AGREEMENT OF PURCHASE AND SALE Pinewood Plaza Hampton, VA
Exhibit 10.19
AGREEMENT OF PURCHASE AND SALE
Pinewood Plaza
Hampton, VA
Hampton, VA
ARTICLE 1: PROPERTY/PURCHASE PRICE
1.1 Certain Basic Terms.
(a) Purchaser and Notice Address:
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With a copy to: | |
Asset Capital Partners, LP, a Delaware limited partnership
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Xxxxxxxx Xxxxxxxx & Xxxxx LLP | |
Attn: Xxxxxxx X. Xx Xxxxx III
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Attn: Xxxxxx Xxxxxxxxx | |
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000 East
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000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000 | |
Xxxxxxxx, XX 00000
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Xxx Xxxxxxx, XX 00000 | |
Telephone: 301/000-0000
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Telephone: 213/000-0000 | |
Facsimile: 301/656-1960
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Facsimile: 213/312-1266 | |
E-mail: xxxxxxxx@xxxxxxxxxxxxxxxx.xxx
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E-mail: xxxxxxxxxxxxxxx@xxxxxxx.xxx | |
(b) Seller and Notice Address:
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With a copy to: | |
Pinewood Plaza Associates, LLC, a Virginia limited liability company
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Beale, Davidson, Xxxxxxxxxxx & Xxxxxx, P.C. | |
c/o Berman Xxxxxxx Properties, LLC
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Attn: Xxxxxxx X. Xxxxx | |
Attn: Xxxxxx X. Xxxxxxx
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000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000 | |
0000 Xxxxxx Xxxxxxxxx, 0xx Xxxxx
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Xxxxxxxx, XX 00000 | |
XxXxxx, XX 00000
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Telephone: 804/000-0000 x000 | |
Telephone: 703/000-0000
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Facsimile: 804/788-0135 | |
Facsimile: 703/556-3246
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E-mail: xxxxxx@xxxxxxxx.xxx | |
E-mail: xxxxxxxx@xxxxxxxxxxxxx.xxx |
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(c) Title Company:
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(d) Escrow Agent: | |
Ticor Title Insurance Company
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Ticor Title Insurance Company | |
Attn: Xxxx Xxxxxxx
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Attn: Xxxx Xxxxxxx | |
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
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0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000 | |
Xxxxxxx Xxxxx, XX 00000
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Xxxxxxx Xxxxx, XX 00000 | |
Telephone: 310/000-0000
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Telephone: 310/000-0000 | |
Facsimile: 310/285-0299
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Facsimile: 310/285-0299 | |
xxxxxxxx@xxxxxxxxxx.xxx
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xxxxxxxx@xxxxxxxxxx.xxx |
(e)
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Date of this Agreement: | The latest date of execution by the Seller or the Purchaser, as indicated on the signature page. | ||||
(f)
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Purchase Price: | $8,527,920.00 | ||||
(g) |
Xxxxxxx Money: | $250,000.00 (the “Initial Deposit”), together with an additional xxxxxxx money deposit of $150,000.00 (the “Additional Deposit”), if required, and together with interest thereon, and all other amounts designated as “Xxxxxxx Money” hereunder. | ||||
(h) |
Due Diligence Period: | The period ending 30 days after the DDP Commencement Date. | ||||
(i)
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DDP Commencement Date: |
The date which is the earlier of (i) the date Purchaser has received all of the Property Information described in Paragraph 2.1, or (ii) 10 business days following the Date of this Agreement. | ||||
(j)
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Closing Date: | As designated by the Purchaser upon not less than 5 business days’ prior notice, but no later than 30 days after the Due Diligence Period. | ||||
(k)
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Broker: | Xxxxxxx & Xxxxxxxxx, and Xxxxxxx. |
1.2 Property. Subject to the terms and conditions of this Agreement of Purchase and
Sale (the “Agreement”), Seller agrees to sell to Purchaser, and Purchaser agrees to
purchase from Seller, all of Seller’s right, title and interest in and to the following property
(collectively, the “Property”):
(a) The “Real Property,” being the land described in Exhibit
A attached hereto, together with (i) all improvements located thereon
(“Improvements”), (ii) all and singular the rights, benefits, privileges, easements,
tenements, hereditaments, and appurtenances thereon or in anywise appertaining to such real
property, and (iii) all right, title, and interest of Seller in and to all strips and gores
and any land lying in the bed of any street, road or alley, open or proposed, adjoining such
real property.
(b) The landlord’s interest in the “Leases”, being all leases, rental
agreements and other agreements permitting occupancy of the Improvements, including leases
which may be made by Seller after the date hereof and prior to Closing as permitted by this
Agreement.
(c) The “Tangible Personal Property,” being all equipment, machinery,
furniture, furnishings, supplies and other tangible personal property owned by Seller, and
Seller’s interest and corresponding obligation in any such property leased by Seller, now or
hereafter located in and used in connection with the operation, ownership or management of
the Real Property.
(d) The “Intangible Personal Property,” being all intangible personal
property related to the Real Property and the Improvements, including, without limitation:
all trade names and trade marks associated with the Real Property and the Improvements,
including Seller’s rights and interests in the name of the Real Property; the plans and
specifications and other architectural and engineering drawings for the Improvements;
warranties and guaranties; contract rights related to the construction, operation, or
ownership of the Real Property (but only to the extent Seller’s obligations thereunder are
expressly assumed by Purchaser pursuant to this Agreement); governmental permits, approvals
and licenses (to the extent assignable); tenant lists and correspondence; all records and
promotional materials relating to the Property; and telephone exchange numbers (to the
extent assignable).
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1.3 Xxxxxxx Money. Within 3 business days after receipt of a fully executed copy of
this Agreement, Purchaser shall deposit the Initial Deposit with the Escrow Agent. Within 3
business days following the expiration of the Due Diligence Period, if this Agreement has not been
terminated, Purchaser shall deposit the Additional Deposit with the Escrow Agent. The Xxxxxxx Money
shall be applied to the Purchase Price at Closing. If this Agreement terminates pursuant to any
express right of Purchaser or Seller to terminate this Agreement other than as a result of Seller’s
default, the Xxxxxxx Money shall be refunded to Purchaser immediately upon request, and all further
rights and obligations of the parties under this Agreement shall terminate. The Xxxxxxx Money
shall be held and disbursed by the Escrow Agent pursuant to Article 9 of this Agreement.
ARTICLE 2: INSPECTION
2.1 Seller’s Delivery of Specified Documents. To the extent such items are in
Seller’s possession or control, Seller shall provide to Purchaser the following (the “Property
Information”) within 5 business days after the Date of this Agreement:
(a) Rent Roll. A current rent roll and delinquency report (“Rent
Roll”) for the Property;
(b) Leases. Copies of all Leases in effect as of the Date of this
Agreement, inclusive of all leases, rental agreements and other rights to occupy all or any
portion of the Property, any amendments, supplements and modifications, and any guarantees
or other assurances related thereto;
(c) Financial Information. Operating statements of the Property for
the 36 months preceding this Agreement (“Operating Statements”), including financial
statements (balance sheet, income, expenses and capital improvements) for the Property for
the two calendar years preceding this Agreement and year-to-date for the current year, and
access to bank statements for the three months preceding this Agreement, if required for
verification of information provided or received by Seller;
(d) Tax Statements; Tax Consultant. Copies of all ad valorem tax
statements relating to the Property for the current year or other current tax period (if
available) and for the 24 months preceding the Agreement, together with the name and address
of Seller’s property tax consultant;
(e) Loss History. The insurance loss history report for the Property
for the 24 months preceding this Agreement;
(f) Utility Bills. Access to utility bills for the Property for the
preceding calendar year and year-to-date for the current year;
(g) Personal Property Inventory. An inventory of the Personal
Property to be conveyed to Purchaser at Closing;
(h) Business License and Permit. Copies of all certificates,
approvals, licenses and/or permits required for the operation of the Property (collectively,
the “Permits”);
(i) Service Contracts. A list, together with copies, of all service,
supply, equipment rental, and other contracts related to the operation of the Property
(“Service Contracts”);
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(j) Maintenance Records. Engineering and property inspection reports
and access all available maintenance work orders and other records for the 36 months
preceding this Agreement related to the Property;
(k) List of Capital Improvements. A list of all capital improvements
known to the Seller and performed on the Property within the 36 months preceding this
Agreement;
(l) Environmental Reports. Any environmental reports related to the
Property;
(m) Plans and Specifications. All construction plans and
specifications relating to the original development of the Property and any major capital
repairs or tenant improvements; and
(n) Existing Title and Survey. Copy of Seller’s existing title
insurance policy and any existing ALTA “as-built” survey of the Property.
(o) Loan Documents. Copies of the existing deed of trust encumbering
the Property (the “Existing Deed of Trust”), securing the existing promissory note
(the “Existing Note”) in favor of Citigroup Global Markets Realty Group, its
successors and assigns (“Lender”), with an unpaid principal balance estimated as of
the Close of Escrow to be approximately $5,767,000.00, and the other documents and
correspondence (collectively with the Existing Deed of Trust and the Existing Note, the
“Existing Loan Documents”) evidencing or securing the loan evidenced by the Existing
Note and the Existing Deed of Trust (the “Existing Loan”). Purchaser is advised that
Lender is certainly requiring impounds for taxes, insurance and replacements in the
approximate amounts of $25,000, $3,500, and 285,000, respectively.
In addition, Seller shall make available to Purchaser at the Property all of the documents and
information more particularly described in Exhibit G attached hereto, and any other
information regarding the Property which Purchaser shall reasonably request, to the extent in
Seller’s possession or control, or in the possession of its agents or representatives.
Seller shall during the pendency of this Agreement provide Purchaser with any known document
described above coming into Seller’s possession or produced by Seller after the initial delivery of
the Property Information. Seller shall provide Purchaser with an updated Rent Roll, dated as of
the last day of the month, for each month during the pendency of this Agreement.
2.2 Due Diligence. Purchaser shall have through the last day of the Due Diligence
Period in which to examine, inspect, and investigate the Property and, in Purchaser’s sole and
absolute judgment and discretion, to determine whether the Property is acceptable to Purchaser and
to obtain all necessary internal approvals of Purchaser. Notwithstanding anything to the contrary
in this Agreement, Purchaser may terminate this Agreement by giving written notice of termination
to Seller (the “Due Diligence Termination Notice”) on or before the last day of the Due
Diligence Period. If Purchaser does not give a notice of its intent to continue this Agreement
beyond the expiration of the Due Diligence Period, Purchaser shall be deemed to have given a Due
Diligence Termination Notice, and this Agreement shall be deemed terminated.
Purchaser shall have reasonable access to the Property for the purpose of conducting surveys,
architectural, engineering, geotechnical and environmental inspections and tests (including
intrusive inspection and sampling), and any other inspections, studies, or tests reasonably
required by Purchaser. Purchaser shall keep the Property free and clear of any liens and will
indemnify, defend, and hold Seller harmless from all claims and liabilities asserted against Seller
as a result of any such entry by Purchaser, its agents, employees or representatives, excluding any
claims or liabilities arising from Purchaser’s
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discovery of any condition relating to the Property. If any inspection or test disturbs the
Property, Purchaser will restore the Property to substantially the same condition as existed
prior to any such inspection or test. Purchaser and its agents, employees, and representatives
shall have a continuing right of reasonable access to the Property during the pendency of this
Agreement, upon reasonable notice, for the purpose of examining and making copies of all books and
records and other materials relating to the Property in Seller’s or its property manager’s
possession and Purchaser shall have the right to conduct a “walk-through” of the Property prior to
the Closing upon appropriate notice to tenants as permitted under the Leases. In the course of its
investigations, Purchaser may make inquiries to third parties, including, without limitation,
lenders, contractors, property managers, parties to Service Contracts and municipal, local and
other government officials and representatives, and Seller consents to such inquiries. Purchaser
shall only interview tenants of the Property following reasonable notice to Seller, and such
interviews will be deferred to the final week of the Due Diligence Period unless otherwise agreed
by Seller. Purchaser agrees that during the term of this Agreement and for a period of 9 months
following a termination of this Agreement for any reason other than Seller’s default, Purchaser
will not solicit any tenant of the Property interviewed by Purchaser pursuant to the terms of this
Agreement; provided, however, that this restriction shall not act as a prohibition against
Purchaser responding to an unsolicited offer or discussion initiated by a prospective tenant or its
representative. The obligations of the Purchaser under this paragraph shall survive the
termination of the Agreement.
2.3 Service Contracts. During the Due Diligence Period, Purchaser will advise Seller
of those Service Contracts which Purchaser will assume and which Service Contracts are to be
terminated by Seller at Closing. Purchaser will assume the obligations arising from and after the
Closing Date under those Service Contracts that are not in default as of the Closing Date and which
Purchaser has agreed will not be terminated. Seller shall terminate at Closing and pay all amounts
due on account of all Service Contracts that are not to be so assumed. Seller shall terminate at
Closing, and Purchaser shall not assume, any property management agreement or leasing arrangement
affecting the Property and Seller shall also simultaneously either (a) terminate any existing lease
(whether written, oral or otherwise) on the Property between Seller and any existing property
management or leasing firm, or any affiliated entity, under which rent is waived or is discounted
as of the Closing Date, or (b) modify any such lease to provide for a then-current market rent.
Purchaser may not contact, interview, and hire any on-site property management personnel, including
those employed by Seller, without Seller’s prior consent.
2.4 Existing Loan Documents. During the Due Diligence Period, Purchaser and
Seller shall jointly seek Lender’s approval of the Existing Loan. Purchaser agrees to initiate its
application to the Lender within 5 business days following the Date of this Agreement, so long as
Purchaser is not obligated to pay any material fees to Lender until it has made at least a
preliminary determination that it intends to proceed with its purchase of the Property. If Lender
fails to approve the assumption of the Existing Loan by Purchaser on the terms of the Existing Loan
Documents (as hereinafter defined), without modification, or if Lender imposes material conditions
to the assumption of the Existing Loan Documents by Purchaser (other than those which are expressly
set forth in the Existing Loan Documents) that are unacceptable to Purchaser, in either case,
Purchaser may, by written notice to Seller, elect to terminate this Agreement, in which event the
Xxxxxxx Money shall be refunded to Purchaser, and each of the parties shall, except to the extent
expressly provided in this Agreement, be released from further liability to the other. If Lender
approves the assumption of the Existing Loan by Purchaser on the terms of the Existing Loan
Documents or otherwise on terms acceptable to Purchaser, Purchaser shall so advise Seller and
Escrow Agent in writing, and the parties shall thereafter proceed to the Close of Escrow as
provided herein. Purchaser and Seller shall each use its good faith reasonable efforts to secure
said approval, including, but not limited to, supplying Lender with such information as Lender
shall require, as soon as reasonably possible following the Effective Date.
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ARTICLE 3: TITLE AND SURVEY REVIEW
3.1 Delivery of Title Commitment and Survey. Purchaser shall cause to be prepared:
(i) a current, effective commitment for title insurance (the “Title Commitment”) issued by
the Title Company, in the amount of the Purchase Price with Purchaser as the proposed insured, and
accompanied by true, complete, and legible copies of all documents referred to in the Title
Commitment; and (ii) a current ALTA-ACSM survey of the Property (the “Survey”), including a
certification addressed to Purchaser in the form attached hereto as Exhibit B.
3.2 Title Review and Cure. During the Due Diligence Period, Purchaser shall review
title to the Property as disclosed by the Title Commitment and the Survey. Seller will reasonably
cooperate with Purchaser in curing any objections Purchaser may have to title to the Property.
Seller shall have no obligation to cure title objections except mortgages and liens of an
ascertainable amount created by, under or through Seller, which Seller shall cause to be satisfied
and released at the Closing. Seller further agrees to remove any exceptions or encumbrances to
title of which are created by, under or through Seller after the Date of this Agreement without
Purchaser’s consent. Purchaser may terminate this Agreement and receive a refund of the Xxxxxxx
Money if the Title Company revises the Title Commitment after the expiration of the Due Diligence
Period to add or modify exceptions or endorsements to the Title Commitment as a result of events
occurring following the Date of this Agreement and through no fault of Purchaser, if such additions
or modifications are adverse and not acceptable to Purchaser and are not removed by the Closing
Date. The term “Permitted Exceptions” shall mean: the specific exceptions (exceptions that
are not part of the promulgated title insurance form) in the Title Commitment that the Title
Company has not agreed to insure over or remove from the Title Commitment as of the end of the Due
Diligence Period and that Seller is not required to remove as provided above; items shown on the
Survey, which have not been removed as of the end of the Due Diligence Period; real estate taxes
not yet due and payable; and tenants in possession as tenants only under the Leases without any
option to purchase or acquire an interest in the Property.
3.3 Delivery of Title Policy at Closing. As a condition to Purchaser’s obligation to
close, the Escrow Agent shall deliver to Purchaser at Closing an ALTA Form B (or other form
required by state law) Owner’s Policy of Title Insurance (the “Title Policy”), with
extended coverage (i.e., with ALTA General Exceptions 1 through 5 deleted, or with corresponding
deletions if the Property is located in a non-ALTA state), issued by the Title Company as of the
date and time of the recording of the Deed, in the amount of the Purchase Price, containing the
Purchaser’s Endorsements, insuring Purchaser as owner of good, marketable and indefeasible fee
simple title to the Property, and subject only to the Permitted Exceptions. “Purchaser’s
Endorsements” shall mean, to the extent such endorsements are available under the laws of the
state in which the Property is located: (a) owner’s comprehensive; (b) access; (c) survey (accuracy
of survey); (d) location (survey legal matches title legal); (e) separate tax lot; (f) legal lot;
(g) zoning 3.1, with parking; and (h) such other endorsements as Purchaser may require based on its
review of the Title Commitment and Survey which Title Company agrees to issue prior to the end of
the Due Diligence Period. Seller shall execute at Closing an owner’s affidavit in such form as the
Title Company shall reasonably require for the issuance of the Title Policy. The Title Policy may
be delivered after the Closing if at the Closing the Title Company issues a currently effective,
duly-executed “marked-up” Title Commitment and irrevocably
commits in writing to issue the Title Policy in the form of the “marked-up” Title Commitment promptly after the Closing Date.
ARTICLE 4: OPERATIONS AND RISK OF LOSS
4.1 Ongoing Operations. During the pendency of this Agreement:
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(a) Performance under Leases and Service Contracts. Seller shall (i)
carry on its business and activities relating to the Property substantially in the same
manner as it did before the Date of this Agreement, and (ii) shall perform its material
obligations under the Existing Loan Documents, Leases, Service Contracts and other
agreements that may affect the Property.
(b) Leasing Arrangements. Without Purchaser’s prior written consent
in each instance, Seller will not amend or terminate any existing Lease, or enter into a new
Lease concerning the Property. Purchaser’s consent shall not be unreasonably withheld so
long as (i) the new Lease is for a term of 3 — 5 years, at a minimum rental of $16 per
square foot, and with tenant improvement costs not to exceed $10 per square foot. Prior to
the expiration of the Due Diligence Period, failure of Purchaser to respond to a request for
consent within 5 business days shall be deemed approval. All leasing commissions and tenant
improvement costs or allowances for existing Leases shall be paid by Seller prior to the
Closing, except for commissions and tenant improvement costs for Leases entered into
following the Date of this Agreement which have been approved by Purchaser. Seller shall
not offset or apply all or any portion of any security deposit held by Seller in connection
with any Lease with a term which extends beyond the Closing Date.
(c) New Contracts. Seller will not enter into any Service Contract
or other agreement that will be an obligation affecting the Property subsequent to the
Closing, except contracts entered into in the ordinary course of business that are
terminable without cause on or prior to the Closing.
(d) Listings and Other Offers. Seller will not list the Property
with any broker or otherwise solicit or make or accept any offers to sell the Property, or
enter into any contracts or agreements (whether binding or not) regarding any disposition of
the Property.
(e) Maintenance of Improvements and Removal of Personal Property.
Seller shall maintain all Improvements in the same condition and repair as Seller is
currently maintaining the Improvements, including the replacement and/or repair of all
mechanical components. Seller will not remove any Personal Property except as may be
required for necessary repair or replacement, and replacement shall be of equal quality and
quantity as existed as of the time of its removal.
4.2 Damage. Risk of loss up to and including the Closing Date shall be borne by
Seller. In the event of any material damage to or destruction of the Property or any portion
thereof, Purchaser may, at its option, by notice to Seller given within 10 days after Seller
notifies Purchaser of such damage or destruction (and if necessary the Closing Date shall be
extended to give Purchaser the full 10-day period to make such election): (i) terminate this
Agreement and the Xxxxxxx Money shall be immediately returned to Purchaser, or (ii) proceed under
this Agreement, receive any insurance proceeds, or an assignment thereof if such proceeds are
unavailable (including any rent loss insurance applicable to any period on and after the Closing
Date), due Seller as a result of such damage or destruction and assume responsibility for such
repair, and Purchaser shall receive a credit at Closing for any deductible or coinsured amount
under said insurance policies and any additional amounts necessary to complete such repairs. If
Purchaser elects (ii) above, Purchaser may extend the Closing Date for up to an additional 10 day
period in which to obtain insurance settlement agreements with Seller’s insurers, and Seller will
cooperate with Purchaser in obtaining the insurance proceeds and such agreements from Seller’s
insurers. If the Property is not materially damaged, then Purchaser shall not have the right to
terminate this Agreement, but Seller shall, at its cost, repair the damage before the Closing in a
manner reasonably satisfactory to Purchaser or, if repairs cannot be completed before the Closing,
assign to Purchaser at Closing any available insurance proceeds for such repair, and credit
Purchaser at Closing an amount equal to the applicable deductible plus any additional cost to
complete the repair. “Material damage” and “Materially damaged” means damage
reasonably exceeding 1 percent of the Purchase Price to repair or
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which, in the reasonable estimation of a mutually acceptable third party contractor, will take
longer than 90 days to repair.
4.3 Condemnation. In the event any proceedings in eminent domain are contemplated,
threatened or instituted by any body having the power of eminent domain with respect to the
Property or any portion thereof, Purchaser may, at its option, by notice to Seller given within 10
business days after Seller notifies Purchaser of such proceedings (and if necessary the Closing
Date shall be extended to give Purchaser the full 10 business day period to make such election):
(i) terminate this Agreement and the Xxxxxxx Money shall be immediately returned to Purchaser, or
(ii) proceed under this Agreement, in which event Seller shall, at the Closing, assign to Purchaser
its entire right, title and interest in and to any condemnation award, and Purchaser shall have the
sole right during the pendency of this Agreement to negotiate and otherwise deal with the
condemning authority in respect of such matter.
4.4 Estoppel Certificates. Following the expiration of the Due Diligence Period,
Seller shall obtain tenant estoppel certificates in a form attached hereto as Exhibit H
(“Tenant Estoppel Certificate”) from each tenant under Leases applicable to any portion of
the Property.
ARTICLE 5: CLOSING
5.1 Closing. The consummation of the transaction contemplated herein
(“Closing”) shall occur on the Closing Date at the offices of the Escrow Agent. Closing
shall occur through an escrow with the Escrow Agent. Funds shall be deposited into and held by
Escrow Agent in a closing escrow account with a bank satisfactory to Purchaser and Seller. Upon
satisfaction or completion of all closing conditions and deliveries, the parties shall direct the
Escrow Agent to immediately record and deliver the closing documents to the appropriate parties and
make disbursements according to the closing statements executed by Seller and Purchaser. The
Escrow Agent agrees that (1) recordation of the Deed constitutes its representation that it is
holding the closing documents, closing funds and closing statements and is prepared and irrevocably
committed to disburse the closing funds in accordance with the closing statement and (2) release of
funds to the Seller shall irrevocably commit the Title Company to issue the Title Policy in
accordance with this Agreement.
5.2 Conditions to the Parties’ Obligations to Close. In addition to all other
conditions set forth herein, the obligation of Seller, on the one hand, and Purchaser, on the other
hand, to consummate the transactions contemplated hereunder shall be contingent upon the following:
(a) The other party’s representations and warranties contained herein shall
be true and correct as of the date of this Agreement and the Closing Date, subject to those
qualifications contained in those representations and warranties. For purposes of this
clause (a), if a representation is made to knowledge, but the factual matter that is the
subject of the representation is false notwithstanding any lack of knowledge or notice to
the party making the representation, such event shall constitute a failure of this condition
only, and not a default by the party making such representation;
(b) As of the Closing Date, the other party shall have performed its
obligations hereunder and all deliveries to be made at Closing have been tendered;
(c) There shall exist no pending or threatened action, suit or proceeding
with respect to the other party before or by any court or administrative agency which seeks
to restrain or prohibit, or to obtain damages or a discovery order with respect to, this
Agreement or the consummation of the transactions contemplated hereby;
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(d) The obligation of Purchaser to consummate the transactions contemplated
hereunder shall also be subject to the conditions that:
(i) there shall exist no pending or threatened actions, suits, arbitrations,
claims, attachments, proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings against Seller that
would materially and adversely affect the Property or the operation of the Property;
(ii) Purchaser shall have obtained from the declarant under any declaration of
covenants, conditions and restrictions or similar instrument (“CC&Rs”)
governing or affecting the use, operation, maintenance, management or improvement of
the Property, an estoppel certificate, in form and substance reasonably satisfactory
to Purchaser;
(iii) Purchaser shall be satisfied that none of Seller or any of its affiliates
is listed on any Government Lists and that the sale of the Property to Purchaser
will not result in a violation of the Patriot Act, any OFAC Laws and Regulations or
any other anti-terrorism or anti-money laundering laws and regulations, including,
without limitation, the Bank Secrecy Act, as amended and the Money Laundering
Control Act of 1986, as amended. Seller shall deliver to Purchaser upon Purchaser’s
request from time to time such information requested by Purchaser regarding the
identity of Seller in order for Purchaser to comply with the Patriot Act, the OFAC
Laws and Regulations and such other anti-terrorism and anti-money laundering laws
and regulations; and
(iv) Purchaser shall have received Tenant Estoppel Certificates executed by
tenants representing not less than eighty-five (85%) percent of the rented square
footage of the Property, which executed certificate shall be acceptable to Purchaser
with no adverse disclosure therein. Seller shall furnish Purchaser with an estoppel
certificate covering any Lease(s) for which Tenant Estoppel Certificate has not been
obtained, certifying as to the matters set forth in the form of Tenant Estoppel
Certificate, which certificate may be accepted by Purchaser, in its sole discretion.
Upon subsequent delivery to Purchaser of any missing tenant estoppel certificate in
the form required herein with no adverse disclosure therein, Seller’s estoppel
certificate shall be of no further force and effect as to the Lease covered by such
estoppel certificate.
(v) There shall be no material adverse change in the condition of the
Property, the status of any Lease, or the financial condition of any tenant,
following the Date of this Agreement, which was not known to Purchaser prior to the
expiration of the Due Diligence Period.
(vi) Unless Purchaser shall have delivered a Defeasance Election, Purchaser
shall have received Lender’s written approval, of the transfer of the Property to,
and assumption of the Existing Loan by, Purchaser as provided in Paragraph
2.4, above, and Lender, Seller and Purchaser shall have executed and delivered
all documentation required by Lender to evidence such consent and Purchaser’s
assumption of the Loan (the “Assumption Documents”). The Assumption
Documents shall include Lender’s certification as to the absence of defaults,
confirmation of all amounts due, and such other information as Purchaser shall
reasonably request.
So long as a party is not in default hereunder, if any condition to such party’s obligation to
proceed with the Closing hereunder has not been satisfied as of the Closing Date, such party may,
in its sole discretion, (i) terminate this Agreement by delivering written notice to the other
party on or before
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the Closing Date, (ii) elect to extend the Closing until such condition is satisfied, and
(iii) elect to consummate the transaction, notwithstanding the non-satisfaction of such condition,
in which event such party shall be deemed to have waived any such condition. In the event such
party elects to close, notwithstanding the nonsatisfaction of such condition, there shall be no
liability on the part of any other party hereto for breaches of representations and warranties of
which the party electing to close had actual knowledge at the Closing. Notwithstanding the
foregoing, the failure of a condition due to the breach of a party shall not relieve such breaching
party from any liability it would otherwise have hereunder. In the event such party elects to
terminate this Agreement, the Xxxxxxx Money shall be returned to Purchaser and neither party shall
incur any further liability under this Agreement.
5.3 Seller’s Deliveries in Escrow. At least one business day prior to the Closing
Date, Seller shall deliver in escrow to the Escrow Agent the following:
(a) Deed. A special warranty deed (warranting title from Seller) in
form provided for under the law of the state where the Property is located, or otherwise in
conformity with the custom in such jurisdiction and mutually satisfactory to the parties,
executed and acknowledged by Seller, conveying to Purchaser good, indefeasible and
marketable fee simple title to the Real Property, subject only to the Permitted Exceptions
(the “Deed”);
(b) Xxxx of Sale and Assignment of Leases and Contracts. A Xxxx of
Sale and Assignment of Leases and Contracts in the form of Exhibit D attached hereto
(the “Assignment”), executed and acknowledged by Seller, vesting in Purchaser good
title to the property described therein free of any claims, except for the Permitted
Exceptions to the extent applicable;
(c) Assumption Documents. The Assumption Documents, duly executed
and acknowledged by Seller, or, if applicable, all documents required by Lender to be
executed by Seller for defeasance of the Existing Loan, duly executed by Seller.
(d) State Law Disclosures. Such disclosures and reports as are
required by applicable state and local law in connection with the conveyance of real
property;
(e) FIRPTA. A Foreign Investment in Real Property Tax Act affidavit
executed by Seller. If Seller fails to provide the necessary affidavit and/or documentation
of exemption on the Closing Date, Purchaser may proceed with withholding provisions as
provided by law;
(f) Certificate of Representations and Warranties. A certificate,
executed by Seller, reaffirming and updating to the Closing Date the representations and
warranties given by Seller under Article 7, which certificate will include an updated Rent
Roll, list of Service Contracts, and Operating Statements;
(g) Contract Terminations. Written evidence of the termination of
all leasing and management agreements affecting the Property, as well as any Service
Contracts which Purchaser did not agree to assume during the Due Diligence Period;
(h) Authority. Evidence of the existence, organization and authority
of Seller and of the authority of the persons executing documents on behalf of Seller
reasonably satisfactory to the Escrow Agent and the Title Company; and
(i) Additional Documents. Any additional documents that Purchaser,
Escrow Agent or the Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement.
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5.4 Purchaser’s Deliveries in Escrow. Except as set forth below, at least one
business day prior to the Closing Date, Purchaser shall deliver in escrow to the Escrow Agent the
following:
(a) Purchase Price. On or before the Closing Date, the Purchase
Price, less the Xxxxxxx Money that is applied to the Purchase Price, and less all amounts
then due on account of the Existing Loan, plus or minus applicable prorations, deposited by
Purchaser with the Escrow Agent in immediate, same-day federal funds wired for credit into
the Escrow Agent’s escrow account;
(b) Xxxx of Sale and Assignment of Leases and Contracts. The
Assignment, executed by Purchaser;
(c) Assumption Documents. The Assumption Documents, duly executed
and acknowledged by Purchaser or, if applicable, all documents required of Purchaser by
Lender for defeasance of the Existing Loan, duly executed by Purchaser.
(d) State Law Disclosures. Such disclosures and reports as are
required by applicable state and local law in connection with the conveyance of real
property; and
(e) Additional Documents. Any additional documents that Seller,
Escrow Agent or the Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement.
5.5 Closing Statements. At least one business day prior to the Closing Date, Seller
and Purchaser shall deposit with the Escrow Agent executed closing statements consistent with this
Agreement in the form required by the Escrow Agent. If Seller and Purchaser cannot agree on the
closing statement to be deposited as aforesaid because of a dispute over the prorations and
adjustments set forth therein, the Closing nevertheless shall occur, and the amount in dispute
shall be withheld from the Purchase Price and placed in an escrow with the Title Company, pursuant
to a written escrow agreement to be approved by Seller and Purchaser, to be paid out upon the joint
direction of the parties or pursuant to court order upon resolution or other final determination of
the dispute.
5.6 Title Policy. The Escrow Agent shall deliver to Purchaser the Title Policy in
accordance with the provisions of Paragraph 3.3.
5.7 Possession. Seller shall deliver possession of the Property to Purchaser at the
Closing subject only to the Permitted Exceptions.
5.8 Delivery of Books and Records. Immediately after the Closing, Seller shall
deliver to Purchaser’s property manager at the Property: the original Leases (or copies certified
by Seller to be true, correct and complete if the original is not available); copies or originals
of all books and records of account, contracts, copies of correspondence with tenants and
suppliers, receipts for deposits, unpaid bills and other papers or documents which pertain to the
Property; all advertising materials, booklets, keys and other items, if any, used in the operation
of the Property; an electronic version of all data maintained by Seller regarding each of the
Leases, each of the tenants under the Leases, correspondence and working files and other books and
records relating to the operation and management of the Property, if available; and, if in Seller’s
possession or control, the original “as-built” plans and specifications and all other available
plans and specifications.
5.9 Notice to Tenants. Seller and Purchaser shall deliver to each tenant immediately
after the Closing a notice regarding the sale in substantially the form Exhibit E attached
hereto, or such other form as may be required by applicable state law.
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ARTICLE 6: PRORATIONS
6.1 Prorations. The items in this Paragraph 6.1 shall be prorated between
Seller and Purchaser as of the close of the day immediately preceding the Closing Date, the Closing
Date being a day of income and expense to Purchaser:
(a) Taxes and Assessments. Purchaser shall receive a credit for any
accrued but unpaid general real estate and personal property taxes and assessments
(including without limitation any assessments imposed by private covenant, “Taxes”)
applicable to any period before the Closing Date, even if such Taxes are not yet due and
payable. If the amount of any Taxes has not been determined as of Closing, such credit
shall be based on 105 percent of the most recent ascertainable Taxes and shall be reprorated
upon issuance of the final tax xxxx. Purchaser shall receive a credit for any special
assessments which are levied or charged against the Property, only if due and payable.
(b) Collected Rent. All collected rent and other income, including
base rent, additional rent and other charges payable under Leases in effect on the Closing
Date. Seller shall be charged and Purchaser credited with any rentals collected by Seller
before Closing but applicable to any period of time after Closing. Uncollected rent and
other income shall not be prorated. If Purchaser collects delinquencies after Closing,
Purchaser shall apply such rent to the obligations owing Purchaser for its period of
ownership and to costs of collection, remitting the balance, if any, to Seller. Purchaser
shall xxxx and attempt to collect such delinquent rent in the ordinary course of business,
but shall not be obligated to engage a collection agency or take legal action to collect any
delinquencies. Seller shall not have the right to seek collection of any rents delinquent
for any period prior to the Closing unless the tenant has vacated the premises under the
Lease before the Closing Date and the Lease is not assigned to Purchaser.
(c) Utilities. Utilities, including water, sewer, electric, and gas,
based upon the last reading of meters prior to the Closing, and common expenses associated
with operation of the Property. Seller shall endeavor to obtain meter readings on the day
before the Closing Date, and if such readings are obtained, there shall be no proration of
such items. Seller shall pay at Closing the bills therefor for the period to the day
preceding the Closing, and Purchaser shall pay the bills therefor for the period subsequent
thereto. If the utility company or vendor will not issue separate bills, Purchaser will
receive a credit against the Purchase Price for Seller’s portion and will pay the entire
xxxx prior to delinquency after Closing. If Seller has paid any utilities no more than 30
days in advance in the ordinary course of business, then Purchaser shall be charged its
portion of such payment at Closing.
(d) Leasing Commissions. On or before the Closing Date, Seller shall
pay in full all leasing commissions due to leasing or other agents for each Lease entered
into prior to the Closing Date, with the exception of amounts which are the obligation of
Purchaser pursuant to Paragraph 4.1(b).
(e) Fees and Charges under Service Contracts. Fees and charges under
such of the Service Contracts as are being assigned to and assumed by Purchaser at the
Closing, on the basis of the periods to which such Service Contracts relate.
(f) Loan Amounts. All delinquent amounts due on account of the
Existing Loan shall be paid by Seller. Interest for the period in which the Closing Date
occurs shall be prorated. Seller shall receive a credit at Closing from Purchaser for
actual moneys held in escrow and
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impounds by Lender as set forth in Paragraph 2.1(o). Seller shall assign all
such moneys to Purchaser at Closing.
6.2 Final Adjustment After Closing. In the event that final bills are not available
or cannot be issued prior to Closing for any item being prorated under Paragraph 6.1, then
Purchaser and Seller agree to allocate such items on a fair and equitable basis as soon as such
bills are available, final adjustment to be made as soon as reasonably possible after the Closing.
Payments in connection with the final adjustment shall be due within 30 days of written notice.
6.3 Tenant Deposits. All tenant and other security deposits (and interest thereon if
required by law or contract to be earned thereon) shall be transferred or credited to Purchaser at
Closing. As of the Closing, Purchaser shall assume Seller’s obligations related to tenant security
deposits, but only to the extent they are properly credited and transferred to Purchaser.
6.4 Utility Deposits. Seller shall receive a credit for the amount of deposits, if
any, with utility companies that are transferable and that are assigned to Purchaser at the
Closing.
6.5 Title and Survey Costs. The cost of the Survey, including any revisions necessary
to make the Survey conform to the requirements of this Agreement, shall be paid by Purchaser. The
premium for the Title Policy shall be paid by Purchaser. Fees due Escrow Agent shall be shared
equally by Purchaser and Seller.
6.6 Sales, Transfer, and Documentary Taxes. Seller shall be responsible for the
Virginia’s Grantor Tax payable in connection with the recordation of the Deed, and Purchaser shall
be responsible for all other documentary, excise, transfer, deed or similar taxes and fees imposed
in connection with the recordation of the Deed under applicable state or local law.
6.7 Wages. Seller shall pay the wages, and the employment taxes and fringe benefits
applicable thereto, payable to employees of Seller as of their discharge on the Closing Date.
6.8 Commissions. Seller and Purchaser represent and warrant each to the other that
they have not dealt with any real estate broker, sales person or finder in connection with this
transaction other than Broker. If this transaction is closed, Seller shall pay Broker in
accordance with their separate agreement. Broker is an independent contractor and is not
authorized to make any agreement or representation on behalf of either party. Except as expressly
set forth above, in the event of any claim for broker’s or finder’s fees or commissions in
connection with the negotiation, execution or consummation of this Agreement or the transactions
contemplated hereby, each party shall indemnify and hold harmless the other party from and against
any such claim based upon any statement, representation or agreement of such party.
6.9 Loan Assumption Costs. Purchaser shall be responsible for all loan assumption
fees and other charges incurred to or on behalf of Lender in connection with the assumption of the
Existing Loan and obtaining Lender’s consent and approval.
6.10 Seller’s Obligations. Other than those obligations of Seller expressly assumed
by Purchaser hereunder or expressly agreed to in writing by Purchaser, Seller shall pay and
discharge any and all liabilities of each and every kind arising out of or by virtue of the conduct
of its business before and as of the Closing Date on or related to the Property.
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ARTICLE 7: REPRESENTATIONS AND WARRANTIES
7.1 Seller’s Representations and Warranties. As a material inducement to Purchaser to
execute this Agreement and consummate this transaction, Seller represents and warrants to Purchaser
that:
(a) Organization and Authority. Seller has been duly organized, is
validly existing, and is in good standing as a Virginia limited liability company. Seller
is in good standing and is qualified to do business in the state where the Property is
located. Subject only to obtaining certain internal approvals on or before the expiration
of the Due Diligence Period, Seller has the full right and authority and has obtained any
and all consents required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby. This Agreement has been, and all of the
documents to be delivered by Seller at the Closing will be, authorized and properly executed
and constitutes, or will constitute, as appropriate, the valid and binding obligation of
Seller, enforceable in accordance with their terms.
(b) Conflicts and Pending Actions or Proceedings. There is no
agreement to which Seller is a party or, to Seller’s knowledge, binding on Seller which is
in conflict with this Agreement. There is no action or proceeding pending or, to Seller’s
knowledge, threatened against Seller or relating to the Property, which challenges or
impairs Seller’s ability to execute or perform its obligations under this Agreement.
(c) Contractors and Suppliers. As of Closing, all contractors,
subcontractors, suppliers, architects, engineers, and others who have performed services or
labor or have supplied materials in connection with Seller’s acquisition, development,
ownership, or management of the Property have been paid in full and all liens arising
therefrom (or claims which with the passage of time or the giving of notice, or both, could
mature into liens) have been satisfied and released.
(d) Rent Roll. All information set forth in any Rent Roll delivered
to Purchaser shall be true, correct, and complete in all material respects as of its date.
Except as shown on the Rent Roll, no tenant under any Lease is entitled to any concession or
allowance, nor has any tenant paid rent more than for the current month. There are no
leasing or other commissions due, nor will any become due, in connection with any existing
Lease, and no understanding or agreement with any party exists as to payment of any leasing
commissions or fees regarding future leases or as to the procuring of tenants. No person is
entitled to occupy all or any portion of the Property except as reflected in the Leases and
the Rent Roll, and no person has any option, right of first refusal or other right to
acquire title to the Property or any interest therein other than Purchaser.
(e) Leases. The Leases and copies of Leases to be delivered to
Purchaser pursuant to this Agreement will be true, correct, and complete as of the date of
its delivery and as of the Closing Date, and are accurately reflected on the Rent Roll. To
Seller’s knowledge, no tenants have asserted nor are there any defenses or offsets to rent
accruing after the Closing Date and no default or breach exists on the part of any tenant.
Seller has not received any notice of any default or breach on the part of the landlord
under any Lease, nor, to the best of Seller’s knowledge, does there exist any such default
or breach on the part of the landlord. Neither Seller nor, to Seller’s knowledge, any other
party is in default under any Lease.
(f) Service Contracts. The list and copies of Service Contracts to
be delivered to Purchaser pursuant to this Agreement will be true, correct, and complete as
of the date of its delivery and as of the Closing Date. Neither Seller nor, to Seller’s
knowledge, any other party is in default under any Service Contract.
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(g) Operating Statements. The Operating Statements to be delivered
to Purchaser pursuant to this Agreement will show all items of income and expense (operating
and capital) incurred in connection with Seller’s ownership, operation, and management of
the Property for the periods indicated, and represent the financial information on which
Seller has relied in its operation, management and ownership of the Property.
(h) Existing Loan. The Existing Loan Documents are all of the
documents evidencing or securing the Existing Loan. The Existing Loan is in good standing,
and Seller is not in default thereunder, nor are there any events which have occurred which,
with the giving of notice or the passage of time, would constitute a default thereunder.
(i) Notice of Violations or Defects. Seller has received no written
notice from any governmental agency that the Property or the use thereof violates any
governmental law or regulation, nor has Seller received any notice from the property owners’
association under the CC&Rs regarding any violation of any covenants or restrictions
encumbering the Property or from any insurance company or underwriter of any defect that
would materially adversely affect the insurability of the Property or cause an increase in
insurance premiums.
(j) Environmental. Seller has no knowledge and has received no
written notice of any violation of Environmental Laws related to the Property or the
presence or release of Hazardous Materials on or from the Property except as disclosed in
the Property Information. To Seller’s knowledge, Seller has not manufactured, introduced,
released or discharged from or onto the Property any Hazardous Materials or any toxic
wastes, substances or materials (including, without limitation, asbestos), and Seller has
not used the Property or any part thereof for the generation, treatment, storage, handling
or disposal of any Hazardous Materials, in violation of any Environmental Laws. The term
“Environmental Laws” includes without limitation the Resource Conservation and
Recovery Act and the Comprehensive Environmental Response Compensation and Liability Act and
other federal laws governing the environment as in effect on the date of this Agreement
together with their implementing regulations and guidelines as of the date of this
Agreement, and all state, regional, county, municipal and other local laws, regulations and
ordinances that are equivalent or similar to the federal laws recited above or that purport
to regulate Hazardous Materials. The term “Hazardous Materials” includes petroleum,
including crude oil or any fraction thereof, natural gas, natural gas liquids, liquified
natural gas, or synthetic gas usable for fuel (or mixtures of natural gas or such synthetic
gas), asbestos and asbestos containing materials and any substance, material waste,
pollutant or contaminant listed or defined as hazardous or toxic under any Environmental
Law. To Seller’s knowledge, there are not now, nor have there been, any above-ground or
underground storage tanks located on the Property.
(k) Reserved.
(l) Withholding Obligation. Seller’s sale of the Property is not
subject to any federal, state, or local withholding obligation of Purchaser under the tax
laws applicable to Seller or the Property.
(m) Anti-Terrorism/Anti-Money Laundering. Neither Seller nor any of
its affiliates (i) is listed on any Government Lists, (ii) has been determined by competent
authority to be subject to the prohibitions contained in Presidential Executive Order No.
13244 (September 23, 2001) or in any enabling or implementing legislation or other
Presidential Executive Orders in respect thereof, (iii) is a person or entity who has been
previously indicted for or convicted of any felony involving a crime or crimes of moral
turpitude or for any violation of the Patriot Act, or (iv) is currently under investigation
by any governmental authority for alleged criminal activity.
15
Seller has no reason to believe that this transaction, including, without limitation,
the source of its funds, would result in a violation by Purchaser or Seller of the Patriot
Act, OFAC Laws and Regulations, or any other anti-terrorism or anti-money laundering laws or
regulations, including, without limitation, the Bank Secrecy Act, as amended, or the Money
Laundering Control Act of 1986, as amended.
For purposes hereof, the term “to Seller’s knowledge” or similar phrase shall mean the
current, actual knowledge of Xxxxxx X. Xxxxxxx or Xxxxxxx X. Xxxxxx, having made no independent
investigation beyond a good faith inquiry of Seller’s property management. As used herein, the
term “current actual knowledge” of a party shall mean that no facts have come to the party’s
attention that would give the party knowledge or notice that any such facts are not true, correct,
and complete, and the party has undertaken no investigation, inquiry, or verification as to such
matters to determine the existence or absence of such facts, and no inference of the party’s
knowledge of the existence or absence of such facts should be drawn from the statements made
herein.
7.2 Purchaser’s Representations and Warranties. As a material inducement to Seller to
execute this Agreement and consummate this transaction, Purchaser represents and warrants to Seller
that:
(a) Organization and Authority. Purchaser has been duly organized
and is validly existing as a corporation, partnership or limited liability company in its
state of formation, and will be qualified to do business in the state in which the Real
Property is located on the Closing Date if required under applicable law. Subject only to
obtaining certain internal approvals on or before the expiration of the Due Diligence
Period, Purchaser has the full right and authority and has obtained any and all consents
required to enter into this Agreement and to consummate or cause to be consummated the
transactions contemplated hereby. This Agreement has been, and all of the documents to be
delivered by Purchaser at the Closing will be, authorized and properly executed and
constitutes, or will constitute, as appropriate, the valid and binding obligation of
Purchaser, enforceable in accordance with their terms.
(b) Conflicts and Pending Action. There is no agreement to which
Purchaser is a party or to Purchaser’s knowledge binding on Purchaser which is in conflict
with this Agreement. There is no action or proceeding pending or, to Purchaser’s knowledge,
threatened against Purchaser which challenges or impairs Purchaser’s ability to execute or
perform its obligations under this Agreement.
(c) Anti-Terrorism/Anti-Money Laundering. Neither Purchaser nor any
of its affiliates (i) is listed on any Government Lists, (ii) has been determined by
competent authority to be subject to the prohibitions contained in Presidential Executive
Order No. 13244 (September 23, 2001) or in any enabling or implementing legislation or other
Presidential Executive Orders in respect thereof, (iii) is a person or entity who has been
previously indicted for or convicted of any felony involving a crime or crimes of moral
turpitude or for any violation of the Patriot Act, or (iv) is currently under investigation
by any governmental authority for alleged criminal activity. Purchaser has no reason to
believe that this transaction, including, without limitation, the source of its funds, would
result in a violation by Purchaser or Seller of the Patriot Act, OFAC Laws and Regulations,
or any other anti-terrorism or anti-money laundering laws or regulations, including, without
limitation, the Bank Secrecy Act, as amended, or the Money Laundering Control Act of 1986,
as amended.
7.3 Survival of Representations and Warranties. The representations and warranties
set forth in this Article 7 are made as of the date of this Agreement and are remade as of the
Closing Date and shall not be deemed to be merged into or waived by the instruments of Closing, but
shall survive the Closing
16
for a period of 12 months. Seller and Purchaser shall have the right to bring an action
thereon only if Seller or Purchaser, as the case may be, has given the other party written notice
of the circumstances giving rise to the alleged breach within such 12 month period. Each party
agrees to defend and indemnify the other against any claim, liability, damage or expense asserted
against or suffered by such other party arising out of the breach or inaccuracy of any such
representation or warranty.
7.4 Acceptance of Property. Subject to Seller’s warranties and representations set
forth in this Agreement, Purchaser acknowledges that Purchaser is purchasing the Property “AS IS.”
Except as expressly set forth herein and in the documents to be delivered at Closing, Seller has
made no representations and held out no inducements to Purchaser and Seller is not liable or bound
in any manner by expressed or implied warranties, guarantees, promises, statements, representations
or information pertaining to the Property, as to the physical condition, zoning regulations, to
which use the Property can be applied, or any other matter affecting or relating to the Property.
ARTICLE 8: DEFAULT AND REMEDIES
8.1 Seller’s Default. If Seller defaults in its obligation to sell and convey the
Property to Purchaser pursuant to this Agreement, Purchaser’s sole remedy shall be to elect one of
the following: (a) to terminate this Agreement, in which event Purchaser shall be entitled to the
return by the Escrow Agent to Purchaser of the Xxxxxxx Money, or (b) to bring a suit for specific
performance provided that any suit for specific performance must be brought within 60 days of
Seller’s default, to the extent permitted by law, Purchaser hereby waives the right to bring suit
at any later date; provided, however, that if specific performance is not a remedy available to
Purchaser due to the willful or intentional act of Seller (such as the prior conveyance of the
Property to third party in violation of this Agreement), then in lieu of specific performance,
Purchaser shall have the right to recover to pursue any and all available remedies, at law or in
equity.
8.2 Purchaser’s Default. In the event that Purchaser fails, without legal excuse, to
complete the purchase of the Property, the Xxxxxxx Money deposit made by Purchaser shall be
forfeited to the Seller as the sole and exclusive remedy available to the Seller for such failure.
The parties acknowledge that Seller’s actual damages in the event of a default by Purchaser under
this Agreement will be difficult to ascertain, and that such liquidated damages represent the
parties’ best estimate of such damages.
8.3 Notice of Default. Except for a party’s failure to close on the Closing Date,
neither party shall have the right to declare a default by the other party and terminate this
Agreement because of a failure by such other party to perform under the terms of this Agreement
unless the other party shall fail to cure such failure to perform within three business days after
its receipt of written notice of such failure to perform.
8.4 Other Expenses. If this Agreement is terminated due to the default of a party,
then the defaulting party shall pay any fees due to the Escrow Agent for holding the Xxxxxxx Money
and any fees due to the Title Company for cancellation of the Title Commitment.
ARTICLE 9: XXXXXXX MONEY PROVISIONS
9.1 Investment and Use of Funds. The Escrow Agent shall invest the Xxxxxxx Money in a
government insured interest-bearing account satisfactory to Purchaser at an institution having
assets of not less than $125,000,000, shall not commingle the Xxxxxxx Money with any funds of the
Escrow Agent or others, and shall promptly provide Purchaser and Seller with confirmation of the
investments made. If the Closing under this Agreement occurs, the Escrow Agent shall deliver the
Xxxxxxx Money to, or upon the instructions of, Purchaser on the Closing Date. Provided such
supplemental escrow instructions are
17
not in conflict with this Agreement as it may be amended in writing from time to time, Seller
and Purchaser agree to execute such supplemental escrow instructions as may be appropriate to
enable Escrow Agent to comply with the terms of this Agreement.
9.2 Termination before Expiration of Due Diligence Period. The Purchaser shall notify
the Escrow Agent of the date that the Due Diligence Period ends promptly after such date is
established under this Agreement, and Escrow Agent may rely upon such notice. If Purchaser elects
to terminate the Purchase Agreement pursuant to Paragraph 2.2, Escrow Agent shall pay the
entire Xxxxxxx Money to Purchaser one business day following receipt of the Due Diligence
Termination Notice from Purchaser (as long as the current investment can be liquidated in one day)
and this Agreement shall thereupon terminate, in which event Purchaser agrees to return to Seller
the Property Information. No notice to Escrow Agent from Seller shall be required for the release
of the Xxxxxxx Money to Purchaser by Escrow Agent. The Xxxxxxx Money shall be released and
delivered to Purchaser from Escrow Agent upon Escrow Agent’s receipt of the Due Diligence
Termination Notice, despite any objection or potential objection by Seller. Seller agrees it shall
have no right to bring any action against Escrow Agent which would have the effect of delaying,
preventing, or in any way interrupting Escrow Agent’s delivery of the Xxxxxxx Money to Purchaser
pursuant to this paragraph, any remedy of Seller being against Purchaser, not Escrow Agent.
9.3 Other Terminations. Upon a termination of this Agreement other than as described
in Paragraph 9.2, either party to this Agreement (the “Terminating Party”) may
give written notice to the Escrow Agent and the other party (the “Non-Terminating Party”)
of such termination and the reason for such termination. Such request shall also constitute a
request for the release of the Xxxxxxx Money to the Terminating Party. The Non-Terminating Party
shall then have five business days in which to object in writing to the release of the Xxxxxxx
Money to the Terminating Party. If the Non-Terminating Party provides such an objection, then the
Escrow Agent shall retain the Xxxxxxx Money until it receives written instructions executed by both
Seller and Purchaser as to the disposition and disbursement of the Xxxxxxx Money, or until ordered
by final court order, decree or judgment, which is not subject to appeal, to deliver the Xxxxxxx
Money to a particular party, in which event the Xxxxxxx Money shall be delivered in accordance with
such notice, instruction, order, decree or judgment.
9.4 Interpleader. Except as provided in Paragraph 9.2 above, Seller and
Purchaser mutually agree that in the event of any controversy regarding the Xxxxxxx Money, unless
mutual written instructions are received by the Escrow Agent directing the Xxxxxxx Money’s
disposition, the Escrow Agent shall not take any action, but instead shall await the disposition of
any proceeding relating to the Xxxxxxx Money or, at the Escrow Agent’s option, the Escrow Agent may
interplead all parties and deposit the Xxxxxxx Money with a court of competent jurisdiction in
which event the Escrow Agent may recover all of its court costs and reasonable attorneys’ fees.
Seller or Purchaser, whichever loses in any such interpleader action, shall be solely obligated to
pay such costs and fees of the Escrow Agent, as well as the reasonable attorneys’ fees of the
prevailing party in accordance with the other provisions of this Agreement.
9.5 Liability of Escrow Agent. The parties acknowledge that the Escrow Agent is
acting solely as a stakeholder at their request and for their convenience, that the Escrow Agent
shall not be deemed to be the agent of either of the parties, and that the Escrow Agent shall not
be liable to either of the parties for any action or omission on its part taken or made in good
faith, and not in disregard of this Agreement, but shall be liable for its negligent acts and for
any loss, cost or expense incurred by Seller or Purchaser resulting from the Escrow Agent’s mistake
of law respecting the Escrow Agent’s scope or nature of its duties. Seller and Purchaser shall
jointly and severally indemnify and hold the Escrow Agent harmless from and against all costs,
claims and expenses, including reasonable attorneys’ fees, incurred in connection with the
performance of the Escrow Agent’s duties hereunder, except with respect to actions or omissions
taken or made by the Escrow Agent in bad faith, in disregard of this Agreement or involving
negligence on the part of the Escrow Agent.
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9.6 Escrow Fee. Except as expressly provided herein to the contrary, the escrow fee,
if any, charged by the Escrow Agent for holding the Xxxxxxx Money or conducting the Closing shall
be shared equally by Seller and Purchaser.
ARTICLE 10: MISCELLANEOUS
10.1 Parties Bound. Neither party may assign this Agreement without the prior written
consent of the other, and any such prohibited assignment shall be void; provided, however, that
Purchaser may assign this Agreement without Seller’s consent to an Affiliate or to effect an
Exchange pursuant to Paragraph 10.16 hereof. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the respective legal representatives, successors,
assigns, heirs, and devisees of the parties. For the purposes of this paragraph, the term
“Affiliate” means (a) an entity that directly or indirectly controls, is controlled by or
is under common control with the Purchaser, or (b) an entity at least a majority of whose economic
interest is owned by Purchaser; and the term “control” means the power to direct the management of
such entity through voting rights, ownership or contractual obligations.
10.2 Headings. The article and paragraph headings of this Agreement are for
convenience only and in no way limit or enlarge the scope or meaning of the language hereof.
10.3 Invalidity and Waiver. If any portion of this Agreement is held invalid or
inoperative, then so far as is reasonable and possible the remainder of this Agreement shall be
deemed valid and operative, and, to the greatest extent legally possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative. The failure by either party to
enforce against the other any term or provision of this Agreement shall not be deemed to be a
waiver of such party’s right to enforce against the other party the same or any other such term or
provision in the future.
10.4 Governing Law. This Agreement shall, in all respects, be governed, construed,
applied, and enforced in accordance with the law of the state in which the Real Property is
located.
10.5 Survival. The provisions of this Agreement that contemplate performance after
the Closing and the obligations of the parties not fully performed at the Closing shall survive the
Closing and shall not be deemed to be merged into or waived by the instruments of Closing.
10.6 No Third Party Beneficiary. This Agreement is not intended to give or confer any
benefits, rights, privileges, claims, actions, or remedies to any person or entity as a third party
beneficiary, decree, or otherwise.
10.7 Entirety and Amendments. This Agreement embodies the entire agreement between
the parties and supersedes all prior agreements and understandings relating to the Property. This
Agreement may be amended or supplemented only by an instrument in writing executed by the party
against whom enforcement is sought.
10.8 Time. Time is of the essence in the performance of this Agreement.
10.9 Confidentiality. Seller and Purchaser shall make no public announcement or
disclosure of any information related to this Agreement to outside brokers or third parties, before
or after the Closing, without the prior written specific consent of the other; provided, however,
that Seller and Purchaser may make disclosure of this Agreement to its lenders, creditors,
officers, employees and agents as necessary to perform its obligations hereunder, and either party
may disclose information which, by its nature, is a matter of public record.
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10.10 Notices. All notices required or permitted hereunder shall be in writing and
shall be served on the parties at the addresses set forth in Paragraph 1.1. Any such
notices shall be either (a) sent by overnight delivery using a nationally recognized overnight
courier, in which case notice shall be deemed delivered one business day after deposit with such
courier, (b) sent by telefax, in which case notice shall be deemed delivered upon transmission of
such notice, or (c) sent by personal delivery, in which case notice shall be deemed delivered upon
receipt. A party’s address may be changed by written notice to the other party; provided, however,
that no notice of a change of address shall be effective until actual receipt of such notice.
Copies of notices are for informational purposes only, and a failure to give or receive copies of
any notice shall not be deemed a failure to give notice. Notices given by counsel to the Purchaser
shall be deemed given by Purchaser and notices given by counsel to the Seller shall be deemed given
by Seller.
10.11 Construction. The parties acknowledge that the parties and their counsel have
reviewed and revised this Agreement and agree that the normal rule of construction — to the effect
that any ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any exhibits or amendments hereto.
10.12 Calculation of Time Periods. Unless otherwise specified, in computing any
period of time described herein, the day of the act or event after which the designated period of
time begins to run is not to be included and the last day of the period so computed is to be
included at, unless such last day is a Saturday, Sunday or legal holiday for national banks in the
location where the Property is located, in which event the period shall run until the end of the
next day which is neither a Saturday, Sunday, or legal holiday. The last day of any period of time
described herein shall be deemed to end at 6:00 p.m. local time where the Property is located.
10.13 Audit Cooperation. At Purchaser’s request, at any time before and for a period
of 3 years after Closing, Seller shall make best efforts to provide or cause its property manager
to provide to Purchaser’s designated independent auditor access to the books and records of the
Property, and all related information regarding the period for which Purchaser is required to have
the Property audited under the regulations of the Securities and Exchange Commission, and Seller
shall make best efforts to provide or cause its property manager to provide to such auditor a
representation letter regarding the books and records of the Property in connection with the normal
course of auditing the Property in accordance with generally accepted auditing standards.
Notwithstanding anything to the contrary contained in this Paragraph 10.13, if Seller’s
property manager proves uncooperative in providing access to the auditors, Seller will use best
efforts to facilitate the auditor’s access to the property manager’s records to review necessary
documents. The Purchaser agrees to indemnify and hold harmless the Seller from any claim, damage,
loss, or liability to which Seller is at any time subjected by any person who is not a party to
this Agreement as a result of Seller’s compliance with this paragraph.
10.14 Procedure for Indemnity. The following provisions govern actions for indemnity
under this Agreement. Promptly after receipt by an indemnitee of notice of any claim, such
indemnitee will, if a claim in respect thereof is to be made against the indemnitor, deliver to the
indemnitor written notice thereof and the indemnitor shall have the right to participate in and, if
the indemnitor agrees in writing that it will be responsible for any costs, expenses, judgments,
damages, and losses incurred by the indemnitee with respect to such claim, to assume the defense
thereof, with counsel mutually satisfactory to the parties; provided, however, that an indemnitee
shall have the right to retain its own counsel, with the fees and expenses to be paid by the
indemnitor, if the indemnitee reasonably believes that representation of such indemnitee by the
counsel retained by the indemnitor would be inappropriate due to actual or potential differing
interests between such indemnitee and any other party represented by such counsel in such
proceeding. The failure of indemnitee to deliver written notice to the indemnitor within a
reasonable time after indemnitee receives notice of any such claim shall relieve such indemnitor of
any
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liability to the indemnitee under this indemnity only if and to the extent that such failure
is prejudicial to its ability to defend such action, and the omission so to deliver written notice
to the indemnitor will not relieve it of any liability that it may have to any indemnitee other
than under this indemnity. If an indemnitee settles a claim without the prior written consent of
the indemnitor, then the indemnitor shall be released from liability with respect to such claim
unless the indemnitor has unreasonably withheld such consent.
10.15 Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of such counterparts shall
constitute one Agreement. To facilitate execution of this Agreement, the parties may execute and
exchange by telephone facsimile counterparts of the signature pages.
10.16 Section 1031 Exchange. Either party may consummate the purchase or sale (as
applicable) of the Property as part of a so-called like kind exchange (an “Exchange”)
pursuant to § 1031 of the Internal Revenue Code of 1986, as amended (the “Code”), provided
that: (a) the Closing shall not be delayed or affected by reason of the Exchange nor shall the
consummation or accomplishment of an Exchange be a condition precedent or condition subsequent to
the exchanging party’s obligations under this Agreement; (b) the exchanging party shall effect its
Exchange through an assignment of this Agreement, or its rights under this Agreement, to a
qualified intermediary (c) neither party shall be required to take an assignment of the purchase
agreement for the relinquished or replacement property or be required to acquire or hold title to
any real property for purposes of consummating an Exchange desired by the other party; and (d) the
exchanging party shall pay any additional costs that would not otherwise have been incurred by the
non-exchanging party had the exchanging party not consummated the transaction through an Exchange.
Neither party shall by this Agreement or acquiescence to an Exchange desired by the other party
have its rights under this Agreement affected or diminished in any manner or be responsible for
compliance with or be deemed to have warranted to the exchanging party that its Exchange in fact
complies with § 1031 of the Code.
10.17 Attorneys’ Fees. Should either party employ attorneys to enforce any of the
provisions hereof, the party against whom any final judgment is entered agrees to pay the
prevailing party all reasonable costs, charges, and expenses, including attorneys’ fees, expended
or incurred in connection therewith.
10.18 Further Assurances. In addition to the acts and deeds recited herein and
contemplated to be performed, executed and/or delivered by either party at Closing, each party
agrees to perform, execute and deliver, but without any obligation to incur any additional
liability or expense, on or after the Closing any further deliveries and assurances as may be
reasonably necessary to consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of the Property to Purchaser.
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SIGNATURE PAGE TO AGREEMENT TO
PURCHASE AND SALE
PURCHASE AND SALE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year
written below.
| PINEWOOD PLAZA ASSOCIATES, LLC, a Virginia limited liability company |
||||
| Date: 8/15/05 | By: | /s/ Xxxxxxx Xxxxxx | ||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | Managing Member | |||
| “Seller” | ||||
| ASSET CAPITAL PARTNERS, L.P., a Delaware limited partnership |
||||
| By: | ACC GP, LLC, its general partner | |||
| By: | Asset Capital Corporation, Inc., its sole member | |||
| By: | /s/ Xxxxxxx X. Xx Xxxxx | |||
| Xxxxxxx X. Xx Xxxxx, III,
President “Purchaser” |
||||
| Date: 8/12/05 | ||||
Escrow Agent has executed this Agreement in order to confirm that the Escrow Agent has received and
shall hold the Xxxxxxx Money and the interest earned thereon, in escrow, and shall disburse the
Xxxxxxx Money, and the interest earned thereon, pursuant to the provisions of Article 9.
| TICOR TITLE INSURANCE COMPANY |
||||
| By: | /s/ Xxxx Fadilla | |||
| Name: | Xxxx Fadilla | |||
| Date: 8/16/05 | Title: | Escrow Officer | ||
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