Exhibit 99.1
AGREEMENT OF PURCHASE AND SALE
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THIS AGREEMENT OF PURCHASE AND SALE ("Agreement"), is made this November 4,
2003 by and between X. XXXXX STREET REALTY CO, LLC, a Virginia limited liability
company ("Seller") and CAPITAL ASSOCIATES MANAGEMENT, LLC, a North Carolina
limited liability company ("Purchaser").
RECITALS:
A. Seller is the owner of certain real property located in the City of
Alexandria, Commonwealth of Virginia, having a street address of 000 Xxxxx Xxxxx
Xxxxxx, containing approximately 112,710 square feet of land area, more or less,
and as more particularly identified and described on Exhibit A, attached hereto
and made a part hereof (the "Land"), together with all currently existing and
future easements, rights, privileges, rights-of-way, hereditaments, tenements
and appurtenances belonging to the Land, all right, title and interest in and to
all open or proposed xxxxxxxx, xxxxxxx, xxxxx, xxxxxxx, alleys, easements,
strips, gores and rights of way, in, on, across, in front of, contiguous to,
abutting or adjoining the Land (collectively with the Land, the "Real
Property").
B. There currently exist improvements on the Land comprised of one (1)
commercial office building (the "Building"), containing 75,700 rentable square
feet of space (together with all other improvements and infrastructure
associated therewith collectively, the "Improvements").
C. A portion of the Building is leased to Wal-Mart Stores, Inc. on a
month-to-month basis (the "Wal-Mart Lease"). The Building is otherwise currently
one hundred percent (100%) leased to and occupied by On-Site Sourcing, Inc., a
Virginia corporation and an affiliate of Seller ("On-Site").
D. Seller is the owner of certain intangible property used or useable in
connection with the Real Property, including, but not limited to Seller's
rights, if any, in and to all books, records, promotional material, leasing
prospects, plans, drawings, designs, surveys, warranties, trade names, licenses,
permits and authorizations used or useable in connection with any part of the
Real Property and/or Improvements (collectively, the "Intangible Property") (the
Real Property, Improvements and Intangible Property are sometimes collectively
referred to herein as the "Property").
E. Seller is a party to those certain service and maintenance contracts
concerning the Property as are more particularly identified on Exhibit B
attached hereto (herein, the "Service Contracts").
F. Purchaser desires to acquire the Property from Seller, and Seller
desires to sell the Property to Purchaser, in accordance with the terms and
conditions hereinafter set forth.
G. Following Seller's conveyance of the Property to Purchaser, Purchaser
desires to lease certain of the same Property to Seller, and Seller desires to
lease such property from Purchaser, in accordance with the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises of the parties
hereto, made one to another, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Agreement of Purchase and Sale. Seller hereby agrees to sell and convey
the Property to Purchaser, and Purchaser hereby agrees to purchase the Property
from Seller, in accordance with the terms and provisions hereof.
2. Title.
(a) Title to the Property shall be good and marketable, of record and in
fact, free and clear of all occupancy agreements, liens, encumbrances and
encroachments and subject only to the operation and effect of the Permitted
Exceptions (as hereafter defined). "Permitted Exceptions" shall be deemed to
mean (i) the On-Site Lease (as defined in Section 11 hereof) and the Wal-Mart
tenancy (which Seller shall make reasonable efforts to convert to a sublease
under the On-Site Lease prior to Settlement, but in any event which tenancy
shall not extend beyond the term of the On-Site Lease), (ii) all matters capable
of being reflected or disclosed on a current and accurate survey (the "Survey")
of the Property, to the extent not objected to by Purchaser, or objected to but
cured by Seller under Subsection 2(b) below, (iii) all instruments and matters
of record among the Land Records of the City of Alexandria, Virginia and
reflected on a commitment for title insurance (the "Title Commitment") from a
title insurer selected by Purchaser (the "Title Company") covering the Property,
to the extent not objected to by Purchaser, or objected to but cured by Seller
under Subsection 2(b) below, (iv) liens for taxes not yet due and payable, (v)
all zoning, development, building and other laws, codes and regulations, and
(vi) recorded easements and other rights of way for utilities and covenants and
restrictions applicable to the general area adjacent to the Property.
Purchaser's objections to the Survey or Title Commitment shall be set forth in a
written notice to Seller given on or before November 22, 2003 (the period from
the date hereof through November 22, 2003, for purposes of this Section 2, the
"Title Period"). Notwithstanding anything to the contrary contained in this
Agreement, Purchaser hereby specifically disapproves of any right or claim of
occupancy of all or any part of the Property (other than in connection with the
On-Site Lease and the Wal-Mart Sub-Lease and tenancy), and all liens evidencing
monetary encumbrances (except the liens securing the Wachovia Debt), and Seller
agrees to cause all such liens to be eliminated at Seller's sole cost and
expense prior to or concurrently with the Settlement.
(b) Title to the Property shall be deemed good and marketable if the Title
Company agrees to insure fee simple title to the Property and issue to
Purchaser, at standard premium rates (which may include extra charges for
endorsements requested by Purchaser), an owner's title insurance policy, subject
only to the Permitted Exceptions (as defined above). If there are material title
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or survey defects disclosed by the Survey or the Title Commitment, Purchaser
shall notify Seller of such title defects within the Title Period and Seller
shall within five (5) days from receiving notice elect, by written notice to
Purchaser, to cure or not to cure such defect(s). If Seller elects not to cure
the title or survey defect (or any of them) in accordance with the preceding
sentence, then Purchaser, within five (5) days from receipt of Seller's written
notice of such election (or the lapse of the notice period, as applicable),
shall elect by written notice to Seller to either (1) waive the title and/or
defect and proceed with Settlement, or (2) terminate this Agreement, in which
event this Agreement shall terminate and the Deposit shall be returned to
Purchaser, upon which neither party shall have any further right or claim
hereunder. Seller covenants and agrees that during the term of this Agreement,
except with the prior written consent of Purchaser, it will not take or fail to
take any action the result of which would cause title to the Property to differ
from the condition of the title described in this Section 2 ("Approved Condition
of Title").
3. Purchase Price. The purchase price ("Purchase Price") for the Property
is Nine Million Nine Hundred Thousand Dollars ($9,900,000) and shall be paid, at
Settlement, as follows:
(a) At Settlement, Purchaser shall assume Seller's existing debt secured
by the Property, previously extended by Wachovia Bank, N.A.
("Wachovia") to Seller, currently in the approximate principal amount
of Five Million Two Hundred Thousand Dollars ($5,200,000.00) (the
"Wachovia Debt"). Purchaser shall submit all applications and fees,
and otherwise make diligent and good faith efforts, to obtain approval
by Wachovia of Purchaser's assumption of the Loan. In the alternative,
Purchaser may, at its sole option, elect to, or if Purchaser's
assumption of the Wachovia Debt is denied by Wachovia Purchaser shall
be required to, repay the Wachovia Debt at Closing, together with any
defeasance or prepayment penalties or costs relating thereto
(collectively, the "Prepayment Costs"), which the parties estimate
shall be approximately $830,000. Regardless of whether Purchaser
elects to assume or repay the Wachovia Debt, the Purchase Price shall
be credited with (i) the amount of the Prepayment Costs (which, in the
event of an assumption, shall be calculated as if Purchaser had
elected to repay the Wachovia Debt), and (ii) the principal, accrued
interest, and any other amounts owing to Wachovia with respect to the
Wachovia Debt as of Settlement, which are paid or assumed by Purchaser
(exclusive of the Prepayment Costs).
(b) The remainder of the Purchase Price (of which the Deposit will be a
part), in the approximate amount of Three Million Eight Hundred
Seventy Thousand Dollars ($3,870,000.00) will be paid to Seller by
federal wire transfer of funds.
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4. Deposit. (a) Prior to the date hereof, Purchaser has delivered to
Commonwealth Land Title Insurance Company, as escrow agent (in such capacity,
the "Escrow Agent"), a deposit of One Hundred Thousand Dollars ($100,000) by
federal wire transfer of funds, to be held by Escrow Agent, in escrow, in a
federally insured interest-bearing account at a financial institution designated
by Purchaser (the "Escrow Account"). As used herein, the term "Deposit" shall
include the initial cash deposit and any accrued interest in the Escrow Account.
Such Deposit shall be deemed non-refundable and forfeited and paid to Seller
except in the express circumstances described herein.
(b) The Deposit shall be credited by Seller in favor of Purchaser as part
of the Purchase Price upon Settlement or delivered to Purchaser or Seller as is
specifically set forth in this Agreement.
(c) If this escrow shall be involved in any litigation or controversy, the
parties hereto shall severally hold the Escrow Agent free and harmless against
any cost or expense that may be suffered by it by reason of such litigation or
controversy, other than due to its negligence or malfeasance. All such costs and
expenses shall be paid by the party who does not prevail in such litigation. In
addition, the party who prevails shall be indemnified against any cost or
expense, including reasonable attorneys' fees (both at trial and on appeal), and
replacement of any depletion in the escrow funds, if such funds are ultimately
to be paid to the prevailing party. This provision shall survive any termination
of this Agreement.
(d) In the event conflicting demands are made, or notices served, upon the
Escrow Agent with respect to this escrow, the Escrow Agent shall have, without
limitation, the following rights and obligations:
(i) Withhold and stop all further proceedings in, and performance of this
escrow for a reasonable period of time to permit resolution; or
(ii) File a suit in interpleader and obtain an order from a court of
competent jurisdiction requiring the parties to interplead and litigate in such
court their several claims and rights amongst themselves. In the event such
interpleader suit is brought, and the escrow funds paid and/or delivered into
court, the Escrow Agent shall ipso facto be fully released and discharged from
all obligations to perform any and all duties or obligations relative to such
funds which are imposed upon it by this Agreement.
(iii) The Escrow Agent, in its capacity as escrow agent, is not to be held
liable for the sufficiency or correctness of the form, manner of execution or
validity of any instrument that might be deposited into the escrow, nor as to
the identity, authority or rights of any person executing the same, nor the
failure of any other party to comply with any provisions of any agreement,
contract or other instrument filed herein, and its duties hereunder shall be
limited to the safekeeping of the money, instruments, or other documents
received by it, and for the disposition of the same in accordance with the
provisions of this Agreement, and for the discharge of its obligations specified
in this Section.
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(iv) Prior to the earlier of the Settlement or the termination of this
Agreement in accordance with its terms, neither party shall have the right to
withdraw any instruments or monies deposited by them with the Escrow Agent,
except as herein specifically provided.
5. Settlement. Settlement shall take place on or before December 31, 2003
(the "Settlement Date") either by escrow of documentation and funds with the
Escrow Agent or at the offices of Seller's counsel in the Washington, DC
metropolitan area (the "Settlement") upon ten (10) days advance notice to
Seller.
6. Settlement Deliveries.
(a) At Settlement Seller shall:
(i) Deliver to the Title Company a good and sufficient special warranty
deed conveying the Property in fee simple to Purchaser in accordance with the
terms hereof, subject to no liens or encumbrances other than the Permitted
Exceptions;
(ii) Execute and deliver to Purchaser and the Title Company an affidavit of
Seller certifying that Seller is not a "foreign person" as defined in the
Federal Foreign Investment in Real Property Tax Act of 1990; as amended;
(iii) Execute and deliver to Purchaser a General Assignment in a form to be
agreed upon by Purchaser and Seller, with a General Assumption to be executed by
Purchaser, assigning the Intangible Property to Purchaser, in accordance with
the terms and conditions hereof, and an assignment of service contracts, with an
assumption to be executed by Purchaser, assigning to Purchaser those of the
Service Contracts which Purchaser has advised Seller, prior to the expiration of
the Feasibility Study Period (hereafter defined), that Purchaser desires to be
assigned to it hereunder (the "Assumed Service Contracts");
(iv) Cause On-Site to execute and deliver to Purchaser two (2) original
counterparts of the On-Site Lease and the letter of credit required as the
Security Deposit thereunder;
(v) Give full and complete possession of the Property to Purchaser, not
subject to the right of possession by any person or entity other than pursuant
to a Permitted Exception;
(vi) Provide such good standing certificates and evidence of authority of
Seller to sell the Property and due authorization and execution of the documents
required from Seller at Settlement as may be required by the Title Company;
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(vii) Deliver to Purchaser all surveys, engineering materials, geotechnical
information, plans, specifications, permits and licenses in Seller's possession
or control, all of which shall be subject to assignment pursuant to the General
Assignment referenced above;
(viii) Deliver to Purchaser a reaffirmation, as of the Settlement Date, of
Seller's representations made in Section 13.2 hereof;
(ix) Deliver to Purchaser all plans and specifications and other items
comprising the Intangible Property in Seller's possession or control;
(x) Deliver to Purchaser the originals, or the best copies available to
Seller, of all licenses and permits in respect of the Property, if any, to the
extent in Seller's possession or control; and
(xi) Execute and deliver an owner's affidavit, Virginia form R-5 and IRS
Form 1099 as may be requested by the Title Company.
(b) At Settlement, Purchaser shall:
(i) Deliver, or cause to be delivered, to Seller and the Escrow Agent, if
applicable, the respective portions of the Purchase Price;
(ii) Execute and deliver to the Title Company such documentation as may be
required in connection with the assumption of the Wachovia Debt;
(iii) Execute and deliver to Seller two (2) counterparts of the On-Site
Lease;
(iv) Execute and deliver to Seller an assumption of the prospective
obligations of Seller under the Assumed Service Contracts; and
(v) Provide a good standing certificate and evidence of authority of
Purchaser to consummate the transaction contemplated hereby and due
authorization and execution of the documents required from Purchaser at
Settlement.
(c) Upon Settlement, Seller and Purchaser shall each instruct the Title
Company to promptly undertake all of the following in the following manner:
(i) Prorations. Prorate all matters referenced in Section 7 based upon the
settlement statement delivered and signed by the parties;
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(ii) Recording. Cause the Special Warranty Deed and deferred purchase money
deed of trust to be recorded in the Land Records of the City of Alexandria;
(iii) Funds. Disburse from funds deposited by Purchaser with Escrow Agent
toward payment of the Purchase Price to Seller and to all items chargeable to
the account of Purchaser pursuant hereto in payment of such costs and disburse
the balance of such funds, if any, to Purchaser;
(vi) Title Policy. Direct the Title Company to issue the Title Policy to
Purchaser.
7. Adjustments.
(a) All items of income and expense (but not any expenses accruing under
any Service Contracts which are not Assumed Service Contracts) relating to the
Property, including, without limitation, real estate taxes, annual front-foot
benefit charges applicable to the Property, and any other matters customarily
adjusted at settlement are to be adjusted between the parties as of the
Settlement Date. Any special assessments pending against the Property as of
Settlement shall be discharged at or prior to Settlement at the expense of
Seller as applicable to the period before the Settlement Date, and assumed by
Purchaser with respect to the period after the Settlement Date. Any Service
Contracts affecting the Property which are not Assumed Service Contracts shall
be terminated by Seller on or before the Settlement Date (if possible),
Purchaser shall have no obligation therefor, and no adjustment of any cost
thereunder shall be made at Settlement.
(b) If Settlement shall occur before the tax rate or the assessed valuation
of the Property is fixed for the then current year, the apportionment of taxes
shall be upon the basis of the tax rate for the preceding year applied to the
latest assessed valuation. Subsequent to Settlement, when the tax rate and the
assessed valuation of the Property is fixed for the year in which Settlement
occurs, the parties agree to adjust the proration of taxes and, if necessary, to
refund or repay such sums as shall be necessary to effect such adjustment.
(c) Following Settlement, Purchaser shall have the right to pursue a
reduction or refund in the real estate tax assessment for the Property from the
appropriate governmental authority for any tax period prior to and after the
Settlement. If Purchaser pursues a tax appeal and obtains an adjustment or
reduction in the real estate tax assessment for the Property after Settlement,
Seller shall be entitled to receive payment of the share of any refund or
adjustment attributable to the period prior to the Settlement Date, offset by
the pro rata share of any costs incurred in pursuing such reduction (but only to
the extent such costs result in a savings as set forth above).
(d) In the event that any errors in prorations or adjustments made at
Settlement are discovered after the Settlement, the parties shall promptly
re-adjust the subject amounts, with such payments to be made between the parties
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as are necessary to correct the errors. In all events, the parties shall make
such adjustments, or confirm in writing that no such adjustments are necessary,
within 120 days after the end of the calendar year in which the closing occurs.
(e) The agreements of Seller and Purchaser set forth in this Section 7
shall survive Settlement.
8. Costs. Examination of title, title insurance, and the costs of the
Survey and Title Commitment shall be paid by Purchaser. Seller shall pay the
Virginia grantor's tax. Purchaser shall pay all other recordation and transfer
taxes and other charges imposed upon recordation of the deed. Purchaser shall
pay the cost of and tax applicable to the recordation of any mortgage or deed of
trust executed at Settlement. Each party shall be responsible for its own
attorneys' and other consultants' fees and expenses. Any other charges in
connection with this transaction shall be paid in accordance with customary
allocations in similar transactions in Alexandria, Virginia.
9. Seller's Deliveries. Seller shall, within five (5) business days after
the date hereof, Seller shall deliver to Purchaser the following, to the extent
the same are currently in the possession or control of Seller or its agents:
(a) Tax Statements. Copies of all bills issued for the most recent two (2)
years for all real property taxes and personal property taxes payable with
respect to the Real Property, or any portion thereof, and copies of all notices
or other documents relating to any such assessments;
(b) Plans and Specifications. Copies of all plans and specifications,
architectural drawings, surveys, site plans and similar documents;
(c) Licenses and Permits. Copies of all licenses and permits, including all
licenses, permits, approvals, dedications and the like, relating or incident to
the Real Property;
(d) Environmental Reports. Copies of any environmental, soils and similar
reports, tests and studies in Seller's possession or control; and
(e) Title and Survey. Copies of any currently existing or previously issued
surveys of all or any part of the Property, and all title information including
both existing tile policies, reports and all underlying documentation noted
therein in Seller's possession or control.
(f) Loan Documents. Copies of all instruments and documents evidencing,
securing or otherwise related to or in connection with the Wachovia Debt.
Purchaser acknowledges that Seller has previously delivered to Purchaser:
(a) a copy of that certain closing binder prepared by Xxxxxx, Xxxxxx & Xxxxxxxxx
labeled "On-Site Sourcing, Inc. Purchase and Finance of 000-000 Xxxxx Xxxxx
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Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, Closing Date: November 17, 2000, having the index
set forth on Exhibit D attached hereto; (b) a copy of that certain "Complete
Appraisal Self-Contained Report" dated October 3, 2000, prepared by Johnson,
McClellan, Xxxxxxx & Page for First Union National Bank, but excluding therefrom
pages 3-14, 17-20, 31, 42, 50-62, 65-77, 79, 84-90 in the body of such report,
and including only the following attachments: (i) $5,800,000 Commercial Note
dated November 15, 2000; (ii) binder letter dated November 20, 2000 from AIG
Environmental to AON Risk Services, Inc.; and (iii) Due Diligence Engineering
Evaluation of North Point Center Building dated August 23, 2000, prepared by
Facility Engineering Associates, P.C. (with only the following appendices
thereto: (1) Appendix A, 10-Year Capital Expenditure Forecast, and (2) Figure 2,
Site Plan, under the tab "Appendix C").
During the term of this Agreement, Seller shall make generally available to
Purchaser copies of Seller's files pertaining to the Property. Purchaser
acknowledges and agrees that Purchaser shall be responsible for verifying
through Purchaser's own due diligence the accuracy and completeness of all
documents and information, including the foregoing, provided by Seller to
Purchaser, and any reliance by Purchaser on such documents and information shall
be at Purchaser's own risk. In addition, Purchaser expressly acknowledges and
agrees that Seller shall not be obligated to furnish, nor shall Purchaser be
entitled to review or have access to, any confidential or proprietary documents
or information connected with the Property, including but not limited to
opinions, appraisals, audits, internal memoranda or other documents, internal
work product or other similar documents, which are in the possession or control
of Seller.
10. Inspection, Development, Marketing. (a) Purchaser shall have the right
from time to time, after providing Seller with reasonable advance notice, to
enter upon the Property for the purpose of making any inspection,
investigations, studies or tests which are deemed necessary or appropriate by
Purchaser, including, without limitation, environmental, soils and related
tests. Notwithstanding the foregoing, Purchaser shall not take any core samples,
install any monitoring xxxxx or undertake any other invasive tests or studies
beyond those as are customarily undertaken in connection with an ASTM Phase I
without the Seller's prior written consent. In the event Purchaser does not
consummate Settlement hereunder, Purchaser shall repair any damage to the
Property resulting from any inspections, studies or tests performed by
Purchaser. During the term of this Agreement, Purchaser, its agents,
consultants, contractors and subcontractors shall have the right to enter upon
the Property and, provided that Purchaser obtains Seller's prior consent, to
interview any party Purchaser deems necessary in order to properly evaluate the
Property. (Seller hereby approves Purchaser's interviewing governmental agencies
for such purposes.) Purchaser shall have the right to disclose to any such
parties that Purchaser is considering purchasing the Property. Purchaser hereby
indemnifies and holds harmless Seller from and against any and all liability,
losses and damages (whether actual, direct, indirect, incidental or
consequential), suits, claims, actions or other proceedings (including
attorneys' fees), and costs and expenses (including the costs of restoration,
remediation and other similar activities) arising in any connection with the
entry onto the Property by Purchaser or any of its employees, agents,
contractors or consultants. The foregoing indemnification shall survive
consummation of Settlement hereunder, or any other termination of this
Agreement.
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Notwithstanding the foregoing, if, during the Feasibility Study Period,
Purchaser receives an ASTM Phase I which indicates the necessity for further
testing, monitoring or remediation, or advises that a Phase II is warranted, and
Seller refuses to consent thereto (which consent shall not be unreasonably
withheld, conditioned or delayed), Purchaser shall have the right to terminate
this Agreement, upon which the Deposit shall be returned to Purchaser and
neither party shall thereafter have any further rights or obligations hereunder.
Prior to entering onto the Property, Purchaser shall deliver to Seller
certificates evidencing (1) commercial general liability insurance coverage
against injury (including death) and property damage with a limit of not less
than $1,000,000 and naming Seller as an additional insured, (2) worker's
compensation insurance coverage with limits of not less than that required by
law, and (3) employer's liability insurance coverage against accident and
disease with a limit of not less than $1,000,000 for each employee. In addition,
prior to performing any ASTM Phase II audit of the Property (for which consent
of Seller is required hereunder), Purchaser shall deliver to Seller certificates
evidencing that Purchaser and any and all parties performing the audit are
covered by environmental liability insurance with a limit of not less than
$1,000,000.
(b) Purchaser may, during the term hereof and thereafter, pursue any
entitlements for the Property it deems necessary, convenient or advisable for
the further improvement of the Property, from all applicable agencies of the
City of Alexandria, Virginia. The approvals which Purchaser may be seeking (the
"Approvals") may (at Purchaser's option) include zoning, conceptual site plan,
preliminary subdivision plan, detailed site plan, water and sewer systems
approval, final authorization and approval of public water and sanitary sewer
service and connections adequate for the Purchaser's planned use, and final
approval of a site plan and building permit(s). Purchaser's success in obtaining
the Approvals shall not be deemed a condition precedent hereunder. Seller
covenants and agrees to cooperate, in reasonable respects, with Purchaser, both
prior to and after Settlement, but at no third party expense to Seller, in
Purchaser's efforts to obtain the Approvals, such cooperation to include, but
not necessarily be limited to promptly executing and delivering to Purchaser any
submission reasonably required in connection with the Approvals. Seller hereby
agrees that its ownership of the Property is subject to the Lease, and that no
physical construction or physical development on the Property shall take place
until the expiration of the Lease. Purchaser agrees that in connection with its
applications for the Approvals, it shall use good faith efforts (at no
additional expense to Purchaser beyond those which Seller would have otherwise
incurred in connection ) to seek from the City of Alexandria, relief from any
existing unfunded or unperformed proffer, site plan, special use permit or
similar approvals related to the occupancy by Seller and/or On-Site, provided
that in no event will Purchaser become obligated for the performance of such
unfunded or unperformed proffer, site plan, special use permit or similar
approvals. Purchaser's good faith efforts as set forth above to seek from the
City of Alexandria, relief from any existing unfunded or unperformed proffer,
site plan, special use permit or similar approvals related to the occupancy by
Seller and/or On-Site, shall include Purchaser offering a proffer package to the
City of Alexandria which has at least reasonably equivalent value as those
currently unfunded or unperformed proffers related to the current On-Site
occupancy as set forth above.
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11. On-Site Lease. At Settlement, Purchaser and On-Site shall enter into a
lease (the "On-Site Lease"), pursuant to which On-Site leases from Purchaser the
entirety of the rentable space within the Building. The On-Site Lease shall be
in substantially the form of Exhibit C attached hereto, in accordance with the
following general terms and conditions:
(a) Premises. The entirety of the rentable square footage in the
Building.
(b) Term. Twenty seven (27) months; provided, however that Purchaser
may elect to shorten such term to twenty-four (24) months,
provided that Seller gives notice of such election on or before
the last day of the fourteenth (14th) month of the term (such
right, "Seller's Option").
(c) Rental. From the commencement of the On-Site Lease through the
twenty-fourth (24th) month of the term, at the rate of Four
Hundred Thousand Dollars ($400,000) per annum, and thereafter
(including the Renewal Term, if exercised), at the rate of Four
Hundred Sixty Thousand Dollars ($460,000) per annum, triple net
(with On-Site responsible for all taxes, utilities, insurance,
maintenance, and repairs).
(d) Capital Replacements. The On-Site Lease shall provide that
neither party shall be obligated for capital repairs or
replacements of the roof, walls, foundations, HVAC, plumbing,
electrical and other mechanical systems, In the event if at any
time after the eighteenth (18th) month of the term of the On-Site
Lease there exists a required repair the cost of which is in
excess of $50,000.00, then, in lieu of making such repair,
On-Site shall have the option of then terminating the On-Site
Lease (and any subleases then existing thereunder) by giving
Purchaser advance notice of thirty (30) days or longer. Further,
in the event the premises under the On-Site Lease become
uninhabitable through no action or inaction of On-Site, then in
such event On-Site shall have the option of then terminating the
On-Site Lease (and any subleases then existing thereunder) by
giving Purchaser advance notice of thirty (30) days or longer.
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(e) Security Deposit. Seller shall furnish a letter of credit in the
amount of Three Hundred Thousand Dollars ($300,000) (such letter
of credit, the "Security Deposit") in form, substance and from an
issuer acceptable to Purchaser The Security Deposit shall be
delivered to Purchaser at Settlement. The Security Deposit shall
secure the payment and performance of On-Site of all of its
obligations under the On-Site Lease. Purchaser may draw upon the
Security Deposit to reimburse Purchaser for any damages it may
incur as a result of any default by On-Site, beyond any
applicable notice or cure periods, as permitted under the terms
of the On-Site Lease. Upon termination of the On-Site Lease,
provided On-Site is not in default thereunder, Purchaser shall
(i) assist On-Site in locating replacement space to relocate from
the Building (or, alternatively, space within the Building at
then current market rates), and (b) return to Seller (within
thirty (30) days after the termination of the Lease) any
remaining portion of the Security Deposit.
(f) Sublease. On-Site shall have the right to sublet all or any
portion of its Premises, subject to the consent of Purchaser and
the terms of the On-Site Lease, which consent shall not
unreasonably be withheld, conditioned or delayed.
12. Conditions Precedent to Purchaser's Obligations. Settlement and
Purchaser's obligations with respect to the transaction contemplated by this
Agreement are subject to the satisfaction, not later than the Settlement (unless
otherwise provided), of the following conditions, and the obligations of the
parties with respect to such conditions are as follows:
(i) Representations, Warranties and Covenants of Seller. Seller shall have
duly performed each and every agreement to be performed by Seller hereunder, and
Seller's representations, warranties and covenants set forth in this Agreement
shall be true and correct as of the Settlement, both in all material respects.
(ii) Seller's Deliveries. Seller shall have delivered all of the items
required to be delivered by Seller under the terms of this Agreement (including,
for purposes hereof, the On-Site Lease).
(iii) Status of Title. Title to the Property shall be as required herein.
(iv) Hazardous Substances. There shall exist no Hazardous Substances or
environmental law violations on, at or concerning the Property as of the
Settlement Date which have a material adverse effect upon the continued
operation of the Property.
12
(v) Proffers. There existing no unfunded or un-performed proffer or other
governmental obligations or agreements with respect to the Property (other than
(a) any such proffers and agreements which were disclosed to Purchaser in
writing prior to the date hereof, which the Purchaser hereby acknowledges and
accepts (subject to Seller maintaining the continuing obligation, for such
proffers and agreements in accordance with the terms hereof), regardless of
whether the performance thereof is current as of Settlement (and for which
Seller shall remain obligated), or (b) any such proffers and agreements created
by or at the request of Purchaser).
(vi) Casualty or Condemnation. There having occurred no pending or
threatened condemnation or casualty to the Property which has a material adverse
affect upon the continued operation of the Property.
(vii) Service Contracts. Seller shall have terminated or has assigned to
On-Site (for On-Site to continue under the terms of the On-Site Lease) any
Service Contract which Purchaser has notified Seller, during the Feasibility
Study Period, that it will not assume at Settlement.
(viii) Financial Condition of On-Site. There shall not have occurred any
change in the condition of On-Site which would have a material adverse affect
upon On-Site's ability to perform its obligations under the On-Site Lease (with
the Purchaser hereby agreeing that the sale or merger of On-Site as a company,
being currently contemplated, shall not be deemed such an event).
The conditions set forth in this Section 12 are solely for the benefit of
Purchaser and may be waived only by Purchaser. Purchaser shall at all times have
the right to waive any condition. Such waiver or waivers shall be in writing.
Any such waiver shall be deemed a release of Seller and any liability of Seller
as a result of the failure of such condition. Neither Seller nor Purchaser shall
act or fail to act for the purpose of permitting or causing any condition to
fail (except to the extent Purchaser, in its own discretion, exercises its right
to disapprove any such items or matters).
In the event any of the conditions set forth in Section 12 (i) - (viii) are
not timely satisfied, deemed approved or waived, for a reason other than the
default of Purchaser or Seller under this Agreement, Purchaser shall have the
right to terminate this Agreement, upon which the Escrow Agent shall immediately
return the Deposit to Purchaser.
13. Intentionally Deleted
14. Condition of Property; Covenants.
14.1 Seller's Covenants. Seller covenants that until Settlement Seller will
(i) continue the operation of the Property in the manner in which currently
operated, (ii) not commit or knowingly permit to be committed any waste to the
Property, (iii) not enter into any lease or service contract without the prior
written consent of Purchaser, which shall not be unreasonably withheld or
delayed, (iv) not enter into any agreement or instrument or take or fail to take
any action which would constitute an encumbrance on the Property or which would
bind Purchaser or the Property after Settlement, without the prior written
consent of Purchaser, which shall not be unreasonably withheld or delayed, (v)
not undertake to modify the zoning classification of the Property, (vi) keep the
13
Wachovia Debt current and not cause or permit any default thereunder, or any
situation which, with the giving of notice or passage of time could constitute a
default thereunder, and (vii) promptly notify Purchaser (and provide a copy) of
any written notices of violation received by Seller from any governmental or
quasi governmental agencies concerning the Property.
14.2 Seller's Representations and Warranties. Seller makes the following
representations and warranties as of the date hereof.
(a) Representations Concerning Seller's Authority. (i) Seller has the legal
power, right and authority to enter into this Agreement and the instruments
referenced herein, and to consummate the transaction contemplated hereby;
(ii) All requisite corporate action has been taken by Seller in connection
with the entering into this Agreement, the instruments referenced herein, and
the consummation of the transaction contemplated hereby;
(iii) This Agreement and all documents required hereby to be executed by
Seller are and shall be valid, legal and binding obligations of Seller and are
enforceable against Seller in accordance with their terms.
(iv) Neither the execution and delivery of this Agreement and the documents
and instruments referenced herein, nor the incurrence of the obligations set
forth herein, nor the consummation of the transaction contemplated herein will
result in the material breach of any terms, conditions or provisions of, or
constitute a material default under, any bond, note, or other evidence of
indebtedness, or any indenture, mortgage, deed of trust, lease or similar
agreement to which Seller is a party and affecting the Real Property.
(b) Pending Actions. To the best of Seller's knowledge, there are no
pending actions, suits, arbitrations, claims or proceedings, at law, in equity
or otherwise, affecting all or any portion of the Property or in which Seller is
a party.
(c) Agreements. Seller has entered into no agreements affecting or relating
to the right of any party with respect to the possession of the Property, or any
portion thereof, which are obligations which will affect the Property or any
portion thereof subsequent to the recordation of the Special Warranty Deed
except as may be reflected in the Approved Condition of Title (including
Permitted Exceptions, which includes the Wal-Mart Lease).
14
(d) No Options. There do not exist any rights of first offer or refusals or
options to purchase the Property or any portion thereof which have been granted
by Seller.
(e) Taxes. Other than the amounts disclosed by the tax bills delivered to
Purchaser by Seller, to Seller's knowledge, no other real property taxes or
assessments have been assessed against the Real Property for the current tax
year. Seller has no knowledge, and Seller has received no notice to the
contrary, of any special assessments or charges which have been levied against
the Real Property.
(f) FIRPTA. Seller is not a foreign person within the meaning of Section
1445(f)(3) of the Internal Revenue Code of 1986, and Seller will furnish a
FIRPTA certificate to Purchaser prior to the Settlement in accordance with the
terms and provisions of Section 6(a) hereof.
(g) Environmental. To the best of Seller's knowledge, there are no
Hazardous Substances (as hereinafter defined) in violation of laws or
regulations at the Property, except as may be disclosed in any reports delivered
pursuant to Section 9 hereof. "Hazardous Substances", as used herein, means any
toxic or hazardous waste, pollutants or substances, including, without
limitation, petroleum products or by-products, asbestos (irrespective of whether
or not encapsulated) and substances defined or listed as hazardous substances or
toxic substances or similarly identified in or pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 41
U.S.C. Section 9601, et seq., hazardous materials identified in or pursuant to
the Hazardous Materials Transportation Act, 49 U.S.C. Section 1802, et seq.,
hazardous waste identified in or pursuant to the Resource Conservation and
Recovery Act of 1976, as amended, 15 U.S.C. Section 2601, et seq. or any
hazardous or toxic substance or pollutant regulated under any other applicable
federal or local environmental law.
(h) Claims. To the best of Seller's knowledge, all bills and claims for
labor performed or materials furnished to or for the Property have been fully
paid (or will be fully paid prior to Settlement), and Seller shall execute such
affidavits, agreements and indemnities as Purchaser or the Title Company request
in connection therewith.
(i) Wachovia Debt. The Wachovia Debt is current in payment, and there
exists no default or event which, with the giving of notice or the passage of
time would constitute a default thereunder.
Any reference in this Agreement to "knowledge," "actual knowledge" or "best
of knowledge" of Seller, or the receipt of notices or other communications by
Seller, shall be deemed to mean the actual knowledge of, or receipt of notice or
communication by, Xxxxx Xxxxxx. Purchaser acknowledges and agrees that neither
such party nor any other employee or agent of Seller shall have any duty or
obligation under this Agreement or other law to make any affirmative
investigation of the matters covered by the foregoing provisions in order to
determine the accuracy or truthfulness thereof. In addition, Purchaser hereby
15
acknowledges and agrees that except with respect to the foregoing
representations and warranties set forth in this provision above, or that which
may be expressly set forth elsewhere in this Agreement (if at all), the Property
is to be conveyed by Seller to Purchaser in "as-is, where-is" condition without
warranty or representation, express or implied, as to zoning, physical
condition, environmental condition, suitability for a particular purpose or any
other matter whatsoever.
The representations and warranties contained herein shall survive
Settlement and recordation of the Special Warranty Deed for a period of six (6)
months, and shall not be deemed to be merged therein.
15. Feasibility Study Period. Purchaser shall have the right from the date
hereof through 5:00 p.m. Eastern Time on November 22, 2003 (the "Feasibility
Study Period") to make such investigations, studies and tests with respect to
the Property as Purchaser deems necessary or appropriate to determine the
feasibility of purchasing the Property. If, during the Feasibility Study Period,
Purchaser determines, in its sole discretion, that the Property is not
acceptable to Purchaser or the purchase thereof is not feasible then Purchaser
may, at any time on the final day of the Feasibility Study Period (the
"Feasibility Study Period Termination Date"), terminate this Agreement by
written notice to Seller. In the event Purchaser obtains an ASTM Phase I prior
to the Feasibility Study Period Termination Date which indicates that further
testing of or on the Property is advised, then (subject to Seller approving such
further testing as set forth in Section 10 hereof) the Feasibility Study Period
Termination Date shall be extended (but only for the purpose of performing such
additional testing as may be approved by Seller in accordance with Section 10
hereof) to that date which is five (5) business days (but not later than the
outside date for Settlement as set forth in Section 5 hereof) after Purchaser
receives a written report based on an ASTM Phase II performed by its
environmental consultant; provided that in any event (i) Purchaser shall
initiate such additional testing promptly once the same has been consented to by
Seller, (ii) Purchaser shall cooperate with its engineers to expedite such
testing to the extent possible, and (iii) the same shall not extend the outside
date for Settlement in accordance with Section 5 of this Agreement. Upon any
timely termination of this Agreement pursuant to this Section 15, the Deposit
shall be promptly paid to Seller, and neither party shall thereafter have any
further rights or obligations hereunder. Without in any way limiting any other
express provision of this Agreement pursuant to which the Deposit is to be
returned to Purchaser, and notwithstanding the foregoing provisions of this
Section 15, if (and only if) the Agreement is terminated in accordance with
Sections 12 (iii) - (viii) hereof, then the Deposit shall be returned to
Purchaser.
16. Condemnation and Casualty. In the event Seller receives notice of any
condemnation proceedings, notice of the intention of any governmental or
quasi-governmental authority to initiate condemnation proceedings, or if any
such proceedings commence, or an actual condemnation or taking of the Real
Property or any portion thereof occurs, which in any such event takes more than
ten percent (10%) of the Property, or there occurs a casualty at or on the
Property the cost of repair for which is $200,00.00 or more, Seller will
promptly notify Purchaser and Purchaser may, within thirty (30) days thereafter
(i) elect to terminate this Agreement, in which event, the Deposit shall be
16
returned to Purchaser and the parties shall be relieved of all further liability
hereunder except as specifically set forth elsewhere in this Agreement; or (ii)
if Purchaser does not elect to terminate this Agreement, claim the condemnation
award or, as applicable, casualty insurance proceeds as well as any unpaid
claims or rights in connection therewith and such claims and awards shall be
assigned to Purchaser at Settlement (and in the event of casualty, together with
the amount of any deductible on Seller's insurance policy), or if paid to Seller
prior to Settlement, shall be credited at Settlement against the Purchase Price.
In the event Purchaser does not terminate this Agreement as aforesaid, Purchaser
shall have the right to negotiate with the condemning authority and/or
applicable insurer, as applicable, and Seller agrees that it shall neither
negotiate nor compromise with such authority or insurer without Purchaser's
prior written consent.
17. Default. (a) If Purchaser shall breach or default hereunder, the amount
of damages not being ascertainable, the Deposit provided in Section 4 above
shall be forfeited and the same shall forthwith be delivered by the Escrow Agent
to Seller as liquidated damages. In the event of such breach or default by
Purchaser, Seller's sole remedy shall be restricted to retention of said
Deposit, and Purchaser shall have no other responsibility or liability of any
kind to Seller by virtue of such default; Seller hereby waiving and
relinquishing any other right or remedy against Purchaser.
(b) If Seller shall breach or default hereunder, Purchaser shall have the
right to either (i) terminate this Agreement and receive a return of the Deposit
together with a reimbursement from Seller of all third party costs and expenses
incurred in connection with the transaction contemplated hereby, up to (but not
exceeding) an amount of $100,000, or (ii) obtain specific enforcement; in which
event, the Deposit (including any portion of the Deposit paid or released to
Seller) shall, at Purchaser's request, be promptly returned to Purchaser during
the pendency of any such action.
18. Broker. Each party, by the execution hereof, represents and warrants
that neither party has engaged the services of any broker, finder, agent or
other similar person or entity in connection with this transaction. Each party
shall indemnify and hold harmless the other against and from any loss, cost,
damage or fee (including attorneys' fees) resulting from any inaccuracy of such
representation and warranty. The provisions of this Section 18 shall survive
Settlement or other termination of this Agreement.
19. Definition of "business day". For purposes of this Agreement, the term
"business day" as used herein shall mean all days of the week except for
Saturday, Sunday and any other days which are declared federal bank holidays in
Washington, D.C. If any period of time ends, or if any act is required to be
performed, on a day other than a business day, then the applicable period of
time shall be deemed to expire, or the date required for the performance of the
appropriate obligation shall be deemed to be extended, on the next business day
following the applicable date of performance.
17
20. Miscellaneous.
(a) Notices. Any and all notices, requests or other communications
hereunder shall be deemed to have been duly given on the day of actual delivery
thereof (as evidenced by receipt therefore) if in writing and if transmitted by
hand delivery with receipt therefor, by recognized overnight courier, or by
registered or certified mail, return receipt requested (or, as to a notice
pursuant to Section 2 hereof, via facsimile transmission with a confirmation by
the sending machine of receipt by the receiving machine) addressed as follows
(or to such new address as the addressee of such a communication may have
notified the sender thereof):
To Seller: On-Site Sourcing, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxx
Facsimile: (000) 000-0000
With copies to: Xxxxxx X.X. Xxxxxxxxxx, Esq.
Xxxxxx, Xxxxxx & Xxxxxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
To Purchaser: Capital Associates Management, LLC
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. X. Xxxxx Xxxxxx
Facsimile (000) 000-0000
AND
Capital Associates Management, LLC
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
With copies to: X. Xxxxxxx Saas, Esq.
Xxxxxxxxx & Saas, P.C.
0000 Xxxx-Xxxx Xxxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Facsimile (000) 000-0000
(b) Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Virginia.
18
(c) Headings. The captions and headings herein are for convenience and
reference only and in no way define or limit the scope or content of this
Agreement or in any way affect its provisions.
(d) Effective Date. This Agreement shall be effective as of the date of
full and final execution and delivery hereof by Purchaser and Seller.
(e) Counterpart Copies; Facimile Transmission. This Agreement may be
executed in two or more counterpart copies, all of which counterparts shall have
the same force and effect as if all parties hereto had executed a single copy of
this Agreement. A facsimile transmission of this Agreement, as signed by the
party making such transmission, shall constitute a valid delivery of this
Agreement by such party for all purposes.
(f) Binding Effect; Assignment. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns; provided, however, that Purchaser shall not be entitled to assign this
Agreement without the prior written consent of Seller, which consent shall be
given or withheld at Seller's sole discretion, provided however that Seller's
consent shall not be required (but advance written notice shall be required) for
an assignment of this Agreement to an entity in which Purchaser retains a
substantial economic interest.
(g) Entire Agreement. This Agreement and the Exhibits attached hereto
contain the final and entire agreement between the parties hereto with respect
to the sale and purchase of the Property and are intended to be an integration
of all prior negotiations and understandings. Purchaser and its agents, and
Seller and its agents, shall not be bound by any terms, conditions statements,
warranties or representations, oral or written, not contained herein. No change
or modifications to this Agreement shall be valid unless the same is in writing
and signed by the parties hereto. No waiver of any of the provisions of this
Agreement shall be valid unless the same is in writing and is signed by the
party against which it is sought to be enforced.
(h) Limitation of Claims. No statutory or other legal rights under federal,
state or local laws and/or regulations shall apply between the parties with
respect to the Property and the transactions contemplated by this Agreement, and
the parties are liable only pursuant to the covenants, representations and/or
warranties expressly stated in this Agreement and no other agreements, laws or
regulations. Likewise, upon Settlement, Purchaser shall be deemed to have
automatically released and discharged forever the Seller and all employees,
officers, directors, trustees, partners and affiliates of Seller, as well as any
investment manager and other agents of Seller, from any and all claims, suits
and liability, including but not limited to actions for contribution or
reimbursement after environmental remediation, which might otherwise arise under
any law or regulation which is not expressly contained in this Agreement.
19
(i) Survival. The terms and provisions of this Agreement shall survive
Settlement and delivery of a deed, and shall not be merged therein except as
expressly provided otherwise herein.
(j) Exhibits
A - Description of Property
B - Service Contracts
C - On-Site Lease
D - Closing Binder Index
The Exhibits attached hereto are hereby incorporated herein by this
reference for all purposes.
(k) Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
such term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
(l) Confidentiality. The parties will maintain the confidentiality of the
terms of the transaction and the contents of this letter and transaction
documents, except that Purchaser and Seller may disclose such matters to their
lenders, prospective lenders, agents, attorneys, accountants, engineers and
others, to the extent reasonably necessary, in connection with the due diligence
and/or consummation of this transaction. In addition, Seller may make such
filings and such other disclosure as may be required under federal securities
laws applicable to Seller's parent, which is a publicly-held company. Seller
agrees that to the extent permitted under applicable securities disclosure and
other laws, Seller shall make reasonable efforts to not include the Purchase
Price in any announcement of this transaction to the local press.
[SIGNATURE PAGE FOLLOWS]
20
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
intending that for all purposes this document constitute a document under seal,
on the date or dates set forth below.
SELLER:
X. XXXXX STREET REALTY CO, LLC
By: /s/ Xxxxx Xxxxxx
Name:
Title:
Date:
PURCHASER:
CAPITAL ASSOCIATES MANAGEMENT, LLC
By: /s/ Xxxxx X Xxxxx
Name:
Title:
Date:
61103-3
3065/003
11-4-03
21
EXHIBIT A
Property Description
--------------------
All those lots of ground, with the improvements thereon, situate in the
City of Alexandria, Virginia, and more particularly described as:
Lots 51 through 511 of the division of property of Xxxxx-Xxxxxxx Building
Corporation as the same appears duly dedicated, platted and recorded by the Deed
of Dedication dated March 9, 1956 and recorded in Deed Book 428 at page 337,
among the Land Records of the City of Alexandria, Virginia.
Tax Map # 054.01-03-06
22
EXHIBIT B
Service Contracts
-----------------
23
EXHIBIT C
On-Site Lease
-------------
24
EXHIBIT D
Closing Binder Index
---------------------
25
