii) the
total costs incurred by Seller in connection with said lease is $50,000.00, then
the Purchase Price shall be increased by $40,000.00 [$50,000.00 x
($800,000.00/$1,000,000.00)].
(b) CLOSING. The date upon which the closing of the transaction contemplated
by this Agreement shall be referred to herein as the "Closing". For all purposes
of this Agreement, the "date of Closing" shall mean the date and time for
Closing selected by Purchaser, but not later than 5:00 pm on September 30, 1997,
unless extended pursuant to Section 5 below; provided that Purchaser shall give
Seller not less than five (5) business days prior written notice of the time and
place of Closing. The Closing shall be held at the office of Purchaser's
attorneys or, at Purchaser's option, at the offices of Purchaser's lending
institution. As of the date of Closing, Seller shall convey title to the
Property to Purchaser or its designee by delivery of a special warranty deed (in
proper statutory form for recording, duly executed and acknowledged), and
Purchaser shall deliver the Purchase Price to Seller. Seller also shall assign
to Purchaser its interest in all of the leases set forth on Exhibit B, and any
amendments or new leases entered into by Seller pursuant to Section 6 (the
"Leases"), and all security deposits relating thereto, and Purchaser shall
assume the obligations of Seller thereunder, all as of the date of Closing. No
later than thirty (30) days after the Option
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Exercise Date, Purchaser may deliver written notice to Seller (the "Rejection
Notice") identifying which of the contracts (other than Leases), set forth on
Exhibit C, including any amendments or extensions to such contracts, and any new
contracts entered into by Seller after the date hereof (the "Contracts"),
Purchaser desires not to assume as of the Closing Date (the "Rejected
Contracts"). Purchaser shall assume Seller's obligations accruing under all
Contracts, other than the Rejected Contracts (the "Assumed Contracts"), from and
after Closing (including obligations to be performed after Closing). Seller
shall indemnify and hold Purchaser harmless for any liability or obligation
under the Rejected Contracts. If Purchaser fails to timely deliver the Rejection
Notice to Seller, all Contracts shall be deemed to be Rejected Contracts. The
delivery to the Settlement Agent of the Purchase Price, the special warranty
deed, assignments of Seller's interest in the Leases (and all security deposits)
and Assumed Contracts, a xxxx of sale with respect to the personal property of
Seller used in connection with the Property, the Seller's Certificate (as
hereinafter defined), such documents and instruments as may be reasonably and
customarily required by Purchaser's title company or Purchaser's lender to
consummate the purchase of the Property and insure title to the Property in the
condition required by the terms hereof, and all other documents and instruments
required to be delivered by either party to the other by the terms hereof, shall
be deemed to be a good and sufficient tender of performance of the terms hereof.
5. EXTENSION OF CLOSING.
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Radio One, Inc.
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(a) Not later than the tenth (10th) business day of each full calendar month
following the date hereof, Seller shall provide Purchaser with a rent roll of
the Property showing the "Building Rents" (as defined below) collected by Seller
for the preceding month. Not later than September 8, 1997, Seller shall deliver
written notice to Purchaser (the "Notice of Rent Sufficiency"), which notice
shall certify whether or not the average monthly "Building Rents" collected by
Seller for the prior two (2) month period (i.e., July and August, 1997) is equal
to or exceeds the sum of $47,500 [subject to adjustment pursuant to subsection
(c) below] (the "Minimum Gross Rent Amount"). If the Notice of Rent Sufficiency
certifies (a) that the Minimum Gross Rent Amount has been achieved, then the
Closing shall not be extended and the parties shall consummate Closing on
September 30, 1997, or (b) that the Minimum Gross Rent Amount has not been
achieved, then the Closing shall be postponed as provided in this Section 5. For
all purposes hereof, the term "Building Rents" shall mean the total rents
collected (but not interest, penalties or late fees) from all tenants of the
Building (other than Tenant, except as hereafter provided) with respect to a
particular calendar month; provided, however, if Tenant leases more than 16,000
square feet of space in the Building during any calendar month of the term, then
the Building Rents shall be increased for said month by an amount which is
calculated by taking (a) the total rents payable by Tenant during said month,
and (b) deducting therefrom the amount calculated by taking the total rents
payable by Tenant during said month and multiplying such amount by a fraction,
the numerator of which is 16,000 and the denominator of which is the number of
square
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Radio One, Inc.
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feet leased to Tenant. For example, if Tenant leases 18,000 square feet and the
total rents payable by Tenant during said month are $16,500.00, then the
Building Rents shall be increased by $1,833.33 [$16,500 - $16,500 x (16,000 -
18,000)].
(b) If the Notice of Rent Sufficiency issued by Seller (the "Pre-Closing
Notice") does not show that the average Building Rents collected during the
applicable months are equal to or greater than the Minimum Gross Rent Amount,
then Purchaser shall have the right to postpone Closing, on a month-by-month
basis, by sending written notice to Seller, until Purchaser has received from
Seller a Notice of Rent Sufficiency showing that Building Rents collected during
a two (2) month period subsequent to the Pre-Closing Notice equals or exceeds
the Minimum Gross Rent Amount (a "Favorable Notice"), in which case Closing
shall be rescheduled by Seller for any date that is at least three (3) business
days after the Favorable Notice is delivered to Purchaser, but before the end of
the month that the Favorable Notice is delivered to Purchaser. Notwithstanding
anything to the contrary contained herein, Purchaser shall have the right, but
not the obligation, to irrevocably waive the receipt of a Favorable Notice as a
condition precedent to Closing and to proceed to Closing in the manner set forth
in this Agreement on or before thirty (30) days from the date of such waiver,
but in no case shall Closing occur after July 31, 1998. If Closing has not
occurred by July 31, 1998, or if Purchaser affirmatively gives written notice to
Seller that it shall not proceed to Closing on or before said date, then (i) the
Purchase Option shall expire and terminate
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Radio One, Inc.
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on said date, without further act being required of either party, in the same
manner as if Purchaser had not exercised its Purchase Option prior to the Option
Expiration Date, and (ii) Seller shall promptly pay Purchaser an amount equal to
Tenant's actual, documented expenditures for Tenant Improvements, up to $15 per
square foot of rentable area in the Premises, but in no event shall said payment
from Seller to Purchaser exceed the sum of Two Hundred and Forty Thousand and
No/100 Dollars ($240,000.00), which amount may be reduced by Landlord by any
damages of Landlord resulting from the default by Tenant under the Lease.
(c) If, at any time prior to the date on which Seller delivers to Purchaser a
Notice of Rent Sufficiency stating that the average Building Rents collected
during the applicable two (2) month period are equal to or exceed the Minimum
Gross Rent Amount, Tenant or any other affiliate of Tenant shall execute a lease
for space in the Building, or renew an existing lease for space in the Building
(other than Tenant's entering into a new lease for space, which space has come
available only as a result of the expiration of the term of an existing lease to
the Building) which reduces the Building Rents collected by Seller for said
office space to an amount which is less than the Building Rents collected for
said office space on the date of execution of this Lease (calculated on an
accrual basis), then there shall be a dollar for dollar reduction (but never an
increase) in the Minimum Gross Rent Amount based upon the amount of reduction in
Seller's collection of Building Rents resulting from Tenant's affiliate's
execution of a lease for said space.
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Radio One, Inc.
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6. Seller's Leasing of Property. From the date hereof until the Closing Date,
Seller shall control the marketing and leasing of space in the Building,
provided, however, that Seller shall not enter into or terminate any Leases,
without Purchaser's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Seller shall pay all costs
associated with the leasing of the Property [subject to reimbursement if a
Closing occurs as more fully described in subsection 4(a)(iii) above]. Upon
receipt from Seller of a bona fide proposal to lease space in the Property to a
prospect (a "Prospect"), which proposal shall set forth a description of said
Prospect's intended use of the premises, Purchaser will have a period of five
(5) business days from receipt of said proposal in which to deliver written
notice to Seller stating either its acceptance or rejection of the Prospect. If
Purchaser's written notice to accept/reject the Prospect is not received by
Seller within said five (5) business day period, or Purchaser fails to elect
either option (i) or (ii) below in said notice, then Purchaser shall be deemed
to have accepted the lease of space on the Property to the Prospect in the same
manner as if Purchaser had delivered a written notice of acceptance to Seller
within the aforesaid five (5) business day period. If Purchaser rejects the
Prospect, then concurrently with said rejection, Purchaser shall either (i)
effectively exercise the Purchase Option to purchase the Property, and the
Purchaser's receipt of the Notice of Rent Sufficiency shall be deemed waived by
Purchaser, and the Closing shall occur within sixty (60) days after Purchaser's
exercise of the Purchase Option (but in no event sooner than fifteen (15)
business days from said date); or (ii)
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lease the space in the Property which Seller proposed to lease to the Prospect,
under the same terms and conditions as Seller was offering to the Prospect, or
(iii) elect neither (i) nor (ii), in which event Seller shall have the right to
enter into such lease with such Prospect, and Purchaser shall be deemed to have
accepted to such lease.
7. TITLE. Attached hereto as Exhibit D is a copy of Seller's existing owner's
title insurance policy. At Closing, title to the Property shall be good of
record and in fact, marketable, insurable at regular rates by a reputable title
insurance company of Purchaser's choice, subject to restrictions of record on
the date of execution of this Agreement, as shown on Exhibit D, except that
title to the Property shall be (i) free and clear of the lien of any deed of
trust, mortgage or other lien or instrument securing the repayment of money, and
(ii) subject to any new leases executed by Seller in the manner set forth in
Section 6 above. The status of title at the time of Closing shall be the same as
that shown in Seller's title, except as provided below. In the event any new
title matters arise prior to Closing, Purchaser shall notify Seller of such new
title defect within five (5) days of Purchaser becoming aware of such new title
defect. For purposes of this Section, if any title defect directly results from
Purchaser's action, such as the placing of a mechanic's lien, then such title
defect shall not be deemed to be a new title defect. Within ten (10) days after
receipt of the Purchaser's letter of new title defects (and supporting
documentation), Seller shall notify Purchaser in writing as to which, if any, of
the new title matters objected to by Purchaser Seller is willing to correct,
with the
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correcting of all such matters which Seller agrees to correct being a covenant
of Seller and a condition to Purchaser's obligation to settle hereunder. If
Seller does not notify Purchaser as above, it shall be deemed that Seller has
elected not to correct all such new title matters to which Purchaser has
objected. Seller agrees that to the extent the new title matters objected to by
Purchaser are of a character that they may be remedied by the payment of sums of
money or by legal action, both of which shall not exceed $25,000 (in the
aggregate), Seller shall be obligated to pay such sums of money or undertake in
good faith and diligently prosecute such legal action, at Seller's sole expense,
subject to the $25,000 cap. Purchaser shall have until ten (10) days after
receipt of Seller's response as to which, if any, new title matters Seller is
willing to correct, to terminate this Purchase Option if Purchaser remains
unsatisfied with the new title defects and in such event neither party shall
have any further rights or obligations under this Purchase Option, except for
those obligations which survive termination hereunder. If any new title defects
to be cured by Seller by Closing have not been cured as of Closing, Purchaser
shall have the right upon written notice to Seller to elect either (i) to
proceed to Closing and waive such new title defect, without abatement of the
Purchase Price, (ii) to terminate this Purchase Option, in which event neither
party shall have any further rights of obligations under the Purchase Option
with respect to the Property, except for those obligations which survive
termination hereunder, or (iii) to postpone Closing to the extent necessary to
enable the new title matters to be remedied, but in no event shall Closing be
extended for such cure for more than two (2) months;
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provided, however, that if the time needed to correct the new title matter is
more than two (2) months, Purchaser shall have the right, at its option, to
elect by written notice to Seller prior to the date of Closing, either (a)
proceed to Closing and waive such new title defect, without abatement of the
Purchase Price or (b) terminate this Purchase Option, whereupon Purchaser and
Seller shall be relieved of all further liability or obligation under the
Purchase Option, except as otherwise provided herein. Notwithstanding the
foregoing, between the date hereof and the date of Closing, Seller shall have
the right to execute and deliver such easements and rights of way which are
required of it by local governmental entities or public utilities (provided
Seller does not seek rezoning or subdivision of the Property). Seller shall
notify Purchaser promptly upon the demand of any such governmental entity or
public utility for such rights in and to the Property, and Purchaser shall have
the right to participate in the negotiation of the form of rights given to any
such third party in the Property. In the event that such rights given to a third
party in the Property shall be reasonably determined to cause a material adverse
effect on Purchaser's ability to use the Property after the date of Closing,
then Purchaser's sole remedy shall be to deliver written notice to Seller
stating that it is unilaterally terminating this Purchase Option, in which event
the Purchase Option shall be deemed terminated, except for those obligations
which survive termination.
8. STUDY PERIOD/DISCLAIMERS. Purchaser may perform (subject to the rights of
other tenants of the Property) reasonable studies and tests of the Property and
review
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materials to determine the condition thereof. By its exercise of the Purchase
Option, Purchaser shall be deemed to have certified to Seller that it has
familiarized itself fully with the Property, and that it has had the opportunity
to perform, and has performed, such inspections, examinations, investigations
and studies thereof as it deemed appropriate in order to determine whether to
purchase the Property in its then current condition. Purchaser agrees that it is
relying solely upon its inspections, examinations, investigations and studies in
electing whether or not to purchase the Property. Notwithstanding anything
herein to the contrary, it is expressly understood and agreed that Purchaser, by
exercising its option, is purchasing the Property "as is" and "where is", and
with all faults and defects, latent or otherwise, and that, except as expressly
provided herein, Seller is making no representations or warranties, either
express or implied, by operation of law or otherwise, with respect to the
quality, physical condition or value of the property, the presence or absence of
hazardous substances in, on, under or about the Property, the zoning
classification of the Property, the compliance of the Property with applicable
law, or the income or expenses from or of the Property. Without limiting the
foregoing, it is understood and agreed that Seller makes no warranty to
Purchaser regarding the Property or its habitability, suitability,
merchantability, fitness for a particular purpose or fitness for any purpose.
With regard to the studies to be performed by Purchaser as set forth in the
first sentence of this subsection, (i) Purchaser shall conduct its studies in a
manner so as not to unreasonably interfere with the business operations of any
of the other tenants of the Property, (ii) Purchaser shall repair
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all damage to the Property caused by the studies and related activities of
Purchaser, its agents or employees associated with such studies, promptly after
the occurrence of such damage, and (iii) Purchaser shall indemnify and hold
harmless Seller from and against any claims, liabilities, reasonable costs
(including, without 1imitation, reasonable attorneys fees) resulting from
physical damage to the Property, or from injury to persons or property caused by
the activities of Purchaser, its agents or employees as described above.
9. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants
the following, each of which shall be true on the date hereof.
(a) Due Authorization. This Purchase Option is duly authorized, executed and
delivered by, and upon delivery hereof shall be binding upon and enforceable
against Seller in accordance with its respective terms. Seller has the legal
right, power and authority to enter into this Purchase Option and to perform all
of its obligations hereunder, and the execution and delivery of this Purchase
Option and performance by Seller of its obligations hereunder shall not conflict
with or result in a breach of any law or regulation, order, judgment, writ,
injunction or decree of any court or governmental instrumentality or any
agreement or instrument to which Seller is a part or by which Seller is bound or
to which Seller or any portion of the Property is subject.
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(b) Moratoria; Litigation. To Seller's actual knowledge, without any duty to
investigate, the Property and the use thereof are free of (i) any sewer, water,
building or other moratoria, municipal violations, and (ii) existing, or to the
Seller's actual knowledge, threatened, litigation or condemnation proceedings
applicable to the Property. Seller has received no written notice of any liens
or special assessments to be made against the Property by any governmental
authority.
(c) Parties in Possession. The Schedule of Leases is set forth as Exhibit B
hereto. Except as set forth on the Schedule of Leases, there are no parties in
possession of the Property or any portion thereof, whether as tenants under
leases or licensees under license agreements or under any other agreement or
arrangement.
(d) Hazardous Waste. To Seller's actual knowledge, except as disclosed in any
environmental reports provided to Purchaser, during Seller's ownership of the
Property, none of the Property has been excavated, no landfill was deposited on
or taken from the Property, no construction debris or other debris (including
without limitation rocks, stumps or concrete) was buried upon any of the
Property, and no hazardous materials, toxic chemicals or similar substances, as
defined in 42 U.S.C. Section 9601(14) or 33 U.S.C. Section 1317(1) or 15 U.S.C.
Section 2606(f), or any similar provision of applicable state or federal law, or
otherwise, or gasoline or oil storage tanks, were stored on or under or
otherwise were in existence on or under the Property.
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10. SELLERS COVENANTS.
(a) Seller's Documents. Within five (5) business days after the date hereof,
Seller shall provide (or already has provided) Purchaser, at no cost to
Purchaser, copies of all plans and specifications, engineering reports, soil
tests, wetlands studies, market studies, surveys, title reports and other tests
and studies pertaining to the Property which are in Seller's possession or
control.
(b) Seller's Actions. From and after the date hereof until Closing or the
termination of this Purchase Option, Seller shall not take any action to rezone
or resubdivide the Property, other than with Purchaser's prior written approval,
which approval shall not be unreasonably withheld, conditioned or delayed.
(c) Landlord's Actions. From and after the Effective Date, Landlord shall (i)
refrain from performing any material grading or excavation, construction or
removal of any improvement, or making any other structural or capital
improvement upon the Property, except as may be reasonably approved by
Purchaser, (ii) refrain from committing any material waste upon the Property,
(iii) not take any action to Rezone or resubdivide the Property, except as
approved by Tenant in its sole discretion, and (iv) maintain appropriate
comprehensive hazard and liability insurance.
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(d) Payment of Charges. Landlord shall, prior to Closing, (i) pay all taxes
and other public charges which are properly due and payable against the
Property, (ii) pay all bills for labor or services for work performed on or with
respect to the Property which are properly due and payable, except those
requested by or on behalf of Tenant, (iii) not breach or violate in any material
respect the terms of any covenants, restrictions, easements or agreements
affecting the Property, or (iv) in any way change the state or condition of
title to the Property, except as otherwise provided herein.
11. CONDITIONS TO SETTLEMENT. It is an express condition to Purchaser's
obligation to proceed to settlement hereunder that all of the following are true
and correct (or waived in writing by Purchaser) on and as of the date of
Closing.
(a) All of the representations and warranties set forth in Section 9 are true
and correct in all material respects, or as to any or all, waived by Purchaser
in its sole discretion, and Seller has performed in all material respects all of
Seller's covenants and obligations hereunder.
(b) There exists with respect to the Property no pending, existing or
threatened (i) condemnation, or (ii) sewer and water or other moratoria which
affects the ability to develop the Property, or (iii) change in the zoning
classification of the Property, other than as applied for in accordance with the
provisions of this Purchase Option.
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(c) Title to the Property shall be in the condition required by Section 7.
From and after the date hereof, Seller shall not, without in each instance
obtaining the prior written consent of Purchaser, which may be given or withheld
in Purchaser's reasonable discretion, (i) sell or transfer the Property, unless
such sale is expressly made subject to this Agreement, (ii) encumber or pledge
the Property or any portion thereof, or (iii) xxxxx x xxxx or security interest
in the Property or any portion thereof.
(d) Seller will provide reasonable assurances to Purchaser that Seller is not
a "foreign person" as defined by Section 1445 of the Internal Revenue Code and
sign such affidavits to that effect as shall be reasonably required by Purchaser
and the title company insuring title for Purchaser.
(e) There will not be in existence on the Closing Date any contracts,
agreements, or understandings binding on Purchaser with respect to the Property
or the ownership, development or operation thereof which shall survive
settlement thereon, other than the Leases, the Assumed Contracts and such other
matters of record which Purchaser has accepted pursuant to this Agreement.
In the event of a failure of any of the above conditions to settlement which
Purchaser declines to waive, Purchaser may at Purchaser's sole discretion,
terminate this Purchase Option, and this Agreement shall thereby terminate, and
the parties shall
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thereafter not have any obligations hereunder, except for those obligations
which by their terms survive termination.
12. CLOSING COSTS. At Closing, Seller and Purchaser shall each pay one-half
(1/2) of all state, county and local transfer and recordation taxes due in
connection with the transfer of the Property from Seller to Purchaser (and
Purchaser shall solely pay any transfer and recordation taxes due in excess
thereof which are a result of any financing acquired by Purchaser in connection
with its acquisition of the Property). Seller shall pay all costs pertaining to
the payoff and release of existing liens, and the cost of preparation of the
Deed. All other costs and expenses attendant to Closing (including, without
limitation, title company charges, title insurance premiums, survey costs, and
notary fees) shall be at the cost of Purchaser, except that Seller shall pay the
fees and expenses of its own counsel which are incurred in connection with said
transaction.
13. CLOSING ADJUSTMENTS.
(a) The following items of income and expense shall be adjusted as of midnight
of the day immediately preceding the date of Closing:
(i) Real estate taxes with respect to the Property. Assessments, if any, for
improvements to the Property completed prior to the date of Closing, whether
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assessment therefor has been levied or not, shall be adjusted as of the date of
Closing and thereafter assumed by Purchaser.
(ii) Fuel, water and sewer service charges and charges for oil, electricity,
telephone and all other public utilities.
(iii) Rental and all other income (including common area charges and other
"pass-throughs") received from tenants.
(vi) All charges payable pursuant to Assumed Contracts for the provision of
services to the Property.
(b) If meters measure the consumption of water, gas and/or electric current at
the Property by Seller (as opposed to by tenants thereof), Seller shall use
reasonable efforts to cause such meters to be read on the day immediately
preceding the date of Closing and shall pay all utility bills resulting
therefrom promptly upon receipt thereof. Purchaser shall have the right to
escrow a reasonable sum to insure payment in full of Seller's obligation to pay
the water xxxx described above. In making the adjustments required by this
subsection, Seller shall receive credit for all prepaid expenses and similar
items that are due on or after the date of Closing, and Seller shall be charged
with any unpaid charges for the period prior to the date of Closing. No
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adjustment shall be made for rents, including all items of additional rent such
as common area maintenance charges, real estate taxes and other charges
(collectively and individually, the "Charges"), that are past due as of the date
of Closing, but Purchaser shall exercise reasonable efforts following the date
of Closing to collect any such unpaid rents and charges. In the event that
amounts are collected by Purchaser (after the date of Closing) from any tenant
of the Property whose lease obligations are past due as of the date of Closing,
Purchaser shall first apply such sum(s) against the amount then currently due
Purchaser, and then pay to Seller, from such collected funds, the balance owed
Seller for the period prior to the date of Closing, if any. The obligation of
the Purchaser set forth above to pay any balance of collected funds to Seller
for the period prior to the date of Closing shall survive Closing. Seller shall
have the right after the date of Closing to commence an action against any
tenant of the Property to collect amounts due Seller from any such tenant with
respect to periods prior to Closing, provided that Seller shall not be entitled
to dispossess any such tenant as a result of such action.
(c) Seller shall use all reasonable efforts to deliver to Purchaser, at least
five (5) business days prior to the date of Closing, a schedule depicting the
adjustments required by this subsection (including a draft settlement statement
to be executed by the parties at Closing), and Purchaser and Seller shall
attempt to confirm to their mutual
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satisfaction all such amounts no later than two (2) business days prior to the
date of Closing.
(d) Within sixty (60) days following the Closing, the Seller and Purchaser
will cooperate in preparing (including allowing Seller or its agent access to
the Property and its records related thereto) a final report to Purchaser
setting forth the final determination of all items included on the Settlement
Statement. In the event that, at any time within said sixty (60) day period,
either party discovers any items which should have been included in the
Settlement Statement but were omitted therefrom, such items shall be adjusted in
the same manner as if their existence had been known at the time of the
preparation of the Settlement Statement. The foregoing limitation shall not
apply to any item which, by its nature, cannot be finally determined within the
period specified. However, no further adjustments shall be made in any event
beyond one (1) year after Closing.
14. ADDITIONAL ESCROW INSTRUCTIONS. Purchaser and Seller shall each comply
with all ordinary and customary requirements of the Settlement Agent in
connection with the transaction contemplated hereby which are consistent with a
transaction of this size and type in Prince George's County, Maryland; provided,
however, that in the event that any portion of such additional requirements
shall be inconsistent with the provisions of
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this Agreement, the provisions of this Agreement shall prevail to the extent of
any inconsistency.
15. DEFAULT; TERMINATION OF PURCHASE OPTION.
(a) By Purchaser. If Purchaser shall fail to discharge any of its obligations
hereunder and shall fail to cure the same within fifteen (15) days after written
notice of default from Seller (but no notice and cure shall be given for
Purchaser's obligation to consummate Closing on the scheduled Closing date),
then, Seller shall have the right by written notice to Purchaser to terminate
this Agreement. Thereafter neither Purchaser nor Seller shall have any liability
under this Purchase Option, except for those provisions which by their terms
survive termination.
(b) By Seller. If Seller shall default in its obligations hereunder, or shall
breach a warranty or representation made herein, or shall fail to perform any
covenant provided herein, and such default, breach or failure is not cured
within fifteen (15) days after written notice of the same from Purchaser (except
that no notice shall be required in connection with a failure to timely close
the transaction contemplated herein), then Purchaser shall, at Purchaser's
option, as Purchaser's sole and exclusive remedy, (a) waive such default or
breach and proceed to Closing, (b) pursue against Seller the right to specific
performance of any and all of Seller's obligations hereunder (including
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obtaining reimbursement of Purchaser's expenses and attorneys' fees in such
action), or (c) terminate this Purchase Option, and the parties shall have no
further liability under this Purchase Option, except those provisions which by
their terms survive termination.
(c) By Tenant. In the event that tenant is in default under the Lease, and as
a result thereof Seller terminates the Lease, then at Seller's election in its
sole discretion, Seller's obligation to sell the Property shall terminate and be
of no further force and effect (whether or not Purchaser has exercised the
Purchase Option).
16. NON-ASSIGNABILITY. The Purchase Option is personal to Purchaser and shall
not be assignable to any other party, provided, however, Purchaser shall have
the right to assign this Purchase Option to any other entity provided, however,
that (1) the assignee assumes in writing all of Tenant's obligations under this
Purchase Option and (2) Tenant confirms in writing that it remains liable for
all of its obligations under this Purchase Option notwithstanding such
assignment and assumption.
17. FURTHER ASSURANCES. Seller and Purchaser each agree that it will, at any
time and from time-to-time after the date of Closing, upon request of the other
party hereto, (i) do, execute, acknowledge or deliver, all such further acts,
deeds, assignments, conveyances and assurances as may reasonably be required to
consummate the transactions contemplated hereby, and (ii) adjust any
mathematical or
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monetary error in the settlement sheet(s) executed by the parties in connection
with the Closing, and make any necessary payment resulting from such adjustment.
This obligation shall survive Closing.
18. MUTUAL INDEMNIFICATION.
(a) By Purchaser. Purchaser hereby agrees to indemnify and hold Seller
harmless from and against (i) any and all debts, liabilities, obligations,
claims and expenses arising from business done, transactions entered into,
conditions existing after or events occurring after settlement with respect to
the ownership, management or operation of the Property by Purchaser, and (ii)
all reasonable costs and expenses (including court costs and reasonable
attorneys' fees) incurred by Seller in connection with any action, suit,
proceeding, demand, assessment or judgment incident to any of the matters for
which Purchaser is indemnifying Seller pursuant to the terms of this paragraph
(a).
(b) By Seller. Seller hereby agrees to indemnify and hold Purchaser harmless
from and against (i) any and all debts, liabilities, obligations, claims and
expenses arising from business done or transactions entered into prior to
settlement with respect to the ownership, management or operation of the
Property by Seller or arising from a breach of any representation, warranty or
covenant of Seller contained in this Purchase Option, and (ii) all reasonable
costs and expenses (including court costs and
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reasonable attorneys' fees) incurred by Purchaser in connection with any action,
suit, proceeding, demand, assessment or judgement incident to any of the matters
for which Seller in indemnifying Purchaser pursuant to the terms of this
paragraph (b).
19. RIGHT OF FIRST OFFER.
(a) If Closing has not occurred by July 31, 1998, Purchaser hereby agrees that
it shall, prior to making an offer to sell the Property, give written notice to
Purchaser setting forth the minimum gross cash price that it will offer to sell
the Property (the "Minimum Price"). The Seller shall have the option (the "First
Offer Option") to purchase the Property at the Minimum Price, which First Offer
Option may be exercised by delivering an irrevocable and unqualified written
notice of acceptance to Seller within thirty (30) days of Purchaser's receipt of
the First Offer Option (the "Acceptance Notice").
(b) In the event that Purchaser timely exercises the First Offer Option,
settlement on the Property shall be made in cash within sixty (60) days of the
date that the Acceptance Notice is sent, with such closing to occur in a manner
and subject to the conditions that is similar to the manner and conditions
relating to a Closing under the Purchase Option.
(c) in the event that Purchaser does not send a timely Acceptance Notice
following receipt of a First Offer Option, Seller shall have the right (but not
the obligation) to offer the Property for sale and to sell the Property, so long
as the gross sale price is
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greater than or equal to the Minimum Price. Upon such sale, this Agreement shall
terminate without any further obligation of either party hereto. In the event
that the Property is not sold during the one (1) year period following the last
day that the Acceptance can be sent (i.e., thirty (30) days from the date of
Purchaser's notice of the Minimum Price), the provisions of Section 19(a) shall
apply to any offer to sell the Property made after the end of such one (1) year
period.
20. NOTICES. Any notice required or permitted to be given hereunder shall be
in writing and may be given by personal delivery or by certified or registered
mail (provided that notice of exercise of any option must in all events be given
by certified or registered mail) addressed to a party at the address herein or
such other address for notice purposes as may be later specified by notice to
the other party. Mailed notices shall be deemed given upon actual receipt at the
address required, or forty-eight hours following deposit in the mail, postage
prepaid, whichever first occurs unless otherwise specifically provided in this
Lease. A copy of all notices required or permitted to be given to Seller
hereunder shall be concurrently transmitted to such other party or parties at
such addresses as Seller may from time to time hereafter designate by notice to
Purchaser.
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Notice addresses are as follows:
Seller National Life Insurance Company, a Vermont corporation
c/x Xxxx Investment Management
0000 00xx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxxxxxx
with a copy to: Shulman, Rogers, Gandal, Pordy & Xxxxx, P.A.
00000 Xxxxxxxxx Xxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esquire
Purchaser: Prior to April 1, 1997:
Radio One, Inc.
0000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx Xxxxxxx, President
After April 1, 1997:
Radio One, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx
Attn: Xxxxxx Xxxxxxx, President
with a copy to: Xxxxx Xxxxx, III, Esq.
Xxxxx & Xxxxxx
0000 X Xxxxxx, X.X., Xxxxx 000X
Xxxxxxxxxx, X.X. 00000-0000
21. PERFORMANCE. Time is of the essence in the performance and satisfaction of
each and every obligation and condition of this Agreement and the Purchase
Option, including but not limited to, the date by which Purchaser is obligated
to exercise the
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Purchase Option, and the date by which the parties are to close the purchase and
sale of the Property in accordance with the terms and conditions hereof.
22. BINDING EFFECT This Agreement shall be binding upon and shall inure to the
benefit of each of the parties hereto, their respective successors, and
permitted assigns.
23. ENTIRE AGREEMENT. This Agreement and the Exhibits constitute the sole and
entire agreement between Purchaser and Seller and no modification hereof shall
be binding unless signed by both Purchaser and Seller.
24. GOVERNING LAW. The validity, construction, interpretation and performance
of this Agreement shall in all ways be governed and determined in accordance
with the laws of the State of Maryland. The parties hereby consent to the
non-exclusive jurisdiction of any state or federal court for the geographical
area which includes Prince George's County, Maryland, in any proceedings
hereunder and waive any objection to any such proceedings based on improper
venue or forum non conveniens.
25. CAPTIONS. The captions used in this Agreement have been inserted only for
purposes of convenience and the same shall not be construed or interpreted so as
to limit or define the intent or the scope of any part of this Agreement.
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26. COUNTERPARTS. This Agreement may be executed in counterparts by the
parties hereto and each shall be considered an original.
27. INTERPRETATION. For purposes of construing the provisions of this
Agreement, the singular shall be deemed to include the plural and vice versa and
the use of any gender shall include the use of any other gender, as the context
may require. Any reference to a number of "days" herein shall be a reference to
"calendar days" unless an express reference in said provision is made to
"business days". If the date on which either Seller or Purchaser is required to
take action hereunder is not a business day (as defined below), the action shall
be taken on the next succeeding business day. For purposes hereof, "business
day" means any day other than a Saturday, Sunday, or other day on which
commercial banks are authorized or required to close under the laws of the State
of Maryland.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
SELLER:
NATIONAL LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------
Title: Director of Equity Real Estate
------------------------------
On: February 10, 1997
------------------------------
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PURCHASER:
RADIO ONE, INC., a Delaware corporation
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Xxxxxx Xxxxxxx
Its: President
On:
----------------------------------
List of Exhibits
Exhibit A - Legal Description
Exhibit B - List of Leases
Exhibit C - List of Contracts
Exhibit D - Existing Title Policy
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EXHIBIT A
---------
LEGAL DESCRIPTION
ALL that parcel or parcels of real property located in Prince George's County,
Maryland known as Parcels C & E in a subdivision known as Lanham Associates
Property, as shown on a Plat recorded among the Plat Records of Prince George's
County, Maryland in Plat Book NLP No. 99, plat 13, the land and improvements
thereon being also known as the Lanham Office Building.
TOGETHER WITH the rights described in a Declaration of Easement dated June 7,
1973 and recorded among the Land Records of Prince George's County in Liber
4366, folio 813 and the rights described in Declaration of Covenants dated
November 8, 1977 and recorded among the aforesaid Land Records in Liber 4845,
folio 792.
