EX-10.12 13 d649797dex1012.htm EX-10.12 TENANT IN COMMON INTERESTS PURCHASE AGREEMENT
Exhibit 10.12
TENANT IN COMMON INTERESTS PURCHASE AGREEMENT
THIS TENANT IN COMMON INTERESTS PURCHASE AGREEMENT (the “Agreement”) effective as of the 2nd day of December, 2013 (“Effective Date”), is made by and among the parties identified on Schedule 1 attached hereto (collectively, “Seller”); XXXXXXX INTERESTS, LLC, a Virginia limited liability company (“Buyer”); and the parties identified on Schedule 2 attached hereto (collectively, the “Xxxxxxx TICs”) (Seller and the Xxxxxxx TICs are sometimes referred to collectively as the “Tenants in Common”). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions hereinafter set forth, the parties do hereby agree as follows:
ARTICLE 1. PURCHASE AND SALE OF TENANT IN COMMON INTERESTS
Upon the terms and subject to the conditions set forth in this Agreement, Buyer agrees to purchase from Seller, and Seller agrees to sell and convey to Buyer at the Closing (as hereinafter defined), all of Seller’s respective undivided tenant in common ownership interests (collectively, the “TIC Interests”) in those certain parcels of real property, and the improvements located thereon (each a “Property” and collectively, the “Properties”), listed on Exhibit A attached hereto and incorporated herein.
ARTICLE 2. CLOSING; EXISTING MORTGAGE LOANS
1
should Closing not occur hereunder as and when scheduled, except to the extent that any delay in Closing hereunder is caused solely by the actions (or omissions) of Seller. The indemnification provided in this Paragraph 2.2 shall survive the Closing and transfer of the TIC Interests or the termination of this Agreement by any party hereto.
ARTICLE 3. PURCHASE PRICE; TRANSFER, SALE AND DELIVERY
Section 3.5 “As Is” Conveyance of Interest & Property. Buyer is thoroughly acquainted with the Property and its condition and agrees to accept the same in its “AS IS”, “WHERE IS” condition as of the Closing Date, but subject to:
(a) All present and future zoning, building and environmental laws, ordinances, codes, restrictions and regulations of any municipal, state, federal or other authority having jurisdiction over the Property, including, without limitation, any proffered conditions affecting the Property.
2
(b) The physical condition of the Property as of the Closing Date; Buyer hereby acknowledges that it has inspected the Property and all features and components thereof and hereby agrees to accept the same and the Interest “AS-IS, WHERE-IS.”
(c) All state of facts with regard to the Property that would be disclosed by a survey of the Property.
(d) All covenants, agreements, restrictions and easements of record (including the TIC Agreement) with respect to the Property, except as provided in Section 3.6 below.
(e) The lien of all real estate taxes whether or not due or payable.
(f) All presently existing and future violations of law or governmental ordinances, orders or requirements, whether or not now or hereafter noted or issued by any governmental office, department or authority.
3
Section 3.8 Closing Documents.
(a) Seller shall execute and deliver at Closing:
(i) the Deeds;
(ii) an affidavit stating, under penalty of perjury, Seller’s U.S. taxpayer identification number and that Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code;
(iii) a closing statement for each of the TIC Interests (together, the “Closing Statements”) to be executed by Seller and Buyer, setting forth the prorations and adjustments to the Purchase Price as required hereunder;
(iv) such evidence or documents as may be required by the title company (“Title Company”) or escrow agent assisting with the Closing (the “Escrow Agent”) evidencing the status and capacity of Seller and the authorization of the person executing and delivering documents on behalf of Seller to do so;
(v) a title affidavit executed by the appropriate Seller for each Property (each a “Title Affidavit”) in form reasonably required by the Title Company for purposes of insuring title, and addressing the actions/omissions of such Seller only, including, without limitation, that there are no construction liens or potential construction liens, that there are no parties in possession or having rights of possession other than those shown on a certified and updated rent roll to be attached thereto, and that nothing has occurred nor has Seller executed any instrument subsequent to the Effective Date hereof affecting title to such Property;
(vi) a 1099 tax reporting form for each Seller;
(vii) any other documents reasonably required by the Title Company or Escrow Agent to close this transaction, in form and content mutually acceptable to Buyer and Seller;
(viii) an agreement(s) (each a “TIC Agreement Termination”) terminating effective as of the Closing Date any Tenants in Common Agreement (each a “TIC Agreement”) of record title against any Property, to be duly recorded in the applicable recording office;
(ix) a xxxx of sale and assignment of leases (including accounts receivable relating to the leases), service contracts and intangibles (each a “General Assignment”) for each Property assigning to Buyer all of Seller’s rights, as the owner of the TIC Interests in such Property, in (1) all furniture, furnishings, fixtures, equipment, tools and other tangible personalty owned or leased (to the extent Seller’s rights in such leases are assignable) by the Tenants in Common and used in connection with the operation of the Property; (2) all space leases of premises in the Property and any ground leases for the Property, together with all guaranties, letters of credit and security deposits with respect to such space leases or ground leases; (3) those certain management agreements (collectively, the “Management Agreements”) with the Manager for the Property; (4) all service contracts for the maintenance and operation of the Property; and (5) all right, title and interest of Seller (to the extent assignable) in and to all intangible property used in connection with the foregoing, including, without limitation, all trademarks, trade names, and all licenses, permits and warranties in connection with the foregoing (to the
4
extent assignable) and all bank accounts maintained by the Manager with respect to the Property. The General Assignment shall release Seller from any ongoing or future liability with respect to the items being assigned therein, and Buyer shall therein indemnify and hold Seller harmless from any future liability with respect to the items being so assigned; and
(x) payment to Lender at Closing of Seller’s Proportionate Share of the December 11 Outstanding Balance under each Existing Mortgage Loan.
(b) At Closing, Buyer will execute (where applicable) and deliver:
(i) The Purchase Price, plus those adjustment amounts referenced herein, plus deliver to the Lender of all additional amounts needed to satisfy Buyer’s obligations under Paragraph 3.2 above relating to repayment in full of the Existing Mortgage Loans at Closing;
(ii) the Closing Statements;
(iii) such evidence or documents as may be required by the Title Company or Escrow Agent evidencing the status and capacity of Buyer and the authorization of the person executing and delivering documents on behalf of Buyer to do so;
(iv) any other documents reasonably required by the Title Company or Escrow Agent or Seller to close this transaction, in form and content mutually acceptable to Buyer and Seller;
(v) the TIC Agreement Terminations;
(vi) a title affidavit for each Property, in form similar to the Title Affidavits, signed by the Xxxxxxx TICs, if necessary; and
(vii) the General Assignments.
ARTICLE 4. MATERIAL ADVERSE CHANGE/ALL OR NONE
5
Buyer and Seller that, as a material inducement to Seller and Buyer to enter into this Agreement, (i) Buyer has agreed to purchase, and Seller has agreed to sell, the TIC Interests in all five (5) Properties, subject to and in accordance with the terms and conditions hereof, with neither party being entitled to remove one or more Properties from this Agreement; (ii) Buyer has agreed to purchase, and Seller has agreed to sell, 100% of the TIC Interests owned by Seller in the five (5) Properties, subject to and in accordance with the terms and conditions hereof; and (iii) neither Buyer nor Seller shall have the right to partially terminate this Agreement as to any individual Property (or the TIC Interests therein), with any termination rights provided to Seller or Buyer herein being exercisable as to the Agreement as a whole only (and exercisable only in strict accordance with the applicable terms and provisions herein).
ARTICLE 5. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER
Seller hereby represents, warrants, and covenants, as of the Effective Date and as of the Closing, as follows:
Section 5.1 Seller has not employed any broker, finder or investment banker or incurred any liability thereto in connection with the transactions contemplated hereby.
Section 5.2 Each Seller is a duly formed and validly existing limited liability company under the laws of the Commonwealth of Virginia. Seller has full limited liability company power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby.
Section 5.3 This Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Seller and, upon the assumption that this Agreement constitutes a legal, valid and binding obligation of Buyer, this Agreement constitutes a legal, valid and binding obligation of Seller.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF THE BUYER
Buyer hereby represents, warrants and covenants to Seller, as of the Effective Date and as of the Closing, as follows:
Section 6.1 Buyer has not employed any broker, finder or investment banker or incurred any liability thereto in connection with the transactions contemplated hereby.
Section 6.2 Buyer is a duly formed and validly existing limited liability company under the laws of the Commonwealth of Virginia. Buyer has full limited liability company power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby.
Section 6.3 This Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Buyer and, upon the assumption that this Agreement constitutes a legal, valid and binding obligation of Seller, this Agreement constitutes a legal, valid and binding obligation of Buyer.
6
ARTICLE 8. MISCELLANEOUS PROVISIONS
If to Seller: | c/o BCP P&W SC Properties I, LLC 0000 Xxxxx Xxxx Xxxx, Xxxxx 000 Xxxxxxxx, XX 00000 Attn: Xxxxx X. Xxxxxx |
7
with copy to: | Xxxxxxxxx Xxxxxxxxx, A Professional Corporation 0000 Xxxx Xxxx Xxxxxx Xxxxxxxx, XX 00000 Attn: Xxxxxxxx X. Xxxxxxx, Esquire | |
If to Buyer: | 0000 Xxxxxxxx Xxxxx Xxxx., Xxxxx 000 Xxxxxxxx Xxxxx, XX 00000 Attn: Xxx X. Xxxxxxx | |
with copy to: | Xxxxxxx X. Land, Esquire Xxxxxxx & Xxxxxxx, P.C. 000 X. Xxxx Xxxxxx, Xxxxx 0000 Xxxxxxx, XX 00000 |
8
Section 8.8 Intentionally Omitted.
Section 8.9 Intentionally Omitted.
9
ARTICLE 9. AGREEMENT WITH XXXXXXX TICS & MANAGER
Section 9.1 Basis of Agreements. The Xxxxxxx TICs are tenants in common with the entities comprising Seller with respect to each of the respective Properties. The Xxxxxxx TICs and Manager are entering into this Agreement solely for the purposes set forth in this Article 9.
Section 9.2 Covenants. As a material inducement to Seller entering into this Agreement, the Tenants in Common and Manager hereby covenant the following, to wit:
(a) From and after the Effective Date hereof until the Closing Date, the Properties shall be managed by Manager in accordance with the terms of the Management Agreements, and the relationship of the Tenants in Common as owners of the tenant in common interests in each Property shall continue to be governed by the terms of the applicable TIC Agreement.
(b) The Tenants in Common (or either of them) and Manager, acting on their behalf, will refrain from: (i) making any material changes on or about any Property other than as required by the terms of the Loan Documents or the conditions imposed in obtaining the Lender Approvals; (ii) creating or incurring or permitting to exist any mortgage, lien, pledge or other encumbrance in any way affecting any Property (or their respective tenant in common ownership interests in any Property) which is not in existence as of the date of this Agreement, other than the Existing Loans or liens for real estate taxes not yet due and payable; (iii) conveying any interest (fee or leasehold) in any Property (other than as permitted under this Agreement); (iv) taking any action to accelerate any Property repair work or performing any capital improvements or accelerating any other Property expenses or incurring new Property expenses not consistent with past practices or deferring the collection of any revenues; (v) creating any new reserve accounts or increasing the amounts held in any existing reserve accounts (except where required by any Lender, independent of the Lender Approvals, to do so); or (vi) making any expenditure in excess of $2,500.00 without the unanimous consent of all Tenants in Common, unless due to an emergency or made pursuant to an existing contract (or renewal of an existing contract) approved by the Tenants in Common, or in accordance with the 2013 budgets for the Properties or any subsequent budget approved by the Tenants in Common. The Tenants in Common agree not to unreasonably withhold their respective consent to any request for any such expenditure and their consent will be deemed to have been given if they fails to respond to a request within five (5) business days.
(c) Except as otherwise permitted under this Agreement, the Tenants in Common (or either of them) and Manager, acting on their behalf, shall not create or agree to create any matter affecting title to or the Tenants in Common’s rights and interests in any Property and their respective tenant in common ownership interests therein without the unanimous prior written consent of the Tenants in Common.
10
(d) All existing insurance policies with respect to the Properties and the operation, maintenance and leasing thereof shall remain continuously in force through and including the Closing Date;
(e) Manager shall operate and manage the Properties in full compliance with the TIC Agreements and the Management Agreements and in the same manner in which they are being operated as of the Effective Date, but subject to the provisions of this Article 9; and Manager shall perform, when due, all of the Tenants in Common’s (or Manager’s) obligations under the Loan Documents, space leases, service contracts, governmental approvals and other agreements relating to the Properties and otherwise in all material respects in accordance with applicable laws, ordinances, rules and regulations affecting the Properties. There shall be no amendments or modifications to the Management Agreements prior to the Closing Date unless the same are approved by the prior unanimous consent of the Tenants in Common, which may be withheld by any Tenant in Common in its sole discretion. Manager shall continue to make quarterly distributions of Property revenue to the Tenants in Common from the Effective Date through and including the Closing Date, in the manner specified in the Management Agreements and in compliance with the terms of Section 9.2(b)(iv) above. Nothing in this Article 9 shall require Manager to expend its own funds in performing its obligations under the Management Agreements or in this Paragraph 9.2(e), nor shall Manager be required to take any actions with respect to the Properties that are beyond the scope of Manager’s authority as granted by the Management Agreements.
(f) Manager and the Xxxxxxx TICs should cooperate, as and when needed, to effectuate the transaction contemplated herein. All action required pursuant to this Agreement that is necessary to effectuate the transaction contemplated herein will be taken promptly and in good faith by Seller and Buyer, and Seller and Buyer shall furnish each other with such documents or further assurances as either party may reasonably require.
(g) Manager and the Xxxxxxx TICs covenant that none of the costs and expenses to be incurred by Buyer in connection with this Agreement, shall be paid out of Property revenues or using funds withdrawn from the Property Accounts, but rather shall be paid from revenue sources independent from the Properties.
Section 9.3 Waiver and Release. If Closing occurs, then, except with respect to matters set forth in Sections 7.2 or 7.3 above, as of the Closing Date, Buyer, Manager and the Xxxxxxx TICs, jointly and severally, on behalf of themselves and to the fullest extent permitted by law, their respective Affiliates, successors and assigns, irrevocably and unconditionally waive any claims against and release, acquit and forever discharge Seller, Seller’s Affiliates, and their respective members, officers, managers, directors, trustees, agents, employees, attorneys, insurers, successors, assigns, heirs, executors and administrators, from any and all liabilities, charges, complaints, claims, actions, causes of action, suits, demands, damages, fines, penalties, costs, and expenses (including without limitation attorney’s fees) known or unknown, suspected or unsuspected, asserted or unasserted, contingent or mature (collectively “Liabilities”), arising out of or related to the Property or the TIC Interests, which are based upon any facts or events existing or occurring prior to the Closing Date. If Closing occurs, then except with respect to matters set forth in Sections 2.2, 7.1 or 7.3 above or any breach by the Xxxxxxx TICs or Manager of their covenants or representations set forth in Section 9.2 above, as of the Closing Date, Seller jointly and severally, on behalf of themselves and to the fullest extent permitted by law, their Affiliates, successors and assigns, irrevocably and unconditionally waives any claims against and releases, acquits and forever
11
discharges the Xxxxxxx TICs and their respective Affiliates and their respective members, officers, manager, directors, trustees, agents, employees, attorneys, insurers, successors, assigns, heirs, executors and administrators, from any and all Liabilities arising out of or related to the Property or the TIC Interests, which are based upon any facts or events existing or occurring prior to the Closing Date.
Section 9.4 Release of Litigation Claims.
(a) The parties acknowledge that Seller filed five lawsuits on February 11, 2010 in the Circuit Court for the City of Norfolk (BCP Westland Square, LLC x. Xxxxxxx Real Estate Company and Xxxxxxx Interests, Inc., Case No.: CL10-1101; BCP Clover, LLC x. Xxxxxxx Real Estate Company and Xxxxxxx Interests, Inc., Case No.: CLIO-1080; BCP South Square, LLC x. Xxxxxxx Real Estate Company and Xxxxxxx Interests, Inc., Case No.: CL10-1104; BCP St. Xxxxxx, LLC x. Xxxxxxx Real Estate Company and Xxxxxxx Interests, Inc., Case No.: CL10-1103; and BCP Waterway, LLC, x. Xxxxxxx Real Estate Company and Xxxxxxx Interests, Inc., Case No.: CL10-1102) (collectively, the “Lawsuits”). The parties recognize and agree that the Lawsuits were nonsuited by Seller on February 1, 2011.
(b) If Closing occurs, then, as of the Closing Date, except with respect to matters set forth in Sections 2.2, 7.1 or 7.3 above or the breach by Xxxxxxx Real Estate Company of its covenants or representations set forth in Section 9.2 above, Seller, on behalf of themselves and to the fullest extent permitted by law, their Affiliates, successors and assigns, hereby irrevocably and unconditionally releases, remises and forever discharges Xxxxxxx Real Estate Company and Xxxxxxx Interests, Inc. and their respective Affiliates, members, officers, managers, directors, trustees, agents, employees, attorneys, insurers, successors, assigns, heirs, executors and administrators, of, for and from any and all Liabilities relating to, arising from or in connection with the management of the Property or the allegations in the Lawsuits. With respect to the Lawsuits, if Closing occurs, Seller shall not after the Closing Date refile the Lawsuits.
Xxxxxxx Real Estate Company and Xxxxxxx Interests, Inc. are intended to be third party beneficiaries of the provisions of this Section 9.4(b) (and shall be entitled to enforce such provision), and shall remain so after any assignment by Xxxxxxx Interests, Inc. of its rights and obligations hereunder with respect to the purchase of the TIC Interests.
(c) If Closing occurs, then, as of the Closing Date, except with respect to matters set forth in Sections 7.2 and 7.3 above, Xxxxxxx Real Estate Company, the Xxxxxxx TICs and Xxxxxxx Interests, Inc., on behalf of themselves and to the fullest extent permitted by law, their respective Affiliates, successors and assigns, hereby irrevocably and unconditionally release, remise and forever discharge Seller and its respective Affiliates, members, officers, managers, directors, trustees, agents, employees, attorneys, insurers, successors, assigns, heirs, executors and administrators, of, for and from any and all Liabilities relating to, arising from or in connection with the ownership and management of the Property or any allegations made in the Lawsuits.
Section 9.5 Survival. Notwithstanding anything to the contrary in this Article 9, the mutual releases set forth in Sections 9.3 and 9.4 above shall not apply to post-Closing Liabilities asserted against Seller, Buyer or the Xxxxxxx TICs by third parties arising from: (i) loss of life, personal injury or property damage occurring during the Tenants in Common’s ownership period or (ii) environmental conditions existing at or on any Property on the Closing Date, but not with respect to environmental conditions first
12
occurring after the Closing Date. For purposes hereof, the term “third parties” shall not include the Tenants in Common, Buyer, Manager or any of their respective Affiliates (including, without limitation, all Affiliates named in Section 8.15 above).
This Article 9 shall survive the Closing and transfer of the TIC Interests.
[Signature Pages Follow]
13
SELLER: | BCP SOUTH SQUARE, LLC, | |||||||||
BCP CLOVER, LLC, | ||||||||||
BCP WATERWAY, LLC, | ||||||||||
BCP WESTLAND SQUARE, LLC, | ||||||||||
BCP ST. XXXXXX, LLC | ||||||||||
By: | BCP P&W SC Properties I, LLC, a Virginia limited liability company, its sole managing member | |||||||||
By: | Xxxxxx Land & Timber Company, Incorporated, a Virginia corporation, its sole managing member | |||||||||
By: | /s/ Xxxxx X. Xxxxxx | |||||||||
Xxxxx X. Xxxxxx, President |
14
BUYER: | XXXXXXX INTERESTS, LLC. | |||||||||||
By: | /s/ Xxx X. Xxxxxxx | |||||||||||
Xxx X. Xxxxxxx, Manager | ||||||||||||
THE XXXXXXX TICS: | SOUTH SQUARE ASSOCIATES, LLC, | |||||||||||
CLOVER PLAZA ASSOCIATES, LLC, | ||||||||||||
WATERWAY PLAZA ASSOCIATES, LLC, | ||||||||||||
WESTLAND SQUARE ASSOCIATES, LLC, | ||||||||||||
ST. XXXXXX PLAZA ASSOCIATES, LLC | ||||||||||||
By: | P&W SC Properties I, LLC, a Virginia limited liability company, its sole managing member | |||||||||||
By: | P&W SC Properties I Management, LLC, a Virginia limited liability company, its sole managing member | |||||||||||
By: | Plume Street Financial, LLC, a Virginia limited liability company, its sole managing member | |||||||||||
By: | /s/ Xxx X. Xxxxxxx | |||||||||||
Name: | Xxx X. Xxxxxxx | |||||||||||
Its: | Managing Member | |||||||||||
MANAGER: | XXXXXXX REAL ESTATE COMPANY | |||||||||||
By: | /s/ Xxx X. Xxxxxxx | |||||||||||
Name: | Xxx X. Xxxxxxx | |||||||||||
Title: | Manager |
15
Schedule 1
Seller Parties
BCP South Square, LLC
BCP Clover, LLC
BCP Waterway, LLC
BCP Westland Square, LLC
BCP St. Xxxxxx, LLC
16
Schedule 2
Xxxxxxx TICs
South Square Associates, LLC
Clover Plaza Associates, LLC
Waterway Plaza Associates, LLC
Westland Square Associates, LLC
St. Xxxxxx Plaza Associates, LLC
17