Exhibit 2.1
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made as of the 19 day of January, 2004, is by and
between OXFORD DEVELOPMENT COMPANY/SOUTHSIDE I, L.P., with an address at Xxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, XX 00000 ("Seller"), and GEN-NET LEASE
INCOME TRUST, INC., a Michigan corporation with an address at 00000 XXXX XXXXX
XXXX, 0XX XXXXX, XXXXXX XXX, XXXXXXXX 00000 ("Buyer").
SECTION 1. SALE OF THE PROPERTY
1.1 On the terms and conditions contained in this Agreement, Seller
agrees to sell and Buyer agrees to purchase that certain tract or parcel of land
consisting of a three story building containing approximately 87,178 square feet
with 339 secure parking stalls located on - two (2) tracts of land containing
approximately 4.493 and .080 acres respectively in Pittsburgh, Pennsylvania (the
"Property"). The legal description of the Property is set forth in Exhibit "A"
attached hereto and by this reference made a part hereof. At Closing Seller
shall deliver the Property to Buyer with all permits required for use and
occupancy of the property in accordance with its intended use in place and fully
satisfactory to Buyer, the General Services Administration ("GSA") and the
Federal Bureau of Investigations ("FBI") (hereinafter collectively "Tenant").
The definition of the Property shall include all appurtenant rights of way,
easements, water rights, covenants and appurtenances and all personal property
located thereon and used in the operation thereof.
1.2 The Property shall be subject to a lease to Tenant expiring not
earlier than September 30, 2016 ("the Lease") at a gross annual rental of Three
Million One Hundred Ninety Thousand Nine Hundred Eighteen Dollars
($3,190,918.00) with a current net operating income ("NOI") of Two Million Three
Hundred Ninety-Six Thousand One Hundred Nineteen Dollars ($2,396,119.00). The
premises leased to the Tenant shall include the entire Property.
1.3 All of Seller's right, title and interest in and to any fixtures
and items of intangible or tangible personal property attached to the
improvements on the Property and owned by Seller are included in the sale and
the Property shall be conveyed "as is", except as otherwise provided herein.
SECTION 2. PURCHASE PRICE.
2.1 The purchase price for the Property (the "Purchase Price") shall be
THIRTY MILLION AND NO/DOLLARS ($30,000,000.00) subject to adjustment as set
forth in Section 2 hereof, and shall be payable as follow:
(a) Two Hundred Thousand and No/00 Dollars ($200,000.00) shall
be paid into an account with Lawyers Title Insurance Corporation (the
"Title Company") acting through its agent, Pittsburgh Settlement
Services ("PSS") Escrow Agent (the "Title Company") on or before the
date that is five (5) days after the Effective Date (see Section 16.14
hereof) of this Agreement. Such amount shall be held and released by
the Title Company in accordance with the provisions of this Agreement
and the escrow provisions attached as EXHIBIT B. Such payments shall be
non-refundable, except as expressly set forth herein. Such payment is
referred to herein as the "Deposit". The Deposit shall be applied to
the Purchase Price at Closing.
(b) The balance of the Purchase Price, subject to adjustment
as set forth in Section 2.2, shall be paid in cash or cash equivalent
on the Closing Date.
2.2 The Purchase Price stated herein has been determined by applying a
capitalization rate of Seven and 99/00 percent (7.99%) to the projected net
operating income ("NOI") generated by the project for the year 2004. The
Purchase Price shall be adjusted to reflect NOI for 2004 after audit conducted
pursuant to Section 10.1(h) hereof. For purposes hereof, NOI shall be defined as
income remaining after deduction from gross rental income (including base rent,
pass through/reimbursed expenses, rental improvements, and amortization) all
fixed and variable operating expenses including a $.10/per square foot reserve,
excluding depreciation, interest charges, capital expenditures and amortization
of underlying debt.
2.3 The Deposit shall be placed in an interest-bearing escrow account.
All interest accruing on the Deposit shall be credited against the Purchase
Price payable at the closing of title pursuant to Section 7 (the "Closing"). If
the Closing does not take place, the interest accrued on the Deposit shall be
paid to the party entitled to receive the Deposit pursuant to the terms of this
Agreement. The Title Company shall serve as custodian of all documents to be
delivered into escrow pursuant to this Agreement and to handle the recordation
of all documents to be admitted to record.
SECTION 3. ADJUSTMENTS AND APPORTIONMENTS
3.1 The following are to be apportioned or adjusted as of the date of
Closing (the "Closing Date"):
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(a) Any charges, which are not paid directly by the TENANT
including but not limited to, real estate taxes, water and sewer
charges, electricity, fuel and other utility charges shall be
apportioned as of the Closing Date in accordance with local custom for
transactions of this type.
(b) Any escrow fees charged by the Title Company for acting as
the escrow agent hereunder and all real estate transfer taxes shall be
shared equally by the parties.
(c) Rental payments made to Seller before Closing, shall be
apportioned as of the Closing Date. Rental deposits, if any, shall be
paid to Buyer.
(d) The following closing costs shall be paid by Buyer:
i. Documentary stamps, if any, on Buyer's mortgages
and notes.
ii. Transfer tax, intangible taxes and transfer fees
shall be divided between the parties.
iii. Recording costs on the deed, Buyer's mortgage
and financing statements.
iv. Costs described in Section 3.1(b) above.
v. The cost of the Owner's and Lender's title
insurance commitment and policy.
vi. Survey and survey update, if any.
vii. Buyer's loan costs.
viii. All expenses of due diligence and all fees and
expenses related to Buyer's financing.
ix. All other expenses incurred by Buyer including
without limitation, all legal fees and expenses of Buyer's
counsel.
(e) The following closing costs shall be paid by Seller:
i. All costs associated with curative or remedial
title work and the recording of any corrective title
instruments and releases.
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ii. Costs as described in Section 3.1 (b) above.
iii. Transfer tax, intangible taxes, and transfer
fees shall be divided between the parties.
iv. All other expenses incurred by Seller, including
without limitation all fees and expenses of Seller's counsel.
3.2 The terms and provisions of this Section 3 shall survive the
Closing Date.
SECTION 4. TITLE
4.1 Seller shall convey good and indefeasible fee simple title to the
Property to Buyer by special warranty deed subject only to the herein defined
Permitted Exceptions.
4.2 Within ten (10) days after the Effective Date Seller shall provide
a commitment for title insurance under an owner's Extended Coverage Policy of
title insurance (ALTA Form) issued by the Title Company (the "Commitment"). Such
Commitment shall commit to insure that provided all premiums are paid, all
Schedule B, Section 1 requirements are met, the special warranty deed is
recorded and any other requirements under the Agreement are satisfied, fee
simple title will vest in Buyer at Closing subject to standard ALTA title policy
printed exceptions (and including Schedule B, Section 2, Exceptions) (the
"Permitted Exceptions"). The cost of such title insurance policy shall be the
minimum promulgated rate allowed by applicable state law, or if there is not a
minimum promulgated rate, at a negotiated rate which is competitive in the local
market.
4.3 Buyer shall have twenty (20) days after receipt of the Commitment
to notify Seller, in writing, of any matter identified in the Commitment or
otherwise known to Buyer which would render the title conveyed to Buyer other
than good, clear, record and marketable or which would adversely affect or
interfere with Buyer's contemplated use, leasing, sub-leasing, financing,
resale, or other transfer of the Property ("Defect of Title"). Failure by Buyer
to give such notice within the prescribed time period shall be deemed a waiver
of any Defect of Title disclosed by the commitment or otherwise known to Buyer
which existed on the Effective Date and such Defect of Title shall be deemed a
Permitted Exception.
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For purposes of this Agreement, Permitted Exceptions shall
also mean (a) ad valorem taxes and assessments not yet due and payable; (b)
applicable zoning, and building laws and ordinances; (c) vehicular or pedestrian
easements of record as of the date of this Agreement affecting the Property and
being contiguous with the front side or rear boundary lines of the Property; (d)
water, sewer, gas, electric, cable television and telephone lines or easements
therefore of record as of the date of the Agreement; (e) prior grants,
reservations or leases of coal, oil, gas or other minerals as shown by
instruments and documents of record as of the date of this Agreement; and (f)
the Lease.
Buyer shall notify Seller of any Defect of Title which does
not exist at the Effective Date but which arises prior to Closing ("Subsequent
Defect"). Such notice shall be in writing and shall be given on or prior to the
Closing Date.
Any notice from Buyer to Seller identifying one or more
Subsequent Defect(s) of Title shall be referred to herein as a "Title Objection
Notice".
4.4 Upon receipt of a Title Objection Notice, Seller shall use
reasonable good faith efforts to cure any such Subsequent Defect(s) . Seller
shall have the right to delay the Closing for up to thirty (30) days ("30 Day
Delay Period") to permit such remedy or cure (such period as provided herein to
Seller to cure any such Subsequent Defect(s) of Title is referred to herein as
the "Title Cure Period"). As part of such cure, Seller shall remove any
consensual liens securing the payment of money. If Seller remedies or cures such
Subsequent Defect(s) prior to the Closing Date as defined in Section 7, closing
shall proceed as scheduled. If Seller remedies or cures such Subsequent Defects
within the 30 Day Delay Period described herein, Seller shall notify Buyer of
such remedy or cure and if Buyer deems such remedy or cure to be satisfactory,
Seller shall have the right to set the Closing Date by giving Buyer written
notice thereof; provided that such Closing Date shall be no sooner than ten (10)
days after such notice and shall not occur after the 30 Day Delay Period without
the written consent of the Buyer. If the Subsequent Defect(s) set forth in the
Title Objection Notice are not corrected or remedied within the Title Cure
Period, then Buyer shall elect, by written notice to Seller within five (5) days
after the end of the Title Cure Period either (i) to accept title to the
Property subject to the uncured Defect(s) of Title without reduction of the
Purchase Price (other than Seller's obligation to pay off any consensual liens
securing the payment of money) and without any right to damages and without any
other liability on the part of Seller, or (ii) to terminate this Agreement,
whereupon all obligations of the parties hereunder shall cease and neither party
shall have any claim against the other by reason of this Agreement, except with
respect to any provision hereof that expressly survives
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the termination of this Agreement. If Seller does not remedy or cure such
Subsequent Defect(s) within the Title Cure Period, and if Buyer elects to
proceed with the Closing, the Closing Date shall be the tenth (10th) calendar
day after the end of the Title Cure Period but not later than the last day of
the 30 Day Delay Period without Buyer's written consent.
4.5 If, on the Closing Date, there are any liens or encumbrances
securing the payment of a fixed liquidated amount of money, that Seller is
obligated to pay or discharge in order to convey good, clear, record and
marketable title to the Property to Buyer, Seller may elect to use any portion
of the Purchase Price to satisfy the same, provided Seller shall authorize the
Title Company to retain a sufficient portion of the Purchase Price to ensure the
payment in full of such liens and encumbrances and the obtaining and the
recording of such satisfactions and releases. Buyer shall be entitled to verify
the sufficiency of any amounts retained to satisfy or discharge of the
obligation to which they are assigned. Assuming due verification of the
sufficiency of the amounts retained to satisfy or discharge the obligation to
which they are assigned, the existence of any such liens or encumbrances shall
not be deemed objections to title if Seller shall comply with the foregoing and
the Title Company is willing to insure the Property without exception for such
lien or encumbrance.
SECTION 5. DELIVERY OF SELLER'S DOCUMENTS
5.1 Within ten (10) days after the Effective Date, Seller shall deliver
to Buyer, to the extent Seller has not already done so, all operating and
financial documents, records, reports, audits, agreements, contracts for
services, title insurance commitments, title insurance policies, leases (a copy
of the fully executed Lease, any lease memorandum, and all lease amendments, if
any), construction and development documents, appraisals, construction
appraisals, warranties, surveys, tests, reports, environmental reports, studies,
notices, advisories, permits, certificates of occupancy, and anything else in
its possession material to the status or conditions of the Property ("Inspection
Materials")
5.2 Owner shall deliver an ALTA/ACSM Land Survey of the Property to
Buyer not later than ten (10) days prior to the conclusion of the Inspection
Period and certified not later than ninety (90) days prior to Closing. The cost
of such survey or recertification costs of an existing survey shall be paid by
Buyer.
5.3 Buyer agrees that any and all information delivered by Seller or
its agents and representatives with respect to the Property shall be held by
Buyer in confidence and not released or shared with anyone except such
employees, lenders and professional advisors as are reasonably necessary to
allow Buyer to evaluate the Property. If for any reason this transaction does
not close, any such
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information and any copies that have been made by Buyer shall be promptly
returned to Seller. The provisions of this Section 5.3 shall survive the
termination of this Agreement.
SECTION 6. INSPECTION PERIOD.
6.1 Unless extended by written agreement of Seller and Buyer, Buyer
shall have until February 9, 2004, unless such date is extended as herein
provided, to conduct an inspection of the Property. Such period shall
hereinafter be referred to as the "Inspection Period". During the Inspection
Period during normal business hours and after 48 hours notice to Seller or its
designated agents, and whatever advanced notice as required under the Lease,
Buyer, or its engineers, architects, building consultants, environmental
investigators, or other representatives, at Buyer's sole cost and expense, may,
subject to Tenant's rights under the Lease, inspect and test the Property for
the purpose of satisfying Buyer in its sole and absolute discretion, that the
Property and the Leases thereon is acceptable and satisfactory to Buyer and
Tenant, that the Property is suitable for Buyer's purposes and that the Property
meets or exceeds all underwriting, legal and regulatory standards and
requirements of Buyer. Such tests (i) shall be noninvasive, (ii) shall be
conducted subject to the rights of tenant, (iii) insurance acceptable to Seller
shall be carried by Buyer and its agents, (iv) shall be conducted during normal
business hours, (v) shall be conducted subject to indemnity of Seller by Buyer
acceptable to Seller, and (vi) shall be subject to delivery of copies of all
tests conducted during the inspection period to Seller. Buyer shall comply with
all laws, rules and regulations of any governmental authority and obtain all
licenses and permits required in connection with such activities. Buyer agrees
to indemnify and hold Seller harmless from and against any property damage or
personal injury or claim or lien against the Property resulting from any such
access or inspection by Buyer or its representatives. Such indemnification shall
survive the Closing or earlier termination of this Agreement. Buyer shall also
have the right during such Inspection Period to examine and review environmental
conditions of the Property, zoning and land use regulations, governmental
entitlements, governmental approvals and any restrictions, agreements,
obligations and liabilities affecting the Property. If Seller fails to provide
any of the documentation in its possession identified in Section 5 hereof on or
before the end of the prescribed ten (10) -day period, the Inspection Period
will be extended one (1) day for each day or partial day delay in the delivery
of such documentation.
6.2 Buyer shall have the right to extend the Inspection Period for an
additional period of fifteen (15) days (the "Extended Inspection Period") by
giving written notice to Seller of its intent to extend within the Inspection
Period. If the Seller extends the Inspection Period, the Deposit shall be non
refundable in
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the event Buyer terminates this Agreement based on matters discovered during the
Inspection Period. Nothing contained in this Section 6.2 shall be deemed to make
the Deposit non refundable if this Agreement is terminated due to the inability
of Seller to convey good, clear, unencumbered and marketable title to the
Property to Buyer, the material inaccuracy of any warranties or representations
made by Seller herein or for any other breach of this Agreement by Seller.
6.3 Buyer shall have the right to terminate this Agreement at any time
during the initial Inspection Period or the Extended Inspection Period in its
sole and absolute discretion for any reason or no reason by giving written
notice to Seller on or before the last day of the Inspection Period as extended.
If Buyer timely gives notice of termination under this Section, all obligations
of the parties hereunder shall cease and neither party shall have any claim
against the other by reason of this Agreement, except with respect to any
provision hereof that expressly survives the termination of this Agreement.
Except as provided in Section 6.2, upon restoration of the Property as provided
in Section 6.1, the Deposit shall be returned to the Buyer. If Buyer fails to
give such written notice of termination on or before the last day of the
Inspection Period as extended, Buyer shall be deemed to have waived its right to
terminate this Agreement pursuant to this Section.
6.4 If Buyer terminates this Agreement in accordance with Section 6.3
above, Buyer shall return to Seller all documents provided to Buyer by Seller,
and any copies thereof made by Buyer and shall provide Seller with copies of all
reports, surveys, plans, studies and analysis prepared by or for Buyer with
respect to the Property. Buyer agrees that any and all information obtained by
it or its agents and representatives with respect to the Property, including
without limitation all reports, surveys, plans, studies and analysis prepared by
or for Buyer with respect to the Property, shall be held by Buyer in confidence
and not released or shared with anyone other than Seller, except for such
employees, lenders and professional advisors as are reasonably necessary to
allow Buyer to evaluate the Property. The provisions of this Section 6.4 shall
survive the termination of this Agreement. If Buyer waives its right to
terminate as provided above, Buyer shall be deemed to have accepted the Property
in an "as is" condition, without any representations or warranties, except as
specifically provided herein, and without abatement or reduction of the Purchase
Price.
SECTION 7. CLOSING AND ESCROW.
7.1 Upon execution of this Agreement, the parties shall deliver an
executed counterpart of this Agreement to the Title Company. This Agreement
shall serve as the instructions to the Title Company as the escrow holder for
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consummation of the purchase and sale contemplated hereby. Seller shall promptly
notify the Title Company and Buyer in writing as to the Effective Date and the
date that the Inspection Period ends, which dates shall be controlling unless
Buyer objects in writing within three (3) days after receipt of such notice or
unless the parties otherwise agree. Seller and Buyer agree to execute such
additional and supplementary escrow instructions as may be appropriate to enable
the escrow holder 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
control.
7.2 The consummation of the transactions contemplated hereby shall be
held and delivery of all items to be made at the Closing under the terms of this
Agreement shall be made at the office of the Title Company, on a date which date
is not later than twenty (20) days after the end of the Inspection Period
subject to satisfaction of conditions precedent set forth herein, or on such
other date as may be agreed by the Parties in writing It is anticipated that
Closing will occur during the month of March, 2004.
7.3 At least one (1) business day prior to the Closing Date, Seller
shall deliver the following into escrow with the Title Company (all in form
reasonably acceptable to the Title Company and Buyer's counsel):
(a) A duly executed and acknowledged Special Warranty Deed
(herein referred to as the "Deed") in recordable form conveying the
Property to Buyer as grantee therein, subject only to Permitted
Exceptions.
(b) A duly executed xxxx of sale ("Xxxx of Sale") transferring
all of Seller's right, title and interest in and to the fixtures and
personal property described in Section 1.3.
(c) A duly executed assignment of the Lease between Seller and
Tenant and the written consent of Tenant thereto (if required By the
Lease).
(d) An affidavit dated as of the date of Closing, duly
executed, certifying that Seller is not a foreign person within the
meaning of the Internal Revenue Code and its regulations.
(e) Such customary affidavits or certificates, duly executed,
as shall be reasonably required by the Title Company for the purpose of
issuing an Owner's and Lender's title insurance policy without
exception for parties other than Tenant in possession or mechanics and
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materialmen's or construction liens claiming by, through or under any
contract, agreement or understanding with Seller or any entity
affiliated with Seller.
(f) A certificate, duly executed, updating the representations
and warranties of Seller set forth in this Agreement through Closing,
which certificate shall state that there has been no material change in
such representations and warranties, or if so, what changes have taken
place.
(g) A duly executed Closing Statement setting forth the
Purchase Price and the various adjustments and prorations set forth
herein, identical to the Closing Statement signed by Buyer pursuant to
Section 7.4.
(h) Such resolutions, authorizations, bylaws or other
documents relating to Buyer as shall be reasonably requested to
evidence the authority of Seller to enter into and consummate the
transaction contemplated by this Agreement.
(i) A duly executed 1099-S Designation Form.
(j) Such other documents as are reasonably necessary to
consummate this Agreement including, without limitation, such events as
may be required by Lease with the Tenant.
Buyer may waive compliance on Seller's part under any of the foregoing items by
an instrument in writing.
7.4 Buyer shall deliver the following into escrow with the Title
Company, at least one (1) business day prior to the Closing Date, unless
otherwise specified:
(a) The balance of the Purchase Price as required by Section
2.1(b), which will be wired to the Title Company no later than 11:00
a.m. on the Closing Date.
(b) A duly executed certificate updating the representations
and warranties of Buyer set forth in this Agreement through such
Closing Date, which certificate shall state that there has been no
material change in said representations and warranties, or if so, what
changes have taken place.
(c) A certificate from the Michigan Secretary of State dated
no
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more than sixty (60) days prior to the Closing, confirming that Buyer
is duly formed and in good standing under the laws of such state.
(d) Such resolutions, authorizations, bylaws or other
documents relating to Buyer as shall be reasonably requested to
evidence the authority of Buyer to enter into and consummate the
transactions contemplated by this Agreement.
(e) A duly executed Closing Statement setting forth the
Purchase Price and the various adjustments and prorations set forth
herein, identical to the Closing Statement signed by Seller pursuant to
Section 7.3.
(f) Such other documents as are reasonably necessary to
consummate this Agreement.
Seller may waive compliance on Buyer's part under any of the foregoing items by
an instrument in writing.
7.5 Upon receipt of all the funds and documents described in Sections
7.3 and 7.4, above, the Title Company shall, in accordance with escrow
instructions reasonably agreed upon by Seller and Buyer, (a) record the Deed and
deliver the documents delivered into escrow by Seller to Buyer, and (b) disburse
the Purchase Price, as adjusted, in accordance with the closing statement and in
accordance with wiring instructions provided by Seller (provided that if Seller
assigns this Agreement to a qualified intermediary in accordance with the
provisions of Section 16.5, funds due Seller on account of the Purchase Price
shall instead be delivered to such qualified intermediary), and deliver the
documents from escrow to the party entitled to receive the same.
SECTION 8. REPRESENTATIONS AND WARRANTIES
8.1 Seller hereby represents and warrants to Buyer, and acknowledges
that Buyer is relying on each of the following statements in entering into this
Agreement, as follows:
(a) Seller is a limited partnership duly formed, validly
existing and in good standing under the laws of Pennsylvania and has
full power and authority to enter into this Agreement and to carry out
the transactions contemplated hereby, and the persons executing this
Agreement on behalf of Seller are duly authorized to execute, on behalf
of Seller, this Agreement, the Deed, Xxxx of Sale, assignments and
other instruments or documents reasonably necessary to effect the
transactions contemplated by this Agreement.
(b) Seller has full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and to
execute this Agreement, the Deed, Xxxx of Sale, assignments and other
instruments or documents reasonably necessary to effect the
transactions
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contemplated by this Agreement.
(c) This Agreement and all documents executed and delivered by
Seller are or at the time of Closing will be duly authorized, executed,
and delivered by Seller and will constitute the legal, valid, and
binding obligations of Seller, enforceable in accordance with their
terms. Such documents do not violate any provisions of any agreement,
instrument or judicial order to which Seller is a party or by which
Seller or the Property is bound including without limitation, the lease
with the United States General Services Administration.
(d) There are no attachments, executions, assignments for the
benefit of creditors, receiverships, conservatorships or voluntary or
involuntary proceedings in bankruptcy or pursuant to any other debtor
relief laws filed by Seller or pending against Seller or Seller's
interest in the Property.
(e) Seller has no knowledge of any litigation or enforcement
or regulatory action or proceeding against or relating to the Property.
(f) Seller has no actual knowledge of any taking, condemnation
or special assessment, actual or proposed, with respect to any part of
the Property.
(g) Seller is not a party to any service contracts relating to
the Property except as delivered by Seller to Buyer during the first
ten (10) days of the Inspection Period.
(h) To the best of Seller's knowledge no hazardous substance
or hazardous waste (as hereinafter defined),, asbestos or petroleum
product has been released by Seller or to the best of Seller's
knowledge by any of Seller's tenants into the environment, discharged,
placed or disposed of at, near or on the Property. The Property has not
been used at any time by Seller or to the best of Seller's knowledge,
Seller's Tenant as a landfill or waste disposal site. To the best of
Seller's knowledge, no claims, litigation, or administrative
proceedings are pending or threatened related to any hazardous
substance or hazardous waste asbestos or petroleum product
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relating in any way to the Property. The Parties acknowledge that the
Property is subject to the terms and conditions of that certain Consent
Order and Agreement between Urban Redevelopment Authority of Pittsburgh
and the Commonwealth of Pennsylvania Department of Environmental
Protection ("DEP") dated April 16, 1998 ("Consent Order") which Consent
Order is recorded in the Recorders office of Allegheny County,
Pennsylvania and Deed Book Volume 10891 Page 480. Seller has complied
with all terms of the Consent Order as the same may apply to the
Property. Seller has obtained the necessary "Act 2 Clearance
Certificate" from DEP following completion of the Seller's development
of the Property. The Parties hereto agree to include in the Special
Warranty Deed and elsewhere, as may be necessary, all appropriate
language pertaining to the environmental status of the Property as may
be required by the Consent Order. The terms "hazardous substance" and
"hazardous waste", as used herein shall have the definitions set forth
in the Resource Conservation Recovery Act, as amended, 42 U.S.C. 6901,
et. seq., or the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. 9601, et. seq. These
representations and warranties shall survive Closing.
(i) The Building constructed on the Property has been
constructed in accordance with the plans and specifications delivered
to Buyer during the Inspection Period subject only to duly approved
change orders. The Building was constructed in a good and workmanlike
manner consistent with accepted construction practices in Pennsylvania
for buildings of this type and use.
(j) The Building is fully compliant with all applicable
building codes, zoning ordinances, covenants and use restrictions.
8.2 Buyer hereby represents, warrants and covenants to Seller, and
acknowledges that Seller is relying on each of the following statements in
entering into this Agreement, as follows:
(a) Buyer is a corporation duly formed, validly existing and
in good standing under the laws of the State of Michigan and has full
power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby, and the persons executing this
Agreement on behalf of Buyer are duly authorized to execute, on behalf
of Buyer, this Agreement, the assignments and other instruments or
documents reasonably necessary to effect the transactions contemplated
by this Agreement.
(b) This Agreement and all documents executed and delivered
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by Buyer are or at the time of Closing will be duly authorized,
executed, and delivered by Buyer and will constitute the legal, valid,
and binding obligations of Buyer, enforceable in accordance with their
terms. Such documents do not violate any provisions of any agreement,
instrument or judicial order to which Buyer is a party or by which
Buyer is bound.
8.3 If either party discovers prior to or at the Closing that any
representation or warranty of the other party was materially untrue or incorrect
when made, the discovering party shall, as its sole remedy, elect to either
waive any such misrepresentation and proceed with the Closing or to terminate
this Agreement. The foregoing notwithstanding, if it is determined that any
representation or warranty of a party was materially untrue or incorrect when
made, the party making such representation shall take reasonable steps to
correct such representation or warranty or to otherwise make such representation
or warranty true.
8.4 Except as otherwise herein provided, the representations and
warranties contained in this Section and elsewhere in this Agreement, refer to
the date of execution of this Agreement, or with respect to any date-down
certificate delivered by the parties pursuant to Sections 7.3 or 7.4, the date
of such certificates. Seller will notify Buyer, promptly after acquiring
knowledge thereof, of any change in facts which arise prior to the conclusion of
the Closing which would make any such representation or warranty materially
untrue if such state of facts had existed on the date of execution of this
Agreement. Seller shall not be in default under this Section or be deemed to
have breached any representation or warranty hereunder unless such
representation or warranty were incorrect or untrue in a material respect when
made or when restated pursuant to the date-down certificates referenced in
Sections 7.3 and 7.4 hereof.
SECTION 9. COVENANTS OF SELLER.
9.1 Between the date hereof the Closing Date or the date of Buyer's
earlier termination of this agreement, as the case may be, Seller shall not
sell, transfer or convey, mortgage or otherwise encumber the Property, or any
part thereof, which would adversely affect Seller's ability to perform under
this Agreement, without the written consent of the Buyer.
9.2 Seller shall not, without the prior written consent of Buyer, enter
into any contract with respect to the Property that will survive the Closing or
will otherwise affect the use, operation, enjoyment or development of the
Property after the Closing.
9.3 Seller shall notify Buyer, promptly after acquiring knowledge
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thereof, of any event or circumstances that would make any representation or
warranty of Seller to Buyer under this Agreement to be materially untrue.
9.4 Seller shall use its best efforts to assure that as of Closing, the
Property is acceptable to and fully occupied by tenant. Seller shall maintain
the Property in the same condition as it exists on the Effective Date,
reasonable wear and tear excepted.
9.5 Seller shall keep, or cause to be kept, fire, casualty and extended
insurance covering the Property, in an amount of not less than the Purchase
Price, through the Closing Date.
SECTION 10. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS TO CLOSE.
10.1 Buyer's obligations hereunder, including the obligation to
purchase and pay for the Property, are subject to the satisfaction of the
following conditions, any of which may be waived by Buyer, in writing signed by
Buyer:
(a) The representations and warranties made by Seller in this
Agreement being true and correct in all material respects on and as of
the Closing Date with the same force and effect as though such
representations and warranties had been made as of the Closing Date;
(b) Seller having performed in all material respects all
covenants and obligations required by this Agreement to be performed by
Seller on or prior to the Closing Date;
(c) Buyer receiving, at Closing, an ALTA Seller's Extended
Coverage Policy of Title Insurance insuring good, clear, record,
marketable and fee simple title to the Property subject only to the
Permitted Exceptions;
(d) Seller delivering possession of the Property free and
clear of all tenants, other than the United States General Services
Administration/Federal Bureau of Investigations; and
(e) Between the expiration of the Inspection Period and the
Closing Date, there shall have occurred no material adverse change in
the environmental conditions of the Property or to the physical
condition of the Property, reasonable wear and tear excepted; provided,
however, that the parties acknowledge and agree that certain adverse
changes to the physical condition of the Property will be governed by
Section 12 below and with respect to those changes, Section 12 will
determine whether
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or not they are grounds for termination of this Agreement.
(f) The Property shall be subject to the Lease with the Tenant
with a term ending not earlier than September 30, 2016 and with no
right of early termination claim, which Lease shall be in effect with
rents and other charges being paid by Tenant without reservation.
(g) Approval of the acquisition by the Board of Directors of
Buyer, such approval and notice thereof to be forthcoming in written
form prior to the end of the Initial Inspection Period. Should the
Board of Directors of Buyer not approve the acquisition prior to the
end of the Initial Inspection Period, Buyer shall have the right to
terminate without penalty or liability to Seller and the Deposit
together with interest accrued thereon, if any, shall be returned to
Buyer. If Buyer fails to terminate the Agreement prior to conclusion of
the Initial Inspection Period, Buyer shall be deemed that it has
obtained the requisite approval.
(h) Delivery to Buyer of the following documents and records
that are reasonably required and necessary for Buyer to meet its
disclosure obligations as a public company (i) a Letter of
Representation and (ii) financial information on the Property for as
long as owned or operated by Seller sufficient for Buyer's auditors, at
its expense, to be able to prepare AICPA standard audited financial
statements, provided that Buyer shall promptly notify the Seller in
writing prior to the expiration of the Initial Inspection Period of any
shortcoming in said reasonably required materials and provided further
that the Seller shall not be required to produce any materials that do
not already exist; should the financial records prove to be not
auditable under the reasonable application of AICPA Standards and
Seller fails to furnish the appropriate material, Buyer shall have the
right during the Initial Inspection Period to terminate the Agreement
without penalty or liability and the Deposit, together with interest
accrued thereon, if any, shall be returned to Buyer.
(i) Owner shall deliver to Buyer at Closing an estoppel
certificate, or lease status letter and subordination agreement from
Tenant in a form consistent with the Tenant's obligations under the
Lease to provide such documents.
(j) The Building shall be occupied by Tenant under a valid
certificate of occupancy and fully compliant with the requirements of
the Lease.
(k) The Property shall be acceptable to and fully occupied by
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Tenant at the date of Closing.
10.2 If any of the conditions set forth in Section 10.1 above are not
satisfied, Buyer, by written notice delivered to Seller on or before the Closing
may elect to (a) waive such condition and proceed with the Closing, or (b)
terminate this Agreement and have the Deposit, together with accrued interest,
if any, returned to it.
10.3 The parties acknowledge that in addition to the matters set forth
in Section 10.1, under certain circumstances, Defect of Title that are not
Permitted Exceptions and which are timely objected to as provided in Section 4
above, may become conditions to Buyer's obligations hereunder, subject to and in
accordance with Section 4.
SECTION 11. SPECIAL CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO
CLOSE.
11.1 Notwithstanding any other section of this Agreement to the
contrary, Buyer's obligation to close is expressly conditioned on completion of
a secondary offering by Government Properties Trust, Inc. ("GPTI"), successor in
interest to Buyer. GPTI has complied with all applicable U.S. securities laws,
rules and regulation such that it may lawfully conduct a public offering of 11.5
million shares of its common stock. Buyer filed an appropriate and complete Form
S-11 Registration Statement with the Securities and Exchange Commission ("SEC")
on October 8, 2003, on behalf of GPTI. Buyer shall, in good faith and with
reasonable diligence, use all commercially reasonable efforts to comply with and
to cause GPTI to comply with all applicable U.S. securities laws, rules and
regulations such that GPTI may lawfully conduct such offering as soon as
possible. For purposes hereof, the secondary offering date shall be the date
that the following conditions are satisfied: the registration statement is
declared effective by the SEC and all conditions of the underwriting agreement
are deemed satisfied by the underwriter ("Secondary Offering Date"). Closing
shall occur ten (10) days following the Secondary Offering Date.
11.2 If, for any reason, the Secondary Offering does not proceed or if
the Secondary Offering Date has not been established by February 9, 2004, Buyer
may, by written notice to Seller, terminate this Agreement. Then, in such event,
the deposit shall be returned to Buyer and neither party shall have any further
liability or obligation to the other pursuant hereto.
SECTION 12. CASUALTY AND CONDEMNATION.
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12.1 If, prior to the Closing Date, all or a "Material Portion of the
Property" (as such term is defined below) is taken by public authority, then
Seller shall promptly notify Buyer and Buyer shall have the option, exercisable
by notice given to Seller within thirty (30) days after notice of such taking,
but in any event prior to the Closing, either to proceed with the Closing "as
is," without a reduction of the Purchase Price, and otherwise pursuant to the
terms hereof, or to terminate this Agreement, in which event the Deposit shall
be returned to Buyer.
12.2 If, prior to the Closing Date, all or a Material Portion of the
Property is damaged or destroyed by fire or other casualty, other than by the
fault or negligence of Buyer, or Buyer's employees, agents, invitees or anyone
claiming right to possession under or through Buyer, then Seller shall promptly
notify Buyer and Seller shall have, at its option, a period of not more than one
hundred twenty (120) days after receipt of such notice within which to repair
any such destruction or damage, subject to reasonable extension due to delays
caused by weather, labor strikes, unavailability of materials or other causes
beyond the control of Seller (such period being referred to herein as the
"Restoration Period"). If Seller elects to repair any such damage or
destruction, the Closing shall be extended to the date that is five (5) days
after the expiration of such Restoration Period; provided, however, that if such
destruction or damage is repaired before the end of such Restoration Period,
Seller shall have the right to close earlier by giving Buyer written notice
setting a Closing Date not sooner than five (5) days after such notice. If such
destruction or damage is not substantially corrected or remedied within such
Restoration Period, or if Seller elects not to repair such destruction or
damage, then Buyer may elect, by written notice to Seller on or before the
earlier of (i) the Closing Date, as the same may be extended by Seller hereunder
or (ii) five days after receipt of notice from Seller electing not to repair
such destruction or damage, to terminate this Agreement, in which event the
Deposit shall be returned to Buyer and neither party shall have any further
obligations to the other hereunder, except with respect to any provision hereof
that expressly survives the termination of this Agreement. Anything to the
contrary herein notwithstanding, Buyer shall have no right to terminate this
Agreement if (a) such damage was due to the fault or negligence of Buyer, or
Buyer's employees, agents, invitees or anyone claiming right to possession under
or through Buyer or (b) such damage is substantially restored prior to receipt
by Seller of Buyer's notice to terminate. If Buyer does not timely elect to
terminate this Agreement as provided above, Buyer shall be deemed to have waived
any right to terminate this Agreement as a result of such destruction or damage
and Buyer shall accept title to the Property subject to such destruction or
damage but without reduction of the Purchase Price and without any right to
damages and without any other liability on the part of Seller, subject to the
provisions of Section 12.3 below.
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12.3 If this Agreement is not terminated as provided above, then Seller
on the Closing Date shall assign to Buyer (without recourse) the right to
recover insurance proceeds (together with the amount of any deductible which
shall be paid to Buyer by Seller) or condemnation awards, if any, payable by
virtue of such casualty or taking; provided, however that such assignment shall
reserve to Seller the right to recover from such proceeds or award any expenses
incurred in obtaining such proceeds or award and reimbursement for any funds of
Seller expended in restoring the Property prior to the Closing Date.
12.4 If, prior to the Closing Date, any portion of the Property is
damaged or destroyed by fire or other casualty (and such damage or destruction
has not been completely restored by Seller), or is taken by public authority,
and such portion is not a Material Portion of the Property, then both Seller and
Buyer shall proceed with the Closing and the Property and the personal property
will be conveyed "as is," without an abatement of the Purchase Price and
pursuant to the terms hereof, but the actual amount of insurance proceeds or
condemnation award, as the case may be, which are collected by the Seller shall
be paid over to Buyer, minus any expenses incurred in obtaining such proceeds or
award and minus any proceeds or award used by Seller to restore the Property. If
uncollected prior to the Closing Date, the right to receive such proceeds or
award, as the case may be, shall be assigned to Buyer (without recourse), such
assignment reserving to Seller the right to recover from such proceeds or award
any expenses incurred in obtaining such proceeds or award and reimbursement for
any funds of Seller expended in restoring the Property prior to the Closing
Date. If Seller has completely restored the Property, Seller shall be entitled
to the entire insurance proceeds.
12.5 For the purposes of this Section, "Material Portion of the
Property" is defined as damage to or a taking of the Property with respect to
which (i) fifteen (15%) or more of the Property are damaged or taken by the
condemning authority, or (ii) access to the Property is permanently lost or
materially modified to the detriment of the Property as a result thereof.
12.6 The parties shall promptly notify each other in writing after
acquiring knowledge thereof, of any taking, destruction or damage to the
Property to which this Section applies. The provisions of this Section shall
survive the Closing hereunder.
SECTION 13. DEFAULT AND REMEDIES.
13.1 If at or prior to Closing, Buyer shall default in the performance
of Buyer's obligations under this Agreement, including without limitation the
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obligation to pay the Purchase Price for the Property in accordance with the
provisions of Section 2.1 or 2.2 hereof, Seller shall be entitled to receive the
Deposit together with all interest accrued hereto and Buyer hereby authorizes
the Title Company to pay such Deposit to Seller together with all interest
accrued thereon in such event. Seller shall receive the Deposit in consideration
of Seller's covenants and agreements herein and as liquidated damages for
Buyer's default. Such liquidated damages shall be Seller's sole remedy and
thereafter neither party shall have any rights or liabilities against or to the
other, except as to any provision that expressly survives Closing or the
termination of this Agreement. The parties acknowledge if Buyer defaults, it is
impossible to compute exactly the damages that would accrue to Seller. Taking
these facts into account, the parties have agreed that the amount of the Deposit
together with all interest accrued thereon is a reasonable estimate by them of
the amount of such damages and fair consideration for Seller's covenants and
agreements set forth herein.
13.2 If at or prior to Closing, Seller shall default in the performance
of Seller's obligations under this Agreement, Buyer, as its sole remedy, may
either (a) terminate this Agreement for such default and have the Deposit
returned to it together with all interest accrued thereon, (b) seek specific
performance of this Agreement, or (c) pursue any other remedies available at law
or in equity.
SECTION 14. NOTICES
14.1 All notices required to be given under this Agreement shall be
deemed given upon the earlier of actual receipt or two (2) days after (i) being
mailed by certified mail, return receipt requested, (ii) delivery to a
nationally recognized overnight delivery service, or (iii) electronic facsimile
transfer addressed as follows:
(a) If intended for Buyer, at
Gen-Net Lease Income Trust, Inc.
00000 Xxxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxx Xxx, XX 00000
Attention: Xxxxx Xxxxxx
Phone Number: (000) 000-0000
Fax Number: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxxx, Xx.
Lieben, Whitted, Houghton,
Slowiaczek & Xxxxxxxx, L.L.O.
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100 Scoular Building
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Phone Number: (000) 000-0000
Fax Number (000) 000-0000
xxxxxxxx@xxxxxxxxx.xxx
----------------------
(b) If intended for Seller, at
Southside Development Company/Southside I, L.P.
Attn: Xxxxx Xxx
Xxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
xxxx@xxxxxx-xxx.xxx
With a copy to:
Xxxxxxx X. Xxxxxx
Oxford Development Company
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
xxxxxxx@xxxxxx-xxx.xxx
----------------------
14.2 Anything contained in this Section to the contrary
notwithstanding, all notices pursuant to the Agreement from Seller to Buyer, or
from Buyer to Seller will be effective if executed by and sent by their
respective attorneys (including facsimile transfer during normal business hours
of the recipient). Buyer and Seller, and their respective counsel, all hereby
agree that if notice is given hereunder by counsel, such counsel may communicate
directly in writing with all principals, as required to comply with the
foregoing notice provisions.
SECTION 15. SURVIVAL AND WAIVER.
15.1 The acceptance by the Buyer of the Deed on the Closing Date shall
be deemed full performance and discharge of each and every agreement and
obligation on the part of Seller hereunder to be performed, and any and all
agreements, representations and warranties of Seller contained in this
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Agreement shall not survive the Closing Date, except to the extent expressly
provided in this Agreement. The Property are being sold and will be conveyed "as
is", "where is", without any representation or warranties as to habitability,
merchantability, fitness, condition or otherwise, and at the Closing, Seller
shall be released from all liability pertaining to the Property, except as
expressly set forth herein. Neither party is relying upon any statements or
representations not embodied in this Agreement.
15.2 It is understood and agreed that (i) all contemporaneous or prior
representations, statements, understandings and agreements, oral or written,
between the parties are merged in this Agreement, which alone fully and
completely expresses the agreement of the parties, and (ii) that this Agreement
is entered into after full investigation, neither party relying on any statement
or representation made by the other which is not embodied in this Agreement.
15.3 The provisions of this Section shall survive the Closing Date.
SECTION 16. MISCELLANEOUS PROVISIONS.
16.1 Seller may not sell, assign, transfer or convey the Property at
anytime before Closing without the express written consent of Buyer. Buyer may
sell, assign, transfer and convey this contract to Government Properties Trust,
Inc. or to a single purpose entity formed by Buyer for that purpose without the
consent or approval of Seller. Buyer may not otherwise sell, assign, transfer of
convey the contract to any persons or entity without the express written consent
of Buyer.
16.2 This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when
executed and delivered shall be of the same binding effect as an original.
16.3 If any one or more of the provisions of this Agreement shall be
held invalid, illegal or unenforceable in any respect, such provision shall not
affect any other provision hereof, and this Agreement shall be construed as if
such provision had never been contained herein.
16.4 In the event either party commences a lawsuit or other proceeding
to enforce its rights hereunder after a breach by the other party, the
prevailing party shall be entitled to reasonable attorney's fees and expenses.
The provisions of this Section shall survive the Closing Date.
16.5 This Agreement, and all the covenants, terms and provisions
contained herein, shall be binding upon and inure to the benefit of the parties
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hereto and to their respective successors and assigns.
16.6 Buyer agrees that Seller may assign this Agreement with respect to
any or all of the Property to an escrow agent, trustee, qualified intermediary
or similar party for the purpose of accomplishing a like-kind exchange within
the meaning of Section 1031 of the Internal Revenue Code, and further agrees to
reasonably cooperate with the Seller to allow Seller to accomplish such
like-kind exchange, provided that Buyer shall not be obligated to incur any
expenses or liability as a result thereof. Buyer may assign this Agreement as
provided in Section 1.3 hereof.
16.7 TIME IS OF THE ESSENCE HEREOF.
16.8 Buyer and Seller agree that no brokerage fee is due to any third
party as a result of this transaction. Buyer and Seller further agree that
neither will pay a brokerage commission or finder's fee to any third party under
this agreement except a fee not to exceed One-Half Percent (1/2%) of the gross
Purchase Price to Investment Realty Advisors ("Broker"). Broker shall certify as
to the aggregate amount of fees received from all parties. Seller and Buyer
further agree to defend and hold one another harmless under the agreement
against all costs and claims for broker's commissions or finder's fees made by
any other person other than the Broker in connection with this transaction. This
agreement shall survive the Closing hereunder, or if the Closing does not occur,
the termination of this Agreement.
16.9 Neither party shall record this Agreement and breach of this
covenant shall, at the option of the non-breaching party, be treated as a
default hereunder.
16.10 This Agreement is and shall constitute a contract under and is to
be construed in accordance with the internal laws of the State of Pennsylvania.
16.11 This Agreement may not be changed or terminated orally.
16.12 The captions to sections hereof are not part of this Agreement
and shall not be deemed to affect the meaning or construction of any of its
provisions.
16.13 Unless otherwise specified, in computing any period of time
described herein, the day of the act or event after which the designated period
of time begins to run is not to be included and the last day of the period so
computed is to be included, unless such last day is a Saturday, Sunday or legal
holiday for national banks in the location where the Property are located, in
which event the period shall run until the end of the next day which is neither
a
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Saturday, Sunday, or legal holiday. The last day of any period of time described
herein shall be deemed to end at 6:00 p.m. Eastern Standard Time.
16.14 The "Effective Date" for purposes of this Agreement shall be the
date that the last of the parties hereto executes this Agreement, as specified
below.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as a sealed instrument as of the day and year first above
written.
SELLER:
OXFORD DEVELOPMENT/SOUTHSIDE I,
L.P., a PENNSYLVANIA limited partnership
By: Development Partner, Inc. General
Partner
By: /s/ Xxxxx X. Matter
---------------------
/s/ Xxxxxx X. Xxx
-----------------
Witness Its: President
------------------
Date: January 14, 2004
-----------------
BUYER:
GEN-NET LEASE INCOME TRUST, INC., a
Michigan corporation
/s/ Xxxxxx X. Xxxxxxx Xx. By: /s/ D. Xxxx Xxxxxx
------------------------- ----------------------
Witness Its: Director - Asset Management
Date: January 19, 2004
-----------------
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