AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement") is entered into as of the 6th
day of January, 1997, by and between XXXXXXXX XXXX NE, INC., a Delaware
corporation ("Purchaser"), and TYSONS CORNER LIMITED PARTNERSHIP, an Illinois
limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE.
1.1 Purchaser agrees to purchase and Seller agrees to sell at the price
of Thirty Million Seven Hundred Fifty Thousand And No/100 Dollars
($30,750,000.00) (the "Purchase Price"), that certain property located in
Tysons Corner, Fairfax County, Virginia and legally described on Exhibit A
attached hereto (the "Land") together with all right, title and interest of
Seller in and to all easements, rights, privileges, rights-of-way,
hereditaments, tenements and appurtenances belonging to the Land, and 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 (hereinafter
collectively with the Land referred to as the "Real Property"), and together
with all improvements situated thereon consisting of an office building
containing approximately 202,954 square feet of leasable floor area, more or
less (the "Improvements") (the Real Property and Improvements hereinafter
collectively referred to as the "Property"). Included in the Purchase Price is
all of the personal property set forth on Exhibit B attached hereto (the
"Personal Property").
1.2 Seller is the owner of certain intangible property used in connection
with the Real Property and Improvements, including, but not limited to Seller's
rights, if any, in and to certain trade names, licenses, permits, governmental
approvals and authorizations used in connection with any part of the Real
Property and Improvements (collectively, the "Intangible Property"), and all
leases for space within the Improvements (the "Leases").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of Two Hundred Thousand
and No/100 Dollars ($200,000.00) (the "Initial Xxxxxxx Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C;
2.2. On January 27, 1997, the additional sum of Two Hundred Thousand and
No/100 Dollars ($200,000.00) (the "Additional Xxxxxxx Money;" the Initial
Xxxxxxx Money and the Additional Xxxxxxx Money are hereinafter together
referred to as the "Xxxxxxx Money") to be held in escrow by and in accordance
with the provisions of the Escrow Agreement.
2.3. On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations set forth herein, by
federally wired "immediately available" funds on or before 3:00 p.m. Chicago
time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by Near North National Title
Corporation as agent for First American Title Insurance Company (hereinafter
referred to as "Title Insurer") dated September 4, 1996 for the Property (the
"Title Commitment"). For purposes of this Agreement, "Permitted Exceptions"
shall mean: (a) general real estate taxes, association assessments, special
assessments, special district taxes and related charges not yet due and
payable; (b) matters shown on the "Survey" (hereinafter defined) to which
Purchaser has not made objections as set forth herein; (c) matters caused by
the actions of Purchaser; and (d) the title exceptions set forth in Schedule B
of the Title Commitment as Numbers 1 through 21 inclusive, to the extent that
same affect the Property and have not been objected to by Purchaser within the
Inspection Period. All other exceptions to title shall be referred to as
"Unpermitted Exceptions". On the Closing Date, Title Insurer shall deliver to
Purchaser a standard title policy in conformance with the previously delivered
Title Commitment, subject to Permitted Exceptions and Unpermitted Exceptions
waived by Purchaser (the "Title Policy"). Purchaser and Seller shall divide
evenly the costs of the Title Commitment and Title Policy and Purchaser shall
pay for the cost of any endorsements to, or extended coverage on, the Title
Policy.
3.2. Seller has delivered a survey of the Property (the "Survey") to
Purchaser prepared by Xxxxxx Consulting, dated October 19, 1996. Purchaser and
Seller shall divide evenly the costs of the Survey.
3.3. Purchaser shall, during the Inspection Period, review the title and
the Survey to the Property and notify Seller of any title or Survey defects
during the Inspection Period and Seller shall have the right, within ten (10)
days from receiving notice, to elect: (i) to cure or bond over the title or
Survey defect at Seller's cost and expense, or (ii) not to cure or bond over
such defect. If Seller elects not to cure or bond over the title or Survey
defect, then Purchaser, within seven (7) days from receipt of Seller's written
notice of such election, shall elect by written notice to Seller to either (1)
waive the title or Survey defect and proceed with Closing with no abatement of
the Purchase Price,or (2) terminate this Agreement, in which event Purchaser
shall be entitled to the immediate return of the Xxxxxxx Money and each party's
rights and liabilities hereunder shall cease, except with respect to those
rights and obligations which specifically survive termination. Notwithstanding
the foregoing, Seller shall be obligated to cure or bond over any monetary
encumbrances currently set forth on the Title Commitment and any encumbrances
as set forth in Paragraph 5 herein, and any currently due real estate taxes and
governmental assessments constituting a lien on the Property, subject to the
terms of Paragraph 12 herein.
3.4. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3.1 and 3.2 shall survive the Closing and the delivery of the Deed
and termination of this Agreement.
4. PAYMENT OF CLOSING COSTS. In addition to the costs set forth in
Paragraphs 3.1 and 3.2, Purchaser and Seller shall divide evenly the costs of
the documentary or transfer stamps to be paid with reference to the "Deed"
(hereinafter defined) and all other stamps, intangible, transfer, documentary,
recording, sales tax and surtax imposed by law with reference to any other sale
documents delivered in connection with the sale of the Property to Purchaser
and all other charges of the Title Insurer in connection with this transaction,
including any escrow fees.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined) and after the
expiration of the Inspection Period, a date-down to the Title Commitment
discloses any new Unpermitted Exception, Seller shall within thirty (30) days
from the date of the date-down to the Title Commitment, as applicable, at
Seller's expense, (i) bond over, cure and/or have any Unpermitted Exceptions
which, in the aggregate, do not exceed $100,000.00 (a "Minor Unpermitted
Exception"), removed from the Title Commitment or to have the Title Insurer
commit to insure against loss or damage that may be occasioned by such
Unpermitted Exceptions each in a manner reasonably acceptable to Purchaser, or
(ii) have the right, but not the obligation, to bond over, cure and/or have any
Unpermitted Exceptions which, in the aggregate, equal or exceed $100,000.00,
removed from the Title Commitment or to have the Title Insurer commit to insure
against loss or damage that may be occasioned by such Unpermitted Exceptions.
In such event, the time of Closing shall be delayed, if necessary, to give
effect to said aforementioned time periods. If Seller fails to cure or have
said Unpermitted Exception removed or have the Title Insurer commit to insure
as specified above within said thirty (30) day period or if Seller elects not
to exercise its rights under (ii) in the preceding sentence, Purchaser may
terminate this Agreement upon notice to Seller within five (5) days after the
expiration of said thirty (30) day period; provided, however, and
notwithstanding anything contained herein to the contrary, if the Unpermitted
Exception which gives rise to Purchaser's right to terminate was recorded
against the Property as a result of the affirmative, willful action of Seller
(and not by any unrelated third party) or if Seller is able to bond over, cure
or remove a Minor Unpermitted Exception for a cost not to exceed $100,000 in a
manner reasonably acceptable to Purchaser or the Title Insurer is willing to
insure over a Minor Unpermitted Exception for a cost not to exceed $100,000 in
a manner reasonably acceptable to Purchaser and Seller fails to expend said
funds in either case, then Purchaser shall have the additional rights contained
in Paragraph 11 herein. Absent notice from Purchaser to Seller in accordance
with the preceding sentence, Purchaser shall be deemed to have elected take
title subject to said Unpermitted Exception. If Purchaser terminates this
Agreement in accordance with the terms of this Paragraph 5.1, this Agreement
shall become null and void without further action of the parties and all
Xxxxxxx Money theretofore deposited into the escrow by Purchaser together with
any interest accrued thereon, shall be returned to Purchaser, and neither party
shall have any further liability to the other, except for Purchaser's
obligation to indemnify Seller and restore the Property, as more fully set
forth in Paragraph 7.
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the date upon which title is transferred to
Purchaser in accordance with this Agreement. Notwithstanding the foregoing, in
the event of damage to the Property by fire or other casualty prior to the
Closing Date, (a) repair of which would cost less than or equal to $100,000.00
(as determined by a licensed engineer or architect selected by Purchaser and
reasonably satisfactory to Seller (the "Approved Engineer")) and (b) which does
not directly and proximately cause tenants in occupancy of five (5) percent or
more of the leasable area of the Property to actually terminate their leases at
the Property or give notice of their intention to rightfully terminate their
leases at the Property in accordance with the terms thereof, Purchaser shall
not have the right to terminate its obligations under this Agreement by reason
thereof, but Seller shall have the right to elect to either repair and restore
the Property (in which case the Closing Date shall be extended until completion
of such restoration) or to assign and transfer to Purchaser on the Closing Date
all of Seller's right, title and interest in and to all insurance proceeds paid
or payable to Seller on account of such fire or casualty together with an
amount equal to Seller's insurance deductible and any additional amount
necessary to repair or restore said casualty (but in no event shall the total
credit exceed $100,000.00 less the amount covered by Seller's insurance).
Seller shall promptly notify Purchaser in writing of any such fire or other
casualty and Seller's determination of the cost to repair the damage caused
thereby. In the event of damage to the Property by fire or other casualty
prior to the Closing Date, (a) repair of which would cost in excess of
$100,000.00 (as determined by the Approved Engineer), or (b) which directly and
proximately causes tenants in occupancy of five (5) percent or more of the
leasable area of the Property to actually terminate their leases at the
Property or give notice of their intention to rightfully terminate their leases
at the Property in accordance with the terms thereof prior to the Closing, then
this Agreement may be terminated at the option of Purchaser, which option shall
be exercised, if at all, by Purchaser's written notice thereof to Seller within
five (5) business days after the later to occur of (a) Purchaser receiving
written notice of such fire or other casualty and the Approved Engineer's
determination of the amount of such damages, or (b) Purchaser receiving written
notice of cancellation of tenant leases representing five (5) percent of the
leasable area of the Property. Upon the exercise of Purchaser's option to
terminate in the preceding sentence, this Agreement shall become null and void,
the Xxxxxxx Money deposited by Purchaser shall be returned to Purchaser
together with interest thereon, and neither party shall have any further
liability or obligations hereunder, except for those liabilities which
specifically survive termination hereunder. In the event that Purchaser does
not exercise the option set forth in the preceding sentence, the Closing shall
take place on the Closing Date and Seller shall assign and transfer to
Purchaser on the Closing Date all of Seller's right, title and interest in and
to all insurance proceeds paid or payable to Seller on account of the fire or
casualty, together with delivery of the insurance deductible.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall:
(i) materially impair access to the Property; (ii) cause any material
non-compliance with any applicable law, ordinance, rule or regulation of any
federal, state or local authority or governmental agencies having jurisdiction
over the Property or any portion thereof; or (iii) materially and adversely
impair the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), all as determined by Purchaser
and Seller in their reasonable discretion, Purchaser may:
6.2.1. terminate this Agreement by written notice to Seller, in
which event the Xxxxxxx Money theretofore deposited by Purchaser, together with
interest thereon, shall be returned to Purchaser and this Agreement shall
become null and void, and neither party shall have any further liability or
obligations hereunder, except for those liabilities which specifically survive
termination hereunder; or
6.2.2. proceed with the Closing, in which event Seller shall assign
to Purchaser all of Seller's right, title and interest in and to any award made
in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall notify Seller, within five (5) business days after
Purchaser's receipt of Seller's notice, whether Purchaser elects to exercise
its rights under Paragraph 6.2.2 or Paragraph 6.2.1. Closing shall be delayed,
if necessary, until Purchaser makes such election. If Purchaser fails to make
an election within such five (5) business day period, Purchaser shall be deemed
to have elected to exercise its rights under Paragraph 6.2.1. If between the
date of this Agreement and the Closing Date, any condemnation or eminent domain
proceedings are initiated which do not constitute a Material Event, Purchaser
shall be required to proceed with the Closing, in which event Seller shall
assign to Purchaser all of Seller's right, title and interest in and to any
award made in connection with such condemnation or eminent domain proceedings.
In the event of any condemnation or similar proceeding which is not a
Material Event, or which is a Material Event but for which Purchaser has
provided notice pursuant to Paragraph 6.2.2 above, Seller covenants and agrees
not to settle or compromise such matter without the prior written consent of
Purchaser, and to notify Purchaser and allow Purchaser to be present at and
participate in any meeting, hearing or other proceeding pertaining to such
action.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on the date hereof and ending at 5:00
p.m. Chicago time on January 22, 1997 (said period being herein referred to as
the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser may enter upon the Property, at
any reasonable time and upon reasonable prior notice to Seller, to inspect the
Property, including a review of leases located at the Property, and to conduct
and prepare such studies, tests and surveys as Purchaser may deem necessary and
appropriate. In connection with Purchaser's review of the Property, Seller
agrees to deliver to Purchaser copies of the current rent roll for the
Property, the most recent tax and insurance bills, utility account numbers,
service contracts, and unaudited year end 1995 and year-to-date 1996 operating
statements, as well as all of the following, all of which shall be delivered to
Purchaser as soon as reasonably practicable:
(i) Annual income and expenses statements for the prior two (2)
calendar years;
(ii) Copies of surveys, site plans and tax bills;
(iii) Copies of all Leases and Service Contracts (defined in
Paragraph 19.2);
(iv) To the extent in Seller's possessions, copies of the plats, and
engineering and architectural plans for the Property; and
(v) A copy of the most recent arrearage report for the Property.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and
expense and Purchaser shall repair any damage caused to the Property as a
result of Purchaser's tests and investigations. Purchaser shall defend,
indemnify and hold Seller and any affiliate, parent of Seller, and all
shareholders, employees, officers and directors of Seller or Seller's affiliate
or parent (hereinafter collectively referred to as "Affiliate of Seller")
harmless from any and all liability, cost and expense (including without
limitation, reasonable attorney's fees, court costs and costs of appeal)
suffered or incurred by Seller or Affiliates of Seller for injury to persons or
property caused by Purchaser's investigations and inspection of the Property.
Purchaser shall undertake its obligation to defend set forth in the preceding
sentence using attorneys selected by Purchaser and reasonably acceptable to
Seller.
Prior to commencing any such tests, studies and investigations, Purchaser
shall furnish to Seller a certificate of insurance evidencing comprehensive
general public liability insurance insuring the person, firm or entity
performing such tests, studies and investigations and listing Seller and
Purchaser as additional insureds thereunder.
If Purchaser is dissatisfied with the results of the tests, studies or
investigations performed or information received pursuant to this Paragraph 7.1
in its sole and absolute discretion, or for any other reason Purchaser
determines to terminate this Agreement, Purchaser shall have the right to
terminate this Agreement by giving written notice of such termination to Seller
at any time prior to the expiration of the Inspection Period. If written
notice is not delivered to Seller pursuant to this Paragraph 7.1 prior to the
expiration of the Inspection Period, then the right of Purchaser to terminate
this Agreement pursuant to this Paragraph 7.1 shall be waived. If Purchaser
fails to terminate this Agreement as aforesaid, then on January 27, 1997,
Purchaser shall deposit the Additional Xxxxxxx Money with the Escrow Agent.
Failure to do so shall be a default by Purchaser hereunder. If Purchaser
terminates this Agreement by written notice to Seller prior to the expiration
of the Inspection Period: (i) Purchaser shall promptly deliver to Seller copies
of all studies, reports and other investigations obtained by Purchaser
(excluding market data prepared by Purchaser that Purchaser reasonably deems to
be proprietary information) in connection with its due diligence during the
Inspection Period; and (ii) the Xxxxxxx Money theretofore deposited by
Purchaser shall be immediately paid to Purchaser, together with any interest
earned thereon, and neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement, except for Purchaser's obligation
to indemnify Seller and restore the Property, as more fully set forth in this
Paragraph 7.1. Notwithstanding anything contained herein to the contrary, the
terms of this Paragraph 7.1, shall survive the Closing and the delivery of the
Deed and termination of this Agreement.
7.2. Except as otherwise set forth herein to the contrary, including
matters set forth in Paragraph 6.1, Purchaser acknowledges and agrees that it
will be purchasing the Property and the Personal Property based solely upon its
inspections and investigations of the Property and the Personal Property, and
that Purchaser will be purchasing the Property and the Personal Property "AS
IS" and "WITH ALL FAULTS", based upon the condition of the Property and the
Personal Property as of the date of this Agreement, normal wear and tear
excepted. Without limiting the foregoing, Purchaser acknowledges that, except
as may otherwise be specifically set forth elsewhere in this Agreement, neither
Seller nor its consultants, brokers or agents have made any representations or
warranties of any kind upon which Purchaser is relying as to any matters
concerning the Property or the Personal Property, including, but not limited
to, the condition of the land or any improvements comprising the Property, the
existence or non-existence of "Hazardous Materials" (as hereinafter defined),
economic projections or market studies concerning the Property, any development
rights, taxes, bonds, covenants, conditions and restrictions affecting the
Property, water or water rights, topography, drainage, soil, subsoil of the
Property, the utilities serving the Property or any zoning or building laws,
rules or regulations or "Environmental Laws" (hereinafter defined) affecting
the Property. Seller makes no representation or warranty that the Property
complies with Title III of the Americans with Disabilities Act or any fire code
or building code. Purchaser hereby releases Seller and the Affiliates of
Seller from any and all liability in connection with any claims which Purchaser
may have against Seller or the Affiliates of Seller, and Purchaser hereby
agrees not to assert any claims for contribution, cost recovery or otherwise,
against Seller or the Affiliates of Seller, relating directly or indirectly to
the existence of asbestos or Hazardous Materials on, or environmental
conditions of, the Property, whether known or unknown; provided, however, that
the foregoing release shall not apply to liability arising in connection with
the breach of Seller's representation and warranties contained herein.
Notwithstanding the foregoing, to the extent a claim is made against Purchaser
concerning the presence of hazardous materials or substances on the Property
and to the extent such hazardous materials or substances were in existence
during the period of Seller's ownership of the Property ("Primary Claim"), then
Purchaser shall have the right to file suit, or assert liability, against
Seller as a third party defendant, or to otherwise assert a claim against
Seller for contribution, cost recovery or otherwise, but only as it relates to
the Primary Claim. As used herein, "Environmental Laws" means all federal,
state and local statutes, codes, regulations, rules, ordinances, orders,
standards, permits, licenses, policies and requirements (including consent
decrees, judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment or
worker health or safety, all as amended or reauthorized, or as hereafter
amended or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency Planning and Community
Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C. Section 11001 et seq., the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et seq.,
the Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq., the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the
Hazardous Materials Transportation Act (the "Transportation Act"), 49 U.S.C.
Section 1802 et seq. As used herein, "Hazardous Materials" means:
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.2 shall survive
the Closing and the delivery of the Deed and termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as set forth herein, Seller
makes no representation or warranty that such material is complete or accurate
or that Purchaser will achieve similar financial or other results with respect
to the operations of the Property, it being acknowledged by Purchaser that
Seller's operation of the Property and allocations of revenues or expenses may
be vastly different than Purchaser may be able to attain. Purchaser
acknowledges that it is a sophisticated and experienced purchaser of real
estate and further that Purchaser has relied upon its own investigation and
inquiry with respect to the operation of the Property and releases Seller and
the Affiliates of Seller from any liability with respect to such historical
information. Notwithstanding anything contained herein to the contrary, the
terms of this Paragraph 7.3, shall survive the Closing and the delivery of the
Deed and termination of this Agreement.
7.4. Seller has provided to Purchaser the following existing report: Phase
I Environmental Site Assessment, prepared by Law Associates, Inc. as Project
No. 0000-0000-00, dated August 6, 1992 ("Existing Report"). Seller makes no
representation or warranty concerning the accuracy or completeness of the
Existing Report. Purchaser hereby releases Seller and the Affiliates of Seller
from any liability whatsoever with respect to the Existing Report, and the
accuracy and/or completeness of the Existing Report. Furthermore, Purchaser
acknowledges that it will be purchasing the Property with all faults disclosed
in the Existing Report. Notwithstanding anything contained herein to the
contrary, the terms of this Paragraph 7.4 shall survive the Closing and the
delivery of the Deeds and termination of this Agreement.
7.5. Notwithstanding anything contained herein to the contrary,
Purchaser's and Seller's obligation to consummate the transaction set forth
herein is contingent upon Purchaser and Seller agreeing in writing as to which
of the outstanding tenant improvements and leasing commissions set forth on
Exhibit O shall be the obligation of Purchaser and which of the outstanding
tenant improvements and leasing commissions set forth on Exhibit O shall be the
obligation of Seller. In the event Purchaser and Seller cannot agree as to the
allocation of the tenant improvements and leasing commissions set forth on
Exhibit O as described in the preceding sentence, this Agreement shall be null
and void and Purchaser shall receive a refund of the Xxxxxxx Money and any
accrued interest thereon and neither party will have any further liability
under this Agreement except to the extent of the obligations which specifically
survive the termination hereof.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
February 10, 1997 (the "Closing Date"), at a mutually acceptable location in
reasonable proximity to the Property, at which xxxx Xxxxxx shall deliver
possession of the Property to Purchaser. This transaction shall be closed
through an escrow with Title Insurer, in accordance with the general provisions
of the usual and customary form of deed and money escrow for similar
transactions in Virginia, or at the option of either party, the Closing shall
be a "New York style" closing at which the Purchaser shall wire the Purchase
Price to Title Insurer on the Closing Date and prior to the release of the
Purchase Price to Seller, Purchaser shall receive the Title Policy or marked up
commitment dated the date of the Closing Date as well as all other deliveries
to be made to Purchaser hereunder. In the event of a New York style closing,
Seller shall deliver to Title Insurer any customary affidavit in connection
with a New York style closing.
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall execute
and deliver to one another a joint closing statement. In addition, at Closing
Purchaser shall deliver to Seller, or to the Title Company with instructions to
deliver to Seller, the balance of the Purchase Price, an assumption of the
documents set forth in Paragraphs 9.2.3 and 9.2.4 and such other documents as
may be reasonably required by the Title Insurer in order to consummate the
transaction as set forth in this Agreement.
9.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
9.2.1. the Deed (in the form of Exhibit E attached hereto),
subject to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. a special warranty xxxx of sale conveying the Personal
Property (in the form of Exhibit F attached hereto);
9.2.3. assignment and assumption of Intangible Property (in the form
attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. all of Seller's tenant files for the Property which are
located at the Property including original, and/or copies of, the Leases (which
shall be delivered at the Property);
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser, subject to the terms
of Leases;
9.2.9. evidence of the termination of the management and leasing
agreement;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the Leases
and the obligation to refund the security deposits (in the form of Exhibit K);
9.2.11. an updated rent roll certified to Purchaser in accordance
with the provisions of Paragraph 16;
9.2.12. a good standing certificate and evidence of authority of
Seller to sell the Property and due authorization and execution of the
documents required from Seller at Closing;
9.2.13. originals, or the best copies available to Seller, of all
licenses and permits in respect of the Property to the extent in Seller's
possession or control;
9.2.14. a reaffirmation, as of the Closing Date, of Seller's
representations made hereunder, subject to the terms of Paragraph 16.4 herein;
and
9.2.15. plans and specifications of the Property to the extent in
Seller's possession or control.
10. PURCHASER'S DEFAULT. ALL XXXXXXX MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER OF ITS
OBLIGATION TO CONSUMMATE CLOSING PURSUANT TO THIS AGREEMENT, SELLER SHALL
RETAIN ALL OF THE XXXXXXX MONEY THERETOFORE DEPOSITED BY PURCHASER AND THE
INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY, EXCEPT
FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET
FORTH IN PARAGRAPH 7.1 HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL
DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT
OR IMPRACTICAL TO DETERMINE. THERETOFORE, BY PLACING THEIR INITIALS BELOW, THE
PARTIES ACKNOWLEDGE THAT THE XXXXXXX MONEY DEPOSITED FROM TIME TO TIME HAS BEEN
AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S
DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, INCLUDING WITHOUT LIMITATION (I) ITS (AND NOT AN UNRELATED THIRD
PARTY'S) AFFIRMATIVE, WILLFUL ACTION WHICH RESULTS IN THE RECORDING OF AN
ENCUMBRANCE AGAINST THE PROPERTY AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO
TERMINATE THIS AGREEMENT PURSUANT TO PARAGRAPH 5 HEREOF; OR (II) ITS FAILURE TO
EXPEND UP TO $100,000 IF (A) SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A
MINOR UNPERMITTED EXCEPTION IN ACCORDANCE WITH THE TERMS HEREOF FOR A COST NOT
TO EXCEED $100,000 OR (B) THE TITLE INSURER IS WILLING TO INSURE OVER A MINOR
UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $100,000 IN ACCORDANCE WITH THE
TERMS HEREOF, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL XXXXXXX MONEY
THERETOFORE DEPOSITED TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS
AGREEMENT SHALL THEN BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES
SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR
PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET
FORTH MORE FULLY IN PARAGRAPH 7 AND THE RIGHT OF PURCHASER TO RECEIVE FROM
SELLER ITS ACTUAL, DOCUMENTED THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE
OF ITS DUE DILIGENCE HEREUNDER AND THE PREPARATION OF THIS AGREEMENT, NOT TO
EXCEED $100,000 IN THE AGGREGATE. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO
THE CONTRARY, IF SELLER'S DEFAULT IS ITS WILLFUL REFUSAL TO DELIVER ANY OF THE
CONVEYANCE DOCUMENTS SET FORTH IN PARAGRAPHS 9.2.1 THROUGH 9.2.12, INCLUSIVE,
THEN PURCHASER WILL BE ENTITLED TO XXX FOR SPECIFIC PERFORMANCE PLUS ANY
REASONABLE ATTORNEYS' FEES INCURRED BY PURCHASER IN SEEKING TO ENFORCE ITS
RIGHTS TO SPECIFIC PERFORMANCE.
12. PRORATIONS.
12.1. The items described in this Paragraph shall be prorated between the
parties on a per diem basis (on the basis of actual calendar days in the
relevant calendar year) so that credits and charges preceding or on 11:59 P.M.
on the day preceding the Closing Date shall be allocated to Seller and credits
and charges for the period after 11:59 P.M. on the day preceding the Closing
Date and all days thereafter shall be allocated to Purchaser. As of June 1,
1997 and June 1, 1998, Seller and Purchaser shall jointly prepare a final
proration statement in accordance with the provisions of this Paragraph 12 and
a final adjusting payment shall then be made, as provided in Paragraph 12.3
hereof.
12.1.1. Real estate taxes and special assessments (on the basis of
allowable discounts for early payments), general and special assessments and
the like ("Taxes") for the year of the Closing Date, as such Taxes may be
increased or decreased after the Closing, shall be prorated as of the Closing
Date based on the most recent ascertainable amount as part of the proration of
"Maintenance Expenses" (hereinafter defined) in Paragraph 12.1.3. Assessments
payable in installments which are due subsequent to the Closing Date shall be
paid by Purchaser.
12.1.2. Minimum rent (exclusive of delinquent or unpaid rents, but
including prepaid rents) paid under the Leases shall be prorated as of the
Closing Date. Percentage Rent, if any, shall be prorated in connection with
the final adjustment set forth in Paragraph 12.3 herein. Rentals are
delinquent when payment thereof is due on or prior to Closing and unpaid as of
the Closing. Delinquent rentals shall be prorated between Purchaser and Seller
as of the Closing but not until they are actually collected by Purchaser.
Seller shall not be required to provide a credit to Purchaser at Closing for
any delinquent rentals. Purchaser shall have the right to collect any
delinquent rentals, but shall not have the obligation to do so except as
specifically set forth below.
12.1.3. Certain of the Leases provide for reimbursement to lessor
of maintenance and operation charges, Taxes, insurance and other expenses
(herein collectively referred to as "Maintenance Expenses"). Some Leases
provide for a determination of the tenant's share of Maintenance Expenses on an
annual basis but provide that an estimated amount thereof (either in the
aggregate or for specified components thereof) shall be paid by tenant to
lessor monthly during the course of the year with a final adjustment to be made
after the close of the year when such costs and expenses have been finally
determined. Seller and Purchaser have agreed as follows with respect to
Maintenance Expenses:
(i) Except as hereinafter provided, Seller shall be responsible for
the payment of all Maintenance Expenses attributable to periods of time prior
to the Closing Date (without taking into account "stops" for base years in the
Leases) and Seller shall be entitled to receive and retain all reimbursements
thereof collected from tenants on account thereof with respect to the period
through the Closing Date (taking into account "stops" for base years in the
Leases); and Purchaser shall be responsible for the payment of all Maintenance
Expenses attributable to periods of time from and after the Closing Date
(without taking into account "stops" for base years in the Leases) and
Purchaser shall be entitled to receive and retain from the tenants all
reimbursements thereof collected from tenants on account thereof with respect
to the Closing Date and thereafter (taking into account "stops" for base years
in the Leases). Purchaser shall be entitled to a credit against the Purchase
Price for sums that are due (or accrued) and unpaid as of the Closing Date
under any Service Contracts which have been assigned to Purchaser, and Seller
shall be entitled to a credit to the extent that sums have been paid under any
Service Contracts which have been assigned to Purchaser for services to be
performed or goods to be delivered after the Closing Date.
(ii) As a part of the final proration referred to in Section 12.3
hereof:
Maintenance Expenses received from Tenants shall be separately
prorated under each Lease. Upon final determination of Maintenance Expense
owed by a Tenant under its Lease for 1996 and 1997, Seller and Purchaser shall
adjust between themselves amounts owed for such calendar year on account of
Maintenance Expenses, and Seller's allocable share of such Maintenance Expenses
payable by such Tenant shall be equal to an amount determined by multiplying
separately each of the Maintenance Expense received from such Tenant by 100%
for 1996 and by the fraction whose numerator is the number of days in 1997
before the Closing Date, and whose denominator is the total number of days in
1997. Purchaser shall remit to Seller its allocable share, less interim
payments previously retained by Seller, if any, less a pro rata share of costs
of collection paid to third parties, if any. If Seller has retained amounts in
excess of its allocable share, Seller, within fifteen (15) days after notice
from Purchaser of the excess owed Purchaser, shall remit such excess to
Purchaser less a pro rata share of costs of collection, if any paid to third
parties.
12.1.4. To the extent not covered by Paragraph 12.1.3, utility and
fuel charges, including, without limitation, charges for water, electricity,
gas, gasoline, steam, oil and telephones used in connection with the heating,
cooling, lighting, maintenance and operation of the Property and any personal
property included therein or used in connection therewith shall be prorated as
of the Closing Date. Seller shall obtain readings of all utility meters no
earlier than 30 days prior to the Closing Date.
12.1.5. Personal property taxes, if any, for any personal property
transferred to Purchaser shall be prorated as of the Closing Date.
12.1.6. Purchaser shall cause a reconciliation of the Maintenance
Expenses to occur with the tenants no later than April 15, 1997 (with respect
to 1996) and April 15, 1998 (with respect to 1997) requesting payment in
accordance with the terms of the Lease and shall use reasonable, good faith
efforts in collecting from the tenants any under-payments for Maintenance
Expenses for 1996 and 1997. The reconciliation with respect to 1996 shall be
based on information provided solely by Seller or its property manager and
information set forth in the Leases
12.2. The following amounts, if any (the "Adjustments"), without
duplication, shall be made:
12.2.1. Purchaser shall be credited and Seller shall be debited
with an amount equal to all security deposits (and any interest due thereon, if
any) paid by tenants under the Leases.
12.2.2. Purchaser shall receive at Closing a credit equal to the
amount of any unsatisfied obligations for outstanding tenant improvement and
leasing commission obligations set forth in Exhibit O as to which Purchaser and
Seller agreed are the obligations of Seller pursuant to Paragraph 7.5 herein
("Seller's Pre-Existing Obligations"). Purchaser agrees to assume (without a
credit from Seller) the payment of those outstanding tenant improvement and
leasing commission obligations set forth in Exhibit O as to which Purchaser and
Seller agreed are the obligations of Purchaser pursuant to Paragraph 7.5 herein
("Purchaser's Pre-Existing Obligations"). To the extent Seller pays any
amounts toward Purchaser's Pre-Existing Obligations prior to Closing then
Seller shall receive a credit from Purchaser therefor. Seller shall receive a
credit, if any, as provided in Paragraphs 25 and 26. Purchaser shall assume at
Closing all third party construction contracts for the performance of tenant
improvement work and leasing commission agreements in connection with those
leases (i) which give rise to Seller's Pre-Existing Obligations, (ii) which
give rise to Purchaser's Pre-Existing Obligations and (iii) for which Purchaser
is assuming the obligations pursuant to Paragraph 25 herein.
12.2.3. Except for tenant improvement work described on Exhibit O,
attached hereto, all capital and other improvements (including labor and
materials) which are contracted for prior to the Closing will be paid by the
Seller, without contribution or proration form Purchaser.
12.3. In connection with the Prorations and the Adjustments herein and
as provided, there shall be prepared the following statements, schedules and
certificates:
12.3.1. Seller shall prepare or cause to be prepared statements in
reasonable detail showing separately each item prorated or adjusted pursuant to
this Agreement and a detailed reconciliation showing separately each item
prorated or adjusted pursuant to this Agreement and a detailed reconciliation
of the Prorations and Adjustments, such statements to be delivered three (3)
business days prior to the Closing and adjusted as necessary at the Closing.
The parties shall mutually agree after review thereof by Purchaser that said
closing statement accurately reflects the method of proration set forth in this
Agreement.
12.3.2. Purchaser, in cooperation with Seller, shall prepare, not
later than June 1, 1997 (with respect to 1996) and June 1, 1998 (with respect
to 1997), a final proration statement, presenting correctly the Prorations and
Adjustments in accordance with the terms of this Agreement and a statement of
"Post-Closing Receipts" (hereinafter defined). Upon issuance of such
proration statement the parties shall make a proration payment as appropriate
(including, without limitation, a settlement of Post-Closing Receipts). For
purposes of preparation of the foregoing statements and at all reasonable times
thereafter, the parties agree to allow the other party and the other party's
accountants and representatives, to examine so much of the books and records in
the possession and control of the other party as relate to such statements and
final reconciliations with tenants on Maintenance Expenses and other charges at
the place or places where they are then regularly maintained. Seller and
Purchaser shall retain such books and records for three (3) years from the
Closing Date.
12.4. All sums paid following the Closing Date by any tenant of the
Property who is indebted to Seller for rent, additional rent or any other sum
due under its Lease for any period prior to and including the Closing Date,
after receipt by Purchaser of all then currently due amounts by said tenant and
any reasonable actual out-of-pocket collection costs of Purchaser shall be
deemed a "Post-Closing Receipt" until such time as all such indebtedness to
Seller is paid in full. For purposes hereof, "amounts currently due" shall
include amounts which would be due for the then current month. Within ten (10)
days following each receipt by Purchaser of a Post-Closing Receipt (other than
with respect to a Maintenance Expense received from a Tenant which will be
adjusted as provided in Paragraphs 12.1 and 12.3), Purchaser shall pay such
Post-Closing Receipt to Seller. Purchaser shall use reasonable efforts to
collect all amounts which, upon collection, would constitute Post-Closing
Receipts hereunder, but Purchaser shall not be required to institute legal
action on account thereof nor to engage attorneys or other professionals in
such efforts. If by June 1, 1997 (with respect to 1996 Maintenance Expenses
and delinquent rent and 1997 delinquent rent) and June 1, 1998 (with respect to
1997 Maintenance Expenses), Purchaser has not collected all amounts due Seller
and shall not have commenced litigation to collect such Post-Closing Receipts,
Seller, after notice to Purchaser, may, at Seller's expense, commence
litigation to collect such unpaid arrearage; provided, however, that Seller
shall have no right to commence any proceeding (i) to evict the tenant or
recover possession of any tenant's space or interfere with the tenant's or
Purchaser's ability (other than financial impact resulting from such
litigation) to conduct business or take any action which would limit
Purchaser's rights to pursue any remedy Purchaser may have for a default under
any Lease, or (ii) to collect any unpaid arrearage of less than $5,000.
Purchaser may, by written notice to Seller within twenty (20) days of receipt
of Seller's notice, restrict Seller from collecting such unpaid arrearage, but
only if Purchaser first pays Seller such unpaid arrearage, in exchange for
Seller's assignment to Purchaser of all of Seller's rights and causes of action
with respect thereto. Purchaser shall cooperate fully with Seller, at no
expense to Purchaser, in this regard and shall execute such instruments, if
any, as Seller may require in order for Seller to commence and prosecute any
such litigation.
12.5. Paragraph 12 of this Agreement shall survive the Closing and the
delivery and recording of the Deed.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof. Notwithstanding the
foregoing, this Agreement may be assigned by Purchaser without the consent of
Seller to any entity affiliated with Purchaser, or the principals of Purchaser
or an entity retaining Purchaser or the principals of Purchaser as a fee
manager provided that Purchaser remains liable for (i) any act or omission by
Purchaser occurring prior to the effective date of such assignment for which
Purchaser is obligated to indemnify Seller pursuant to Paragraph 7 hereof and
(ii) in accordance with the terms of the last sentence of this Paragraph 14.
Any permitted assignee shall assume in writing all of the obligations of
Purchaser under this Agreement from and after the date of the assignment. If
any assignee of Purchaser under this Agreement petitions or applies for relief
in bankruptcy or said assignee is adjudicated as a bankrupt or insolvent, or
said assignee files any petition, application for relief or answer-seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any present or
future federal, state or other statute, law, code or regulation relating to
bankruptcy, insolvency, or other relief for debtors (collectively, a
"Bankruptcy Filing") on or before the Closing Date, said Bankruptcy Filing
shall be a default under this Agreement and Purchaser shall indemnify Seller
for all costs, attorney's fees and expenses of Seller resulting from Seller's
efforts to obtain the Xxxxxxx Money as liquidated damages and to clear title to
the Property from any encumbrance resulting from the Bankruptcy Filing.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to Insignia Mortgage and Investment Company (to be paid by Seller).
Seller's commission to Insignia Mortgage and Investment Company shall only be
payable out of the proceeds of the sale of the Property in the event the
transaction set forth herein closes. Purchaser and Seller shall indemnify,
defend and hold the other party hereto harmless from any claim whatsoever
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) from anyone claiming by or through the indemnifying party any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated other than to Insignia Mortgage and Investment
Company. The indemnifying party shall undertake its obligations set forth in
this Paragraph 15 using attorneys selected by the indemnifying party and
reasonably acceptable to the indemnified party. The provisions of this
Paragraph 15 will survive the Closing and delivery of the Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by Xxx Xxxxxx, the asset manager (the "Seller's Representative"). Any
knowledge or notice given, had or received by any of Seller's agents, servants
or employees shall not be imputed to Seller, the general partner or limited
partners of Seller, the subpartners of the general partner or limited partners
of Seller or Seller's Representatives. A copy of Paragraph 16.2 shall be
delivered to the on-site manager of the Property within two (2) business days
after the execution by Seller of this Agreement, with a request to advise Xxx
Xxxxxx within two (2) business days after receipt by the on-site manager as to
the accuracy and truthfulness of the representations and warranties. If the
on-site manager indicates that any of the representations or warranties were
incorrect, Seller shall notify Purchaser as to the response of the on-site
manager by no later than January 8, 1997. If the on-site manager responds that
any of the representations or warranties were incorrect then the terms of
Paragraph 16.4 herein shall apply. If Seller fails to so notify Purchaser,
Purchaser shall be entitled to conclude that the on-site manager reviewed the
representations and warranties and that they are correct.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties shall survive Closing for a period of one
hundred twenty (120) days (i.e. the claiming party shall have no right to make
any claims against the other party for a breach of a representation or warranty
after the expiration of one hundred twenty (120) days immediately following
Closing):
(i) Other than as set forth on the litigation list delivered to
Purchaser and attached hereto as Exhibit N, to 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 by reason of Seller's ownership of the Property, including, but not
limited to, judicial, municipal or administrative proceedings in eminent
domain, collection actions, worker's compensation, personal injuries or
property damages alleged to have occurred at the Property or by reason of the
condition or use of or construction on the Property;
(ii) Seller has the power to execute and deliver this Agreement and
consummate the transactions contemplated herein;
(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, nor compliance with the terms of this Agreement and
documents and instruments referenced 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 Property;
(v) To Seller's knowledge, the rent roll attached hereto as Exhibit
M which Seller will update (and certify to Seller's knowledge and subject to
the terms of Paragraph 16.4 herein) as of the Closing Date is accurate as of
the date set forth thereon;
(vi) To Seller's knowledge, 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 set forth in the Leases and the Service
Contracts provided to Purchaser in accordance with this Agreement;
(vii) To Seller's knowledge, there are no maintenance contracts,
Service Contracts or any other contracts affecting or relating to the Property
which will survive the Closing except those to be conveyed to Purchaser in
accordance with the terms of this Agreement;
(viii) To Seller's knowledge, other than as set forth in the
Leases, 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;
(ix) 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 the
FIRPTA Certificate to Purchaser prior to the Closing in accordance with the
terms and provisions of Paragraph 19 hereof;
(x) To Seller's knowledge, the Personal Property listed on Exhibit B
is all located on the Real Property;
(xi) To Seller's knowledge, other than as set forth on Exhibit O, no
leasing commissions are currently due for any of the current terms of the
existing Leases, and no tenant improvements are owing to any tenants on account
of the current terms of the existing leases; and
(xii) Except as may be set forth in the Existing Report, to Seller's
knowledge, Seller has not received any notice from any governmental authority
having jurisdiction over the Property of any uncured violation of any
Environmental Law with respect to the Property.
16.3. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power and authority to execute and deliver this
Agreement and consummate the transactions contemplated herein.
16.4. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement to become untrue in any material
respect, said party shall promptly disclose said information to the other party
hereto. Provided the party making the representation or warranty did not take
any deliberate actions to cause the representation or warranty in question to
become untrue in any material respect, said party shall not be in default under
this Agreement and the sole remedy of the other party shall be to terminate
this Agreement. Notwithstanding anything contained herein to the contrary, if
the status of any of the tenancies changes from the date of the rent roll
attached hereto and the date of the rent roll delivered at Closing, provided
the change in status is not caused by a breach of Seller's covenants contained
in Paragraph 17 herein, then Purchaser shall not have the right to terminate
this Agreement or make any claim for a breach of a representation or warranty
hereunder involving the rent roll or tenancies thereunder; provided, however,
that in the event either (i) Deltek System, Inc. (except with respect to its
lease of Suite 420), (ii) McGuire, Woods, Battle & Xxxxxx or (iii) tenants
collectively occupying 20,000 square feet of the Property validly exercise a
termination right in their respective leases (tenants under leases expiring by
their terms shall not be considered to be exercising a termination right), and
provided such termination is not precipitated by the actions of Purchaser, then
Purchaser shall have the right to terminate this Agreement, and recover its
Xxxxxxx Money and neither party hereto will have any further obligations except
for those which specifically survive the termination hereof. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing.
16.5. Seller shall use good faith efforts to comply with any written
notices to Seller received by Seller prior to Closing of violations of law or
municipal ordinances, orders or requirements issued by any governmental
authority against or affecting the Property (the "Violations"). If any
Violations remain uncured on the Closing Date, Purchaser shall receive a credit
against the Purchase Price equal to the estimated cost of curing the same, as
estimated by an architect or engineer selected by Purchaser and reasonably
satisfactory to Seller. Notwithstanding the foregoing, in the event the cost
to cure the Violation exceeds One Hundred Thousand Dollars ($100,000.00), then
Purchaser at its election, may as its sole remedy in respect thereof either
(A) terminate this Agreement, in which event the parties shall direct the
Escrow Agent to return the Xxxxxxx Money with any interest accrued thereon to
Purchaser and neither party hereto will have any further obligations except for
those which specifically survive the termination hereof or (B) accept the
Property subject to the Violation and receive a credit equal to $100,000.
17. SELLER COVENANTS. Seller covenants as follows:
That until Closing 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 remove any item of
Personal Property from the Real Property or Improvements, except in the
ordinary course of business, (iv) except as set forth in Paragraph 25 herein,
neither cancel, amend nor renew any Lease without the prior written consent of
Purchaser, (v) continue the insurance currently carried by Seller, or such
replacements thereof, on the Property, in amounts and in such form as Seller
may determine using commercially reasonable judgement, (vi) not undertake to
modify the zoning classification of the Property, and (vii) perform when due,
and otherwise comply with, all of Seller's obligations and duties under the
Leases and Service Contracts.
18. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. The Closing and
Purchaser's obligations with respect to the transaction contemplated by this
Agreement are subject to the satisfaction, not later than the Closing (unless
otherwise provided), of the following conditions, and the obligations of the
parties with respect to such conditions are as follows:
18.1. Tenant Estoppel Certificates. Purchaser shall have received the
estoppel certificates referenced in Paragraph 26 hereof.
18.2. Seller's Deliveries. Seller shall have delivered all of the items
required to be delivered by Seller under the terms of this Agreement.
18.3. Title Insurance. As of the Closing, the Title Company shall have
issued or shall have committed to issue the Title Policy to Purchaser.
19. SERVICE CONTRACTS.
19.1. Provided that Purchaser has (i) not terminated this Agreement, and
(ii) is otherwise not in default of its obligations hereunder, Seller agrees
that it shall not enter into any new service, maintenance or operating
agreement (unless Seller deems, in its reasonably discretion, an emergency
situation requiring the prompt entering into any such agreement) without the
prior written consent of Purchaser in each case.
19.2. The service contracts set forth on Exhibit H are all of the service
contracts or maintenance agreements affecting the Property (and are
collectively referenced herein as the "Service Contracts"). Purchaser may, by
written notice delivered to Seller prior to the expiration of the Inspection
Period, instruct Seller to deliver a notice of termination for any Service
Contract. Any cancellation fees shall be borne by Purchaser.
20. LIMITATION OF LIABILITY.
20.1. Neither Seller's partners nor any Affiliate of Seller, nor any
of their respective beneficiaries, shareholders, partners, officers, directors,
agents or employees, heirs, successors or assigns shall have any personal
liability of any kind or nature for or by reason of any matter or thing
whatsoever under, in connection with, arising out of or in any way related to
this Agreement and the transactions contemplated herein, and Purchaser hereby
waives for itself and anyone who may claim by, through or under Purchaser any
and all rights to xxx or recover on account of any such alleged personal
liability.
20.2. Notwithstanding anything contained herein to the contrary,
Purchaser hereby agrees that the maximum aggregate liability of Seller for
actual damages (Purchaser hereby waiving any claim for consequential or
punitive damages), in connection with, arising out of or in any way related to
a breach by Seller under this Agreement or any document or conveyance agreement
in connection with the transaction set forth herein after the Closing shall be
$500,000.00. Purchaser hereby waives for itself and anyone who may claim by,
through or under Purchaser any and all rights to xxx or recover from Seller any
amount greater than said limit.
21. TIME OF ESSENCE. Time is of the essence of this Agreement.
22. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: x/x Xxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxx Xxxxxx Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
0000 Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
(000) 000-0000
(000) 000-0000 (FAX)
and to: Xxxxxx Xxxxxx & Zavis
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Small, Esq.
(000) 000-0000
(000) 000-0000 (FAX)
TO PURCHASER: Xxxxxxxx Xxxx NE, Inc.
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxx
(000) 000-0000
(000) 000-0000 (FAX)
and one copy to: Xxxxxxxxx and Saas
0000 Xxxx-Xxxx Xxxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Attention of X. Xxxxxxx Saas
(000) 000-0000
(000) 000-0000 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or the same day as given if sent by facsimile transmission and
received by 5:00 p.m. Chicago time or on the 4th business day after the same is
deposited in the United States Mail as registered or certified matter,
addressed as above provided, with postage thereon fully prepaid. Any such
notice, demand or document not given, delivered or made by registered or
certified mail, by overnight courier or by facsimile transmission as aforesaid
shall be deemed to be given, delivered or made upon receipt of the same by the
party to whom the same is to be given, delivered or made. Copies of all
notices shall be served upon the Escrow Agent.
23. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution. Seller will forward one (1) copy of the
executed Agreement to Purchaser and will forward the following to the Escrow
Agent:
(A) One (1) fully executed copy of this Agreement; and
(B) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller. Upon confirmation of
the foregoing Purchaser shall deliver the Initial Xxxxxxx Money to Escrow
Agent.
24. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of Virginia, without regard to its conflict of laws provisions.
25. NEW LEASES. Seller agrees to deliver to Purchaser five (5) days prior to
the expiration of the Inspection Period any new leases executed by Seller.
After the expiration of the Inspection Period, Seller shall not execute any new
lease affecting the Property or modify, amend or accept the surrender
(collectively or individually a "Modification Agreement") of any of the Leases
without Purchaser's prior written consent. Upon requesting Purchaser's
consent, Seller shall deliver a complete copy of said proposed lease to
Purchaser with a copy of any brokerage commission agreement and statement as to
the cost of any tenant improvement work, contributions, and brokerage
commissions due or to become due in connection therewith (the "Disclosure
Documents"). Purchaser's consent shall be deemed given if Purchaser has not
responded to the contrary within five (5) business days after receipt of
Seller's written request and the complete copy of said lease or Modification
Agreement and other material. If approved by Purchaser, a complete copy of any
such lease or Modification Agreement shall be delivered to Purchaser within
five (5) days of the full execution thereof. With respect to all new leases or
Modification Agreement executed and delivered to Purchaser five (5) days prior
to the expiration of the Inspection Period and with respect to all other new
leases or Modification Agreement, provided Purchaser has approved the new lease
to the extent said approval is required, leasing costs and commissions, tenant
improvements and contributions, and reasonable attorneys' fees, shall be paid
by Purchaser or credited to Seller at Closing if already paid by Seller
provided such costs and expenses were specifically disclosed to Purchaser in
the Disclosure Documents.
26. TENANT CERTIFICATE CONDITION TO CLOSING.
26.1. The following terms have been defined as follows for convenience
of reference:
(i) "Tenant Certificate" means a certificate, commonly known as an
estoppel certificate, signed by a tenant with respect to its Lease, either in
the form set forth on Exhibit L hereto or on such other form as is
substantially consistent with the requirements of the tenant's lease for such
certificates but in no event dated earlier than December 24, 1996.
(ii) "Seller Tenant Certificate" means a Tenant Certificate signed by
the Seller and limited to the "knowledge of Seller" (as defined in Paragraph 16
herein) with respect to a particular Lease for which the Tenant in question has
either (i) failed to execute and deliver a Tenant Certificate, in which case
the Seller Tenant Certificate shall be in the form of Exhibit L, or (ii)
executed and delivered a Tenant Certificate in a form other than Exhibit L, or
a Tenant Certificate containing less information than required by Exhibit L, in
which case the Seller Tenant Certificate shall be limited to those matters in
Exhibit L which are not addressed in the Tenant Certificate in question.
Seller shall deliver all Seller Tenant Certificates to the on-site manager of
the Property and discuss the accuracy of all Seller Tenant Certificates with
the on-site manager prior to delivery of the Seller Tenant Certificates to
Purchaser.
(iii) "Qualification" means any assertion in a Tenant Certificate
or Seller Tenant Certificate (whether in the form of Exhibit L or otherwise) of
(i) a claim, counterclaim, offset or defense against the landlord, (ii) a
default on the part of the landlord, (iii) unpaid credits, allowances or other
sums due from the landlord prior to the date of the estoppel (other than
expressly disclosed on Exhibit M or Exhibit O attached hereto or pursuant to a
new lease pursuant to Xxxxxxxxx 00 xxxxxx), (xx) an unfulfilled construction or
other obligation on the part of the landlord prior to the date of estoppel
(other than expressly disclosed on Exhibit M or Exhibit O attached hereto or
pursuant to a new lease pursuant to Paragraph 25 herein), or (v) information
which is contrary (x) to the information contained in the rent roll attached
hereto as Exhibit M or (y) the information pertaining to tenant allowances and
concessions and leasing commissions contained on Exhibit O;
(iv) "Unacceptable Qualification" means any Qualification other than
the following:
(a) a Qualification which is expressly disclosed on the rent
roll attached hereto as Exhibit M or the schedule attached hereto as Exhibit O
or a Qualification relating to non-payment of February, 1997 rent, provided the
same is not as a result of a default by Seller; or
(b) a Qualification expressly disclosed in this Agreement or
the Exhibits attached hereto and made a part hereof, such as litigation
disclosed on Exhibit N.
26.2. If a Qualification is not an Unacceptable Qualification, it
shall not affect Purchaser's obligations to close hereunder or give rise to any
liability from Seller to Purchaser.
26.3. Seller shall promptly request a Tenant Certificate in the form
of Exhibit L from all tenants, and shall in good faith pursue the collection of
the same. Seller shall deliver to Purchaser, upon Seller's receipt thereof,
all Tenant Certificates signed by tenants (whether in the form of Exhibit L or
otherwise).
26.4. It shall be a condition to Purchaser's obligations hereunder
(the "Estoppel Condition") that Seller deliver to Purchaser, at or prior to
February 3, 1997 (i) a Tenant Certificate from each tenant of the Property
listed in Exhibit P attached hereto ("Major Tenant"), and (ii) either a Tenant
Certificate or Seller Tenant Certificate from all non-Major Tenants. A Tenant
Certificate or Seller Tenant Certificate shall not be counted toward
satisfaction of the Estoppel Condition if such certificate discloses
Unacceptable Qualifications; provided that Unacceptable Qualifications with an
aggregate "Estoppel Qualification Sum" (hereinafter defined) of less than
$100,000 shall be permitted as provided herein. The "Estoppel Qualification
Sum" shall mean the following:
(i) if the claim asserted arises out of a defect which can be cured,
with the expenditure of money on a one time basis, such as a physical defect,
then such sum shall be calculated by a reasonable estimate of the cost to
repair or remediate said defect; and
(ii) if the claim asserted affects a continuing obligation of a
tenant under the lease, such as the payment of rent, then the claim shall be
calculated by (i) determining the amount of the claim on a per annum basis,
(ii) multiplying said amount by the number of years or partial years said claim
would affect the monetary obligations under the lease and (iii) discounting
said product on a present value basis using a discount rate of 10% per annum.
If the Unacceptable Qualifications have an Estoppel Qualification Sum of
less than $100,000 in the aggregate for all of the Leases, then Seller shall
either (i) grant Purchaser a credit at Closing for an amount equal to the
Estoppel Qualification Sum, or (ii) cure all conditions giving rise to an
Unacceptable Qualification on or before the Closing. The determination to
perform the covenant contained in subparagraphs (i) or (ii) in the preceding
sentence shall be made by Seller in its sole discretion. Provided Seller
performs its covenant in this Paragraph 26.4, the disclosure of Unacceptable
Qualifications having an Estoppel Qualification Sum of less than $100,000 in
the aggregate shall not affect Purchaser's obligations to close hereunder or
give rise to any additional liability from Seller to Purchaser.
26.5. If Seller delivers any Tenant Certificates without any
Qualifications after Closing to Purchaser containing all of the information
herein required from a tenant under a Lease for whom Seller has executed and
delivered a Seller Tenant Certificate at Closing, the Seller Tenant Certificate
executed and delivered by Seller at Closing shall become null and void and the
Tenant Certificate received from the tenant shall be substituted therefor.
Seller's liability under Seller Tenant Certificates shall be limited pursuant
to Paragraph 20 herein.
26.6. If Seller has not satisfied the Estoppel Condition on or before
February 3, 1997, then Purchaser shall have the right to terminate this
Agreement by delivering written notice to Seller on or before February 5, 1997.
If Purchaser exercises its rights to terminate in accordance with the terms of
this Paragraph 26.6, this Agreement shall be null and void without further
action of the parties and all Xxxxxxx Money theretofore deposited by Purchaser
together with any interest accrued thereon, shall be returned to Purchaser, and
neither party shall have any further liability to the other, except for those
obligations which specifically survive the terms hereof. If Purchaser does not
terminate this Agreement pursuant to the first sentence of this Paragraph 26.6,
the parties shall proceed to Closing and (i) Purchaser shall receive a credit
at Closing equal to the amount of the Estoppel Qualification Sum of the
Unacceptable Qualifications contained in the Tenant Certificates and Seller
Tenant Certificates, up to an aggregate amount of $100,000 or (ii) Seller shall
cure all conditions giving rise to an Unacceptable Qualification Sum up to an
aggregate amount of $100,000. The determination to perform the covenant
contained in subparagraphs (i) or (ii) in the preceding sentence shall be made
by Seller in its sole discretion.
27. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
28. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
29. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
XXXXXXXX XXXX NE, INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Its: EVP
----------------------------------
SELLER:
TYSONS CORNER LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Tysons Corner Partners, Inc., an Illinois general
partnership, its general partner
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
-----------------------------------
Its: Authorized Representative
-----------------------------------
_____________________ of Insignia Mortgage and Investment Company
("Seller's Broker") executed this Agreement in its capacity as a real estate
broker and acknowledges that the fee or commission due it from Seller as a
result of the transaction described in this Agreement is as set forth in that
certain Listing Agreement, dated ___________, 1996 between Seller and Seller's
Broker (the "Listing Agreement"). Seller's Broker also acknowledges that
payment of the aforesaid fee or commission is conditioned upon the Closing and
the receipt of the Purchase Price by the Seller. Seller's Broker agrees to
deliver a receipt to the Seller at the Closing for the fee or commission due
Seller's Broker and a release, in the appropriate form, stating that no other
fees or commissions are due to it from Seller or Purchaser.
INSIGNIA MORTGAGE AND INVESTMENT COMPANY
By:
-----------------------------------
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Quitclaim Xxxx of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
L - Tenant Certificate
M - Rent Roll
N - Litigation
O - Outstanding Brokerage Commissions and Tenant Improvement Work
P - Major Tenants
