SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 9, 1996
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THE PARKWAY COMPANY
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(Exact name of Registrant as specified in its charter)
Texas 0-12505 74-2123597
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
300 One Jackson Place, 188 E. Capitol St., Jackson, MS 39201
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (601) 948-4091
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(Former name or former address, if changed since last report)
FORM 8-K
THE PARKWAY COMPANY
Item 2. Acquisition or Disposition of Assets.
On July 9, 1996, Parkway Virginia, Inc., a
wholly-owned subsidiary of The Parkway Company
("Parkway") purchased three office buildings in
northern Virginia from MBL Life Assurance Corporation,
an unrelated party. The 8381 and 8391 Courthouse Road
Buildings are each three-story buildings connected by a
common courtyard located in Tysons Corner, Virginia.
The two buildings contain an aggregate of 94,929 square
feet of leaseable space and have a 333 space parking
area. The Courthouse Road Buildings were 97% leased at
the date of purchase. The Cherokee Business Center is
a three-story office building located in Springfield,
Virginia containing 53,710 square feet of leaseable
space and a 221 space parking area. Cherokee Business
Center was 94% leased at the date of purchase. The
total purchase price for the three buildings was
$11,050,000 and was funded from existing cash reserves.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
It is impractical to provide the audited
financial statements of 8381 and 8391 Courthouse Road
and Cherokee Business Center required by Item 7(a) of
Form 8-K, but such financial statements will be filed
as soon as practical but not later than 60 days after
the filing of this Form 8-K.
(b) Pro Forma Consolidated Financial Statements.
The pro forma consolidated financial
statements will be filed with the audited financial
statements of 8381 and 8391 Courthouse Road and
Cherokee Business Center.
(c) Exhibits.
(10) Agreement for Sale and
Purchase By and Between MBL Life Assurance
Corporation, a New Jersey Corporation and The
Parkway Company, a Texas Corporation dated June 7,
1996. Parkway agrees to furnish supplementally to
the Securities and Exchange Commission on request
a copy of any omitted schedule or exhibit to this
agreement.
FORM 8-K
THE PARKWAY COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
DATE: July 23, 1996
THE PARKWAY COMPANY
BY: /s/Sarah P. Clark
Sarah P. Clark
Vice President,
Chief Financial Officer
and Secretary
June 7, 1996
AGREEMENT OF SALE AND PURCHASE
by and between
MBL LIFE ASSURANCE CORPORATION,
A NEW JERSEY CORPORATION
and
THE PARKWAY COMPANY,
A TEXAS CORPORATION
CENTENNIAL WOODFORD MEWS BUILDING,
8381-91 OLD COURTHOUSE ROAD
City of Vienna,
County of Fairfax, Virginia
(RE# 559)
AND
CHEROKEE BUILDING,
5510 CHEROKEE AVENUE
City of Alexandria,
County of Fairfax, Virginia
(RE# 583)
INDEX
Article 1 SALE AND PURCHASE
Article 2 CONSIDERATION FOR CONVEYANCE
2.1 Purchase Price
2.2 Allocation of purchase Price
Article 3 EARNEST MONEY
3.1 Initial Deposit
3.2 Additional Deposit
Article 4 SURVEY AND TITLE POLICY
4.1. Permitted Exceptions
4.2 Survey
4.3 Title Policy
Article 5 ADDITIONAL ITEMS TO BE FURNISHED TO PURCHASER BY
SELLER
5.1 Submission Items
5.2 Additional Submission Items
5.3 Confidentiality
5.4 Information
Article 6 INSPECTION AND AUDIT
6.1 Inspection Period
6.2 Condition of Subject Properties
Article 7 DAMAGE OR DESTRUCTION PRIOR TO THE CLOSING
7.1 Damage or Destruction
7.2 Purchaser's Option in Excess of Amount
7.3 Purchaser's Option Less Than Amount
7.4 Estimated Cost of Repair, Replacement and
Restoration
7.5 Condemnation
Article 8 CONDITION OF PROPERTY
8.1 Condition of Property
8.2 Purchaser's Additional Waivers
8.3 Management of Property
8.4 Modification of Renewals of Leases
8.5 Purchaser's Representations and Warranties
8.6 Seller's Representations and Warranties
Article 9 CLOSING
9.1 Date of Closing
9.2 Delivery of Items at Closing by Seller
9.3 Delivery of Items at Closing by Purchaser
9.4 Prorations
9.5 Errors and Omissions
9.6 Purchaser's Costs
9.7 Seller's Costs
Article 10 REAL ESTATE COMMISSION
10.1 Commissions
10.2 Broker Indemnifications
Article 11 REMEDIES OF DEFAULT
11.1 Termination of Contract by Purchaser
11.2 Purchaser's Default
11.3 Seller's Default
Article 12 MISCELLANEOUS
12.1 Not ices
12.2 Effective Date
12.3 Assignment
12.4 Laws
2.5 Modification
12.6 Authority
12.7 Times and Dates
12.8 Descriptive Headings
12.9 Entire Contract
12.10 Construction
12.11 Non-Recordable
12.12 Third Party Beneficiary
12.13 Legal Relationship
12.14 Contemplation of Closing
12.15 Return of Documents
12.16 Effect of Holidays
12.17 Completion of Documents
Exhibits
A-1 Legal Description of Centennial Woodford Mews Building
A-2 Legal Description of Cherokee Building
B-1 Survey of Centennial Woodford Mews property
B-2 Survey of Cherokee property
C - Special Warranty Deed
D - Quitclaim Bill of Sale and General Assignment
E - Assignment and Assumption Agreement
F - Notice to Tenants
G - Certification of Non-Foreign Status by Corporation
H - Seller's Affidavit of Title
I-1 - Phase I Environmental Audit of Centennial Woodford
I-2 - Phase I Environmental Audit of Cherokee
J-1 - Centennial Woodford Mews Building Title Commitment
J-2 - Cherokee Title Commitment
K - Service Contracts
L - Personal Property
M - Security Deposits
N - Rent Roll
AGREEMENT OF SALE AND PURCHASE
THIS AGREEMENT OF SALE AND PURCHASE ("Contract") is entered
into by and between MBL LIFE ASSURANCE CORPORATION, a New Jersey
corporation ("Seller") and THE PARKWAY COMPANY, a Texas
corporation ("Purchaser").
ARTICLE 1
Sale and Purchase
Subject to the terms and provisions hereof, Seller agrees to
sell to Purchaser, and Purchaser agrees to purchase from Seller:
(a) all right, title and interest of Seller in and to
the real property described on EXHIBITS "A-1 and A-2"
attached hereto and made a part hereof, together with all
right, title and interest of Seller in and to any and all
strips or gores, roads, easements, streets and ways
bounding such real property, and rights of ingress and
egress thereto (collectively, the "Real Property");
(b) all right, title and interest of Seller in and to
all improvements situated upon the Real Property, including,
but not by way of limitation, those certain buildings,
structures, fixtures and other improvements of every kind
and nature presently situated on, in, under or hereafter
erected, installed or used in, or about the Real Property
and commonly known as the (i) Centennial Woodford Mews
Building, 8381-91 Old Courthouse Road, Vienna, Virginia; and
(ii) Cherokee Building, 5510 Cherokee Avenue,
Alexandria, Virginia (collectively, the "Improvements");
(c) all right, title and interest of Seller in and to
all personal property of every kind and nature now or
hereafter installed, located, situated or used in, on or
about, or in connection with the operation, use and
enjoyment of the Real Property or the Improvements
(collectively, the "Personal Property");
(d) all right, title and interest of Seller in all
material intangible personal property used in the operation
and/or management of the Real Property and Improvements and
in the repair, operation and maintenance of the Personal
Property and includes, without limitation (i) all assignable
guaranties and warranties (including those pertaining to
construction of the Improvements, if any); (ii) all
assignable licenses and other permits relating to the
Subject Properties or the operation thereof; (iii) all
assignable contracts, agreements and contract rights; (iv)
all utility connections related to the Subject Properties;
(v) all rights to use the name "Centennial Woodford Mews
Building" and "Cherokee Building" on a non-exclusive basis;
and (vi) all leases, tenancies and rental agreements or
arrangements with tenants, and security, damage and other
deposits and payments which have been collected by Seller
and are in Seller or Seller's property manager's possession
with respect to the Leases and not retained by Seller in
accordance with the terms of the Leases (collectively the
"Intangible Property").
The Real Property, Improvements, Personal Property and
Intangible Property are hereinafter collectively referred to as
the "Subject Properties
ARTICLE 2
CONSIDERATION FOR CONVEYANCE
2.1 PURCHASE PRICE The purchase price for the Subject
Properties is and shall be the sum of Eleven Million Fifty
Thousand and No/100 Dollars ($11,050,000.00) (the "Purchase
Price"), which shall be due and payable in cash by wire transfer
of immediately available federal funds at the closing of title
and delivery of the deed ("Closing").
2.2 ALLOCATION OF PURCHASE PRICE The Purchase Price has been
allocated as follows in accordance with Section 1060 of the
Internal Revenue Code.
Centennial Woodford Mews Building $7,559,000.00
Cherokee Building $3,491,000.00
TOTAL $11,050,000.00
The Seller and Purchaser stipulate and agree that they shall
adhere to such allocation for federal, state and income tax
reporting purposes. The terms of this Section 2.2 shall survive
Closing of this Contract.
ARTICLE 3
EARNEST MONEY
3.1 INITIAL DEPOSIT Upon Purchaser's execution of this
Contract, Purchaser shall deliver to the Seller four (4) fully
executed counterparts of this Contract, and shall simultaneously
deliver to the Title Company (as defined in Section 4.3) by wire
transfer of immediately available federal funds, or cashier's
check or bank check drawn by a bank satisfactory to Seller the
amount of One Hundred Thousand and No/l00 Dollars ($100,000.00)
(the "Earnest Money"). Purchaser shall also provide the Title
Company with its federal tax identification number. The Title
Company shall, promptly upon receipt of the Earnest Money and
Purchaser's federal tax identification number, place the Earnest
Money in an interest bearing account in a federally insured
institution approved by Seller. The interest thus derived shall
become part of the Earnest Money and shall be paid to the party
entitled to the Earnest Money in accordance with the terms
hereof. If the sale contemplated by this Contract is consummated
in accordance with the terms hereof, the Earnest Money including
the interest gained thereon shall be applied to the Purchase
Price to be paid to Seller at the Closing. Except as otherwise
provided herein, the Earnest Money shall be nonrefundable to
Purchaser upon the Effective Date of this Contract (as defined in
Section 12.2).
This Contract shall be of no force and effect until such time as
(i) Purchaser has complied with each of the terms of this Section
3.1; (ii) Seller has executed this Contract; and (iii) Seller has
sent to Purchaser one (1) fully executed counterpart of this
Contract in accordance with Section 12.2 of this Contract;
provided, however, Seller shall not execute this Contract until
Purchaser has deposited the Earnest Money with the Title Company.
In the event the Title Company cannot comply with the obligations
pursuant to this Article, Purchaser and Seller shall mutually
select another title company. Within five (5) days after the
Effective Date, the Title Company will deliver an insured closing
letter to Seller in a form acceptable to Seller. The Title
Company must sign this Contract as evidence that the Title
Company agrees to be bound by the obligations contained herein.
3.2 ADDITIONAL DEPOSIT On or before the expiration date of
the Inspection Period (as defined in Section 6.1), Purchaser
shall deliver to the Title Company an additional Two Hundred
Thousand and No/100 Dollars ($200,000.00) (sometimes hereinafter
referred to as the "Additional Earnest Money") which shall be
deposited into such account and become part of the Earnest Money.
The failure of Purchaser to deliver the Additional Earnest Money,
in the amount and within the time period required hereby, shall
entitle Seller, at its sole and unfettered election, to terminate
this Contract, in which event the Earnest Money deposited by
Purchaser shall be paid to the Seller and no party hereto shall
have any further rights or liabilities hereunder, except for
Purchaser's liability pursuant to Section 6.1 hereof.
However, if Seller has not received Purchaser's Notice of
Termination (as defined in Section 6.2) prior to the expiration
of the Inspection Period, Seller may elect not to terminate this
Contract and to demand immediate receipt by the Title Company of
the Additional Earnest Money. The failure of Purchaser to pay to
the Title Company the Additional Earnest Money will be a default
hereunder for which Seller may elect any of its rights under
Section 11.2 hereof, including, without limitation, the right to
pursue Seller's claim against Purchaser for the full amount of
the Additional Earnest Money and all costs and expenses of
collection, including, without limitation, reasonable attorneys'
fees, and interest on such amounts due hereunder at the rate of
twelve percent (12%) per annum from the date of the expiration of
the Inspection Period until such amounts shall have been paid in
full.
IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT UNLESS EXPRESSLY
PROVIDED HEREIN TO THE CONTRARY, UPON THE EFFECTIVE DATE OF THIS
CONTRACT, THE EARNEST MONEY SHALL THEREAFTER BE NONREFUNDABLE TO
PURCHASER.
ARTICLE 4
SURVEY AND TITLE POLICY
4.1 PERMITTED EXCEPTIONS The Subject Properties are sold and
are to be conveyed subject to the following:
(a) Zoning and building laws1 restrictions, regulations and
ordinances of the municipality in which the Real Property
is located, if any.
(b) Covenants, conditions, easements and restrictions of
record.
(c) State of facts an accurate survey or personal
inspection would show.
(d) All notes or notices of violations of law or municipal
ordinances, orders or requirements noted in or issued by
the Departments of Housing and Buildings, Fire, Labor,
Health, or other Federal, State or Municipal
Departments having jurisdiction, against or affecting the
Subject Properties at the date of the Closing.
(e) Any matters as set forth in Sections 4.2 and/or 4.3
hereof not objected to by Purchaser prior to the expiration
of the Inspection Period, and any matters objected to by
Purchaser prior to the expiration of the Inspection Period
which the Title Company (as such term is defined in Section
4.3 hereof) is willing to affirmatively insure.
Provided, however, that Purchaser shall only be obligated to
accept the Subject Properties subject to the "Permitted
Exceptions" as such term is defined in Section 4.3.
4.2 SURVEY By Purchaser's execution of this Contract,
Purchaser acknowledges receipt of (i) a survey affecting the
Centennial Woodford Mews Building property as determined and
prepared by Paciulli, Simmons and Associates, Ltd. dated May 16,
1996 attached hereto as Exhibit "B-i" and made a part hereof, and
(ii) a survey affecting the Cherokee Building property as
determined and prepared by Paciulli, Simmons and Associates, Ltd.
dated May 16, 1996 attached hereto as Exhibit" B-2" and made a
part hereof (collectively referred to as the "Survey"). Purchaser
may cause the Survey to be updated/revised and/or recertified at
Purchaser's sole cost and expense. Any matter identified on the
updated/revised/ recertified Survey must be objected to by the
Purchaser prior to the expiration of the Inspection Period in
accordance with the provisions of Section 4.3 hereof or it shall
be deemed a permitted exception. If this Contract is terminated,
Purchaser will return the Survey and any copies thereof to
Seller.
4.3 TITLE POLICY Purchaser hereby acknowledges the receipt
and acceptance of (i) that certain title commitment number 9676-
50002 dated effective December 27, 1995 on the Centennial
Woodford Mews property attached hereto as Exhibit "J-1" and made
a part hereof (the "Centennial Woodford Mews Title Commitment")
together with copies of all documents constituting exceptions to
Seller's title as reflected in the Centennial Woodford Mews; and,
(ii) that certain title commitment number 9676-50003 dated
effective December 27, 1995 on Cherokee property attached hereto
as Exhibit "J-2" and made a part hereof (the "Cherokee Title
Commitment") together with copies of all documents constituting
exceptions to Seller's title as reflected in the Cherokee Title
Commitment (said Centennial Woodford Mews Title Commitment and
the Cherokee Title Commitment sometimes hereinafter referred to
as the "Title Commitment") for the issuance of one (1) Owner's
Policy of Title Insurance covering both properties from Chicago
Title Insurance Company, 7921 Jones Branch Drive, 6th Floor,
McLean1 Virginia 22102 (the "Title Company") attn: Susan B.
Poff, phone (703) 902-9700, facsimile (703) 903-9395. Within
five (5) days after the Effective Date, Seller at Seller's sole
cost and expense, will furnish to Purchaser an update of said
Title Commitment together with copies of any additional
exceptions to Seller's title as reflected in the updated Title
Commitment. Purchaser shall have until on or before the
expiration of the Inspection Period to review the Survey, Title
Commitment and the documents referred to therein and referenced
in Section 4.1(a) through (e) hereinabove and to deliver to
Seller in writing such objections as Purchaser may have to
anything contained or set forth in the Title Commitment or
Survey. Any item to which Purchaser does not object prior to the
expiration of the Inspection Period shall be deemed to be a
permitted exception ("Permitted Exceptions"). As to items to
which Purchaser makes objections, Seller may elect, in its sole
discretion, to cure such objections, such cure to include, but
not to be limited to, the Title Company providing affirmative
insurance over such objection(s) in a form acceptable to
Purchaser. In the event Seller elects not to cure such matters
prior to the Closing, Seller will notify Purchaser of such
election and Purchaser shall have the right, within five (5) days
after Seller's notice, to either (i) terminate the Contract, in
which event it shall receive a full refund of the Earnest Money,
and no party hereto shall have any further rights hereunder
except for Purchaser's liability pursuant to Article 6 hereof, or
(ii) waive such title and survey matters, without any reduction
in the Purchase Price, and proceed to the Closing, whereupon such
waived title and survey matters shall also be deemed
"Permitted Exceptions".
In the event Seller elects to cure such objections and
Seller is unable to cure same by the Closing, then Seller may
extend the Closing for a period of time thereafter in order to
cure same, but in no event shall the Closing be extended for more
than sixty (60) days after the originally scheduled date (as same
shall be amended pursuant to the terms of this Contract). If
cure is unable to be effected within such extended sixty-day
period, then this Contract shall terminate and the Earnest Money
shall be paid to the Purchaser.
ARTICLE 5
ADDITIONAL ITEMS TO BE FURNISHED
TO PURCHASER BY SELLER
5.1 SUBMISSION ITEMS Within five (5) days after the
Effective Date, Seller shall furnish to Purchaser the following:
(a) Copies of the most recent tax statements on the Subject
Properties.
(b) Copies of all operating statements for the Subject
Properties for the last two (2) calendar years, i.e., 1994 and
1995, and for the current year 1996 through April 30, 1996.
5.2 ADDITIONAL SUBMISSION ITEMS With the execution of this
Contract the Purchaser hereby acknowledges the receipt of the
following from Seller:
(a) A phase I environmental site assessment on Centennial
Woodford Mews Building dated September 18, 1991 prepared by ATEC
Environmental Services attached hereto as Exhibit "I-i" and made
a part hereof.
(b) A phase I environmental site assessment on the Cherokee
Building dated September 3, 1991 prepared by ATEC Environmental
Services attached hereto as Exhibit "1-2" and made a part hereof.
(c) A list of all service contracts, warranties or other
agreements affecting the operation of the Subject Properties
(herein collectively the "Miscellaneous Contracts"), relating or
pertaining to the Subject Properties in the possession of
Seller's property manager ("Manager") attached hereto as Exhibit
"K" and made a part hereof. Purchaser shall assume all
of the Miscellaneous Contracts at Closing, provided such
Miscellaneous Contracts permit such assumption.
(d) A list of the Personal Property attached hereto as
Exhibit "L" and made a part hereof.
(e) A list of the tenant security deposits and letters of
credit representing tenant security deposits in the possession of
Seller and/or Manager attached hereto as Exhibit "M" and made a
part hereof.
(f) A Rent Roll (herein so called) attached hereto as
Exhibit "N" and made a part hereof certified by Seller's property
manager as true and correct to the best of their knowledge
prepared as of the first day of the month of the Effective Date,
which Rent Roll shall reflect, as of the date thereof, in
relation to all leases or other tenancy agreements with
respect to the Improvements ("Leases") together with copies of
each and every Lease identified on the Rent Roll executed and in
effect as of the Effective Date:
(i) suite number;
(ii) name of tenant;
(iii) monthly rental; and
(iv) the expiration date of the Lease.
At Closing, Seller shall provide Purchaser with an updated
Rent Roll dated not earlier than five (5) days prior to Closing.
The items described in Sections 5.1 and 5.2 are hereinafter
collectively referred to as the "Submission Items". Seller and
Purchaser acknowledge that the Subject Properties were acquired
by Seller's predecessor through foreclosure and that
Seller's obligations under this Article 5 are limited to records
and information to which Seller and/or Seller's property manager
("Manager") have access.
5.3 CONFIDENTIALITY All of the Submission Items and any
other reports, documents or information given by Seller to
Purchaser in connection herewith shall be returned to Seller or
kept in confidence by Purchaser pursuant to the terms and
conditions of that certain Confidentiality Agreement Between
Broker and Recipient dated May 29, 1996 ("Confidentiality
Agreement").
5.4 INFORMATION As an essential inducement to Seller to sell
the Subject Properties to Purchaser on the favorable terms and
conditions set forth in this Contract, Purchaser acknowledges and
agrees that: (i) all documents, materials, reports, studies and
other information delivered or disclosed to Purchaser by Seller
(the "Information") are being provided to Purchaser for
informational purposes only and only as an accommodation to
Purchaser; (ii) Seller had not made, is not making, and will not
make any representation, warranty or promise of any kind, express
or implied, concerning the accuracy or completeness of all or any
part of the Information; and (iii) any inaccuracy,
incompleteness, or deficiency in any part of the Information
shall be solely the risk and responsibility of Purchaser, shall
not be chargeable in any respect to Seller, and shall not form
the basis of any claims by Purchaser against Seller, its
employees, agents, or assigns such claims being expressly waived
and relinquished by Purchaser (upon Purchaser's request, however,
Seller will consider waiving any conflicts of interest in the
event Purchaser desires to engage any such person or entity to
prepare, author, compile or create any documents, materials,
reports, studies or other information directly for
Purchaser's benefit).
ARTICLE 6
INSPECTION AND AUDIT
6.1 INSPECTION PERIOD Purchaser shall have twenty (20) days
after the Effective Date (the "Inspection Period") within which
to make all audits, inspections or investigations desired
by Purchaser, subject to Seller's requirements as hereinafter set
forth. Purchaser and Purchaser's accountants, attorneys or other
representative(s) (which shall not exceed four (4) persons at any
one time, including Purchaser and its representatives, each of
which persons must be accompanied by an authorized employee or
representative of Manager or Seller) shall have the right, during
regular business hours and with reasonable notice, to:
(a) interview the Manager regarding the management or
operation of the Subject Properties and to inspect the
Leases and books and records of the Subject Properties that
are in the Manager's possession;
(b) inspect the books, records and files relating to the
condition or operation of the Subject Properties that are in the
possession or control of Seller or its Manager;
(c) subject to the rights of tenants occupying space in the
Improvements, at its sole risk and expense, inspect the Real
Property and Improvements and make such tests, surveys and
inspections as Purchaser deems necessary, including, without
limitation, soil tests, topographical surveys, structural and
foundation surveys, concrete tests, roof inspections,
equipment inspections and environmental inspections.
Purchaser shall exercise (and cause its agents and employees to
exercise) due care and ordinary prudence in performing such
surveys, inspections and tests and shall not exercise such right
in a manner that materially interferes with the operation of the
Subject Properties. If the transactions contemplated hereby
are not consummated, Purchaser, at its own cost and expense,
promptly shall repair any damage to the Subject Properties
resulting from such surveys, tests or inspections. Purchaser
shall indemnify, defend, save and hold harmless Seller from and
against any and all claims, liens (including, without limitation,
mechanic's and materialman's liens), actions, suits, proceedings,
costs, expenses, damages or other liabilities, including, without
limitation, attorneys' fees and court costs, all as incurred,
arising out of the rights granted to Purchaser pursuant to the
terms of this Inspection Period. Purchaser, its contractors and
representatives shall keep confidential any and all information,
documents and reports obtained or prepared by them relating to
the Subject Properties in accordance with the terms and
conditions of the Confidentiality Agreement. At Seller's request,
Purchaser shall furnish to Seller copies of all studies, tests
and surveys undertaken and completed in connection with such
inspections and at Seller's request therefore, certify same to
Seller. The terms of this Section 6.1 shall survive the Closing
or the termination of this Contract.
6.2 CONDITION OF SUBJECT PROPERTIES In the event that
Purchaser, during the Inspection Period, disapproves of the
condition of the Subject Properties or the Submission Items, in
its sole and absolute discretion, Purchaser may terminate this
Contract by delivering, prior to the expiration of the Inspection
Period, written notice to Seller specifically and unequivocally
terminating this Contract ("Notice of Termination"). In such
event, Seller shall be paid the Earnest Money, and no party
hereto shall have any further obligations hereunder except
Purchaser's liabilities under Section 6.1 hereof. In the event
that Purchaser fails within the Inspection Period to give the
Notice of Termination, Purchaser shall be deemed to have accepted
the condition of the Subject Properties and Submission Items and
Purchaser may not thereafter terminate this Contract by reason of
the condition of the Subject Properties or Submission Items. If
Purchaser notifies Seller within the Inspection Period that
Purchaser approves the condition of the Subject Properties and
Submission Items, then Purchaser shall be deemed to have waived
Purchaser's right to terminate under this Section 6.2 and may not
thereafter terminate this Contract by reason of the condition of
the Subject Properties and Submission Items.
ARTICLE 7
DAMAGE OR DESTRUCTION PRIOR TO THE Closing
7.1 DAMAGE OR DESTRUCTION Until Closing, the risk of loss or
damage to the Subject Properties by fire or other casualty is
assumed by Seller, but without any obligation on the part of
Seller to repair or replace any such loss or damage unless Seller
elects to do so as hereinafter provided. Seller shall notify
Purchaser of the occurrence of any such loss or damage to the
Real Property and Improvements ("Seller's Notice") within ten
(10) days after such occurrence or by the day of Closing,
whichever first occurs. If the estimated cost of repair,
replacement or restoration of such loss or damage (as defined in
Section 7.4 hereof) is equal to or in excess of One Million One
Hundred Five Thousand and No/100 Dollars ($1,105,000.00) to the
Real Property and Improvements, either party may upon notice to
the other, terminate this Contract, in which event this Contract
shall be terminated and of no further force or effect and no
party hereto shall thereafter have any further rights against, or
obligations or liabilities to, any other by reason of this
Contract except for Purchaser's liability pursuant to Section 6.1
hereof and any monies paid by Purchaser as Earnest Money shall be
returned to Purchaser and all insurance proceeds shall be paid to
Seller. If Seller elects to make such repairs and restorations,
Seller's Notice shall set forth an adjourned date for Closing;
provided, however, whether or not Seller elects to make such
repairs and restorations, if the cost to repair, replace or
restore such loss or damage is equal to or in excess of One
Million One Hundred Five Thousand and No/100 Dollars
($1,105,000.00), Purchaser shall have the following options: (i)
to declare the Contract canceled and of no further force or
effect and to receive a refund of all monies paid by Purchaser as
Earnest Money, in which event no party shall thereafter have any
further rights against, or obligations or liabilities to, any
other by reason of this Contract except for Purchaser's liability
pursuant to Section 6.1 hereof, or (ii) to complete the purchase
in accordance with this Contract without reduction of the
Purchase Price; provided, however, Seller shall turn over to
Purchaser at the Closing the net proceeds actually collected by
Seller under the provisions of any hazard insurance policies to
the extent that they are attributable to loss of or damage to the
Real Property and Improvements, plus the amount of Seller's
deductible, if any, less any sums theretofore expended by Seller
in repairing or replacing such loss or damage or in collecting
such proceeds and assign Seller's rights thereto to Purchaser.
7.2 PURCHASER'S OPTION IN EXCESS OF AMOUNT If the estimated
cost of repair, replacement or restoration of such loss or damage
to the Real Property and Improvements is equal to or in excess of
One Million One Hundred Five Thousand and No/100 Dollars
($1,105,000.00), Purchaser may exercise the resulting option
under (i) or (ii) of Section 7.1 above only by written notice
given to Seller within ten (10) business days after receipt of
Seller's bid from a contractor in accordance with Section 7.4
hereof. If Purchaser does not give such notice to Seller within
the prescribed time period, Purchaser shall be deemed to have
elected its option under Section 7.1 (ii).
7.3 PURCHASER'S OPTION LESS THAN AMOUNT If the estimated
cost of repair, replacement or restoration of such loss or damage
to the Real Property and Improvements is less than One Million
One Hundred Five Thousand and No/100 Dollars ($1,105,000.00), and
Seller does not elect to make such repairs and restorations,
Purchaser shall complete the purchase in accordance with Section
7.1 (ii) above.
7.4 ESTIMATED COST OF REPAIR, REPLACEMENT AND RESTORATION The
term "estimated cost of repair, replacement and restoration" or
"estimated value of such portion of the Real Property and
Improvements to be taken" shall mean a firm bid for the actual
cost of repair and restoration obtained by Seller, within twenty
(20) days of receipt of Seller's Notice, from a reputable
contractor regularly doing business in the locality where Subject
Properties are located.
7.5 CONDEMNATION If an amount equal to or in excess of One
Million One Hundred Five Thousand and No/100 Dollars
($1,105,000.00) of the Subject Properties is taken prior to the
Closing by any governmental or quasi-governmental body or agency
in the exercise of the power of eminent domain, then either
party, upon notice to the other, may terminate this Contract, in
which event the Earnest Money will be paid to the Purchaser and
all condemnation awards and proceeds shall be paid to Seller and
no party hereto shall thereafter have any further rights against,
or obligations or liabilities to, any other by reason of this
Contract except for Purchaser's obligations and liabilities
pursuant to Section 6.1 hereof. If this Contract is not so
terminated and the Closing hereunder is completed, all
condemnation awards and proceeds shall be paid to Purchaser. If
the governmental authority exercising its power of eminent domain
has not determined the value of that portion of the Real Property
and Improvements to be taken, then the estimated value of such
portion to be taken shall be determined in accordance with
Section 7.4 hereof except that such determination shall be made
by an appraiser mutually selected by Purchaser and Seller.
ARTICLE 8
CONDITION OF PROPERTY
8.1 CONDITION OF PROPERTY IT IS EXPRESSLY UNDERSTOOD AND
AGREED THAT PURCHASER SHALL ACCEPT THE CONVEYANCE OF THE SUBJECT
PROPERTIES IN THEIR PRESENT CONDITION, "AS-IS, WHERE-IS," SUBJECT
TO ALL PATENT AND LATENT DEFECTS, IF ANY, WITH NO REPRESENTATION
OR WARRANTY BY SELLER EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS
CONTRACT AS TO THEIR FITNESS, SUITABILITY, HABITABILITY, OR
USABILITY, INCLUDING BUT NOT LIMITED TO, (I) THE QUALITY OR
CONDITION OF THE IMPROVEMENTS AND THE REAL PROPERTY INCLUDING,
WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, (II) THE MANNER
OF OPERATING THE SUBJECT PROPERTIES AND THE EXPENSES RELATED
THERETO, (III) THE COMPLIANCE OF THE SUBJECT PROPERTIES WITH ANY
LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY GOVERNMENTAL BODY,
IT BEING UNDERSTOOD THAT THE SELLER'S PREDECESSOR IN TITLE
ACQUIRED THE SUBJECT PROPERTIES BY VIRTUE OF A SUBSTITUTE
TRUSTEE'S DEED ARISING OUT OF A FORECLOSURE SALE, AND (IV) THE
NATURE AND EXTENT OF ANY SERVITUDES, RIGHTS-OF-WAY, LEASES,
POSSESSION, LIENS, ENCUMBRANCES, LICENSES, RESERVATIONS,
CONDITIONS OR OTHERWISE EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS
CONTRACT. PURCHASER ACKNOWLEDGES THAT IT IS NOT RELYING UPON ANY
REPRESENTATION, WARRANTY, STATEMENT OR OTHER ASSERTION WITH
RESPECT TO THE SUBJECT PROPERTIES' CONDITION MADE BY SELLER AND
ACCEPTS THE SUBJECT PROPERTIES UNDER THE EXPRESS UNDERSTANDING
THAT THERE ARE NO EXPRESS OR IMPLIED WARRANTIES MADE BY SELLER
WITH RESPECT TO THE CONDITION OR VALUE OF THE SUBJECT PROPERTIES
(EXCEPT FOR LIMITED WARRANTIES OF TITLE SET FORTH IN ANY OF THE
CLOSING DOCUMENTS). PURCHASER DECLARES THAT IT IS EXPERIENCED IN
THE OWNERSHIP AND OPERATION OF PROPERTIES SIMILAR TO THE SUBJECT
PROPERTIES AND THEREFORE ACKNOWLEDGES THAT IT WILL RELY SOLELY ON
ITS OWN INVESTIGATION AND EXAMINATION OF THE SUBJECT
PROPERTIES,,WHICH IT IS QUALIFIED TO MAKE, AND NOT ON ANY
INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER. SELLER MAKES
NO REPRESENTATION AS TO ANY ENVIRONMENTAL MATTERS RELATING TO THE
SUBJECT PROPERTIES INCLUDING, WITHOUT LIMITATION, SOIL
CONDITIONS, PURCHASER HAVING BEEN GIVEN THE INSPECTION PERIOD TO
SATISFY ITSELF THAT THERE ARE NO HAZARDOUS MATERIALS (DEFINED IN
THIS SECTION 8.1) ON OR IN THE SUBJECT PROPERTIES THAT WOULD
CAUSE EITHER STATE OR FEDERAL AGENCIES TO ORDER A CLEANUP OF THE
SUBJECT PROPERTIES UNDER ANY ENVIRONMENTAL LAW. AS USED HEREIN,
THE TERM "ENVIRONMENTAL LAW" SHALL MEAN AND INCLUDE COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT, 42 U.S.C.
9601, ET SEQ., RESOURCE CONSERVATION AND RECOVERY ACT 42 U.S.C.
6901, ET SEQ. AND ALL OTHER SIMILAR EXISTING AND FUTURE FEDERAL,
STATE AND MUNICIPAL STATUTES, RULES, REGULATIONS AND ORDINANCES
GOVERNING THE ENVIRONMENT OR THE GENERATION, DISPOSAL OR STORAGE
OF ANY HAZARDOUS MATERIALS, ALL AS AMENDED FROM TIME TO TIME, AND
ALL RULES AND REGULATIONS PROMULGATED THEREUNDER. THE TERM
"HAZARDOUS MATERIALS" SHALL MEAN AND INCLUDE ASBESTOS,
POLYCHORINATED BIPHENYLS, PETROLEUM PRODUCTS AND ANY OTHER
HAZARDOUS OR TOXIC MATERIALS, WASTES AND SUBSTANCES THAT ARE
DEFINED AS SUCH IN ANY ENVIRONMENTAL LAW. SELLER MAKES NO
REPRESENTATION AS TO THE CONDITION OR VALUE OF THE SUBJECT
PROPERTIES. PURCHASER HEREBY WAIVES AND RELEASES SELLER OF AND
FROM ANY CLAIMS, ACTIONS, CAUSES OF ACTION, DEMANDS, RIGHTS,
LIABILITIES, OBLIGATIONS, DAMAGES, COSTS, EXPENSES OR
COMPENSATION WHATSOEVER, DIRECT OR INDIRECT, KNOWN OR UNKNOWN,
FORESEEN OR UNFORESEEN, THAT PURCHASER NOW HAS OR THAT MAY ARISE
IN THE FUTURE ON ACCOUNT OF OR IN ANY WAY GROWING OUT OF OR IN
CONNECTION WITH THE ECONOMIC, PHYSICAL OR ENVIRONMENTAL CONDITION
OF THE SUBJECT PROPERTIES, OR ANY ENVIRONMENTAL LAW OR APPLICABLE
REGULATION. THE PROVISIONS OF THIS SECTION 8.1 SHALL BE CONTAINED
IN THE DEED TO BE DELIVERED TO PURCHASER AT CLOSING, SHALL
SURVIVE CLOSING AND THE FUTURE TRANSFER OF ANY OR ALL OF THE
SUBJECT PROPERTIES BY
PURCHASER.
8.2 PURCHASER'S ADDITIONAL WAIVERS Purchaser agrees that
Seller shall not be responsible or liable to Purchaser for any
construction defects, errors, omissions, or on account of any
other conditions affecting the Subject Properties as Purchaser is
purchasing the Subject Properties AS IS, WHERE IS and WITH ALL
FAULTS. Purchaser or anyone claiming, by, through or under
Purchaser, hereby fully releases Seller, its employees, officers,
directors, representatives and agents from any and all claims
that it may now have or hereafter acquire against Seller, its
employees, officers, directors, representatives and agents for
any cost, loss, liability, damage, expense, demand, action or
cause of action arising from or related to any construction
defects, errors, omissions, or other conditions affecting the
Subject Properties. Purchaser further acknowledges and agrees
that this release shall be given full force and effect, according
to each of its express terms and provisions, including, but not
limited to, those relating to unknown and unsuspected claims,
damages, and causes of action.
8.3 MANAGEMENT OF PROPERTIES Seller agrees that it will
continue to cause the Subject Properties to be managed and
operated by Manager through the Closing in a manner consistent
with the manner currently being practiced. Seller makes no
representations and assumes no responsibility with respect to
continued occupancy of the Real Property and Improvements or any
part thereof by any tenant or tenants now in possession. Prior
to the Closing, Seller shall be entitled, but not obligated, to
enforce the rights under any Lease or any tenancy by litigation
in any court- having jurisdiction over landlord and tenant
matters. The removal by Seller of tenants that are in default
under their leases shall not give rise to any claim on the part
of Purchaser or affect this Contract in any manner whatsoever.
After the Closing, Seller shall be entitled to collect arrearages
due Seller prior to Closing under any Lease or any tenancy (i) by
litigation in any court having jurisdiction over landlord and
tenant matters, or (ii) in any other manner Seller may elect.
8.4 MODIFICATION OR RENEWALS OF LEASES Seller will advise
Purchaser of, any pending renewal or modification of an existing
Lease or any proposed new lease of space in the Improvements,
that is acceptable to Seller, in its sole and absolute
discretion, and will provide to Purchaser written specifications
("Specifications") of certain terms and conditions with respect
thereto, including, among other things, location of the leased
premises, rental rate, term, options or renewals (if any), tenant
improvement costs and leasing commissions. Purchaser shall have
a period of five (5) business days after receipt of Seller's
Specifications within which to approve or disapprove in writing
such proposed modifications or renewal of an existing Lease or
such proposed new lease for space in the Improvements. Notice
to Seller of such approval or disapproval must be received by
Seller within such five (5) business day period. If Purchaser so
approves, then all costs incurred in connection with such renewal
or extension of an existing Lease or such new lease, including,
without limitation, tenant improvements and leasing commissions
(collectively "Costs"), shall be the responsibility of Purchaser
and Purchaser shall reimburse Seller at Closing for Costs
reasonably incurred by Seller in connection therewith. If
Purchaser fails to approve or disapprove within such five (5)
business day period, Purchaser shall be deemed to have approved
such proposed modification or renewal of the existing Lease or
such proposed new Lease.
If within such five (5) day period, Purchaser disapproves of
any such renewal or extension of an existing Lease or a proposed
new lease, Seller shall not enter into any of such agreements
unless this Contract is terminated. Notwithstanding the
provisions of this Section 8.4, any renewal, expansion or option
granted to a tenant under an existing Lease shall not be subject
to the provisions of this Section 8.4 and Purchaser shall accept
the Subject Properties subject to such Lease, as so renewed,
expanded or optioned, and shall assume all duties,
obligations and liabilities under any and all agreements in
relation to paying any Costs in connection therewith including,
without imitation, reimbursing Seller at Closing for any Costs
reasonably incurred. Purchaser's duties and obligations under
this Section 8.4, including, without limitation, its obligations
to pay all Costs, shall survive the Closing.
Notwithstanding anything contained herein to the contrary,
Seller shall at Closing either (i) provide evidence of the
payment of, or (ii) apply as a credit to the Purchase Price the
actual amount incurred or to be incurred less any amount actual
paid by Seller with respect to any tenant improvements, moving
expenses, and/or leasing commissions associated with the
lease(s), renewal or expansion with tenants in the Subject
Properties executed prior to the Effective Date of this Contract.
8.5 PURCHASER'S REPRESENTATIONS AND WARRANTIES Purchaser
makes the following representations and warranties, as of the
date of execution of this Agreement and as of the Closing Date
which shall survive Closing and conveyance of the Subject
Properties to
Purchaser:
(i) AUTHORITY. Purchaser is a corporation duly
formed, organized, existing and in good standing
under the laws of the State of Texas; Purchaser
has full legal right, power and authority to
execute and fully perform its obligations under
this Agreement, without the need for any further
action under its governing instruments; and the
persons executing this Agreement and the other
documents required hereunder are the duly
designated officers of Purchaser and are
authorized to do so.
(ii) INSPECTION. Purchaser has made, or will make
prior to expiration of the Inspection Period,
an independent investigation, to the extent
Purchaser deems necessary or appropriate,
concerning the physical condition, value,
development, use, marketability, feasibility and
suitability of the Subject Properties, including,
without limitation, land use, zoning and other
governmental restrictions.
(iii) NO OTHER SELLER REPRESENTATIONS. Except
as expressly set forth herein, Purchaser
acknowledges that no representations or
warranties, express or implied, have been made by
Seller or Seller's representatives
8.6 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller makes
the following representations and warranties, as of the date of
execution of this Agreement and as of the Closing Date, which
shall survive conveyance of the Subject Properties to Purchaser:
(i) AUTHORITY. Seller is a corporation, duly formed,
organized, existing and in good standing under the
laws of the State of New Jersey; Seller has full
legal right, power and authority to execute and
fully perform its obligations under this
Agreement, without the need for any further action
under its governing instruments; and the persons
executing this Agreement and the other documents
required hereunder are the duly designated off
officers of Seller and are authorized to do so.
(ii) MARKETABLE TITLE. As of Closing, Seller will own
the Personal Property free and clear of all liens,
-claims, encumbrances, and rights of others, and
will convey same to Purchaser. Seller is not a
party to any contract agreement, or commitment to
sell, convey, assign, transfer or otherwise
dispose of any portion or portions of the
Subject Properties.
(iii) FIRPTA. Seller is not a "foreign person"
(as defined in the Internal Revenue Code and
Income Tax Regulations). The provisions of the
Foreign Investment in Real Property Tax Act of
1980, as amended, are not applicable to the Sale.
ARTICLE 9
CLOSING
9.1 DATE OF CLOSING The Closing hereunder shall take place
at the offices of the Title Company at 9:00 a.m. The Closing
shall be on or before five (5) days after the expiration of the
Inspection Period.
9.2 Delivery of Items At Closing By Seller At the Closing,
Seller shall deliver or cause to be delivered to Purchaser and
Purchaser shall accept and execute where indicated, each of the
following items (if Purchaser's execution is required by the
terms of such items):
(a) special warranty deed, in the form attached hereto
as Exhibit "C" and made a part hereof duly executed and
acknowledged by Seller, conveying title in the Real
Property and Improvements to Purchaser, subject to the
Permitted Exceptions;
(b) bill of sale in the form attached hereto as
Exhibit "D" and made a part hereof duly executed and
acknowledged by Seller, conveying to Purchaser the Personal
Property, without warranty, subject to the Permitted
Exceptions;
(c) an assignment, without recourse in the form
attached as Exhibit "E" and made a part hereof, duly
executed and acknowledged by Seller, assigning to Purchaser
all of Seller's interest in (i) the Leases and security
deposits (that are in Seller's or Manager's possession),
(ii) those Miscellaneous Contracts Purchaser is assuming
pursuant to Section 5.1(b) hereof, (iii) the warranties,
guaranties, and bonds applicable to the Subject Properties
and (iv) any and all outstanding tenant improvement
contracts and/or capital contracts (collectively
referred to herein as "TI Contracts") any and all rights to
use the names "Cherokee Building" and the "Centennial
Woodford Mews Building
(d) transfer of all security deposits in the form of
letters of credits that are in Seller's possession;
(e) a letter in the form attached as Exhibit "F" and
made a part hereof to be addressed to each tenant under the
Leases advising such tenant that the Subject Properties
have been sold to Purchaser and that Purchaser has assumed
the obligation to refund such tenant's security deposit in
accordance with such Lease, with the exact amount of the
deposit specified for such tenant;
(f) executed originals of all Leases or occupancy
agreements and security deposits of tenants (the security
deposits shall be transferred to Purchaser by separate
check issued from the Manager's account), that are in
possession of Manager or Seller, relating to all or any
part of the Subject Properties;
(g) all keys to all locks on the Subject Properties
in possession of Seller;
(h) copies of Miscellaneous Contracts, TI Contracts,
Leases in Seller's possession, assigned to Purchaser;
(i) a certification in the form attached as Exhibit
"G" and made a part hereof executed by Seller containing
the following:
(i) the Seller's U.S. Taxpayer Identification
Number;
(ii) the business address of Seller; and
(iii) a statement that Seller is not a foreign person within
the meaning of Sections 1445 and 7701 of the Internal
Revenue Code ("IRC") (i.e., Seller is not a
nonresident alien, foreign corporation, foreign
partnership, foreign trust or foreign estate as those
terms are defined in the IRC and applicable
Income Tax Regulations);
(j) a Seller's Affidavit of Title in the form
attached as Exhibit "H" and made a part hereof executed by
the Seller; and
(k) deliver to Purchaser such evidence or documents as
may be required by the Purchaser or the Title Company
evidencing the status and capacity of Seller and the
authority of the person or persons who are executing the
various documents on behalf of the Seller in connection
with the sale of the Subject Properties.
9.3 Delivery of Items at Closing By Purchaser At the
Closing, Purchaser shall:
(a) deliver to Seller the Purchase Price, allowable
prorations and similar items;
(b) deliver to Seller such evidence or documents as
may be required by the Seller or the Title Company
evidencing the status and capacity of Purchaser and the
authority of the person or persons who are executing the
various documents on behalf of Purchaser in connection with
the acquisition of the Subject Properties;
(c) join Seller in the execution of the document
described in 9.2(c) above, which document shall include an
assumption agreement wherein Purchaser assumes any and all
liabilities or obligations of Seller under Sections 8.1 and
8.2 hereof, the Leases, tenants' security deposits,
Miscellaneous Contracts TI Contracts and any other
agreements, contracts, licenses or permits assigned to
Purchaser by Seller and agrees to indemnify and hold Seller
harmless from any claims and expenses arising after
Closing, (including, without limitation, reasonable
attorneys' fees) in relation to such matters, items or
documents; and
(d) join Seller in the execution of the documents
described in items 9.2(b), 9.2(e) above, and the execution
of closing statements as may be prepared by the Seller
and/or Title Company.
9.4 Prorations At the Closing, the following items shall
be adjusted and prorated between Seller and Purchaser on a per
diem basis as of 12:01 A.M. on the day of Closing:
(a) Rents and other charges payable under the Leases.
For purposes hereof, all rents and other charges payable
under the Leases for the calendar month in which the
Closing occurs shall be prorated on the basis of sums
actually collected by Seller prior to the Closing. All
rent collections prior to the Closing shall be first
applied to arrears for prior months, with any balance to be
applied to current monthly charges. From and after
Closing, all rent collections shall be first applied to
current monthly charges, with the balance, -if any, to be
applied to arrears for prior months. After the Closing,
Purchaser shall have a duty and obligation to Seller to
remit such unpaid rents and other charges to Seller when
collected by Purchaser. Purchaser shall use reasonable
efforts to collect any such unpaid rents or other charges
in arrears. The provisions of this Section 9.4(a) shall
survive the Closing.
(b) Payments under the Miscellaneous Contracts assumed
by Purchaser on the basis of the actual payments owed
thereunder. If the actual payments owed under the
Miscellaneous Contracts are not known at the Closing, the
proration of such payments shall be made on the basis of the
best evidence then available, which proration shall be
final.
(c) Real estate, ad valorem and personal property
taxes, sewer rents and charges, and other state, county and
municipal taxes, charges and assessments (special or
otherwise) which may be paid in installments shall be
prorated on the basis of the calendar year for which the
same are levied, imposed or assessed (i.e. real estate
taxes imposed on the calendar year 01/01/96 to 12/31/96).
Tax bills are sent out in June and December. Therefore,
the second-half real estate tax prorations shall be
calculated on the 1995 second half tax bills. All tax
prorations shall be final at Closing. Seller shall pay
regular installments of special assessments that have
become due prior to the Closing. All installments of
special assessments or portions due on or after the Closing
shall be assumed and paid by Purchaser.
(d) Charges for water, electricity, gas and other
utilities. The consumption of all water, electricity, gas
and other utilities is measured by meter, and Seller shall
furnish a current reading of each meter at the Closing,
which readings shall have been made either as of midnight
on the day prior to the Closing or as close to the Closing
as reasonably possible, and in any event Seller shall be
responsible for paying charges therefor to midnight on the
day prior to the Closing or submitting proof that such
charges were previously paid. In the event meter readings
current as of midnight on the day prior to the Closing are
not available at Closing, then Seller shall pay at Closing
the charges to the date of the most recent reading or
submit proof that such charges were previously paid, and
the parties further agree to notify the utility companies
to read the meters as soon as possible after Closing and
adjust and prorate such utility charges when the actual
readings are available.
9.5 Errors and Omissions Any errors and omissions in
computing apportionments at Closing shall be promptly corrected,
which obligation survives the Closing.
9.6 purchaser's Costs At Closing, Purchaser shall pay for
the following:
(i) the premium charges and surcharges for an owner's title
policy, and endorsement, if any, to be issued to Purchaser;
(ii) all escrow fees and any and all other title related fees
charged by the Title Company;
(iii) costs of recording all documents delivered by Seller to
Purchaser or by Purchaser to Seller at the Closing;
(iv) the attorneys' fees of Purchaser's counsel in connection
with or relating to the transactions contemplated by
this Contract;
(v) all deed stamps, intangible taxes and other transfer taxes
including but not limited to the County and States taxes
(Grantor's and State recordation taxes);
(vi) any updated/revisions/recertification to Survey;
(vii) mortgage, conveyance and tax certificate fees charged
by the Title Company; and
(viii) any other expenses not expressly stipulated
herein as expenses to be paid by Seller.
9.7 SELLER'S COSTS At Closing, Seller shall pay for the
following:
(i) the cost of the Survey;
(ii) the attorney's fees of Seller's
counsel in connection with or relating to
the transactions contemplated by this
Contract; and
(iii) the title commitment charges, if any.
ARTICLE 10
REAL ESTATE COMMISSION
10.1 COMMISSIONS Seller and Purchaser hereby covenant
and agree one with the other that no real estate commissions,
finders' fees or brokers' fees have been or will be incurred in
connection with this Contract or the transactions contemplated
hereby,- except as specified in this Section 10.1. A commission
("Commission") in the amount of Three Hundred Seventeen Thousand
Two Hundred Thirty and No/100 Dollars ($317,230.00) shall be
payable by Seller to Barnes, Morris, Pardoe & Foster, Inc. 1420
Spring Hill Road, Suite 200, Mc Lean, Virginia 22102 ("Broker")
at Closing if and when Closing occurs. Broker hereby indemnifies
and holds Seller and Purchaser harmless, from and against any
claims, causes of action or liabilities, including, without
limitation, reasonable attorneys' fees and court costs, that may
be incurred with respect to any claim for other real estate
commissions, brokers' fees or finders' fees relative to this
Contract. The provisions of Section
10.1 shall survive the Closing or termination of this Contract.
10.2 BROKER INDEMNIFICATIONS By executing this Contract,
Broker agrees that if for any reason whatsoever (including,
without limitation, the act or default of the Purchaser or Seller
hereunder or the unavailability or uninsurability of the title to
the Subject Properties) the Closing should not occur or this
Contract should be canceled or terminated by Seller or Purchaser,
then Seller shall be released and the Broker hereby releases
Seller, from any and all liability, claim or cause of action
whatsoever, and the Commission shall not be due or payable to
Broker. The Commission, if any, shall be the sole compensation
paid to Broker. Broker shall not be entitled to reimbursement for
any expenses or any other obligations Broker incurs in relation
to or in connection with the performance of its services in
relation to this Contract. Upon payment of the Commission, if
any, to Broker, Seller shall have no further duty or obligation
to Broker and payment of such Commission, if any, by Seller shall
release Seller as of such date from any and all claims Broker may
have against Seller relating to the Subject Properties whether
known or unknown and whether past, present or future.
ARTICLE 11
REMEDIES OF DEFAULT
11.1 TERMINATION OF CONTRACT BY PURCHASER If this Contract
is terminated by Purchaser in accordance with any one or more
Sections hereof that entitle Purchaser to terminate this
Contract, then the Earnest Money shall be paid to Seller by the
Title Company, (unless otherwise specifically stated herein) and
no party hereto shall have any further obligations to any other
hereunder, except for Purchaser's obligations and liabilities
under Section 6.1 hereof.
11.2 PURCHASER'S DEFAULT If the Purchaser fails or refuses
to consummate the purchase of the Subject Properties for any
reason other than Seller's failure to tender performance of
Seller's obligations hereunder, or termination of the Contract
pursuant to a right granted to Purchaser hereunder to do so, then
the Earnest Money shall be paid to the Seller by the Title
Company as liquidated damages. Such amount is agreed upon by and
between Seller and Purchaser as liquidated damages due to the
difficulty and inconvenience of ascertaining and measuring actual
damages and the uncertainty thereof; and no other damages, rights
or remedies (except as provided in Section 6.1 hereof) shall in
any case be collectible, enforceable or available to Seller, but
Seller shall accept said cash payments as Seller's total damages
and relief.
11.3 SELLER'S DEFAULT In the event of Seller's default
hereunder, this Contract shall be terminated, the Earnest Money
shall be returned to Purchaser by the Title Company and as its
sole remedy Purchaser may receive from Seller the sum of
$100,000.00 as liquidated damages. Such amount is agreed upon by
and between Seller and Purchaser as liquidated damages due to the
difficulty and inconvenience of ascertaining and measuring actual
damages and the uncertainty thereof; and no other damages, rights
or remedies shall in any case be collectible, enforceable or
available to Purchaser, but Purchaser shall accept said cash
payment as Purchaser's total damages and relief.
ARTICLE 12
MISCELLANEOUS
12.1 NOTICES All notices, demands, consents, or other
communications of any type (collectively "Notices") given by
Seller to Purchaser or by Purchaser to Seller whether required by
this Contract or in any way related to any of the transactions
contracted for herein shall be void and of no effect unless given
in accordance with the provisions of this Section 12.1. All
notices shall be in writing and shall be delivered to the person
to whom the notice is directed, either in person or by United
States Mail1 as a registered or certified item, return receipt
requested. Notices may also be sent by facsimile transmission
("fax") or overnight mail. Notices delivered by mail shall be
effective three (3) days after deposited in a post office or with
respect to an overnight service, effective as of the day
designated for receipt, other proper depository, as the case may
be, under the care or custody of the United States Postal Service
or other carrier, as the case may be, enclosed in a wrapper with
the proper postage affixed and addressed, if to the Purchaser, as
follows:
The Parkway Company
188 East Capital Street, Suite 300
Jackson, Mississippi 39201
Attn: James Ingram
Phone: (601) 948-4091
Fax: (601) 949-4077
with a copy to: Steven Hendrix, Esq.
Forman Perry
188 East Capital Street, Suite 1200
Jackson, Mississippi 39201
Phone: (601) 960-8603
Fax: (601) 960-8609
and addressed, if to the Seller, as follows:
Nora E. Miller
MBL Life Assurance Corporation
520 Broad Street
Real Estate Investment Division
Newark, New Jersey 07102-3111
Phone: (201) 481-8425
Fax: (201) 268-4332
with a copy to: Hilary A. Kruce, Esq.
MBL Life Assurance Corporation
520 Broad Street
Law Department
Newark, New Jersey 07102-3111
Phone: (201)481-8550
Fax: (201) 268-4335
Any party hereto may change the address or contact for notice
specified above by giving the other party ten (10) days advance
written notice of such change of address or contact.
12.2 EFFECTIVE DATE This Contract may be executed in
multiple counterparts on the respective dates set forth below,
each of which shall constitute an original, but which together
shall constitute but one Contract. Execution by Purchaser hereof
shall constitute an offer by Purchaser to Seller to purchase the
Subject Properties for the price and on and subject to the terms
and conditions herein set forth, which offer shall automatically
terminate and be of no force or effect unless Seller shall
execute and return to Purchaser one (1) fully executed
counterpart of this Contract within ten (10) business days after
Seller's receipt of the Contracts. Notwithstanding the above
and Article 3 hereof, the date of execution hereof by Seller
shall be the effective date of this Contract (the "Effective
Date")
12.3 ASSIGNMENT This Contract may not be assigned by
Purchaser, provided, however, Purchaser shall have the right to
sell, assign or transfer its right, title and interest in this
contract to an entity in which Purchaser holds of record and
beneficially at least a fifty-one percent (51%) interest and that
is at all times under the "control" of Purchaser. The term
"control", for the purposes of this Section 12.3, shall mean
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of an entity1
whether through the ownership of voting securities, by contract
or otherwise. Notwithstanding the above, Purchaser's right to
assign or transfer shall be contingent upon Purchaser providing
to Seller, at least five (5) business days prior to the Closing,
the name of the proposed assignee, the address to which Purchaser
requests rents to be forwarded post Closing for completion of the
Notice to Tenants attached as Exhibit "J" hereto, and any other
information that Seller may require in relation to such proposed
assignment.
12.4 LAWS This Contract shall be construed and interpreted
in accordance with the laws of the State of Virginia and the
obligations of the parties hereto are and shall be performable in
the county wherein the Subject Properties are located. Where
required for proper interpretation, words in the singular shall
include the plural; the masculine gender shall include the neuter
and feminine, and vice versa.
12.5 MODIFICATION This Contract may not be modified or
amended, except by an agreement in writing signed by Seller and
Purchaser. Seller and Purchaser may waive any of the conditions
contained herein or any of the obligations of the other
hereunder, but any such waiver shall be effective only if in
writing and signed by the party waiving such conditions or
obligations.
12.6 AUTHORITY Each person executing this Contract warrants
and represents that he is fully authorized to do so.
12.7 TIMES AND DATES TIME IS OF THE ESSENCE IN THIS CONTRACT
and all times and dates shall be in accordance with Newark, New
Jersey Time.
12.8 DESCRIPTIVE HEADINGS The descriptive headings of the
several Articles, Sections and paragraphs contained in this
Contract are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions
hereof.
12.9 ENTIRE CONTRACT This Contract, including the Exhibits
hereto and the Submission Items, constitutes the entire agreement
among the parties, whether written or oral, pertaining to the
subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the parties
in connection therewith. No representation1 warranty, covenant,
agreement or condition not expressed in this Contract shall be
binding upon the parties hereto or shall affect or be effective
to interpret, change or restrict the provisions of this Contract
unless the parties have complied with the terms of Section 12.5
hereof.
12.10 CONSTRUCTION This Contract shall not be construed more
strongly against any party regardless of who was more responsible
for its preparation.
12.11 NON-RECORDABLE This Contract, a memorandum of this
Contract, an interest in ownership of the Subject Properties or
any other document that would constitute an exception to Seller's
title shall not be recorded and the provisions hereof shall not
constitute a lien on the Subject Properties.
12.12 THIRD-PARTY BENEFICIARY It is specifically understood
and agreed that no person or other entity shall be a third-party
beneficiary hereunder, and that none of the provisions of this
Contract shall be for the benefit of or be enforceable by anyone
other than the parties hereto, and that only the parties hereto
shall have any rights hereunder.
12.13 LEGAL RELATIONSHIP Nothing herein shall be construed
as to constitute or establish any type of joint venture,
partnership, or any other type of legal relationship between the
parties other than the vendor-vendee relationship established
hereby between Seller and Purchaser.
12.14 CONTEMPLATION OF CLOSING If Purchaser closes the sale
contemplated herein, Purchaser shall be conclusively deemed to
have waived any breach or default by Seller of any
covenant, representation or warranty under this Contract (but not
under any of the documents executed at Closing that shall
thereafter continue to be effective in accordance with their
terms).
12.15 RETURN OF DOCUMENTS Upon termination of this Contract
for any reason by Purchaser or Seller, Purchaser shall have the
obligation to return all documents and copies thereof (including
the Survey) and any other information or documentation resulting
from Purchaser's inspections, to Seller. Neither Seller nor the
Title Company shall have any obligation to return the last Five
Thousand and No/100 Dollars ($5,000.00) of the Earnest Money to
Purchaser upon any permitted termination of this Contract by
Purchaser until all of such documents and copies thereof
(including the Survey) have been returned to Seller.
12.16 EFFECT OF HOLIDAYS In the event any date specified or
computed under this Contract for the performance of an obligation
by either Seller or Purchaser, or for the occurrence of any event
provided for herein, shall be a Saturday, Sunday or "recognized
holiday" (defined for purposes hereof as any holiday observed by
federal law), then the date for such performance or occurrence
shall be automatically extended to the next calendar day which is
not a Saturday, Sunday or recognized holiday.
12.17 COMPLETION OF DOCUMENTS Seller and Purchaser
understands and agrees that the forms of closing documents which
are attached as exhibits hereto may have to be modified in order
to be made appropriate for the transaction contemplated herein.
It is anticipated by the parties that such modifications will
consist of inserting appropriate information in the blanks
contained in the forms of closing documents attached as exhibits
hereto. Seller and Purchaser agree that any such changes will be
mutually agreed upon by Seller and Purchaser.
EXECUTED on this 10th day of June, 1996, by Purchaser.
THE PARKWAY COMPANY
By: James M. Ingram
Name: James M. Ingram
Title: Vice President
EXECUTED on this 10th day of June, 1996, by Purchaser.
THE PARKWAY COMPANY
By: Steven G. Rogers
Name: Steven G. Rogers
Title: President
EXECUTED on this 11th day of June, 1996, by Seller.
MBL LIFE ASSURANCE CORPORATION
By: Michael S. Ryan
Name: Michael S. Ryan
Title: Senior Vice President
The Contract has been received by the Title Company this
12th day of June, 1996. By its execution of this Contract,
below, the Title Company agrees to be bound by the terms hereof
to the extent that the Contract imposes duties upon the Title
Company, and subject to the attached general conditions of
escrow.
CHICAGO TITLE INSURANCE COMPANY
By: R. Eric Taylor
Name: R. Eric Taylor
Title: Commercial Counsel
Broker executes this Contract solely for the purpose of
confirming and agreeing to the terms of Article 10 hereof.
BARNES, MORRIS, PARDOE & FOSTER, INC.
By: Martin J. Ryan
Name: Martin J. Ryan
Title: Senior Vice President
