AGREEMENT OF PURCHASE AND SALE
0000
00xx
Xxxxxx, X.X.
Xxxxxxxxxx,
X.X.
THIS
AGREEMENT OF PURCHASE AND SALE
(“Agreement”) is made as of February 13, 2006 (“Contract Date”), between (i) BNA
Washington Inc., a Delaware corporation (“Seller”), and (ii) CESC 1227 LLC, a
Delaware limited liability company (“Purchaser”).
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 executed by Purchaser in connection with the
Property.
1.1.2 Accounting
Firm:
as
defined in Section 10.10.
1.1.3 Action:
any
action, suit, arbitration, governmental investigation or other legal
proceeding.
1.1.4 Adjacent
Agreement:
the
Agreement of Purchase and Sale dated as of the Contract Date between Seller
and
Adjacent Purchaser, relating to the purchase and sale of the Adjacent
Property.
1.1.5 Adjacent
Property:
Xxx 000
xx Xxxxxx 00 xx xxx Xxxxxxxx xx Xxxxxxxx, together with all right, title and
interest of Seller in and to any Appurtenances thereto.
1.1.6 Adjacent
Purchaser:
CESC
1229-1231 TRS Inc., a Delaware corporation, an affiliate of
Purchaser.
1.1.7 Apportionment
Time: 12:01
a.m. local time at the Property.
1.1.8 Appurtenances:
with
respect to a parcel of land, (i) all rights, ways, easements, privileges
and appurtenances to such parcel, (ii) all strips and gores appurtenant to
such parcel, and (iii) any land lying in the bed of any streets, roads and
alleys appurtenant to such parcel.
1.1.9 BNA:
The
Bureau of National Affairs, Inc., a Delaware corporation.
1.1.10 Closing:
the
consummation of the purchase and sale of the Property as contemplated by this
Agreement.
1.1.11 Closing
Date:
the date
on which the Closing occurs.
1.1.12 Code:
the
Internal Revenue Code of 1986, as amended.
1.1.13 Confidentiality
Agreement:
the
Confidentiality Agreement executed by Purchaser in connection with the
Property.
1.1.14 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.
1.1.15 Contract
Date:
as
defined in the Preamble.
1.1.16 Crystal
City Agreement:
the
Agreement of Purchase and Sale dated as of the Contract Date between Crystal
City Seller and Crystal City Purchaser, relating to the purchase and sale of
the
Crystal City Property.
1.1.17 Crystal
City Property:
a
to-be-subdivided three-dimensional lot and improvements therein comprising
a
portion of the land and improvements described in Arlington County Site Plan
No.
56, commonly known as the “Crystal Mall” complex, which lot and improvements
consist of the office building located at 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx, as shown on Schedule 1.1.6 to the Crystal City Agreement (and as
modified from time to time in accordance therewith).
1.1.18 Crystal
City Purchaser:
Seller,
as purchaser under the Crystal City Agreement.
1.1.19 Crystal
City Seller: collectively,
CESC Mall Land L.L.C., a Delaware limited liability company and CESC Mall
L.L.C., a Virginia limited liability company, affiliates of
Purchaser.
1.1.20 Damages:
out of
pocket damages, liabilities, losses, claims, costs and expenses (including
reasonable attorneys’ fees and expenses).
1.1.21 Deposit:
as
defined in Section 2.2.
1.1.22 District:
the
Government of the District of Columbia.
1.1.23 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.
1.1.24 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.
1.1.25 EBG:
Xxxxxxx
Xxxxxx & Green, P.C., and all occupants of the premises described in the EBG
Lease.
1.1.26 EBG
Lease:
Lease,
dated May 12, 1989, between Seller and Xxxxxxx Xxxxxx & Green, P.C., as
amended.
1.1.27 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.
1.1.28 Exchange
Agreement:
the
Exchange Agreement dated as of the Contract Date among all of the parties to
this Agreement, the Adjacent Agreement and the Crystal City Agreement, providing
for the coordination of certain rights and remedies of the parties pursuant
to
such agreements.
1.1.29 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.
1.1.30 Improvements:
the
buildings, structures, installations and other improvements, including such
facilities, fixtures and appurtenances as shall constitute real property,
located in or on the Land, commonly known as 0000 00xx
Xxxxxx,
X.X., Xxxxxxxxxx, X.X.
1.1.31 Intangible
Property:
collectively, (i) all assignable guarantees and warranties, if any, that relate
to the Improvements or Personal Property, (ii) all assignable permits,
certificates of occupancy, and other public approvals that relate to the Land
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.
1.1.32 Land:
Lot
109
in Square 24 in the District of Columbia, together with all right, title and
interest of Seller in and to any Appurtenances thereto.
1.1.33 Landlord:
Seller
or any successor landlord under the Leases.
1.1.34 Land
Records:
the land
records of the District of Columbia.
1.1.35 Leases:
collectively, the leases described on Schedule
3.10
and any
leases, licenses or other agreements for the occupancy of any portion of the
Land or Improvements that are entered into in accordance with Section
5.4.
1.1.36 Legal
Requirement:
any
federal, state, local or municipal constitution, law, statute, ordinance, rule,
order or regulation.
1.1.37 Letter
of Credit: as
defined in Section 2.2.2.1.
1.1.38 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
not yet due and payable, and (iii) the rights of tenants under the
Leases.
1.1.39 Person:
a
natural person or any legal or governmental entity.
1.1.40 Personal
Property:
all
equipment, furniture, furnishings, appliances, tools, machinery, supplies and
other tangible personal property owned by Seller and located at and used solely
in connection with the operation of the Land and Improvements (as opposed to
such items as may be used by Seller and/or BNA exclusively as an occupant of
office space in the Improvements and in connection with Seller’s and/or BNA’s
publishing and printing business therein, all of which items shall remain the
property of Seller or BNA, as appropriate).
1.1.41 Property:
collectively, (i) the Land, (ii) all right, title and interest of Seller in
and to the Improvements, (iii) all of Seller’s right, title and interest in and
to the Personal Property, the Intangible Property, the Leases and the
Contracts.
1.1.42 Purchase
Price:
as
defined in Section 2.2.
1.1.43 Purchaser:
as
defined in the Preamble.
1.1.44 Purchaser
Indemnified Parties:
as
defined in Section 7.5.1.
1.1.45 Purchaser’s
Designee:
as
defined in Section 11.1.
1.1.46 Seller:
as
defined in the Preamble.
1.1.47 Seller
Indemnified Parties:
as
defined in Section 7.5.2.
1.1.48 Seller’s
Knowledge:
the
actual current knowledge of Xxx Xxxxxx and Xxxxxxxxx Xxxxx (and for any time
period after any such Person ceases to be in the employ of BNA, 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.
1.1.49 Settlement
Statement:
as
defined in Section 10.1.
1.1.50 Survey:
as
defined in Section 5.2.2.
1.1.51 Survey
Standards:
as
defined in Section 5.2.2.
1.1.52 Tax
Deferral Agreement:
the
Agreement among, Seller, BNA and the District dated September 4, 1996, pursuant
to which the District agreed to defer payment of real estate taxes with respect
to the Land and Improvements.
1.1.53 Title
Commitment:
as
defined in Section 5.2.1.
1.1.54 Title
Company:
Commonwealth Land Title Insurance Company, acting through Escrow Agent as its
agent.
1.1.55 Transaction
Documents: collectively,
this Agreement and the documents executed at Closing by Seller and/or Purchaser
(or Purchaser’s Designee).
1.1.56 Vornado:
Vornado
Realty L.P., a Delaware limited partnership.
1.2 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
District of Columbia (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 Adjacent Agreement,
the Exchange Agreement, the Access Agreement, and the Confidentiality 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
Adjacent Agreement, the Exchange Agreement, the Access Agreement, and the
Confidentiality Agreement. Without limiting the generality of the foregoing,
the
offer letter dated as of May 31, 2005 between Seller and Xxxxxxx X. Xxxxx
Commercial Realty (an affiliate of Purchaser) 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 Forty Million Dollars ($40,000,000.00), subject 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 Seven Hundred Twenty Thousand Dollars
($720,000.00), 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
E
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, (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, floor area ratio, development potential, 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. Seller
is
a corporation duly formed, validly existing and in good standing under the
laws
of the State of Delaware, and qualified to transact business and in good
standing under the laws of the District of Columbia. Seller has full corporate
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) result in a breach of or default under any contract or other agreement
to which Seller is a party or by which the Property is bound or any provision
of
the organizational documents of Seller.
3.4 Bankruptcy.
Seller
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.
3.5 Litigation.
Except
as set forth on Schedule
3.5,
there
are no Actions pending or, to Seller’s Knowledge, threatened against Seller 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.
Seller
has not 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 Seller
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.
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. 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.
3.10 Leases.
There
are no leases, licenses or other agreements permitting the possession or
occupancy of all or any portion of the Land 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. Except
as
set forth in Schedule
3.10,
there
are no outstanding obligations on the part of the Landlord under the Leases
to
construct or pay for tenant improvements or to pay any leasing commissions,
and
the Leases provide for no free rent periods that have not expired. 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.
Seller
is not 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 limited liability company 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 District
of
Columbia, 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 of the
Property. Purchaser shall have the right to interview the tenant under any
Lease, provided, however, that Purchaser shall first deliver written notice
thereof to Seller, and at Seller’s option a representative of Seller shall
participate in any such interviews. In the event Purchaser desires to conduct
any physically invasive due diligence, Purchaser shall provide Seller with
the
scope of the work to be done and the name of the contractor to conduct such
work, and shall request Seller’s prior consent thereto, which consent shall not
be unreasonably withheld. 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 Seller as an
additional insured, 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 Seller and its 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. 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 termination 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 Land and Improvements, accompanied by a copy of all
documents referred to in the Title Commitment.
5.2.2 Purchaser
has obtained, prior to the Contract Date, a survey of the Property by VIKA
dated
August 4, 2005, and revised November 1, 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),
and all items shown on the Survey, 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. Seller may use a portion of the Purchase Price to effect such cure
at Closing. Seller shall have the right to mortgage the Property prior to
Closing, provided that that lien of such mortgage shall be released at or prior
to Closing at Seller’s sole cost and expense.
5.3 Operation
of Property. Prior
to
Closing, except as otherwise expressly provided in this Agreement:
5.3.1 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.
5.3.2 Seller
shall maintain and repair the Improvements substantially in their present
condition, except for reasonable wear and tear and damage by casualty or
condemnation, and except for such other matters as may be agreed upon by the
parties in writing following a written request by Seller that Purchaser waive
Seller’s obligation hereunder with respect to specific repairs or replacements,
which request shall be considered by Purchaser in good faith in light of
Purchaser’s then-current plans to redevelop (or not) the
Improvements.
5.3.3 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.
5.3.4 Seller
shall maintain, at its cost, standard premises operations liability coverage,
and shall add Purchaser as an additional insured promptly after the Contract
Date.
5.4 Leases.
5.4.1 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. Prior to Closing, Seller shall, at its sole cost
and expense (except as otherwise provided in the EBG Lease), complete all of
the
work to be performed by the Landlord pursuant to the EBG Lease. Purchaser’s
approval shall not be required with respect to any modification of any Lease
that is required under the terms of such Lease but Seller shall deliver to
Purchaser written notice of such modification or renewal 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.
5.4.2 Prior
to
the Contract Date, Seller has obtained and delivered to Purchaser an estoppel
certificate from the tenant under each Lease. Seller shall
use
commercially reasonable efforts to obtain from each such tenant and deliver
to
Purchaser, prior to Closing, an updated estoppel certificate in substantially
the form of Exhibit
D
or in
the form required by such tenant’s Lease, dated no earlier than the date that is
thirty (30) days prior to the scheduled date for Closing.
5.5 Contracts.
Prior
to
Closing, Seller shall terminate all Contracts affecting or relating to the
Property, other than Contracts that constitute Permitted
Exceptions.
5.6 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.
5.7 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.
5.8 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.
5.9 Tax
Deferral.
At or
prior to Closing, Seller shall pay (or shall cause BNA to pay) all real estate
taxes deferred by the District pursuant to the Tax Deferral Agreement, together
with any interest, penalties and other amounts payable in connection
therewith.
5.10 Crystal
City Agreement: Seller
shall perform the obligations of Crystal City Purchaser under the Crystal City
Agreement. Purchaser shall cause Crystal City Seller to perform the obligations
of Crystal City Seller under the Crystal City Agreement.
5.11 Adjacent
Agreement: Seller
shall perform its obligations under the Adjacent Agreement. Purchaser shall
cause Adjacent Purchaser to perform its obligations under the Adjacent
Agreement.
5.12 Access
for Marketing:
Prior to
Closing, Purchaser shall have the right, upon reasonable prior notice to Seller
and during normal business hours, to show the Improvements to prospective
tenants, investors and other interested parties.
5.13 Pre-Development
Activities.
Prior to
Closing, Purchaser shall have the right to apply for and pursue the following:
(i) a planned unit development designation, variances or other zoning relief
affecting all or any portion of the Property and/or the Adjoining Property,
(ii)
the subdivision of the Property and/or the Adjoining Property into one or more
record lots or assessment and taxation lots, and (iii) such other land use,
development and construction permits and approvals as may be required in
connection with Purchaser’s planned redevelopment of the Property and/or the
Adjoining Property. All costs in connection with any such proceedings shall
be
borne by Purchaser. Seller shall, at Purchaser’s expense, cooperate with
Purchaser in such manner as Purchaser may reasonably request in connection
with
such proceedings. To the extent required by applicable Legal Requirements,
Seller, as the owner of the Property, shall execute or join in any documents
required in connection with the foregoing (including applications for planned
unit development designation, variances or other zoning relief), provided that
(a) Seller shall not be exposed to any liability as a result thereof (or shall
be indemnified by Purchaser for any such liability) and (b) the proposed action
shall not impose any obligations of any kind on Seller nor adversely affect
the
Property prior to Closing.
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 5.7) 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 Purchase Price
paid
by Purchaser at Closing.
6.1.4 Unless
the Crystal City Agreement has been terminated as a result of a default by
Crystal City Seller thereunder, Closing shall have occurred, or shall
concurrently be occurring, under the Crystal City Agreement.
6.1.5 Closing
shall have occurred, or shall concurrently be occurring, under the Adjacent
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
6.1.5, 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 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 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 Crystal City Agreement has been terminated as a result of a default by
Crystal City Purchaser thereunder, Closing shall have occurred, or shall
concurrently be occurring, under the Crystal City Agreement.
6.3.5 Closing
shall have occurred, or shall concurrently be occurring, under the Adjacent
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
6.3.5, 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 by
Purchaser.
ARTICLE
7.
CLOSING
7.1 Closing.
Closing
shall be held on the date that closing is required to occur under the Crystal
City Agreement (including any extensions of closing thereunder), but not earlier
than December 1, 2006.
7.1.1 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.
7.1.2 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.
7.1.3 Unless
Closing under the Crystal City Agreement shall have been extended pursuant
to
Section 7.1.2.2 of the Crystal City Agreement, Seller shall have the right,
in
Seller’s sole but reasonable discretion, to continue for a limited period as
described below to occupy the portions of the Land and Improvements occupied
by
Seller immediately prior to Closing (“Seller Premises”) in order to accommodate
Seller’s move to the Crystal City Property. If Seller shall exercise such right,
then at Closing, Purchaser, as landlord, and Seller, as tenant, shall execute
a
lease (“Seller Lease”) of the Seller Premises. The Seller Lease shall (i)
provide for rental per square foot equal to the rental per square foot
(including real estate taxes and operating expense passthroughs), taking into
account a monthly rent set-off in the amount of $27,830.40, then payable under
the terms of the EBG Lease, (ii) provide that Seller accepts the Seller
Premises in an “as is” condition on the Closing Date, (iii) provide for a term
commencing on the Closing Date and expiring on a date designated by Seller
that
is not later than the earlier of (x) ninety (90) days after the Closing Date
or
(y) such date (which shall not be less than thirty (30) days after the Closing
Date) as may be required by Purchaser in order to accommodate a new third party
tenant or to commence redevelopment activities, and (iv) otherwise be in
substantially the same form as the Xxxxxxx X. Xxxxx Commercial Realty standard
form of office lease, with such changes thereto as Seller and Purchaser, each
acting reasonably and in good faith, shall mutually agree upon.
7.1.4 Except
as
otherwise provided in Section 7.1.2.1 of the Crystal City Agreement, Seller
shall surrender the Land and Improvements at Closing (or, if applicable, the
expiration of the Seller Lease) and shall, at its sole cost and expense, remove
from the Land and Improvements all equipment, furniture, furnishings,
appliances, tools, machinery, supplies and other tangible personal property
owned or leased by Seller other than the Personal Property.
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
A,
conveying fee title to the Land and Improvements to Purchaser, duly executed
and
acknowledged by Seller, and dated as of the Closing Date.
7.2.2 The
Xxxx
of Sale (“Xxxx of Sale”) in the form of Exhibit
B,
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
C,
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 If
Seller
has exercised its right to continue to occupy the Seller Premises following
Closing, the Seller Lease, duly executed by Seller, and dated as of the Closing
Date.
7.2.5 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).
7.2.6 A
title
affidavit, in customary form reasonably satisfactory to the Title Company and
Seller, duly executed by Seller.
7.2.7 An
affidavit, in the form required by the Code and the regulations issued pursuant
thereto, to the effect that Seller is not a foreign person within the meaning
of
the Code.
7.2.8 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.
7.2.9 A
written
direction to Escrow Agent to disburse the Deposit to Seller in accordance with
Section 8.1.2.1.
7.2.10 To
the
extent within the possession or under the control of the Seller, originals
of
the Leases, Contracts and Intangible Property.
7.2.11 A
Settlement Statement in accordance with Section 10.1, duly executed by
Seller.
7.2.12 Notices
to the tenants under all Leases, and to vendors under all Contracts, informing
them of the change in ownership of the Property.
7.2.13 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 If
Seller
has exercised its right to continue to occupy the Seller Premises following
Closing, the Seller Lease, duly executed by Purchaser or Purchaser’s Designee,
and dated as of the Closing Date.
7.3.3 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).
7.3.4 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).
7.3.5 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.
7.3.6 A
written
direction to Escrow Agent to disburse the Deposit to Seller in accordance with
Section 8.1.2.1.
7.3.7 The
balance of the Purchase Price, as adjusted pursuant to
Article 10.
7.3.8 A
Settlement Statement in accordance with Section 10.1, duly executed by Purchaser
or Purchaser’s Designee.
7.3.9 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.
All
transfer and recordation taxes imposed upon the recordation of the Deed and
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. Any
other
closing costs shall be borne by the parties in accordance with custom for
transactions similar to the transactions described herein in the District of
Columbia.
7.5 Indemnification.
7.5.1 Subject
to any express provisions of this 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, (ii) any breach
of
any covenant made by Seller in this Agreement, (iii) liabilities to any third
party, including liabilities under the Leases, 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), and (iv) any liability of Seller, BNA
or
the Property under the Tax Deferral Agreement.
7.5.2 Subject
to any express provisions of this 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, (ii) any
breach of any covenant made by Purchaser or Purchaser’s Designee in this
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 Leases, that are incurred by any
Seller Indemnified Party based upon any matter relating to the use, maintenance,
operation or construction of the Property occurring on or after the Closing
Date.
7.5.3 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 (except with respect to the Tax Deferral
Agreement) 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, in the aggregate together with Seller’s
liability under Section 7.5.1 of the Adjacent Agreement, an amount equal to
Five
Million Dollars ($5,000,000.00), except for liability based upon actual fraud
on
the part of Seller. The foregoing limitations shall not be applicable to
Seller’s indemnity obligations with respect to the Tax Deferral
Agreement.
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 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. The foregoing limitations
shall not be applicable to Seller’s indemnity obligations with respect to the
Tax Deferral Agreement, which shall survive Closing without limitation as to
time.
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 5.7) 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 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.
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 Escrow Agent shall, subject to Sections 8.1.3 and
8.1.4, pay the Deposit to Seller. In addition, if Seller, on or before the
date
that is three (3) years after the date on which this Agreement terminates
pursuant to this Section 8.2 (“Outside Date”), sells the Property to a third
party purchaser (“Successor Purchaser”) for a gross purchase price that is less
than the Purchase Price, then not later than thirty (30) days following receipt
by Purchaser of the documentation provided by Seller in accordance with this
Section 8.2, Purchaser shall pay to Seller an amount (“Sales Price Damages”)
equal to the difference between the Purchase Price and the gross purchase price
paid by the Successor Purchaser. Seller shall provide Purchaser with correct
and
complete copies of all documentation reasonably requested by Purchaser in
connection with the determination of the Sales Price Damages. If Seller also
sells the Adjacent Property on or before the Outside Date then the “Sales Price
Damages” collectively payable by Purchaser and Adjacent Purchaser under this
Agreement and the Adjacent Agreement shall be calculated on an aggregate basis.
In no event shall the Sale Price Damages under this Agreement and the Adjacent
Agreement exceed in the aggregate $11,000,000. The amount of the Deposit plus
the amount, if any, of the Sales Price Damages, 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 amount of the Deposit,
together with the amount, if any, of the Sales Price Damages, 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
Sections 6.3.1 through 6.3.4 not being satisfied, except for the damages
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, Crystal City Seller and Crystal City Purchaser are executing
the
Crystal City Agreement for the sale by the Crystal City Seller to Crystal City
Purchaser of the Crystal City Property. This Agreement and the Crystal City
Agreement shall be subject to the provisions of the Exchange
Agreement.
8.4.2 Any
default by Crystal City Purchaser under the Crystal City Agreement shall
constitute a default by Seller under this Agreement. Any default by the Crystal
City Seller under the Crystal City Agreement shall constitute a default by
Purchaser under this Agreement.
8.5 Adjacent
Agreement.
Closing
on the sale of the Property pursuant to this Agreement and closing on the sale
of the Adjacent Property pursuant to the Adjacent Agreement shall occur
concurrently. In no event shall Seller be obligated to sell the Property nor
shall Purchaser be required to purchase the Property without the concurrent
Closing of the sale or purchase, respectively, of the Adjacent Property. Any
default by Adjacent Purchaser under the Adjacent Agreement shall constitute
a
default by Purchaser under this Agreement. Any default by Seller under the
Adjacent Agreement shall constitute a default by Seller under this Agreement.
If
the Adjacent Agreement is terminated for any reason prior to Closing, this
Agreement shall terminate automatically, the Deposit shall be delivered to
the
party entitled to receive the Deposit (as defined under the Adjacent Agreement)
under the Adjacent Agreement, 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.
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 prior to Closing, upon becoming aware of
the
same, and (ii) any fire or other casualty occurring prior to Closing that
affects the Property 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 is commenced against all or any
portion of Property, and such proceeding does not materially adversely affect
the use, occupancy or redevelopment of the Property, as reasonably determined
by
Seller and Purchaser, each acting reasonably and in good faith, 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.
9.3 Major
Condemnation.
If,
prior to Closing, a proceeding for condemnation 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 ten (10) 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 Casualty.
If,
prior
to Closing, the Property is damaged by fire or other casualty, 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 fire
or
other casualty insurance proceeds payable to Seller (other than any portion
of
such proceeds in respect of income lost prior to Closing or expended by or
on
behalf of Seller prior to Closing to restore the Property), plus the amount
of
any deductible, and Seller shall have no obligation to repair or restore the
Property. Notwithstanding the foregoing, Seller shall be obligated to undertake
such repair and restoration as may be required (i) under the terms of the
Leases, and (ii) in any event, to safeguard the Property.
9.5 Insurance.
Prior to
Closing, Seller shall maintain, at its cost, “broad form/special perils”
insurance with respect to the Improvements in an amount equal to 100% of the
replacement cost thereof.
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. 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.
10.3 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. Rents earned and attributable to the period beginning on
the
Closing Date and thereafter will be paid to Purchaser directly by the tenants
or
licensees, or if received by Seller prior to Closing shall be credited to
Purchaser at Closing.
10.3.2 All
Rents
received on or after the Closing Date by Purchaser in respect of any Lease
shall
be applied first to sums due under such Lease attributable to the period
beginning on the Closing Date through the last day of the month in which such
sums were received. Thereafter, any remaining sums shall be promptly paid to
Seller to the extent of any Rent owing to Seller under the applicable Lease
for
periods prior to the Closing Date. All Rents received by Seller after Closing,
whether attributable to the period prior to or after the Closing Date, shall
be
deemed to be held in trust by Seller for Purchaser and shall be promptly
delivered to Purchaser by Seller for application as provided in this
Section.
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 Purchaser with
the
cooperation of 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.
10.3.6 Purchaser
shall receive the following credits with respect to the Landlord’s obligations
under the Ninth Amendment to Office Lease dated as of June 30, 2004
(“9th
Amendment”), between Seller and EBG: (i) to the extent that such amounts have
not previously been paid to or applied against rent payable by EBG, a credit
in
the total amount of all rent credits provided under Section 5(b) of the
9th
Amendment, plus (ii) to the extent that Seller has not previously paid EBG
for
all amounts reimbursable by the Landlord under Section 7(b) of the 9th
Amendment, a credit in the amount of Seller’s and Purchaser’s good faith
estimate of all remaining reimbursable amounts thereunder, plus (iii) to the
extent that Seller has not previously paid EBG for all amounts payable by the
Landlord under Section 7(c) of the 9th
Amendment, a credit in the amount of all remaining amounts payable thereunder.
To the extent permitted under the EBG Lease, at Purchaser’s option, which may be
exercised at any time prior to Closing, all or any portion of such amounts
shall
be paid to EBG out of Seller’s proceeds at Closing.
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 Deposits.
Seller
shall receive a credit for all deposits made by or on behalf of Seller 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.
10.7 Permits.
Seller
shall receive a credit for prepaid fees for any permits that are assigned to
Purchaser.
10.8 Tax
Appeals.
10.8.1 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.
10.8.2 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.
10.9 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.
10.10 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 10.10 shall be conducted in the District
of
Columbia.
10.11 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.
10.12 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 Vornado; (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 Access Agreement and the Confidentiality Agreement, but such
assignment shall not relieve Purchaser of its obligations under this 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
Purchaser:
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
Seller:
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 District of
Columbia, 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.
Seller
represents to Purchaser that other than The Staubach Company - Northeast, Inc.
(“Seller’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. Purchaser represents to Seller 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
Seller’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 District
of Columbia Provisions.
11.13.1 The
characteristic of the soil of the Land, as described by the Soil Conservation
Service of the U.S. Department of Agriculture in the Soil Survey Book of the
District of Columbia (area 11)
published in July 1976, and as shown on the Soil Maps of the District of
Columbia at
the back
of that publication, is Urban Land. For further information, Purchaser may
contact a soil testing laboratory, the District of Columbia Department of
Environmental Services or the Soil Conservation Service of the U.S. Department
of Agriculture. The foregoing is set forth pursuant to requirements of the
District of Columbia Code and is not intended, and shall not be construed as,
limiting the conditions set forth herein with respect to Purchaser’s right to
make investigations, tests and studies satisfactory to it.
11.13.2 In
accordance with the requirements of Section 3(g) of the District of Columbia
Underground Storage Tank Management Act of 1990, as amended by the District
of
Columbia Underground Storage Tank Management Act of 1990 Amendment Act of 1992
(the “Act”), Seller has informed Purchaser, and hereby re-informs Purchaser,
that Seller has no knowledge of the existence or removal, during Seller’s
ownership of the Property, of any underground storage tanks at or from the
Property. This disclosure notice was provided to Purchaser prior to entering
into 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:
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.
PURCHASER:
CESC
1227
LLC, a Delaware limited liability company
By: Vornado
Realty L.P., a Delaware limited
partnership, sole member
By: Vornado
Realty Trust, a Maryland real
estate investment trust, its general
partner
By:
/s/Xxxxxxxx X. Xxxxxx
Name:
Xxxxxxxx X. Xxxxxx
Its:
President, CSCR
-
-
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 CRYSTAL CITY SELLER
The
undersigned, jointly and severally, hereby guaranty 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, shall survive any termination of this Agreement. If at any time
prior to the satisfaction or expiration of Purchaser’s obligations under Section
8.2, the undersigned do not collectively own at least two of the buildings
located at Crystal Mall (as defined in the Crystal City Agreement), the
undersigned shall cause an affiliate of Vornado Realty, L.P., a Delaware limited
partnership, with a net worth of at least $20,000,000 to guaranty the
obligations guarantied by the undersigned hereunder.
CESC
Mall
Land L.L.C., a Delaware limited liability company
By:
Name:
Its:
CESC
Mall
L.L.C., a Virginia limited liability company
By:
Name:
Its:
1541473_1.DOC
Schedules
and Exhibits
Schedules
3.5 Pending
Actions
3.10 Leases
5.2.1 Title
Commitment
Exhibits
A Form
of
Deed
B Form
of
Xxxx of Sale
C Form
of
Assignment
D Form
of
Estoppel
E Form
of
Letter of Credit
