AGREEMENT OF PURCHASE AND SALE
0000
X. Xxxx
Xxxxxxxxx,
Xxxxxxxx
AGREEMENT
OF PURCHASE AND SALE
THIS
AGREEMENT OF PURCHASE AND SALE
(“Agreement”) is made as of February 13, 2006 (“Contract Date”), between (i) BNA
Washington Inc., a Delaware corporation (“Purchaser”), and (ii) CESC Mall Land
L.L.C., a Delaware limited liability company (“Fee Owner”) and CESC Mall L.L.C.,
a Virginia limited liability company (“Leasehold Owner,” and collectively with
Fee Owner, “Seller”).
ARTICLE
1. INTERPRETATION
1.1 Definitions.
For
purposes of this Agreement, the following capitalized terms shall have the
meanings indicated:
1.1.1 Access
Agreement:
the
Access Agreement dated as of June 16, 2005, executed by Purchaser in connection
with the Property.
1.1.2 Accounting
Firm:
as
defined in Section 10.12.
1.1.3 Action:
any
action, suit, arbitration, governmental investigation or other legal
proceeding.
1.1.4 Apportionment
Time: 12:01
a.m. local time at the Property.
1.1.5 BNA:
The
Bureau of National Affairs, Inc., a Delaware corporation.
1.1.6 BNA
Lot:
a
portion of the Office Parcel comprising a three-dimensional subdivided lot
substantially as depicted in the subdivision plat attached as Schedule
1.1.6,
as
subdivided pursuant to Section 5.3.
1.1.7 Closing:
the
consummation of the purchase and sale of the Property as contemplated by
this
Agreement.
1.1.8 Closing
Date:
the date
on which the Closing occurs.
1.1.9 Code:
the
Internal Revenue Code of 1986, as amended.
1.1.10 Confidentiality
Agreement:
the
Confidentiality Agreement dated as of June 16, 2005, executed by Purchaser
in
connection with the Property.
1.1.11 Contract:
any
contract for services, maintenance and supplies, equipment leases, and any
other
contract or agreement relating to the management, use, maintenance, operation,
provisioning or equipping of the Property, and all amendments thereto, excluding
the Work Agreement and the Renovation Contracts, and also excluding the Excluded
Property.
1.1.12 Contract
Date:
as
defined in the Preamble.
1.1.13 Crystal
Mall:
collectively, the Office Parcel and the Hotel Parcel, together with all
improvements located thereon as described in Arlington County Site Plan No.
56,
commonly known as the “Crystal Mall” complex and including the Crystal City
Marriott Hotel and the office buildings currently having the following
addresses: 1800, 1801, 1851 and 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx,
and
any replacements of such buildings and improvements.
1.1.14 Damages:
out of
pocket damages, liabilities, losses, claims, costs and expenses (including
reasonable attorneys’ fees and expenses).
1.1.15 Deposit:
as
defined in Section 2.2.
1.1.16 District
Agreement:
collectively, the Agreements of Purchase and Sale dated as of the Contract
Date
between District Seller and District Purchaser, relating to the purchase
and
sale of the District Property.
1.1.17 District
Property:
collectively, Xxxx 000 xxx 000 xx Xxxxxx 24 in the District of Columbia,
together with all improvements thereon.
1.1.18 District
Purchaser:
collectively, (i) as to Xxx 000 xx Xxxxxx 00 xx xxx Xxxxxxxx xx Xxxxxxxx
and the
improvements thereon, CESC 1227 LLC, a Delaware limited liability company,
an
affiliate of Seller, and (ii) as to Xxx 000 xx Xxxxxx 00 xx xxx Xxxxxxxx
xx
Xxxxxxxx and the improvements thereon, CESC 1229-1231 TRS Inc., a Delaware
corporation, an affiliate of Seller.
1.1.19 District
Seller: Purchaser,
as seller under the District Agreement.
1.1.20 Encumbrance:
any
lien, mortgage, deed of trust, security interest, pledge, charge, option,
encroachment, easement, covenant, lease, reservation or restriction of any
kind
(whether recorded, perfected, inchoate, actual or contingent) affecting
title.
1.1.21 Environmental
Laws:
all
Legal Requirements in effect as of the Contract Date relating to the protection
of the environment or to human health, or regulating the manufacture, use
or
disposal of Hazardous Substances.
1.1.22 EPA
Lease:
Lease
Xx. XX-00X-00000, dated June 30, 1989, between Leasehold Owner and the United
States of America, as amended.
1.1.23 EPA
Premises:
the
portion of the space that is leased pursuant to the EPA Lease that is located
within the Improvements.
1.1.24 EPA
Tenant:
the
United States of America, and all occupants of the EPA Premises holding through
or under the United States of America.
1.1.25 EPA
Vacation Date:
the date
on which the EPA Tenant shall completely vacate the entire EPA Premises and
release possession and control thereof to Leasehold Owner.
1.1.26 Escrow
Agent:
Commercial Settlements, Inc., 0000 00xx
Xxxxxx,
X.X., Xxxxx 000, Xxxxxxxxxx, X.X., Attn: Xxxxx X. Xxxxxx, as agent for the
Title
Company.
1.1.27 Exchange
Agreement:
the
Exchange Agreement dated as of the Contract Date among all of the parties
to
this Agreement and the District Agreement, providing for the coordination
of
certain rights and remedies of the parties pursuant to such agreements.
1.1.28 Excluded
Property:
all
right, title and interest of Seller in, to and under the Joint Venture Agreement
by and among various joint venture parties trading under the name and style
of
Xxxxxxx X. Xxxxx Management Environmental Control Associates, dated October
1,
1979 and amended July 1, 1994.
1.1.29 Existing
Ground Lease:
the
Lease dated June 30, 2000, between Fee Owner, as landlord, and Leasehold
Owner,
as tenant, with respect to the Office Parcel.
1.1.30 Existing
Lender:
The
Prudential Insurance Company of America, and any successor holder of the
Existing Mortgage.
1.1.31 Existing
Mortgage:
collectively, (i) the Amended and Restated Deed of Trust and Security Agreement
B (Office - Fee) dated June 30, 2000 between Fee Owner and Existing Lender,
recorded in the Land Records at Book 2500, Page 925, and (ii) the Amended
and
Restated Deed of Trust and Security Agreement B (Office - Leasehold) dated
June
30, 2000 between Leasehold Owner, Fee Owner and Existing Lender, recorded
in the
Land Records at Book 2500, Page 881.
1.1.32 Existing
REA:
the
Declaration and Grant of Easements and Covenants dated as of October 27,
1997,
by Xxxxxx Associates Limited Partnership, a Virginia limited partnership,
as
grantor and grantee, and consented to by Existing Lender and Marriott Hotel
Services, Inc., recorded in the Land Records at Book 2857, Page 0173, as
amended.
1.1.33 Fee
Owner:
as
defined in the Preamble.
1.1.34 Force
Majeure Delay:
as
defined in the Work Agreement.
1.1.35 G-1
Lease:
as
defined in Section 5.7.4.
1.1.36 G-1
Option: as
defined in Section 5.7.4.
1.1.37 G-1
Premises:
as
defined in Section 5.7.4.
1.1.38 Garage:
Levels
G-2 and G-3 of the parking garage for Crystal Mall.
1.1.39 GSA:
the
United States of America, acting through the General Services Administration.
1.1.40 GSA
Lease:
Lease
Xx. XX-00X-00000, dated February 6, 2001, between Leasehold Owner and the
United
States of America, as amended.
1.1.41 GSA
Premises: the
space
that is leased pursuant to the GSA Lease, located within both the Improvements
and other improvements on the Remaining Office Parcel.
1.1.42 Hazardous
Substance:
any
pollutant, contaminant or any toxic, radioactive or otherwise hazardous
substance, including petroleum, its derivatives, by-products and other
hydrocarbons, asbestos, and toxic mold, in each case as regulated under
Environmental Laws.
1.1.43 Hotel
Parcel: the
parcel of land described on Schedule
1.1.43.
1.1.44 Improvement
Expenditure:
as
defined in the Work Agreement.
1.1.45 Improvements:
the
buildings, structures, installations and other improvements, including such
facilities, fixtures and appurtenances as shall constitute real property,
located in or on the BNA Lot, commonly known as 0000 Xxxxx Xxxx
Xxxxxx.
1.1.46 Ineligible
Costs:
as
defined in the Work Agreement.
1.1.47 Intangible
Property:
collectively, (i) all assignable guarantees and warranties that relate to
the
Improvements or Personal Property, (ii) all assignable permits, certificates
of
occupancy, and other public approvals that relate to the BNA Lot or the
Improvements, (iii) all plans and specifications for the Improvements,
(iv) all rights and work product under construction, service, consulting,
engineering, architectural and similar contracts relating to the Property,
(v)
books and records relating solely to ownership or operation of the Property,
and
(vi) keys and lock and safe combinations relating to the Property, excluding
the
Excluded Property.
1.1.48 Land
Records:
the land
records of the Office of the Circuit Court of Arlington County,
Virginia.
1.1.49 Leasehold
Owner: as
defined in the Preamble.
1.1.50 Leases:
collectively,
the leases described on Schedule
3.10
and any
leases, licenses or other agreements for the occupancy of any portion of
the BNA
Lot or Improvements that are entered into in accordance with
Section 5.7.
1.1.51 Legal
Requirement:
any
federal, state, local or municipal constitution, law, statute, ordinance,
rule,
order or regulation.
1.1.52 Letter
of Credit: as
defined in Section 2.2.2.1.
1.1.53 Management
Agreement:
the
agreement between Purchaser and Manager for the provision of property management
and related services for the Property from and after Closing, in the form
attached as Exhibit E.
1.1.54 Manager:
Xxxxxxx
X. Xxxxx Real Estate Services L.P., an affiliate of Seller.
1.1.55 Office
Parcel: the
parcel of land described on Schedule
1.1.55.
1.1.56 Permitted
Exceptions:
collectively, (i) the matters approved or deemed approved by Purchaser in
accordance with Section 5.2, (ii) the lien for real estate taxes and
assessments (including business improvement district assessments) not yet
due
and payable, and (iii) the rights of tenants under the Leases.
1.1.57 Person:
a
natural person or any legal or governmental entity.
1.1.58 Personal
Property:
all
equipment, furniture, furnishings, appliances, tools, machinery, supplies
and
other tangible personal property owned by Fee Owner and Leasehold Owner and
located at and used solely in connection with the operation of the BNA Lot
and
Improvements.
1.1.59 Project
Costs:
as
defined in the Work Agreement.
1.1.60 Property:
collectively, (i) a fee simple interest in the BNA Lot and the Improvements,
(ii) all rights, ways, easements, privileges and appurtenances to the BNA
Lot
and Improvements under the Supplemental REA, and (iii) all of Seller’s right,
title and interest in and to the Personal Property, the Intangible Property,
the
Leases and the Contracts.
1.1.61 Purchase
Price:
as
defined in Section 2.2.
1.1.62 Purchaser:
as
defined in the Preamble.
1.1.63 Purchaser
Indemnified Parties:
as
defined in Section 7.5.1.
1.1.64 Purchaser’s
Designee:
as
defined in Section 11.1.
1.1.65 Remaining
Office Parcel:
the
Office Parcel, less and except the BNA Lot.
1.1.66 Renovation
Contract:
any
contract or agreement entered into by Seller or its affiliates in accordance
with the Work Agreement.
1.1.67 Renovations:
as
defined in the Work Agreement.
1.1.68 Seller:
as
defined in the Preamble.
1.1.69 Seller
Delay:
as
defined in the Work Agreement.
1.1.70 Seller
Indemnified Parties:
as
defined in Section 7.5.2.
1.1.71 Seller’s
Knowledge:
the
actual current knowledge of J. Xxxxx Xxxxxxx and Xxxxxx X. Xxxxxxxxxxx (and
for
any time period after any such Person ceases to be in the employ of Vornado,
such Person’s replacement with respect to such Person’s responsibility with
respect to the Property), without any obligation to review any files or make
inquiry of any Person. No knowledge of any other Person shall be imputed
to
Seller.
1.1.72 Settlement
Statement:
as
defined in Section 10.1.
1.1.73 Substantial
Completion:
as
defined in the Work Agreement.
1.1.74 Supplemental
REA:
as
defined in Section 5.4.1.
1.1.75 Survey:
as
defined in Section 5.2.2.
1.1.76 Survey
Standards: as
defined in Section 5.2.2.
1.1.77 Target
Completion Date:
July 15,
2007. Notwithstanding the foregoing, if the EPA Vacation Date shall occur
after
August 31, 2006, then the Target Completion Date shall be extended by one
day
for each day after August 31, 2006 until the EPA Vacation Date occurs.
1.1.78 Title
Commitment:
as
defined in Section 5.2.1.
1.1.79 Title
Company:
Commonwealth Land Title Insurance Company, acting through Escrow Agent as
its
agent.
1.1.80 Transaction
Documents: collectively,
this Agreement, the Work Agreement, the Supplemental REA and the documents
executed at Closing by Seller and/or Purchaser (or Purchaser’s
Designee).
1.1.81 Vornado:
Vornado
Realty L.P., a Delaware limited partnership.
1.1.82 Work
Agreement:
the Work
Agreement attached as Exhibit A
providing for Seller’s coordination of the Renovations.
1.2 Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws
of the
Commonwealth of Virginia (without reference to conflicts of laws
principles).
1.3 Captions,
Numbering and Headings. Captions,
numbering and headings of Articles, Sections, Schedules and Exhibits in this
Agreement are for convenience of reference only and shall not be considered
in
the interpretation of this Agreement. References in this Agreement to Articles,
Sections, Schedules and Exhibits shall be deemed to be references to such
Articles, Sections, Schedules and Exhibits in this Agreement unless otherwise
expressly specified.
1.4 Number;
Gender.
Whenever
required by the context, the singular shall include the plural, the neuter
gender shall include the male gender and female gender, and vice
versa.
1.5 Business
Day.
In the
event that the date for performance of any obligation under this Agreement
falls
on other than a business day, then such obligation shall be performed on
the
next succeeding business day.
1.6 Severability.
In
the
event that one or more of the provisions of this Agreement shall be held
to be
illegal, invalid or unenforceable, each such provision shall be deemed severable
and the remaining provisions of this Agreement shall continue in full force
and
effect, unless this construction would operate as an undue hardship on Seller
or
Purchaser or would constitute a substantial deviation from the general intent
of
the parties as reflected in this Agreement.
1.7 No
Oral Modifications or Waivers.
No
modification of this Agreement shall be valid or effective unless the same
is in
writing and signed by Seller and Purchaser. No purported waiver of any of
the
provisions of this Agreement shall be valid or effective unless the same
is in
writing and signed by the party against whom it is sought to be enforced.
Notwithstanding
the foregoing, the parties agree that the time for performance of any matter
to
be performed pursuant to this Agreement may be modified by mutual exchange
of
electronic mail by the parties or their respective counsel.
1.8 Exhibits.
All
Schedules and Exhibits referenced in this Agreement are incorporated by this
reference as if fully set forth in this Agreement, and all references to
this
Agreement shall be deemed to include all such Schedules and
Exhibits.
1.9 Integration.
This
Agreement, all Schedules and Exhibits appended to this Agreement, the documents
and agreements referenced in this Agreement, the Exchange Agreement, the
Access
Agreement, the Confidentiality Agreement and the Work Agreement contain the
entire understanding between Seller and Purchaser with respect to the sale
of
the Property, and are intended to be a full integration of all prior or
contemporaneous agreements, conditions, understandings or undertakings between
Seller and Purchaser with respect thereto. There are no promises, agreements,
conditions, undertakings, understandings, warranties or representations,
whether
oral, written, express or implied, between Seller and Purchaser with respect
to
the sale of the Property other than as are expressly set forth in this
Agreement, the Schedules and Exhibits appended to this Agreement, the documents
and agreements referenced in this Agreement, the Exchange Agreement, the
Access
Agreement, the Confidentiality Agreement and the Work Agreement. Without
limiting the generality of the foregoing, any Memorandum of Understanding
between Leasehold Owner and BNA is hereby superseded and shall be of no further
force or effect.
1.10 No
Construction Against Drafter. This
Agreement has been negotiated and prepared by Seller and Purchaser and their
respective attorneys and, should any provision of this Agreement require
judicial interpretation, the court interpreting or construing such provision
shall not apply the rule of construction that a document is to be construed
more
strictly against one party.
1.11 Including.
The term
“including,” and variants thereof, shall mean “including without
limitation.”
ARTICLE
2. SALE OF PROPERTY
2.1 Sale
and Purchase.
Subject
to and in accordance with the terms of this Agreement, Seller shall sell
to
Purchaser, and Purchaser shall purchase from Seller, all of the
Property.
2.2 Purchase
Price.
2.2.1 The
purchase price (“Purchase Price”) for the sale and purchase of the Property
shall be the sum of the following: (i) Seventy Four Million and 00/100ths
Dollars ($74,000,000), plus (ii) the amount of the Improvement Expenditure
that
Seller has paid, incurred or committed prior to Closing, subject to the
adjustments described in Section 7.1.3 and to the debits and credits described
in Article 10.
2.2.2 The
Purchase Price shall be payable as follows:
2.2.2.1. Within
three (3) business days following the Contract Date, Purchaser shall deposit
into escrow with Escrow Agent the sum of Two Million Dollars ($2,000,000.00)
which deposit may be in the form of either immediately available funds or
an
irrevocable sight draft letter of credit in the form attached as Exhibit H
and
otherwise in form and content reasonably acceptable to Seller (“Letter of
Credit”).
2.2.2.2. The
Letter of Credit deposited pursuant to Section 2.2.2.1, any proceeds of a
draw on such Letter of Credit pursuant to this Agreement, any immediately
available funds deposited by Purchaser pursuant to Section 2.2.2.1 and any
interest accrued on such proceeds or funds, shall be referred to collectively
as
the “Deposit.” The Deposit shall be held in accordance with Section 8.1. At
Closing, the cash portion of the Deposit shall, at Purchaser’s option, either be
paid to or at the direction of Seller and credited against the Purchase Price
or
returned to Purchaser, and any Letter of Credit not previously drawn by Escrow
Agent shall be returned to Purchaser, together with a letter from Seller
authorizing the termination of such Letter of Credit.
2.2.2.3. At
Closing, Purchaser shall pay to or at the direction of Seller by wire transfer
of immediately available funds, the balance of the Purchase Price (net of
the
cash portion of the Deposit), as adjusted for the debits and credits described
in Article 10.
2.2.2.4. Any
Letter of Credit shall be issued by a financial institution acceptable to
Seller
and having a long-term unsecured debt rating from Standard & Poor’s
Corporation of not less than “A” (or equivalent from another nationally
recognized rating agency).
2.3 Condition
of Property. Purchaser
acknowledges that (i) Purchaser has been given a reasonable opportunity to
inspect and investigate the Property, all improvements thereon and all aspects
relating thereto, including all of the physical, environmental and operational
aspects of the Property, either independently or through agents and experts
of
Purchaser’s choosing, and (ii) Purchaser will acquire the Property based solely
upon Purchaser’s own investigation and inspection of the Property and the
representations, warranties and covenants of Seller expressly set forth in
the
Transaction Documents executed by Seller. Seller
and Purchaser agree that, except as expressly provided for in this Agreement
and
the other Transaction Documents executed by Seller, including the Work
Agreement, (i) the Property shall be sold and Purchaser shall accept possession
of the Property on the Closing Date “AS IS,” “WHERE IS,” and “WITH ALL FAULTS,”
and (ii) such sale shall be without representation or warranty of any kind,
whether express, implied, statutory or otherwise, including any warranty
of
income potential, operating expenses, uses, merchantability or fitness for
a
particular purpose, and Seller hereby disclaims and renounces any such
representation or warranty. Purchaser further acknowledges and agrees that,
except as expressly provided in the Transaction Documents executed by Seller,
Seller shall be under no duty to make any affirmative disclosure regarding
any
matter which may be known to Seller, or its officers, directors, contractors,
agents or employees, and that it is relying solely upon its own inspection
of
the Property and not upon any representations made to it by any Person
whomsoever on Seller’s behalf.
ARTICLE
3. SELLER’S REPRESENTATIONS AND WARRANTIES
Seller
hereby represents and warrants to Purchaser as follows:
3.1 Good
Standing. Each
of
Fee Owner and Leasehold Owner is a limited liability company duly formed,
validly existing and in good standing under the laws of the state of its
organization, and qualified to transact business and in good standing under
the
laws of the Commonwealth of Virginia. Each of Fee Owner and Leasehold Owner
has
full limited liability company power and authority to execute this Agreement
and
to consummate the transaction contemplated by this Agreement.
3.2 Due
Authorization.
The
execution, delivery and performance of this Agreement by Seller and the
consummation by Seller of the transactions contemplated by this Agreement
have
been duly and validly authorized by all requisite actions of Seller. Assuming
the due execution and delivery of this Agreement by Purchaser, this Agreement
constitutes the valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms.
3.3 No
Violations. The
execution, delivery and performance of this Agreement by Seller and the
consummation by Seller of the transactions contemplated by this Agreement
will
not: (i) violate any Legal Requirement or any order of any court
or governmental authority that is binding on Seller or the Property; or
(ii) subject to obtaining the approvals of Existing Lender as described in
this Agreement, result in a breach of or default under any contract or other
agreement to which Fee Owner and/or Leasehold Owner is a party or by which
the
Property is bound or any provision of the organizational documents of Fee
Owner
or Leasehold Owner.
3.4 Bankruptcy.
Neither
Fee Owner nor Leasehold Owner is the subject debtor under any federal, state
or
local bankruptcy or insolvency proceeding, or any other proceeding for
dissolution, liquidation or winding up of its assets.
3.5 Litigation.
Except
as set forth on Schedule
3.5,
there
are no Actions pending or, to Seller’s Knowledge, threatened against Fee Owner
or Leasehold Owner or relating to the ownership, operation, development,
use or
occupancy of the Property, before any court or governmental authority, which
if
adversely determined would affect Seller’s ability to enter into or perform this
Agreement or would materially adversely affect the ownership or operation
of, or
title to, the Property.
3.6 Violations
of Law.
Neither
Fee Owner nor Leasehold Owner has received written notice from any governmental
authority alleging a violation of any Legal Requirement affecting the Property
that has not been corrected. Seller shall have the right to update the
representation set forth in this Section 3.6 to reflect any such written
notice that is received by Fee Owner or Leasehold Owner after the Contract
Date.
3.7 Condemnation.
There
are no pending condemnation actions with respect to the Property, and to
Seller’s Knowledge there are no threatened or contemplated condemnation actions
with respect to the Property. Seller shall have the right to update the
representation set forth in this Section 3.7 to reflect (i) any
condemnation that becomes pending after the Contract Date, or (ii) any
threatened or contemplated condemnation that first becomes known to Seller
after
the Contract Date, in which event the provisions of Article 9 shall
control.
3.8 Environmental
Matters.
Except
as provided in the reports listed on Schedule
3.8,
to
Seller’s Knowledge, other than (i) Hazardous Substances used in the ordinary
course of maintaining and cleaning the Property in commercially reasonable
amounts, and (ii) Hazardous Substances used as fuels, lubricants or otherwise
in
connection with vehicles, machinery and equipment located at the Property
in
commercially reasonable amounts, no Hazardous Substances are present on or
in
the Property. Except as provided in the reports listed on Schedule
3.8,
to
Seller’s Knowledge, the Hazardous Substances described in the foregoing clauses
(i) and (ii) are being used and disposed of in compliance with all applicable
Environmental Laws.
3.9 Contracts.
There
are
no Contracts that will affect the Property as of the Closing Date, except
(i)
Permitted Exceptions, and (ii) as otherwise permitted under this Agreement
including Section 5.8.
3.10 Leases.
There
are no leases, licenses or other agreements permitting the possession or
occupancy of all or any portion of the BNA Lot or Improvements other than
those
identified on Schedule
3.10.
Seller
has provided to Purchaser a correct and complete copy of each Lease. To Seller’s
Knowledge, the Leases are in full force and effect. Seller shall have the
right
to update the representation set forth in this Section 3.10 to reflect
Leases executed, terminated or modified after the Contract Date in accordance
with this Agreement.
3.11 Foreign
Person.
Neither
Fee Owner nor Leasehold Owner is a “foreign person” as defined in
Section 1445 of the Code.
ARTICLE
4. PURCHASER’S REPRESENTATIONS AND WARRANTIES
Purchaser
hereby represents and warrants to Seller as follows:
4.1 Good
Standing.
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has full power and authority
to
conduct the business in which it is now engaged. Purchaser is duly qualified
to
do business and in good standing under the laws of the Commonwealth of Virginia,
or will be so qualified and in good standing as of the Closing
Date.
4.2 Due
Authorization.
The
execution, delivery and performance of this Agreement by Purchaser and the
consummation by Purchaser of the transactions contemplated by this Agreement
have been duly and validly authorized by all requisite actions of Purchaser.
Assuming the due execution and delivery of this Agreement by Seller, this
Agreement constitutes the valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms.
4.3 No
Violations. The
execution, delivery and performance of this Agreement by Purchaser and the
consummation by Purchaser of the transactions contemplated by this Agreement
will not: (i) violate any Legal Requirement or any order of any
court or governmental authority that is binding on Purchaser; or
(ii) result in a breach of or default under (A) any contract or other
agreement to which Purchaser is a party or (B) any provision of the
organizational documents of Purchaser.
4.4 Bankruptcy.
Purchaser is not the subject debtor under any federal, state or local bankruptcy
or insolvency proceeding, or any other proceeding for dissolution, liquidation
or winding up of its assets.
4.5 Litigation.
There
are no Actions pending or, to Purchaser’s knowledge, threatened against
Purchaser before any court or governmental authority, an adverse determination
of which would materially adversely affect (i) the financial condition of
Purchaser, or (ii) Purchaser’s ability to enter into or perform this
Agreement.
4.6 Terrorist
Organizations Lists. Purchaser
is not acting, directly or indirectly, for or on behalf of any Person named
by
the United States Treasury Department as a Specifically Designated National
and
Blocked Person, or for or on behalf of any Person designated in Executive
Order 13224 as a Person who commits, threatens to commit, or supports
terrorism. Purchaser is not engaged in the transaction contemplated by this
Agreement directly or indirectly on behalf of, or facilitating such transaction
directly or indirectly on behalf of, any such Person.
ARTICLE
5. ACTIONS PENDING CLOSING
5.1 Due
Diligence.
5.1.1 Purchaser
acknowledges that Purchaser has completed such inspections and investigations
of
the Property as Purchaser deems desirable to evaluate the financial and physical
condition of the Property and such other matters that Purchaser may deem
relevant and hereby waives any further due diligence period.
5.1.2 Prior
to
Closing, Purchaser and Purchaser’s agents and contractors shall have the right
to enter upon the Property during regular business hours and upon reasonable
prior notice to Seller. Purchaser and Purchaser’s agents and contractors may at
Seller’s option be accompanied by a representative of Seller during any such
entry upon the Property. Purchaser agrees that all inspections of the Property
shall be subject to the rights or security requirements of tenants under
Leases,
and shall be conducted in a manner not unreasonably disruptive to tenants,
guests or invitees at the Property or otherwise to the operation or renovation
of the Property. Purchaser shall have the right to interview the tenant under
any Lease, provided, however, that Purchaser shall first obtain the prior
written consent of Seller, and at Seller’s option a representative of Seller
shall participate in any such interviews. Prior to entry onto the Property,
Purchaser shall provide Seller with a certificate of insurance evidencing
that
Purchaser maintains a commercial general liability policy that names Fee
Owner,
Leasehold Owner and Manager as additional insureds, in such amounts and from
such insurers as Seller shall approve, such approval not to be unreasonably
withheld. Purchaser shall (i) restore the Property, at its own expense, to
substantially the same condition which existed prior to any inspections or
other
activities of Purchaser thereon; and (ii) be responsible for and pay any
and all liens by contractors, subcontractors, materialmen, or laborers
performing the inspections or any other work for Purchaser, its agents or
contractors on or related to the Property. Purchaser agrees to and hereby
does
indemnify, defend and hold harmless Fee Owner, Leasehold Owner, Manager and
their respective affiliates, members, partners, shareholders, officers,
directors, employees, agents, representatives, licensees, and the successors
of
any of the foregoing, harmless from and against any and all damages including
mechanic’s and materialmen’s liens, caused by the entry by Purchaser and/or any
of Purchaser’s agents or contractors onto the Property pursuant to this
Section 5.1.2, provided that Purchaser shall not be so liable for the mere
discovery by Purchaser or its agents or contractors of any existing condition
at
the Property. Purchaser’s obligations pursuant to this Section 5.1 shall
survive the Closing (without limitation as to time) or earlier termination
of
this Agreement.
5.1.3 Seller
has made available to Purchaser for inspection and copying or delivered to
Purchaser such documents, materials and information concerning the Property
as
Seller may have in its possession or under its control, excluding only
(i) materials that Seller shall have obtained or developed in connection
with the potential sale of the Property, (ii) materials that are subject to
attorney-client privilege, (iii) internal communications, and (iv) internal
projections, forecasts, valuations, budgets and analyses.
5.1.4
Purchaser
shall, at no cost to Seller (but without representation or warranty of
any
kind), furnish to Seller copies of any third-party reports received by
Purchaser
relating to any inspections of the Property conducted on Purchaser's behalf
(excluding, however, any such reports by Purchaser's Broker). Upon any
termination of this Agreement (other than a termination resulting from
a default
by Seller), Purchaser shall (i) assign all of its right, title and interest
in
any such third party reports to Seller (without representation or warranty
of
any kind) and (ii) return all documents, materials and information ( and
all
copies thereof) concerning the Property that Seller has provided to
Purchaser. Purchaser's obligation in this Section 5.1.4 shall survive the
terminiation of this Agreement.
5.2 Title
and Survey.
5.2.1 Purchaser
acknowledges receipt from Title Company, prior to the Contract Date, of the
commitment for an ALTA Owner’s Policy of Title Insurance attached as
Schedule
5.2.1
(“Title
Commitment”) for the BNA Lot, accompanied by a copy of all documents referred to
in the Title Commitment.
5.2.2 Purchaser
acknowledges receipt from Seller, prior to the Contract Date, of a survey
of
Crystal Mall, including the Property, by XxXxxxxxxx Associates Ltd., dated
June
23, 2005 and revised October 27, 2005 (“Survey”) prepared in accordance
with the Minimum Standard Detail Requirements and Classifications for ALTA/ACSM
Land Title Surveys published in 1999 (“Survey Standards”).
5.2.3 All
Encumbrances as of the effective date of the Title Commitment (excluding
Encumbrances shown on Schedule B, Section 1, of the Title Commitment),
all items shown on the Survey, all items shown on the subdivision plat attached
hereto as Schedule
1.1.6
(as such
plat may be amended or revised as permitted under this Agreement), and the
Supplemental REA shall be deemed to have been approved by Purchaser and shall
be
Permitted Exceptions for all purposes under this Agreement.
5.2.4 Seller
shall cure at or before the Closing all Encumbrances other than the Permitted
Exceptions (subject, in the case of any mechanics’ lien or materialmen’s
lien arising from the Renovations, to Purchaser’s compliance with the Work
Agreement). Seller may use a portion of the Purchase Price to effect such
cure
at Closing and title insurance that affirmatively insures over any such matter
shall constitute cure of such matter.
5.3 Subdivision
of Office Parcel. Promptly
following the Contract Date, Seller, at its sole cost and expense, shall
apply
for, and shall thereafter diligently pursue, the subdivision (“Subdivision”) of
the Office Parcel to establish the BNA Lot as a separate legal lot under
the
subdivision ordinances of Arlington County, Virginia. The subdivision plat
shall
be in the form attached as Schedule
1.1.6.
Any
material deviations from Schedule
1.1.6
shall be
subject to Purchaser’s prior written approval not to be unreasonably withheld.
Seller shall pay all costs of the Subdivision, including the cost of any
impact
fees, proffers and development conditions imposed by Governmental Authorities
as
a condition to the approval of the Subdivision. Seller shall keep Purchaser
regularly informed of the status of the Subdivision, and shall promptly respond
to Purchaser’s inquiries regarding the status of the same.
5.4 Supplemental
REA.
5.4.1 Prior
to
March 28, 2006, Purchaser and Seller, each acting reasonably and in good
faith,
shall negotiate the form of a declaration of reciprocal covenants, easements
and
restrictions (“Supplemental REA”) to govern the BNA Lot and Improvements, on the
one hand, and the Remaining Office Parcel and the improvements thereon, on
the
other hand. The Supplemental REA shall include (i) the matters described
on
Exhibit G,
(ii)
such other matters as may be normal and customary for reciprocal covenants,
easements and restrictions, and (iii) such other matters as either Purchaser
or
Seller may reasonably request to ensure that the BNA Lot and Improvements,
on
the one hand, and the Remaining Office Parcel and the improvements thereon,
on
the other hand, may be separately owned, operated, leased, financed and
sold.
5.4.2 Seller
shall use commercially reasonable efforts to cause Existing Lender to approve
the Supplemental REA and to subordinate the Existing Mortgage to the
Supplemental REA concurrently with the recordation thereof. If by the later
of
(a) the date that is sixty (60) days after approval by Seller and Purchaser
of
the final form of the Supplemental REA, and (b) the date that is thirty (30)
days after approval of the Subdivision by Arlington County (such later date,
the
“REA Approval Date”), Existing Lender shall not have (i) approved the
Supplemental REA and (ii) agreed to subordinate the Existing Mortgage to
the
Supplemental REA upon the recording thereof, then Purchaser shall thereafter
have the right to terminate this Agreement by written notice to Seller given
any
time before Existing Lender has approved the Supplemental REA and agreed
to
subordinate the Existing Mortgage to the Supplemental REA upon the recording
thereof. If by the date that is sixty (60) days after the REA Approval Date,
Existing Lender shall not have provided such approval and agreement, then
Seller
shall thereafter have the right to terminate this Agreement by written notice
to
Purchaser given at any time before Existing Lender has approved the Supplemental
REA and agreed to subordinate the Existing Mortgage to the Supplemental REA
upon
the recordation thereof. Upon any such termination, Escrow Agent shall return
the Deposit to Purchaser and neither party to this Agreement shall thereafter
have any further rights or liabilities under this Agreement other than those
that expressly survive termination of this Agreement. Seller shall keep
Purchaser regularly informed of the status of Existing Lender’s approval of the
Supplemental REA, and shall promptly respond to Purchaser’s inquiries regarding
the status of the same.
5.4.3 The
Supplemental REA shall be recorded in the Land Records immediately following
the
recordation of the Subdivision. The cost of such recordation shall be shared
equally by Seller and Purchaser. At Closing, Purchaser shall succeed to the
rights and obligations of the owner of the BNA Lot and Improvements as set
forth
in the Supplemental REA.
5.5 Renovation
of Improvements; Vacation of EPA Premises. Seller
and Purchaser shall perform their respective obligations under the Work
Agreement. Seller shall use commercially reasonable efforts to cause the
EPA
Tenant to completely vacate the entire EPA Premises and release possession
and
control to Leasehold Owner in accordance with the EPA Lease, and in all events
by August 31, 2006, including taking such actions as filing an official claim
with the appropriate contracting officer. If the EPA Tenant shall not have
completely vacated the entire EPA Premises and released possession and control
to Leasehold Owner by February 28, 2007, then Purchaser shall thereafter
have
the right to terminate this Agreement by written notice to Seller given any
time
before the EPA Tenant shall have relinquished possession of the EPA Premises
to
Leasehold Owner. If the EPA Tenant shall not have completely vacated the
entire
EPA Premises and released possession and control to Leasehold Owner by June
30,
2007, then Seller shall thereafter have the right to terminate this Agreement
by
written notice to Purchaser given any time before the EPA Tenant shall have
relinquished possession of the EPA Premises to Leasehold Owner. Upon any
such
termination, Escrow Agent shall return the Deposit to Purchaser and neither
party to this Agreement shall thereafter have any further rights or liabilities
under this Agreement other than those that expressly survive termination
of this
Agreement. Seller shall keep Purchaser regularly informed of the status of
Seller’s efforts to cause the EPA Tenant to relinquish possession of the EPA
Premises, and shall promptly respond to Purchaser’s inquiries regarding the
status of the same.
5.6 Operation
of Property. Prior
to
Closing, except as otherwise expressly provided in this Agreement and the
Work
Agreement:
5.6.1 Seller
shall continue to operate the Property in the ordinary course of business
consistent with the practices and procedures in effect as of the Contract
Date.
5.6.2 Seller
shall maintain and repair the Improvements substantially in their present
condition, except for reasonable wear and tear and damage by casualty or
condemnation.
5.6.3 Seller
shall not remove any Personal Property, except as may be required for repair
or
replacement in the ordinary course of business, and replacement shall be
of
approximately equal quality and quantity as the removed item of Personal
Property.
5.6.4 Seller
shall maintain, at its cost, standard premises operations liability coverage,
and shall add Purchaser as an additional insured promptly after the Contract
Date. Notwithstanding the foregoing, the incremental increase in premiums
paid
by Seller attributable only to the Builder’s Risk portion of such coverage, if
any, as a direct result of the Renovations shall constitute a Project Cost
for
purposes of the Work Agreement and shall be paid in the same manner as other
Project Costs described therein.
5.7 Leases.
5.7.1 Prior
to
Closing, except as otherwise set forth in this Agreement, Seller shall not
(i)
enter into any new lease, license or other agreement for the occupancy of
the
Improvements, or (ii) modify any Lease in a manner that would be binding
on
Purchaser from and after Closing, without the prior written approval of
Purchaser in each instance, such approval to be granted or withheld in
Purchaser’s sole discretion. Purchaser’s approval shall not be required with
respect to (a) any modification of any Lease that is required under the terms
of
such Lease, or (b) the renewal of the GSA Lease pursuant to the terms thereof,
or (c) the amendment described in Section 5.7.2, but Seller shall deliver
to Purchaser written notice thereof within five (5) days of Seller’s receipt of
the same. Prior to Closing, Seller shall perform its obligations under each
Lease, and shall endeavor to promptly collect all rents due under the Leases
in
accordance with Seller’s usual practices.
5.7.2 Seller
and Purchaser acknowledge that only a portion of the GSA Premises is located
in
the Improvements, and that the balance of the GSA Premises is located in
the
improvements on the Remaining Office Parcel. Seller shall use commercially
reasonable efforts to cause GSA to amend the GSA Lease, as soon as practicable,
to delete from the description therein of the GSA Premises such portions
thereof
as are located on the first floor and Level G-1. If GSA does not agree to
such
amendment of the GSA Lease prior to Closing, then Purchaser and Seller, each
acting reasonably and in good faith, shall mutually determine a strategy
to
separate the benefits and burdens of the GSA Lease between the portions of
the
GSA Premises that are and are not part of the Improvements.
5.7.3 Prior
to
the Contract Date, Seller has obtained from the GSA and delivered to Purchaser:
(i) a Statement of Lease in a form consistent with the minimum requirements
of
the Federal Acquisition Regulations (“FAR”), and (ii) a Novation Acceptance
Letter in a form reasonably requested by Purchaser, confirming that Purchaser
will be acceptable to GSA as landlord under the GSA Lease on the terms and
conditions set forth in this Agreement. Prior to Closing, Seller shall use
commercially reasonable efforts to obtain from GSA an updated Statement of
Lease
(“Updated Statement of Lease”) in a form reasonably requested by Purchaser or in
a form consistent with the minimum requirements of the FAR, dated no earlier
than the date that is thirty (30) days prior to the scheduled date for Closing.
At Closing, Seller and Purchaser shall cause to be delivered to GSA original
counterparts of a novation agreement in substantially the form attached to
the
Novation Acceptance Letter (“Novation Agreement”), duly executed by Seller and
Purchaser, together with all supporting documentation known by the parties
to be
required by GSA in connection with its execution of the Novation Agreement.
After Closing, Seller and Purchaser shall use commercially reasonable efforts
to
obtain from GSA the fully executed Novation Agreement and deliver all additional
supporting documentation (if any) required by GSA for execution of the Novation
Agreement.
5.7.4 Purchaser
shall have the option (“G-1 Option”) to lease from Leasehold Owner that portion
of the Xxxxx X-0 improvements located on the Remaining Office Parcel as is
shown
on Schedule
5.7.4
(“G-1
Premises”). Purchaser shall exercise the G-1 Option by written notice to
Leasehold Owner given on or before February 28, 2006. If Purchaser shall
exercise the G-1 Option by such date, then at Closing, Leasehold Owner, as
landlord, and Purchaser, as tenant, shall execute a lease (“G-1 Lease”) of the
G-1 Premises. The G-1 Lease shall (i) provide for an initial “full service”
rental of $23/square foot, with a 2.5% annual escalation and a base year
for
operating expenses and taxes of the first lease year, (ii) provide for a
$25/square foot tenant allowance over the “as is” condition of the G-1 Premises
on the Contract Date, (iii) provide for a term commencing on the Closing
Date
and expiring on the fifth (5th)
anniversary of the Closing Date, (iv) provide that upon expiration of the
term
thereof, the costs of separating the portions of the G-1 Premises located
in the
Improvements and the Remaining Office Parcel, respectively, shall be borne
by
Seller and Purchaser as set forth in Section 5(e) of the Work Agreement,
and (v) otherwise be in substantially the same form as Manager’s standard form
of office lease, with such changes thereto as Leasehold Owner and Purchaser,
each acting reasonably and in good faith, shall mutually agree
upon.
5.7.5 From
time
to time prior to Closing, Seller may be required or requested to provide
additional services under the GSA Lease, and Seller may need to enter into
Contracts with third parties for the procurement of such services. Any such
Contracts shall be subject to Purchaser’s approval, such approval not to be
unreasonably withheld or delayed. It is understood and agreed that Purchaser
may
refuse to approve such proposed Contracts unless GSA pays the cost thereof
or
otherwise compensates the landlord under the GSA Lease therefor.
5.8 Contracts.
Prior
to
Closing, Seller shall terminate all Contracts affecting or relating to the
Property, other than (i) Contracts that constitute Permitted Exceptions,
(ii)
Contracts that are entered into by Manager in accordance with the Management
Agreement, (iii) Contracts that are entered into in accordance with the
Supplemental REA, and (iv) such Contracts as may be required by the occupant
of
the GSA Premises in connection with its use and occupancy thereof.
5.9 Termination
of Ground Lease.
At or
prior to Closing, Fee Owner and Leasehold Owner shall terminate the Existing
Ground Lease to the extent that it affects the BNA Lot, such that the transfer
of the BNA Lot and Improvements to Purchaser pursuant to this Agreement is
free
and clear of any leasehold interest of Leasehold Owner.
5.10 Title.
Except
as expressly permitted or required under this Agreement, prior to Closing,
Seller shall not cause or voluntarily permit any change in title to the Property
or any Encumbrance against title to the Property.
5.11 Existing
Mortgage. Seller
shall use commercially reasonable efforts to cause Existing Lender to release
the BNA Lot from the lien of the Existing Mortgage at or prior to Closing,
at
Seller’s sole cost and expense, including the payment of all fees and costs
imposed by Existing Lender in connection with such release. If by the date
that
is ninety (90) days after the Contract Date, Existing Lender shall not have
agreed in writing to release the BNA Lot from the lien of the Existing Mortgage,
then Purchaser shall thereafter have the right to terminate this Agreement
by
written notice to Seller given any time before Existing Lender has agreed
to
release the BNA Lot from such lien. If by the date that is 120 days after
the
Contract Date, Existing Lender shall not have agreed in writing to release
the
BNA Lot from the lien of the Existing Mortgage, then Seller shall thereafter
have the right to terminate this Agreement by written notice to Purchaser
given
any time before Existing Lender has agreed to release the BNA Lot from such
lien. Upon any such termination, Escrow Agent shall return the Deposit to
Purchaser and neither party to this Agreement shall thereafter have any further
rights or liabilities under this Agreement other than those that expressly
survive termination of this Agreement. Seller shall keep Purchaser regularly
informed of the status of Existing Lender’s agreement to release the BNA Lot
from the lien of the Existing Mortgage, and shall promptly respond to
Purchaser’s inquiries regarding the status of the same.
5.12 Updates
to Representations.
Prior to
Closing, Seller and Purchaser shall each promptly notify the other in writing
if
it becomes aware of any fact or condition that is inconsistent with any of
Seller’s representations or warranties under this Agreement. Such
representations and warranties shall automatically be deemed modified to
reflect
all information actually known to Purchaser prior to the Contract Date,
including information contained in all third-party due diligence reports
prepared at the direction of Purchaser or Purchaser’s Broker.
5.13 Satisfaction
of Conditions.
Prior to
Closing, Seller and Purchaser shall each use good faith, commercially reasonable
efforts to satisfy the conditions to Closing set forth in Article
6.
5.14 District
Agreement: Seller
shall cause District Purchaser to perform the obligations of District Purchaser
under the District Agreement. Purchaser shall perform the obligations of
District Seller under the District Agreement.
5.15 Incentives.
5.15.1 The
parties acknowledge that Arlington County has agreed to provide certain
incentives to Purchaser in connection with Purchaser’s relocation to Arlington
County including a to-be-agreed-upon reduction in the assessed value of the
BNA
Lot and Improvements (the “Assessment Reduction”) for a period of ten (10) years
(“Assessment Reduction Period”). In connection with certain determinations that
must be made for the Assessment Reduction, Seller shall, promptly upon request
of Purchaser, cooperate with Purchaser in such manner as Purchaser may
reasonably request, including:
5.15.1.1. Executing
a written request, prepared by Purchaser, with Arlington County (pursuant
to
standard tax assessment appeal procedures and timelines established in Arlington
County) seeking a formal administrative review of the 2006 tax assessment
attributable to the BNA Lot and Improvements (and if necessary, a Board of
Equalization Appeal) and providing documentation of the anticipated vacation
of
the EPA Premises by EPA Tenant during 2006 and the anticipated demolition
of
portions of the existing improvements.
5.15.1.2. Prior
to
the commencement of the Renovations, executing a written application, prepared
by Purchaser, with Arlington County pursuant to Section 20-23 of the
Arlington County Code for exemption under Article 20 of the revised and amended
Arlington County Code, and coordinating a site inspection with the Arlington
County Department of Real Estate Assessments.
5.15.1.3. At
the
completion of the Renovations, notifying the Arlington County Department
of Real
Estate Assessments and coordinating a site inspection for the establishment
of
the ceiling of the Assessment Reduction.
5.15.2 Purchaser
shall prepare all requests, applications and materials described in Sections
5.15.1.1 through 5.15.1.3. Seller and Purchaser shall keep each other regularly
informed of the status of discussions with Arlington County relating to the
2006
assessment for the BNA Lot and Improvements and all their activities relating
to
the Assessment Reduction. Seller and Purchaser shall work together in good
faith
to ensure that the consequences of the vacation of the EPA Premises are
reflected in the 2006 assessment for the BNA Lot and Improvements only (through
subdivision or proportionate allocation, as appropriate). Purchaser shall
pay
any incremental third-party costs incurred by Seller in connection with any
activities relating to the Assessment Reduction other than costs that would
otherwise have been incurred by Seller in connection with normal and customary
actions to seek review and reduction of the proposed 2006 tax assessment
applicable to the BNA Lot and Improvements.
ARTICLE
6. CONDITIONS TO CLOSING
6.1 Purchaser’s
Conditions to Closing.
The
obligation of Purchaser to consummate the Closing shall be subject to the
satisfaction of each of the following conditions, any or all of which may
be
waived in whole or in part by Purchaser:
6.1.1 Each
of
Seller’s representations and warranties set forth in this Agreement (as modified
by all modifications and updates expressly permitted by Article 3 or the
second sentence of Section 5.12) shall be correct in all material respects
as of the Closing Date.
6.1.2 Seller
shall have performed all of its material obligations under this Agreement
required at or prior to Closing.
6.1.3 The
Title
Company shall be prepared to issue to Purchaser, immediately upon consummation
of Closing, an Owner’s Policy of Title Insurance consistent with the Title
Commitment, at standard rates and in an amount equal to the sum of (i) the
Purchase Price and (ii) the adjustments to the Purchase Price pursuant to
Section 10.10.
6.1.4 Unless
the District Agreement has been terminated as a result of a default by District
Seller thereunder, Closing shall have occurred, or shall concurrently be
occurring, under the District Agreement.
6.2 Failure
of Purchaser’s Condition.
In the
event of the failure of any condition set forth in Section 6.1.1 through
6.1.4, Purchaser, at its sole election, may (i) terminate this Agreement
and (subject to the last sentence of this Section 6.2) receive a return of
the Deposit, (ii) waive the condition and proceed to Closing, or (iii) extend
the date for Closing for such additional period of time (not to exceed one
hundred twenty (120) days in the aggregate for all such extensions) as may
be
reasonably required to allow such condition to be satisfied. Nothing set
forth
in this Section 6.2 shall affect Purchaser’s rights or remedies under
Section 8.3 with respect to any breach of this Agreement or the Work
Agreement by Seller.
6.3 Seller’s
Conditions to Closing.
The
obligation of Seller to consummate the Closing shall be subject to the
satisfaction of each of the following conditions, any or all of which may
be
waived in whole or in part by Seller:
6.3.1 Each
of
Purchaser’s representations and warranties set forth in this Agreement shall be
correct in all material respects as of the Closing Date.
6.3.2 Each
of
Purchaser’s representations and warranties set forth in this Agreement shall be
correct in all material respects as if made by Purchaser’s Designee (if any) as
of the Closing Date.
6.3.3 Purchaser
shall have performed all of its material obligations under this Agreement
required at or prior to Closing.
6.3.4 Unless
the District Agreement has been terminated as a result of a default by District
Purchaser thereunder, Closing shall have occurred, or shall concurrently
be
occurring, under the District Agreement.
6.4 Failure
of Seller’s Condition. In
the
event of the failure of any condition precedent set forth in Section 6.3.1
to 6.3.4, Seller, at its sole election, may (i) terminate this Agreement,
in
which event the Deposit (subject to the last sentence of this Section 6.4)
shall be returned to Purchaser, (ii) waive the condition and proceed to Closing,
or (iii) extend the date for Closing for such additional period of time
(not to exceed one hundred twenty (120) days in the aggregate for all such
extensions) as may be reasonably required to allow Purchaser to satisfy such
condition. Nothing set forth in this Section 6.4 shall affect Seller’s
rights or remedies under Section 8.2 with respect to any breach of this
Agreement or the Work Agreement by Purchaser.
ARTICLE
7. CLOSING
7.1 Closing.
7.1.1 Closing
shall be held on the date that is ten (10) days following Substantial
Completion, but not earlier than December 1, 2006, and subject in all events
to
such extensions as may be expressly provided in this Agreement.
7.1.2 Notwithstanding
Section 7.1.1, Seller shall have the following rights to accelerate or
extend the date for Closing:
7.1.2.1. Seller
shall have the right to accelerate the date for Closing to a date that is
not
more than sixty (60) days earlier than the date on which Substantial Completion
is likely to occur. Seller shall exercise its right to accelerate the date
for
Closing pursuant to this Section 7.1.2.1 by written notice to Purchaser
given not less than one hundred twenty (120) days prior to the date on which
Substantial Completion is likely to occur. If Seller exercises such right,
then
Closing shall occur on such date as Seller may designate by not less than
ten
(10) days prior written notice to Purchaser, and the additional terms set
forth
on Schedule
7.1.2.1
shall
apply.
7.1.2.2. Seller
shall have the right to extend the date for Closing to a date that is not
more
than ninety (90) days after Substantial Completion. Seller shall exercise
its
right to extend the date for Closing pursuant to this Section 7.1.2.2 by
written notice to Purchaser given not less than thirty (30) days prior to
the
date on which Substantial Completion is likely to occur. If Seller exercises
such right, then Closing shall occur on such date as Seller may designate
by not
less than ten (10) days prior written notice to Purchaser, and the additional
terms set forth on Schedule
7.1.2.2
shall
apply.
7.1.2.3. For
purposes of Sections 7.1.2.1 and 7.1.2.2, the determination of the date on
which Substantial Completion is likely to occur shall be made jointly by
Seller
and Purchaser, each acting reasonably and in good faith. If Seller and Purchaser
are unable to agree on such date, then such date shall be determined by the
Architect (as defined in the Work Agreement).
7.1.3 If
Substantial Completion shall not have been achieved by the Target Completion
Date, and as a result thereof the date for Closing pursuant to
Section 7.1.1 shall not have occurred, then the Purchase Price shall be
adjusted as follows:
7.1.3.1. If
Substantial Completion would have occurred on the Target Completion Date
but for
the occurrence of a Seller Delay, then the Purchase Price shall be reduced
by
the product obtained by multiplying (i) the number of days after the Target
Closing Date that Substantial Completion has not occurred as a result of
Seller
Delay by (ii) $10,000 per day.
7.1.3.2. If
Substantial Completion is delayed beyond the Target Completion Date for any
reason other than as described in Section 7.1.3.1, then the Purchase Price
shall be increased by the product obtained by multiplying (i) the number
of days
of such delay minus the number of days (not to exceed thirty (30)) of such
delay
attributable to Force Majeure Delay, by (ii) $10,000 per day (except as
otherwise provided in this Section 7.1.3.2). Notwithstanding the foregoing,
(a)
if Seller shall receive from the Contractor delay damages as a result of
the
Contractor’s failure to achieve timely Substantial Completion in accordance with
the Contractor Agreement (as defined in the Work Agreement), then the amount
of
such delay damages so received shall be credited, dollar-for-dollar, against
the
increase to the Purchase Price described in this Section 7.1.3.2, and (b)
if
Substantial Completion is delayed beyond the Target Completion Date as a
result
of Force Majeure Delay in excess of the thirty (30) days referred to in clause
(i) above, then the Purchase Price shall be increased by the product obtained
by
multiplying (x) the number of days of Force Majeure Delay in excess of such
thirty (30) days, by (y) $5,000 per day, provided that the Purchase Price
shall
not be increased by more than $450,000 pursuant to this clause (b).
In
addition, Seller shall continue to investigate the availability of insurance
(“Delay Damage Coverage”) to cover the obligations of Purchaser under clause (b)
above, and if such Delay Damage Coverage is available at a cost that is mutually
acceptable to Seller and Purchaser then the parties shall purchase such Delay
Damage Coverage and share the costs equally. If such Delay Damage Coverage
is
purchased by the parties, it is understood and agreed that the Purchase Price
shall not be increased pursuant to this Section 7.1.3.2 as a result of the
occurrence of an event otherwise covered by the Delay Damage Coverage except
to
the extent of applicable deductibles.
7.1.4 Closing
shall be conducted through an escrow with Escrow Agent. Seller and Purchaser
shall execute (or cause their counsel to execute) such additional instructions
to Escrow Agent as may be required in connection therewith.
7.1.5 Pre-closing
(“Pre-Closing”) shall be held at the Washington, D.C., offices of DLA Xxxxx
Xxxxxxx Xxxx Xxxx US LLP on the business day immediately preceding the scheduled
date for Closing. At Pre-Closing, Seller and Purchaser shall execute and
deliver
to Escrow Agent all documents and deliveries required under Sections 7.2
and
7.3, other than the Settlement Statement and payment of the amounts required
to
be paid at Closing. Seller and Purchaser shall complete and execute the
Settlement Statement, and Seller and Purchaser shall pay the amounts required
to
be paid at Closing to Escrow Agent at Closing by wire transfer of immediately
available funds, such that the amounts due to or on behalf of Seller pursuant
to
the Settlement Statement shall be wire transferred into a bank account or
accounts designated by Seller no later than 3:00 p.m. local time at the Property
on the Closing Date.
7.2 Seller’s
Closing Deliveries.
At or
prior to Closing, Seller shall deliver to Escrow Agent the
following:
7.2.1 The
Deed
(“Deed”) in the form of Exhibit B,
conveying fee title to the BNA Lot and Improvements to Purchaser, duly executed
and acknowledged by Fee Owner, and dated as of the Closing Date.
7.2.2 The
Xxxx
of Sale (“Xxxx of Sale”) in the form of Exhibit C,
conveying all of Seller’s right, title and interest in the Personal Property to
Purchaser, duly executed by Seller, and dated as of the Closing
Date.
7.2.3 The
Assignment (“Assignment”) in the form of Exhibit D,
assigning all of Seller’s right, title and interest in the Leases, Contracts and
Intangible Property to Purchaser, duly executed by Seller, and dated as of
the
Closing Date.
7.2.4 The
Management Agreement, duly executed by Manager and dated as of the Closing
Date.
7.2.5 The
Novation Agreement, duly executed by Leasehold Owner, and dated as of the
Closing Date.
7.2.6 If
Purchaser has exercised the G-1 Option, the G-1 Lease, duly executed by
Leasehold Owner, and dated as of the Closing Date.
7.2.7 The
Agreement (“Reserved Rights Agreement”) in the form of Exhibit F,
duly
executed and acknowledged by Vornado, and dated as of the Closing Date.
7.2.8 A
memorandum of the Reserved Rights Agreement in the form attached to Exhibit F,
duly
executed and acknowledged by Vornado, and dated as of the Closing Date. Such
memorandum shall be recorded in the Land Records at Closing immediately
following recordation of the Deed and prior to any Encumbrances securing
financing placed by Purchaser, and Seller and Purchaser shall share equally
in
the costs of such recordation.
7.2.9 A
certificate, duly executed by Seller, confirming that its representations
and
warranties set forth in this Agreement are correct in all material respects
as
if made on the Closing Date (or noting any exceptions).
7.2.10 A
title
affidavit, in customary form reasonably satisfactory to the Title Company
and
Seller, duly executed by Seller.
7.2.11 An
affidavit, in the form required by the Code and the regulations issued pursuant
thereto, to the effect that neither Fee Owner nor Leasehold Owner is a foreign
person within the meaning of the Code.
7.2.12 Such
evidence of the power and authority of Seller to consummate the transactions
described in this Agreement as may be reasonably required by Purchaser or
Title
Company.
7.2.13 A
written
direction to Escrow Agent to disburse the Deposit in accordance with
Section 8.1.2.1.
7.2.14 To
the
extent within the possession or under the control of the Seller, originals
of
the Leases, Contracts and Intangible Property.
7.2.15 A
Settlement Statement in accordance with Section 10.1, duly executed by
Seller.
7.2.16 Notices
to the tenants under all Leases, and to vendors under all Contracts, informing
them of the change in ownership of the Property.
7.2.17 Such
other documents and instruments as are customary and as may be reasonably
requested by Purchaser, Escrow Agent or Title Company, to effectuate the
transactions contemplated by this Agreement.
7.3 Purchaser’s
Closing Deliveries.
At or
prior to Closing, Purchaser shall deliver to Escrow Agent the
following:
7.3.1 The
Assignment, duly executed by Purchaser or Purchaser’s Designee, and dated as of
the Closing Date.
7.3.2 The
Management Agreement, duly executed by Purchaser or Purchaser’s Designee and
dated as of the Closing Date.
7.3.3 The
Novation Agreement, duly executed by Purchaser or Purchaser’s Designee, and
dated as of the Closing Date.
7.3.4 If
Purchaser has exercised the G-1 Option, the G-1 Lease, duly executed by
Purchaser or Purchaser’s Designee, and dated as of the Closing
Date.
7.3.5 The
Reserved Rights Agreement, duly executed and acknowledged by Purchaser or
Purchaser’s Designee, and dated as of the Closing Date.
7.3.6 The
memorandum of the Reserved Rights Agreement, duly executed and acknowledged
by
Purchaser or Purchaser’s Designee, and dated as of the Closing Date.
7.3.7 A
certificate, duly executed by Purchaser, confirming that its representations
and
warranties set forth in this Agreement are correct in all material respects
as
if made on the Closing Date (or noting any exceptions).
7.3.8 A
certificate from Purchaser’s Designee, duly executed by Purchaser’s Designee,
confirming that Purchaser’s representations and warranties set forth in the
Agreement are correct in all material respects as if made by such Purchaser’s
Designee on the Closing Date (or noting any exceptions).
7.3.9 Such
evidence of the power and authority of Purchaser and Purchaser’s Designee to
consummate the transactions described in this Agreement as may be reasonably
required by Seller or Title Company.
7.3.10 A
written
direction to Escrow Agent to disburse the Deposit in accordance with
Section 8.1.2.1.
7.3.11 The
balance of the Purchase Price, as adjusted pursuant to Section 7.1 and
Article 10.
7.3.12 A
Settlement Statement in accordance with Section 10.1, duly executed by
Purchaser or Purchaser’s Designee.
7.3.13 Such
other documents and instruments as are customary and as may be reasonably
requested by Seller, Escrow Agent or Title Company to effectuate the
transactions contemplated by this Agreement.
7.4 Closing
Costs.
Seller
shall pay the Virginia Grantor’s Tax, and Purchaser shall pay the state and
county Recordation Tax, imposed upon the recordation of the Deed. All escrow
or
settlement fees of Escrow Agent shall be borne equally by Seller and Purchaser.
Seller and Purchaser shall each bear its own counsel’s fees and expenses in
connection with the transactions described in this Agreement. Purchaser shall
pay all costs of Purchaser’s due diligence investigations of the Property, title
insurance premiums and costs, and costs of the Survey. Seller shall pay all
costs of the Subdivision, all costs of terminating the Existing Ground Lease,
and all costs of recording any instrument relating to the Existing Financing.
Any other closing costs shall be borne by the parties in accordance with
custom
for transactions similar to the transactions described herein in Arlington
County, Virginia.
7.5 Indemnification.
7.5.1 Subject
to any express provisions of this Agreement and the Work Agreement to the
contrary, from and after Closing, Seller hereby agrees to indemnify Purchaser,
Purchaser’s Designee, and their respective trustees, directors, officers,
employees, partners, members and affiliates (collectively, “Purchaser
Indemnified Parties”), and to hold Purchaser Indemnified Parties harmless from
and against, any and all Damages paid or incurred by Purchaser Indemnified
Parties due to (i) any breach of any representation or warranty made by Seller
in this Agreement or the Work Agreement, (ii) any breach of any covenant
made by
Seller in this Agreement or the Work Agreement, and (iii) liabilities to
any
third party, including liabilities under the GSA Lease and EPA Lease, that
are
based upon any matter relating to the use, maintenance, operation or
construction of the Property occurring prior to the Closing Date (except
to the
extent that Purchaser receives a credit therefor at Closing). The foregoing
shall not apply to Damages relating to the Renovations, responsibility for
which
shall be allocated in accordance with the Work Agreement.
7.5.2 Subject
to any express provisions of this Agreement and the Work Agreement to the
contrary, from and after Closing, Purchaser hereby agrees to indemnify Seller
and its trustees, directors, officers and employees, partners, members and
affiliates (collectively, “Seller Indemnified Parties”), and to hold Seller
Indemnified Parties harmless from and against, any and all Damages paid or
incurred by Seller Indemnified Parties due to (i) any breach of any
representation or warranty made by Purchaser or Purchaser’s Designee in this
Agreement or the Work Agreement, (ii) any breach of any covenant made by
Purchaser or Purchaser’s Designee in this Agreement or the Work Agreement, (iii)
any obligations with respect to which Purchaser receives a credit at Closing,
to
the extent of such credit, and (iv) liabilities to any third party, including
liabilities under the GSA Lease, that are incurred by any Seller Indemnified
Party in its capacity as former owner of the Property, based upon any matter
relating to the use, maintenance, operation or construction of the Property
occurring on or after the Closing Date. The foregoing shall not apply to
Damages
relating to the Renovations, responsibility for which shall be allocated
in
accordance with the Work Agreement.
7.5.3 Subject
to any express provisions of the Work Agreement to the contrary, the obligations
of Seller under Section 7.5.1 shall not extend to (i) any Damages
arising out of the alleged presence at, or release or disposal from the Property
of any Hazardous Substance, or the alleged violation of any Environmental
Laws,
(ii) any Damages arising out of a violation of any Legal Requirement with
respect to the physical condition, maintenance or improvement of the Property
(including zoning and building codes and the Americans with Disabilities
Act)
which exists on or before the Closing Date, or (iii) any Damages arising
out of the state of the physical condition, maintenance or improvement of
the
Property on or before the Closing Date, except (in the case of this clause
(iii)
only) Damages for the death of or injury to third parties, or damage to property
other than the Property. The obligations of Seller under Section 7.5.1 and
of Purchaser under Section 7.5.2 shall not extend to (a) any consequential
or punitive damages, (b) any loss or diminution of value in the Property
(except in the case of a breach of a representation or warranty by Seller),
or
(c) any Damages that are not payable to third parties (except in the case
of a breach of a representation or warranty by Seller).
7.5.4 Notwithstanding
anything to the contrary in this Agreement, Seller’s liability under
Section 7.5.1 shall not exceed an amount equal to Five Million Dollars
($5,000,000.00) except for liability based upon actual fraud on the part
of
Seller.
7.5.5 Whenever
either party shall learn through the filing of a claim or the commencement
of a
proceeding or otherwise of the existence of any liability for which the other
party is or may be responsible under this Section 7.5, the party learning
of such liability shall notify the other party promptly and furnish such
copies
of documents (and make originals thereof available) and such other information
as such party may have that may be used or useful in the defense of such
claims.
The indemnified party shall afford the indemnifying party full opportunity
to
defend such claims, using counsel reasonably acceptable to the indemnified
party, in the name of the indemnified party and generally shall cooperate
with
the indemnifying party in the defense of such claim, provided that no such
matter shall be settled without the prior written consent of the indemnified
party.
7.5.6 This
Section 7.5 shall survive Closing indefinitely, except that Seller’s
indemnification of Purchaser pursuant to Section 7.5.1 (other than to the
extent of liabilities under the GSA Lease and EPA Lease prior to Closing)
shall
terminate on the date that is one (1) year after the Closing Date. From and
after Closing, the indemnification provisions in this Section 7.5 shall be
the exclusive remedies of Seller and Purchaser in connection with any of
the
matters described in this Section 7.5 and the transaction described in this
Agreement, and each party hereby waives and releases and other rights or
remedies it may have under applicable law or at equity in connection
therewith.
7.6 Survival.
7.6.1 Except
where this Agreement expressly provides for a longer period, the
representations, warranties, covenants and indemnities of Seller and Purchaser
set forth in this Agreement shall survive Closing until the date that is
one (1)
year after the Closing Date, and any action on any such representation,
warranty, covenant or indemnity must be instituted on or before such
date.
7.6.2 Notwithstanding
any other provision of this Agreement, if at or prior to Closing Purchaser
obtains actual knowledge that any representation or warranty of Seller under
this Agreement (as the same is modified pursuant to Section 5.12) is
inaccurate in any respect, but nonetheless proceeds to Closing, Purchaser
shall
be deemed to have waived any right to make a claim arising out of such
inaccuracy.
ARTICLE
8. ESCROW, DEFAULT, REMEDIES
8.1 Escrow
Terms.
8.1.1 Escrow
Agent shall promptly give notice to Purchaser and Seller upon its receipt
of any
portion of the Deposit from Purchaser in accordance with this Agreement.
Escrow
Agent shall invest the Deposit (if in cash) in overnight repurchase obligations
secured by United States obligations through such bank as Escrow Agent may
elect
and shall be approved by Purchaser and Seller. Escrow Agent shall not be
liable
for any loss of such investment (unless due to Escrow Agent’s gross negligence
or willful misconduct). All interest on the Deposit shall be treated by Escrow
Agent for income tax purposes as earned by Purchaser, and Purchaser shall
provide its tax identification number to Escrow Agent for this
purpose.
8.1.2 Escrow
Agent shall deliver the Deposit to Seller or to Purchaser, as the case may
be,
under the following conditions:
8.1.2.1. At
Closing, the Deposit shall be delivered to Seller (if in cash) or to Purchaser
(if a Letter of Credit) upon receipt by Escrow Agent of a statement executed
by
Seller and Purchaser that the Deposit may be so released; or
8.1.2.2. The
Deposit shall be delivered to Seller following receipt by Escrow Agent of
written demand therefor from Seller, stating that Purchaser has defaulted
in the
performance of its obligations under this Agreement and specifying the
Section of this Agreement which entitles Seller to receive the Deposit, but
only if Purchaser shall not have given written notice of objection in accordance
with Section 8.1.3; or
8.1.2.3. The
Deposit shall be delivered to Purchaser following receipt by Escrow Agent
of
written demand therefor from Purchaser stating that Seller has defaulted
in the
performance of its obligations under this Agreement or that this Agreement
was
terminated under circumstances entitling Purchaser to the return of the Deposit,
and specifying the Section of this Agreement which entitles Purchaser to
the return of the Deposit, but only if Seller shall not have given written
notice of objection in accordance with Section 8.1.3; or
8.1.2.4. The
Deposit shall be delivered as directed by joint written instructions of Seller
and Purchaser.
8.1.3 Upon
the
filing of a written demand for the Deposit by Seller or Purchaser pursuant
to
Section 8.1.2.2 or 8.1.2.3, Escrow Agent shall promptly give notice thereof
(including a copy of such demand) to the other party. The other party shall
have
the right to object to the delivery of the Deposit, by giving notice of such
objection to Escrow Agent at any time within five (5) business days after
such
party’s receipt of notice from Escrow Agent, but not thereafter. Failure to
deliver such objection notice within such period shall be deemed to be a
waiver
of such party’s right to object to Escrow Agent’s compliance with such demand.
Such objection notice shall set forth the basis for objecting to the delivery
of
the Deposit. Upon receipt of such notice of objection, Escrow Agent shall
promptly give a copy of such notice to the party who filed the written demand.
The foregoing five (5) business day period does not constitute a cure period
in
which either Seller or Purchaser, as the case may be, shall be required to
accept tender of cure of any default under this Agreement. If the Deposit
is in
the form of the Letter of Credit, then Escrow Agent shall draw upon the same
prior to the release of the Deposit to Seller, and Seller and Purchaser hereby
irrevocably direct Escrow Agent to effectuate such draw.
8.1.4 If
Escrow
Agent shall have received the notice of objection provided for in
Section 8.1.3 within the time therein prescribed, Escrow Agent shall
continue to hold the Deposit until (i) Escrow Agent receives written notice
from Seller and Purchaser directing the disbursement of the Deposit, in which
case Escrow Agent shall then disburse the Deposit in accordance with said
direction, or (ii) litigation is commenced between Seller and Purchaser, in
which case Escrow Agent shall deposit the Deposit with the clerk of the court
in
which said litigation is pending, or (iii) Escrow Agent takes such
affirmative steps as Escrow Agent may elect, at Escrow Agent’s option, in order
to terminate Escrow Agent’s duties hereunder (but in no event disbursing the
Deposit to either Seller or Purchaser), including depositing the Deposit
in
court and commencing an action for interpleader, the costs thereof to be
borne
by whichever of Seller or Purchaser is the losing party. If
the
Deposit is in the form of the Letter of Credit, then Escrow Agent shall draw
upon the same prior to the delivery of the Deposit to the clerk of court,
and
Seller and Purchaser hereby irrevocably direct Escrow Agent to effectuate
such
draw. Seller and Purchaser shall execute such documents as may be necessary
to
cause Escrow Agent to effectuate such draw.
8.1.5 Escrow
Agent may rely and act upon any instrument or other writing reasonably believed
by Escrow Agent to be genuine and purporting to be signed and presented by
any
person or persons purporting to have authority to act on behalf of Seller
or
Purchaser, as the case may be, and shall not be liable in connection with
the
performance of any duties imposed upon Escrow Agent by the provisions of
this
Agreement, except for Escrow Agent’s own gross negligence, willful misconduct or
default. Escrow Agent shall have no duties or responsibilities except those
set
forth herein. Escrow Agent shall not be bound by any modification or termination
of this Agreement unless the same is in writing and signed by Purchaser and
Seller, and, if Escrow Agent’s duties hereunder are affected, unless Escrow
Agent shall have given prior written consent thereto. Escrow Agent shall
be
reimbursed by Seller and Purchaser for any expenses (including reasonable
legal
fees and disbursements of outside counsel, including all of Escrow Agent’s fees
and expenses with respect to any interpleader action pursuant to
Section 8.1.4) incurred in connection with this Agreement, and such
liability shall be joint and several; provided that, as between Purchaser
and
Seller, the prevailing party in any dispute over the Deposit shall be entitled
to reimbursement of any such expenses paid to Escrow Agent. In the event
that
Escrow Agent shall be uncertain as to Escrow Agent’s duties or rights hereunder,
or shall receive instructions from Purchaser or Seller that, in Escrow Agent’s
opinion, are in conflict with any of the provisions hereof, Escrow Agent
shall
be entitled to continue to hold the Deposit pursuant to Section 8.1.4, and
may decline to take any other action.
8.1.6 Escrow
Agent shall have the right at any time to resign upon ten (10) business
days prior notice to Seller and Purchaser. Seller and Purchaser shall jointly
select a successor Escrow Agent and shall notify Escrow Agent of the name
and
address of such successor Escrow Agent within ten (10) business days after
receipt of notice from Escrow Agent of its intent to resign. If Escrow Agent
has
not received notice of the name and address of such successor Escrow Agent
within such period, Escrow Agent shall have the right to select on behalf
of
Seller and Purchaser a bank or trust company to act as its successor hereunder.
At any time after the ten (10) business day period, Escrow Agent shall have
the
right to deliver the Deposit to any successor selected hereunder, provided
such
successor shall execute and deliver to Seller and Purchaser an assumption
agreement whereby it assumes all of Escrow Agent’s obligations hereunder. Upon
the delivery of all such amounts and such assumption agreement, the successor
shall become the Escrow Agent for all purposes under this Section 8.1 and
shall have all of the rights and obligations of the Escrow Agent under this
Section 8.1, and the resigning Escrow Agent shall have no further
responsibilities or obligations hereunder.
8.1.7 If
the
Deposit is in the form of the Letter of Credit, then not later than the date
that is thirty (30) days prior to the expiration of such Letter of Credit,
Purchaser shall cause such Letter of Credit to be extended or replaced with
another Letter of Credit that satisfies the requirements of this Agreement.
If
Purchaser fails to so extend or replace such Letter of Credit by such date,
then
Escrow Agent shall draw upon the same and hold the proceeds of such draw
as the
Deposit hereunder, and Seller and Purchaser hereby irrevocably direct Escrow
Agent to effectuate such draw. Seller and Purchaser shall execute such documents
as may be necessary to cause Escrow Agent to effectuate such draw. If either
party disputes the release of the Deposit to the other pursuant to
Section 8.1.3, then if the Deposit is in the form of the Letter of Credit,
Escrow Agent is hereby irrevocably directed to draw upon the Letter of Credit
and hold the proceeds of such draw as the Deposit.
8.2 Purchaser’s
Default.
8.2.1 If
Purchaser defaults in its obligation to proceed to Closing in accordance
with
this Agreement, or if any condition set forth in Sections 6.3.1 through
6.3.4 is not satisfied and Seller elects not to proceed to Closing, and if
such
default is not cured and/or such condition is not satisfied within fifteen
(15)
days after Seller has given Purchaser written notice of the same, then Seller
shall have the right to terminate this Agreement by written notice to Purchaser,
and upon such termination (i) Escrow Agent shall, subject to
Sections 8.1.3 and 8.1.4, pay the Deposit to Seller, and (ii) Purchaser
shall pay to Seller an amount equal to the sum of (a) One Hundred Percent
(100%)
of any portion of the Improvement Expenditure that has been paid, incurred
or
irrevocably committed in accordance with the terms of the Work Agreement
prior
to the date of such default or the failure of such condition, plus (b) any
amount that Seller has paid, incurred or irrevocably committed prior to the
date
of such default or the failure of such condition that exceeds the Improvement
Expenditure and for which Purchaser is responsible under the Work Agreement,
plus (c) interest that has accrued under Sections 5(b) and (c) of the Work
Agreement as of the date of such default or the failure of such condition,
plus
(d) interest on the amounts described in the foregoing clauses (a), (b) and
(c)
at the lesser of the rate of 10% per annum or the highest rate permitted
by law
from the date of such default or failure of such condition to the date such
amounts have been paid in full.
8.2.2 Notwithstanding
anything to the contrary set forth in Section 8.2.1 above, if (i) any
expenditures from the Improvement Expenditure have been paid, incurred or
irrevocably committed by Seller for the purpose of improving those components
of
the building of the Property that are identified on Schedule
8.2.2
to this
Agreement (collectively, “Base Building Renovations”), and the design,
engineering and permitting of the Base Building Renovations, (ii) Seller,
on or
before the date that is three (3) years after the date on which this Agreement
terminates pursuant to Section 8.2.1 (“Outside Date”), enters into one or
more legally binding transactions (each, a “Successor Transaction”) with one or
more tenants or users for the occupancy of all or any portion of the Property
(each, a “Successor User”), and (iii) either (a) the terms of the Successor
Transaction require that a particular component of the Base Building Renovations
shall be retained, in whole or in part, for the use by or benefit of the
Successor User, or (b) on or before the Outside Date, the Successor User
irrevocably elects that a particular component of the Base Building Renovations
will be retained, in whole in part, for the use by or benefit of the Successor
User (each such retained component described in clause (a) or (b), “Retained
Component”), then Seller, within sixty (60) days after the Outside Date (or
after such earlier date on which the Retained Components may be identified
pursuant to the foregoing clause (a) or (b)), shall return to Purchaser a
portion of the amount paid by Purchaser to Seller pursuant to
Section 8.2.1(a) equal to the actual cost of such Retained Components as
incurred by Seller pursuant to the Work Agreement. Concurrently with Seller’s
payment of such amount, Seller shall provide Purchaser with a written statement
setting forth in reasonable detail the cost of the Retained Components. If
Purchaser does not object in writing to such statement within ten (10) business
days of receipt thereof, specifying in reasonable detail any item(s) it believes
have been omitted from such statement, then the statement shall be deemed
final
and binding. If Purchaser timely objects to such statement, then the parties
shall negotiate in good faith regarding any areas of disagreement, it being
understood and agreed that the final decision regarding the inclusion or
exclusion of any item of Retained Components shall be made by the general
contractor who is performing a majority (by cost) of the work for the Successor
Transaction (or if there is no such general contractor, by the architect
who is
providing design services for the Successor Transaction). Notwithstanding
the
foregoing, (a) if Seller determines in its sole and absolute discretion to
demolish the Property, it is understood and agreed that there shall be no
value
attributed to any items of Base Building Renovations for purposes of this
Section 8.2.2, and (b) in no event shall the aggregate amounts required to
be paid by Seller to Purchaser pursuant to this Section 8.2.2 exceed
$11,000,000.00.
8.2.3 The
amounts described in this Section 8.2 shall be full and complete liquidated
damages, and the exclusive and sole right and remedy of Seller, and neither
party shall have any further obligations or liabilities to the other party
under
this Agreement, except for obligations that expressly survive termination
of
this Agreement. Purchaser acknowledges that Seller’s actual damages caused by
Purchaser’s default in its obligation to proceed to Closing would be difficult
to determine precisely and that the amounts described herein, as liquidated
damages, is a fair and reasonable approximation. Seller hereby waives any
right
to recover damages (whether actual, consequential, punitive or other) as
a
result of Purchaser’s default in its obligation to proceed to Closing in
accordance with this Agreement or as a result of any conditions set forth
in
Section 6.3 not being satisfied, except for the liquidated damages as
described in this Section 8.2. This Section 8.2 shall survive any
termination of this Agreement.
8.3 Seller’s
Default.
If
Seller defaults in its obligation to proceed to Closing in accordance with
this
Agreement, or if any condition set forth in Section 6.1.1, 6.1.2 or 6.1.4
is not satisfied and Purchaser elects not to proceed to Closing, and if such
default is not cured and/or such condition is not satisfied within fifteen
(15)
days after Purchaser has given Seller written notice of the same, then Purchaser
shall be entitled, as its sole remedy, to either (i) specific performance
of
this Agreement, provided that any action for specific performance must be
initiated no later than sixty (60) days after the date that Closing is otherwise
required to occur under this Agreement, or (ii) terminate this Agreement by
written notice to Seller, and upon such termination Escrow Agent shall, subject
to Sections 8.1.3 and 8.1.4, return the Deposit to Purchaser and neither
party shall have any further obligations or liabilities to the other party
under
this Agreement, except for obligations that expressly survive termination
of
this Agreement, provided that if specific performance is not available to
Purchaser due to an intentional act of Seller, then in addition to terminating
this Agreement, Purchaser shall be entitled to reimbursement by Seller of
Purchaser’s out-of-pocket costs actually expended in connection with the
transaction contemplated by this Agreement in an aggregate amount not to
exceed
the amount of the Deposit. Purchaser hereby waives any right to recover damages
(whether actual, consequential, punitive or other) as a result of Seller’s
default in its obligation to proceed to Closing in accordance with this
Agreement or as a result of any conditions set forth in Sections 6.1.1, 6.1.2
or
6.1.4 not being satisfied, except as expressly set forth in this
Section 8.3. This Section 8.3 shall survive any termination of this
Agreement.
8.4 District
Agreement.
8.4.1 On
the
Contract Date, District Seller and District Purchaser are executing the District
Agreement for the sale by District Seller to District Purchaser of the District
Property. This Agreement and the District Agreement shall be subject to the
provisions of the Exchange Agreement.
8.4.2 Any
default by District Purchaser under the District Agreement shall constitute
a
default by Seller under this Agreement. Any default by District Seller under
the
District Agreement shall constitute a default by Purchaser under this
Agreement.
ARTICLE
9. CASUALTY AND CONDEMNATION
9.1 Notice
to Purchaser.
Seller
shall give Purchaser prompt written notice of (i) any pending or threatened
condemnation affecting the Property or the Garage prior to Closing, upon
becoming aware of the same, and (ii) any fire or other casualty occurring
prior
to Closing that affects the Property or the Garage and that is reasonably
estimated by Seller, acting reasonably and in good faith, to cost more than
$10,000.00 to repair.
9.2 Minor
Condemnation. If,
prior
to Closing, a proceeding for condemnation (other than temporary condemnation
resulting from a holdover by EPA Tenant under the EPA Lease) is commenced
against all or any portion of Property or the Garage which (i) reduces the
square footage of the Improvements by less than five percent (5%), (ii) reduces
the number of parking spaces in the Garage allocated to Purchaser by less
than
five percent (5%), and (iii) does not materially and adversely affect the
use
and occupancy of the Improvements (as the same may be reduced) as contemplated
by the Work Agreement, then this Agreement shall continue in full force and
effect and the Purchase Price shall not be reduced, but Purchaser shall be
entitled to an assignment of all condemnation awards payable to Seller (other
than any portion of such awards in respect of income lost prior to Closing
or
expended by or on behalf of Seller prior to Closing to restore the Property),
and Seller shall have no obligation to repair or restore the Property except
as
set forth in the Work Agreement.
9.3 Major
Condemnation.
If,
prior to Closing, a proceeding for condemnation (other than temporary
condemnation resulting from a holdover by EPA Tenant under the EPA Lease)
is
commenced against all or any portion of Property, and such proceeding is
not
covered by Section 9.2, then Purchaser shall have the right, upon notice in
writing to Seller delivered within thirty (30) days after Seller gives Purchaser
notice of such condemnation, to terminate this Agreement, whereupon this
Agreement shall terminate, Escrow Agent shall return the Deposit to Purchaser
and neither party to this Agreement shall thereafter have any further rights
or
liabilities under this Agreement other than those that expressly survive
termination of this Agreement. If Purchaser does not timely elect to terminate
this Agreement, then this Agreement shall continue in full force and effect
and
the Purchase Price shall not be reduced, but Purchaser shall be entitled
to an
assignment of all condemnation awards payable to Seller (other than any portion
of such awards in respect of income lost prior to Closing or expended by
or on
behalf of Seller prior to Closing to restore the Property), and Seller shall
have no obligation to repair or restore the Property.
9.4 EPA
Holdover. Any
temporary condemnation resulting from a holdover by EPA Tenant under the
EPA
Lease (whether or not formal condemnation proceedings shall be filed) shall
not
be treated as a condemnation under this Article 9, but shall be treated as
a
failure of the EPA Tenant to relinquish possession of the EPA Premises to
Leasehold Owner for purposes of determining whether the EPA Vacation Date
has
occurred and the terms of Section 5.5 shall apply.
9.5 Casualty. If,
prior
to Closing, the Improvements, or any other improvements (including the Garage)
within the Remaining Office Parcel that are necessary for the use and occupancy
of the Improvements (such other improvements, “Related Improvements”), are
damaged or destroyed by fire or other casualty, then the following shall
apply:
(i) this Agreement shall continue in full force and effect and the Purchase
Price shall not be reduced, (ii) Seller shall promptly undertake and diligently
pursue the restoration of the Improvements and the Related Improvements to
substantially the same condition as existed prior to the casualty, (iii)
Seller
shall pay all costs of restoring the Improvements and the Related Improvements,
other than the cost of restoring any Renovations, (iv) Seller shall make
available for the restoration of the Renovations all casualty insurance proceeds
that are payable as a result of the damage to or destruction of the Renovations,
and any shortfall shall be paid as a Project Cost in accordance with the
Work
Agreement, and (v) the restoration of the Renovations shall be included within
the scope of work required under the Work Agreement and shall be performed
pursuant to the Work Agreement.
9.6 Insurance.
Prior
to Closing, Seller shall maintain, at its cost, “broad form/special perils”
insurance with respect to the Improvements and the Related Improvements,
including “builder’s risk” coverage for the Renovations, in an amount equal to
100% of the replacement cost thereof. Notwithstanding the foregoing, the
incremental increase in premiums paid by Seller attributable only to the
Builder’s Risk portion of such coverage, if any, as a direct result of the
Renovations shall constitute a Project Cost for purposes of the Work Agreement
and shall be paid in the same manner as other Project Costs described therein.
Purchaser shall have the right to participate in the adjustment of any claim
with respect to such insurance following the Contract Date with respect to
the
Renovations, and the proceeds thereof shall be applied against the costs
of the
restoration of the Renovations pursuant to the Work Agreement. Purchaser
shall
have the right to participate in any condemnation proceedings relating to
the
Property and to approve in its reasonable discretion any settlement in
connection therewith.
ARTICLE
10. PRORATIONS
10.1 Prorations
Generally.
Seller
and Purchaser shall receive debits and credits against the Purchase Price
pursuant to this Article 10. In the case of any adjustment to be made at
Closing, such adjustment shall be set forth on a settlement statement
(“Settlement Statement”) executed by Seller and Purchaser, and the portion of
the Purchase Price payable pursuant to Section 2.2.2.3 shall be increased
or decreased to reflect such adjustment. In the case of any adjustment to
be
made after Closing, Purchaser and Seller shall make such adjustment by payment
of immediately available funds to the other party within five (5) days of
the
date such adjustment is determined.
10.2 Governmental
Charges.
10.2.1 Real
estate taxes, personal property taxes, and any other governmental assessments
for the tax year(s) in which Closing occurs shall be apportioned between
Seller
and Purchaser as of the Apportionment Time.
10.2.2 If
as of
Closing, Arlington County has not established an assessment for the BNA Lot
and
Improvements that is separate from the assessment for the Remaining Office
Parcel and the improvements thereon generally, then at Closing, real estate
taxes for purposes of Section 10.2.1 shall be estimated by allocating to
the BNA Lot a proportionate share of the total assessment of the Office Parcel
and improvements thereon based on the “floor area ratio” of the Improvements as
a percentage of the total “floor area ratio” of the improvements located on the
Office Parcel. At such time after Closing as Arlington County has established
an
assessment for the BNA Lot and Improvements that is separate from the assessment
for the Remaining Office Parcel and the improvements thereon generally, Seller
and Purchaser shall promptly thereupon reapportion the real estate taxes
as of
the Apportionment Time based on the actual separate assessment.
10.2.3 Notwithstanding
anything to the contrary contained herein, Purchaser shall cooperate with
Seller
in such manner as Seller may reasonably request to cause the Assessment
Reduction Period to commence on or after the Closing Date; provided, however,
that if the Assessment Reduction Period commences prior to the Closing Date
and
the real estate taxes payable by Seller for the BNA Lot and Improvements
for the
period prior to Closing are reduced below the amount of real estate taxes
that
would otherwise have been payable for the BNA Lot and Improvements for such
period, Purchaser shall be entitled to a credit at Closing equal to the amount
of such reduction (except for any portion of such reduction as may be payable
to
the tenant under any Lease). Notwithstanding the foregoing, Purchaser shall
not
be entitled to a credit at Closing as a result of any reduction in real estate
taxes prior to Closing as a result of generally applicable law, policies
and
procedures in effect in Arlington County, Virginia.
10.3 Rents
under Leases.
All
rents and other charges (including base rent, percentage rent, expense
reimbursement rent and any additional rent) under Leases (collectively, “Rents”)
shall be apportioned in accordance with the following provisions:
10.3.1 All
Rents
which were earned and attributable to the period prior to the Closing Date
shall
be retained by Seller to the extent that such Rents have been collected prior
to
the Closing Date.
10.3.2 All
Rents
received on or after the Closing Date by Seller or Purchaser in respect of
any
Lease shall be applied (i) first to sums due under the applicable Lease
attributable to the lease month prior to the lease month in which the Closing
Date occurs, (ii) second to sums due under the applicable Lease attributable
to
the lease month during which the Closing Date occurs, (iii) third to any
other
sums due under the applicable Lease attributable to after the Closing Date,
and
(iv) fourth to any other sums due under the applicable Lease attributable
to
prior to the Closing Date. Rents received by either Seller or Purchaser after
Closing shall be deemed to be held in trust for application in accordance
with
this Section 10.3.2.
10.3.3 Any
customary and actual, direct out of pocket costs incurred by Purchaser in
collection of delinquent Rents shall be deducted by Purchaser prior to the
payment to Seller on account of delinquent Rents. Purchaser shall not modify
any
Lease in such a way to affect the amounts of Rents that may be due to Seller.
Seller shall have the right to contact tenants to request payment of delinquent
rentals after the Closing Date and to institute legal proceedings, at Seller’s
sole expense, to collect and retain such delinquent Rents, but not to evict
such
tenants.
10.3.4 Reconciliations
of taxes, insurance charges and other expenses owed by tenants and licensees
under Leases for the calendar year (or fiscal year if different from the
calendar year) in which Closing occurs shall be prepared by Manager with
the
cooperation of Purchaser and Seller within one hundred twenty (120) days
following the end of such year in accordance with the requirements set forth
in
the Leases and as provided in this Section 10.3.4. For those Leases in
which tenant pays a proportionate share of taxes, insurance charges or other
expenses over a base year amount or expense stop, the proration of the amount
received from such tenant over such base year amount or expense stop shall
be
calculated based on the total amount of such expenses for the Property incurred
by each of Seller and Purchaser reduced by the base year amount allocated
evenly
for the portion of the year each owns the Property. The base year amount
will be
prorated between the parties based on the number of days each party owned
the
Property during such year. For Leases which do not have a base year amount
or
expense stop, the proration between the parties of income received from tenants
from reconciliations of expenses under the Leases shall be calculated based
on
the expenses actually incurred by each party for such year and each party’s
period of ownership of the Property.
10.3.5 Purchaser
shall receive a credit for any cash security deposit actually posted by the
tenant under any Lease, except to the extent that such security deposit has
been
applied by Seller prior to the Closing Date in accordance with the terms
of the
applicable Lease. Seller and Purchaser shall cooperate to transfer to Purchaser
any security deposit posted by the tenant under any Lease that is in a form
other than cash.
10.4 Contracts.
All
amounts payable under the Contracts shall be apportioned between Seller and
Purchaser as of the Apportionment Time.
10.5 Utilities.
Water,
sewer, fuel, electricity, gas and other utilities shall be apportioned between
Seller and Purchaser as of the Apportionment Time.
10.6 Renovation
Contracts.
Amounts
payable under the Renovation Contracts shall not be apportioned between Seller
and Purchaser as of the Apportionment Time. Seller shall pay such amounts
to the
extent of the Improvement Expenditure and other amounts paid, incurred or
committed to by Seller under the Work Agreement and credited to Seller at
Closing, and Purchaser shall pay the remainder of such amounts.
10.7 Deposits.
Seller
shall receive a credit for all deposits made by or on behalf of Seller or
Manager as of the Apportionment Time as security under any Contract, utility,
public service or other arrangement to the extent the same remains on deposit
for the benefit of Purchaser.
10.8 Permits.
Seller
shall receive a credit for prepaid fees for permits that are assigned to
Purchaser (other than fees that are paid from the Improvement
Expenditure).
10.9 Tax
Appeals.
10.9.1 If
any
appeal of any taxes or assessments is pending as of the Closing Date with
respect to any tax period that has closed prior to the Closing Date, Seller
shall be entitled to receive any rebate or credit resulting from such appeal,
and shall pay all expenses of prosecuting such appeal.
10.9.2 If
any
appeal of any taxes or assessments is pending as of the Closing Date with
respect to the period in which the Closing Date occurs (“Current Year Tax
Appeal”), such taxes or assessments shall be re-prorated between Seller and
Purchaser as of the Apportionment Time in accordance with the results of
such
Current Year Tax Appeal. Seller shall consider in good faith any request
by
Purchaser to initiate a Current Year Tax Appeal. Seller and Purchaser shall
cooperate in the prosecution of each Current Year Tax Appeal. All third party
costs and fees incurred in connection with any Current Year Tax Appeal,
including legal fees and expenses, shall be paid by Seller to the extent
due and
payable prior to the Closing Date, and shall be paid by Purchaser to the
extent
due and payable on or after the Closing Date, but upon completion of the
Current
Year Tax Appeal, all such costs and fees shall be prorated between Purchaser
and
Seller in the same proportion as they bear re-prorated taxes and
assessments.
10.10 Renovation
Matters.
At
Closing, the Purchase Price shall be increased to reflect the following
adjustments:
10.10.1 Any
Additional Deposit (as defined in the Work Agreement) that Seller has paid,
incurred or committed prior to Closing, together with the interest thereon
provided for in Section 5(d) of the Work Agreement.
10.10.2 The
amount of any Excess Improvement Expenditure Adjustment that is due and payable
as of Closing pursuant to Section 5(b) of the Work Agreement.
10.10.3 An
amount
equal to the sum of the following tranches of Project Costs (other than
Ineligible Costs), in each case paid, incurred or committed in accordance
with
the Work Agreement: (i) 3% of the first $10,679,612, plus (ii) 2% of the
next
$14,705,882, plus (iii) 1% of any additional Project Costs.
10.11 Transaction
Taxes.
Seller
shall be responsible for its federal and state income, franchise and similar
taxes applicable to the transactions contemplated by this Agreement. Purchaser
shall be responsible for any bulk sales taxes, personal property sales taxes,
and similar taxes applicable to the transactions contemplated by this
Agreement.
10.12 Disputes
with Respect to Adjustments. If
Seller
and Purchaser, each acting reasonably and in good faith, cannot resolve any
issue with respect to the adjustments described in this Article 10, they
shall
submit such issue for binding resolution by a nationally recognized accounting
firm mutually acceptable to both parties (“Accounting Firm”). The parties shall
bear equally all fees and expenses of the Accounting Firm in connection with
the
resolution of such issue, and each party shall bear its own legal, accounting
and other fees and expenses incurred in connection with the resolution of
the
issue by the Accounting Firm. Such resolution shall be final and binding
on the
parties and judgment may be entered upon such resolution in any court having
jurisdiction thereof. Seller and Purchaser agree that the proceeding described
in this Section 10.12 shall be conducted in Arlington,
Virginia.
10.13 Interest
on Amounts Owed.
Any
amount that is payable by Seller or Purchaser to the other pursuant to this
Article 10 and not paid when due shall bear interest from the date due until
paid at the rate of ten percent (10%) per annum.
10.14 Survival.
This
Article 10 shall survive Closing.
ARTICLE
11. MISCELLANEOUS
11.1 Assignment.
Neither
Seller nor Purchaser shall assign this Agreement without the consent of the
other. Notwithstanding the foregoing, without Seller’s consent, Purchaser shall
have the right to assign the right to receive the Property at Closing to
another
Person (“Purchaser’s Designee”), subject to the following
conditions: (i) such Purchaser’s Designee is a direct or indirect
wholly-owned subsidiary of BNA; (ii) Purchaser shall give notice to Seller
no later than ten (10) business days prior to the date set for Closing of
the identity of Purchaser’s Designee; and (iii) such assignment shall not
adversely affect any Exchange or delay or otherwise adversely affect Closing.
Upon any such assignment, Purchaser’s Designee shall be deemed to have assumed
for the benefit of Seller all obligations of Purchaser under this Agreement,
the
Work Agreement, the Access Agreement and the Confidentiality Agreement, but
such
assignment shall not relieve Purchaser of its obligations under this Agreement,
the Work Agreement, the Access Agreement and the Confidentiality
Agreement.
11.2 Notices.
Notices
and other communications required or permitted under this Agreement shall
be in
writing and delivered by hand against receipt or sent by recognized overnight
delivery service, by certified or registered mail, postage prepaid, with
return
receipt requested or by facsimile. All notices shall be addressed as
follows:
If
to
Seller:
Vornado
Realty L.P.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx
Phone:
(000) 000-0000
Fax:
(000) 000-0000
with
a
copy to:
Xxxxxxx
X. Xxxxxxx, Esquire
Vice
President and Division Counsel
Xxxxxxx
X. Xxxxx Real Estate Services L.P.
0000
Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxx,
Xxxxxxxx 00000
Phone:
(000) 000-0000
Fax:
(000) 000-0000
and
with
a copy to:
Xxxxxxx
X. Xxxxxxx, Esq.
Xxxxxx
& Xxxxxx LLP
000
00xx
Xxxxxx,
X.X.
Xxxxxxxxxx,
X.X. 00000
Phone:
(000) 000-0000
Fax:
(000) 000-0000
If
to
Purchaser:
BNA
Washington, Inc.
0000
00xx
Xxxxxx, XX
Xxxxxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxxxxx
Phone:
(000) 000-0000
Fax:
(000) 000-0000
with
a
copy to:
Xxxx
Xxxxxxx
Senior
Vice President
Staubach
0000
Xxxxxxxx Xxxxx, Xxxxx 000
XxXxxx,
Xxxxxxxx 00000
Phone:
(000) 000-0000
Fax:
(000) 000-0000
and
Xxx
Xxxxxxx, Esquire
DLA
Xxxxx
Xxxxxxx Xxxx Xxxx US LLP
0000
00xx
Xxxxxx,
X.X.
Xxxxxxxxxx,
X.X. 00000
Phone:
(000) 000-0000
Fax:
(000) 000-0000
If
to
Escrow Agent:
Commercial
Settlements, Inc.
0000
00xx
Xxxxxx,
X.X., Xxxxx 000
Xxxxxxxxxx,
X.X. 00000
Attn:
Xxxxx X. Xxxxxx
Phone:
(000) 000-0000
Fax:
(000) 000-0000
or
to
such other addresses as may be designated by a proper notice. Notices shall
be
deemed to be effective upon receipt (or refusal thereof) if personally
delivered, sent by recognized overnight delivery service, or sent by certified
or registered mail, postage prepaid, with return receipt requested, or upon
electronically verified transmission, if such delivery is by
facsimile.
11.3 Waiver
of Jury Trial; Jurisdiction.
Seller
and Purchaser each hereby waives any right to jury trial in the event any
party
files an action relating to this Agreement or to the transactions or obligations
contemplated by this Agreement. Any action, suit or proceeding arising out
of
this Agreement or the transactions contemplated by this Agreement shall be
brought exclusively in the United States District Court for the Eastern District
of Virginia or the Circuit Court for Arlington County, Virginia, and Seller
and
Purchaser agree that such courts are the most convenient forum for resolution
of
any such action and further agree to submit to the jurisdiction of such courts
and waive any right to object to venue in such courts.
11.4 Counterparts
and Effectiveness.
This
Agreement may be executed in any number of counterparts which, when taken
together, shall constitute a single binding instrument. Execution and delivery
of this Agreement by facsimile shall be sufficient for all purposes and shall
be
binding on any Person who so executes.
11.5 Brokerage.
Purchaser represents to Seller that other than The Staubach Company - Northeast,
Inc. (“Purchaser’s Broker”), no broker, finder or similar consultant has acted
on its behalf in connection with this Agreement or the transaction contemplated
by this Agreement. Seller represents to Purchaser that no broker, finder
or
similar consultant has acted on its behalf in connection with this Agreement
or
the transaction contemplated by this Agreement. At Closing, Seller shall
pay to
Purchaser’s Broker a commission pursuant to a separate agreement. Purchaser and
Seller each shall indemnify and hold the other harmless from claims made
by any
broker, finder or similar consultant claiming through it for a commission,
fee
or compensation in connection with this Agreement or the transaction
contemplated by this Agreement, and such indemnity shall survive Closing
without
limitation as to time. The indemnification obligations set forth in this
Section 11.5 shall survive Closing or any termination of this
Agreement.
11.6 Confidentiality.
Purchaser and Seller shall each maintain as confidential any and all information
and material obtained about the other which is furnished to it by the other
in
connection with this Agreement, and such obligation shall survive any
termination of this Agreement and shall survive Closing for a period of one
(1)
year. Purchaser and Seller shall each maintain as confidential the terms
of this
Agreement and such obligation shall survive any termination of this Agreement,
but shall terminate at Closing. Purchaser shall maintain as confidential
any and
all information and material about the Property which is furnished to it
by or
on behalf of Seller, and such obligation shall survive any termination of
this
Agreement but shall terminate at Closing. Confidential information shall
not
include information and material which (i) becomes generally available to
the
public other than as a result of a disclosure prohibited by this
Section 11.6, (ii) is known to Purchaser or Seller, as the case may
be, on a non-confidential basis, prior to its receipt of such information
and
material from the other party, or (iii) becomes available to Purchaser or
Seller, as the case may be, on a non-confidential basis from a source other
than
the other party which is not prohibited from disclosing the same.
Notwithstanding the foregoing, (i) each of Purchaser and Seller may
disclose confidential information to its employees, agents or advisors, and
to
potential investors or lenders, in each case on a need-to-know basis after
the
recipients of the information have been informed of the confidential nature
of
such information and directed not to disclose such information except in
accordance with this Section 11.6, (ii) each of Purchaser and Seller
may disclose confidential information to the extent required by applicable
law
or the rules of any applicable securities exchange, and (iii) Purchaser and
Seller, following prior notice to and consultation with the other, may disclose
the transaction contemplated by this Agreement to the extent necessary to
obtain
consents or approvals contemplated by this Agreement.
11.7 Bulk
Sales Compliance. Seller
and Purchaser acknowledge that they do not intend to comply with and have
agreed
to waive the provisions of any statutory bulk sale or similar requirements
applicable to the transactions contemplated by this Agreement, and Seller
and
Purchaser agree to rely upon the adjustment provisions of this Agreement
to
address any matters that would otherwise be subject to such bulk sale
requirements.
11.8 Public
Announcements.
Prior to
Closing, each party shall notify the other and provide the other with an
opportunity to comment on any proposed form of press release or other written
disclosure with respect to this Agreement or the transactions contemplated
by
this Agreement not less than twenty-four (24) hours prior to such proposed
disclosure.
11.9 Recordation.
Neither
Seller nor Purchaser shall record this Agreement or any notice of this Agreement
in the land records of any jurisdiction.
11.10 Time
of Essence.
Time is
of the essence with respect to the performance of all obligations, and the
exercise of all rights, of Seller and Purchaser under this
Agreement.
11.11 Rule
Against Perpetuities.
Notwithstanding any other provision in this Agreement, Closing shall occur,
if
at all, prior to the date that is twenty-one (21) years following the death
of
the survivor of Xxxxxx X. Xxxx and Xxxxx Xxxx and the now living children
of
said persons.
11.12 Like-Kind
Exchanges.
11.12.1 Notwithstanding
anything contained herein to the contrary, Purchaser acknowledges that Seller
may designate the Property as relinquished property to consummate a like-kind
exchange or reverse like-kind exchange under Section 1031 of the Code (an
“Exchange”) with respect to property that Seller will acquire either prior to or
within one hundred eighty (180) days after Closing (the “Replacement Property”).
In the event that Seller designates the Property as relinquished property
to
consummate an Exchange with respect to the Replacement Property through the
use
of a qualified intermediary (“Intermediary”) and/or an Exchange Accommodation
Titleholder (“EAT”), Purchaser shall cooperate in structuring the transaction as
an Exchange for the benefit of Seller and Purchaser agrees to render all
required performance under this Agreement to either the Intermediary or the
EAT
(either the Intermediary or the EAT referred to herein as the “1031 Assignee”)
to the extent reasonably directed by Seller and to accept performance of
all of
Seller’s obligations by the 1031 Assignee. Purchaser agrees that performance by
the 1031 Assignee will be treated as performance by Seller, and Seller agrees
that Purchaser’s performance to the 1031 Assignee will be treated as performance
to Seller. No assignment of rights under this Agreement to a 1031 Assignee
shall
effect a release of Seller from obligations under this Agreement.
11.12.2 Notwithstanding
anything contained herein to the contrary, Seller acknowledges that Purchaser
may designate the Property as replacement property to consummate an Exchange
with respect to property that Seller will relinquish either prior to or within
one hundred eighty (180) days after Closing (the “Relinquished Property”). In
the event that Purchaser designates the Property as replacement property
to
consummate an Exchange with respect to the Relinquished Property through
the use
of a 1031 Assignee, Seller shall cooperate in structuring the transaction
as an
Exchange for the benefit of Purchaser and Seller agrees to render all required
performance under this Agreement to such 1031 Assignee to the extent reasonably
directed by Purchaser and to accept performance of all of Purchaser’s
obligations by the 1031 Assignee. Seller agrees that performance by the 1031
Assignee will be treated as performance by Purchaser, and Purchaser agrees
that
Seller’s performance to the 1031 Assignee will be treated as performance to
Purchaser. No assignment of rights under this Agreement to a 1031 Assignee
shall
effect a release of Purchaser from obligations under this
Agreement.
11.13 Liability
of Parties.
11.13.1 Fee
Owner
and Leasehold
Owner
shall be jointly and severally liable for all obligations of Seller under
this
Agreement.
11.13.2 BNA
is
guarantying certain obligations of Purchaser under this Agreement, as and
to the
extent set forth in the Joinder of BNA attached to this Agreement.
[Signatures
on following page]
-
-
IN
WITNESS WHEREOF,
Seller
and Purchaser have caused this Agreement to be executed as of the Contract
Date.
SELLER:
CESC
Mall
Land L.L.C., a Delaware limited liability company
By:
/s/Xxxxxxxx X. Xxxxxx
Name:
Xxxxxxxxx X. Xxxxxx
Its:
President, CSCR
CESC
Mall
L.L.C., a Virginia limited liability company
By:
Name:
Its:
PURCHASER:
BNA
Washington Inc., a Delaware corporation
By:
/s/ Xxxxxxxxx Xxxxx
Name:
Xxxxxxxxx Xxxxx
Its:
President, BNA Washington Inc.
By:
/s/Xxxxxx X. Xxxxxxxx
Name:
Xxxxxx X. Xxxxxxxx
Its:
Chairman of the Board, BNA Washington Inc.
-
-
JOINDER
OF ESCROW AGENT
The
undersigned is joining this Agreement to evidence its agreement to receive,
hold
and disburse the Deposit in accordance with the terms of the
Agreement.
Commonwealth
Land Title Insurance Company
By:
Name:
Its:
-
-
JOINDER
OF BNA
The
undersigned hereby guaranties the prompt and full payment to Seller of all
amounts due and payable by Purchaser pursuant to Section 8.2 of the
foregoing Agreement of Purchase and Sale. Such guaranty is absolute and
unconditional, is a guaranty of payment and performance and not of collection,
and shall survive any termination of this Agreement.
The
Bureau of National Affairs, Inc., a Delaware corporation
By:
Name:
Its:
By:
Name:
Its:
1395009_22.DOC
Schedules
and Exhibits
|
Schedules
|
|
|
1.1.6
|
Description
of BNA Lot
|
|
1.1.43
|
Description
of Hotel Parcel
|
|
1.1.55
|
Description
of Office Parcel
|
|
3.5
|
Pending
Actions
|
|
3.8
|
Environmental
Reports
|
|
3.10
|
Leases
|
|
5.2.1
|
Title
Commitment
|
|
5.7.4
|
Depiction
of G-1 Premises
|
|
7.1.2.1
|
Accelerated
Closing - Additional Terms
|
|
7.1.2.2
|
Extended
Closing - Additional Terms
|
|
8.2.2
|
Base
Building Renovations
|
|
Exhibits
|
|
|
A
|
Work
Agreement
|
|
B
|
Form
of Deed
|
|
C
|
Form
of Xxxx of Sale
|
|
D
|
Form
of Assignment
|
|
E
|
Form
of Management Agreement
|
|
F
|
Form
of Reserved Rights Agreement
|
|
G
|
Terms
of Supplemental REA
|
|
H
|
Form
of Letter of Credit
|
