<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 14, 1998
AMERICAN INDUSTRIAL PROPERTIES REIT
(Exact Name of Registrant as Specified in its Charter)
TEXAS 1-9016 75-6335572
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or Organization) Identification Number)
6210 NORTH BELTLINE ROAD, SUITE 170, IRVING, TEXAS 75063
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (972) 756-6000
<PAGE> 2
The undersigned Registrant hereby amends its Current Report on Form 8-K dated
October 14,1998, which was filed with the Securities and Exchange Commission on
October 29, 1998, to include the financial statements for the A&A Portfolio
Properties and the A&A Virginia Properties (together the "A&A Portfolio" or the
"Properties") required by Item 7 (a) and the pro forma financial information
required by Item 7 (b).
The Trust evaluated the historical sources of revenue and nature of expenses
related to the Properties as part of its due diligence procedures. The Trust is
not aware of any material factors related to the Properties that would cause the
financial information included herein not to be necessarily indicative of future
operating results.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements: See Index to Financial Statements and Pro Forma
Financial Information appearing on page F-1 of this Form 8-K/A.
(b) Pro Forma Financial Information: See Index to Financial Statements and
Pro Forma Financial Information appearing on page F-1 of this Form
8-K/A.
(c) Exhibits
The following exhibits are filed with this report:
Exhibit
Number Description
10.1 Purchase and Sale Agreement, dated as of May 10, 1998, by and between
A&A Greenbrier, Inc., A&A Northpointe B, Inc., A&A Northpointe C, Inc.
and A&A Greenbrier Tech, Inc. and DDR Office Flex Corporation.
10.2 Purchase and Sale Agreement, dated as of May 10, 1998, by and between
Battlefield/Virginia, Inc. and DDR Office Flex Corporation.
10.3 Amendment to Purchase and Sale Agreement dated July 8, 1998, by and
between A&A Greenbrier, Inc., A&A Northpointe B, Inc., A&A Northpointe
C, Inc. and A&A Greenbrier Tech, Inc. and DDR Office Flex Corporation.
10.4 Amendment to Purchase and Sale Agreement dated July 8, 1998, by and
between Battlefield/Virginia, Inc. and DDR Office Flex Corporation.
10.5 Second Amendment to Purchase and Sale Agreement dated September 30,
1998, by and between A&A Greenbrier, Inc., A&A Northpointe B, Inc., A&A
Northpointe C, Inc. and A&A Greenbrier Tech, Inc. and DDR Office Flex
Corporation.
10.6 Second Amendment to Purchase and Sale Agreement dated September 30,
1998, by and between Battlefield/Virginia, Inc. and DDR Office Flex
Corporation.
10.7 Special Warranty Deed, dated as of October 14, 1998, by and between A&A
Greenbrier, Inc. and American Industrial Properties REIT.
10.8 Special Warranty Deed, dated as of October 14, 1998, by and between A&A
Northpointe B, Inc. and American Industrial Properties REIT.
10.9 Special Warranty Deed, dated as of October 14, 1998, by and between A&A
Northpointe C, Inc. and American Industrial Properties REIT.
10.10 Special Warranty Deed, dated as of October 14, 1998, by and between A&A
Greenbrier Tech, Inc. and American Industrial Properties REIT.
23.1 Consent of PricewaterhouseCoopers LLP
<PAGE> 3
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.
AMERICAN INDUSTRIAL PROPERTIES REIT
By: /s/ CHARLES W. WOLCOTT
-----------------------------------------------
Charles W. Wolcott
President and Chief Executive
Officer
December 28, 1998
<PAGE> 4
INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
<TABLE>
<S> <C>
FINANCIAL STATEMENTS
The A&A PORTFOLIO PROPERTIES
Report of Independent Accountants................................................................. F-2
Combined Statement of Revenue and Certain Expenses for the year ended
October 31, 1998.................................................................................. F-3
Notes to Combined Statement of Revenue and Certain Expenses....................................... F-4
The A&A VIRGINIA PROPERTIES
Report of Independent Accountants................................................................. F-6
Combined Statement of Revenue and Certain Expenses for the year ended
December 31, 1997 and the nine month period ended September 30, 1998
(Unaudited)....................................................................................... F-7
Notes to Combined Statement of Revenue and Certain Expenses....................................... F-8
PRO FORMA FINANCIAL INFORMATION............................................................................ F-10
Pro forma condensed consolidated balance sheet as of September 30, 1998........................... F-13
Pro forma condensed consolidated statement of operations for the nine months
ended September 30, 1998.......................................................................... F-15
Pro forma condensed consolidated statement of operations for the year
ended December 31, 1997........................................................................... F-17
</TABLE>
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
December 10, 1998
To the Board of Directors and Shareholders of
American Industrial Properties REIT
We have audited the accompanying combined statement of revenue and certain
expenses of The A&A Portfolio Properties, described in Note 1, for the year
ended October 31, 1998. This historical statement is the responsibility of
management. Our responsibility is to express an opinion on this historical
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying combined historical statement is prepared on the basis
described in Note 2, for the purpose of complying with Rule 3-14 of Regulation
S-X of the Securities and Exchange Commission (for inclusion in Form 8-K/A of
American Industrial Properties REIT) and is not intended to be a complete
presentation of the combined revenues and expenses of The A&A Portfolio
Properties.
In our opinion, the combined historical statement referred to above presents
fairly, in all material respects, the combined revenue and certain expenses of
The A&A Portfolio Properties, on the basis described in Note 2, for the year
ended October 31, 1998, in conformity with generally accepted accounting
principles.
PricewaterhouseCoopers LLP
Cleveland, Ohio
F-2
<PAGE> 6
AMERICAN INDUSTRIAL PROPERTIES REIT
THE A&A PORTFOLIO PROPERTIES
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
October 31, 1998
----------------
<S> <C>
Revenue:
Minimum rents $1,819,674
Recoveries from tenants 326,418
----------
2,146,092
----------
Certain expenses:
Operating and maintenance 148,264
Real estate taxes 188,039
----------
336,303
----------
Revenue in excess of certain expenses $1,809,789
==========
</TABLE>
The accompanying notes are an integral part of this combined statement of
revenue and certain expenses.
F-3
<PAGE> 7
AMERICAN INDUSTRIAL PROPERTIES REIT
THE A&A PORTFOLIO PROPERTIES
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
- -------------------------------------------------------------------------------
1. OPERATIONS
For purposes of the accompanying combined statement of revenue and
certain expenses, The A&A Portfolio Properties represent two light
industrial properties (the "Properties") comprised of three buildings,
which American Industrial Properties REIT (the "Trust") acquired in
October 1998. A summary of the Properties is as follows:
<TABLE>
<CAPTION>
Name of Property Location Year Built
---------------- -------- ----------
<S> <C> <C>
Battlefield / Virginia, Inc. Manassas, VA 1988 / 1989
Greenbrier Tech Chesapeake, VA 1986
</TABLE>
A combined statement of revenue and certain expenses has been presented
because the Properties have commonality of ownership, are under common
control and management and have been purchased through a single
transaction.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying combined statement of revenue and certain expenses has
been prepared on the accrual basis of accounting.
The accompanying combined financial statement is not representative of
the actual operations for the periods presented as certain revenues and
expenses, which may not be comparable to the revenues and expenses
expected to be earned or incurred by the Trust in the future operations
of the Properties, have been excluded. Revenues excluded consist of
interest, gains on sales of property, and other revenues unrelated to
the continuing operations of the Properties. Expenses excluded consist
of depreciation on the building, financing costs, and other general and
administrative expenses not directly related to the future operations of
the Properties.
Income Recognition
Rental income is recorded on the straight line basis.
Concentration of Risk
The Properties are concentrated in the Manassas, VA and Chesapeake, VA
area. The principal competitive factors in this market are price,
location, quality of space, and amenities. The Properties represent a
small portion of the total similar space in the market and compete with
other properties for tenants. For the year ended October 31, 1998, 59.3%
of the combined base rents were derived from the Properties' largest
tenant, AT&T. AT&T is the sole tenant of the two Battlefield buildings.
F-4
<PAGE> 8
AMERICAN INDUSTRIAL PROPERTIES REIT
THE A&A PORTFOLIO PROPERTIES
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
- -------------------------------------------------------------------------------
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. ACQUISITION OF PROPERTIES BY THE TRUST
On October 14, 1998, the Trust purchased Battlefield and on October 16,
1998 purchased Greenbrier Tech along with three other light industrial
properties, located in Virginia and managed by Cambridge, from a group
of related sellers for an aggregate purchase price of $40,170,000. The
acquisition of the five properties was funded with $22,421,000 in
assumed debt and the remainder in borrowings from Developers Diversified
Realty Corporation, a strategic investor in the Trust. The aggregate
purchase price related to the Properties was $20,224,000 including
assumed debt of $12,388,000.
F-5
<PAGE> 9
REPORT OF INDEPENDENT ACCOUNTANTS
December 10, 1998
To the Board of Directors and Shareholders of
American Industrial Properties REIT
We have audited the accompanying combined statement of revenue and certain
expenses of The A&A Virginia Properties, described in Note 1, for the year ended
December 31, 1997. This historical statement is the responsibility of
management. Our responsibility is to express an opinion on this historical
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying combined historical statement is prepared on the basis
described in Note 2, for the purpose of complying with Rule 3-14 of Regulation
S-X of the Securities and Exchange Commission (for inclusion in Form 8-K/A of
American Industrial Properties REIT) and is not intended to be a complete
presentation of the combined revenues and expenses of The A&A Virginia
Properties.
In our opinion, the combined historical statement referred to above presents
fairly, in all material respects, the combined revenue and certain expenses of
The A&A Virginia Properties, on the basis described in Note 2, for the year
ended December 31, 1997, in conformity with generally accepted accounting
principles.
PricewaterhouseCoopers LLP
Cleveland, Ohio
F-6
<PAGE> 10
AMERICAN INDUSTRIAL PROPERTIES REIT
THE A&A VIRGINIA PROPERTIES
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NINE MONTH
PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 1998 DECEMBER 31,
(UNAUDITED) 1997
------------------ ------------
<S> <C> <C>
Revenue:
Minimum rents $1,847,597 $2,563,274
Recoveries from tenants 181,919 289,373
Other income 900 38,883
---------- ----------
2,030,416 2,891,530
---------- ----------
Certain expenses:
Operating and maintenance 519,933 647,420
Real estate taxes 141,816 189,179
---------- ----------
661,749 836,599
---------- ----------
Revenue in excess of certain expenses $1,368,667 $2,054,931
========== ==========
</TABLE>
The accompanying notes are an integral part of this combined statement of
revenue and certain expenses.
F-7
<PAGE> 11
AMERICAN INDUSTRIAL PROPERTIES REIT
THE A&A VIRGINIA PROPERTIES
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
- -------------------------------------------------------------------------------
1. OPERATIONS
For purposes of the accompanying combined statement of revenue and
certain expenses, The A&A Virginia Properties represents three light
industrial properties (the "Virginia Properties") comprised of four
buildings, which American Industrial Properties REIT (the "Trust")
acquired in October 1998. A summary of the Virginia Properties is as
follows:
<TABLE>
<CAPTION>
Name of Property Location Year Built
---------------- -------- ----------
<S> <C> <C>
Northpointe B Sterling, VA 1986
Northpointe C Sterling, VA 1987
Greenbrier Circle Chesapeake, VA 1981 / 1983
</TABLE>
A combined statement of revenue and certain expenses has been presented
because the Virginia Properties have commonality of ownership, are under
common control and management and have been purchased through a single
transaction.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying combined statement of revenue and certain expenses has
been prepared on the accrual basis of accounting.
The accompanying combined financial statement is not representative of
the actual operations for the periods presented as certain revenues and
expenses, which may not be comparable to the revenues and expenses
expected to be earned or incurred by the Trust in the future operations
of the Virginia Properties, have been excluded. Revenues excluded
consist of interest and other revenues unrelated to the continuing
operations of the Virginia Properties. Expenses excluded consist of
depreciation on the building, financing costs, legal fees, and other
general and administrative expenses not directly related to the future
operations of the Virginia Properties.
Income Recognition
Rental income is recorded on the straight line basis.
Concentration of Risk
The Virginia Properties are concentrated in the Sterling, VA and
Chesapeake, VA area. The principal competitive factors in this market
are price, location, quality of space, and amenities. The Virginia
Properties represent a small portion of the total similar space in the
market and compete with other properties for tenants. For the year ended
December 31, 1997, 11.9% of the combined base rents were derived from
the Virginia Properties' largest tenant, Northrup Grumann Corporation.
F-8
<PAGE> 12
AMERICAN INDUSTRIAL PROPERTIES REIT
THE A&A VIRGINIA PROPERTIES
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
- -------------------------------------------------------------------------------
Interim Statements
The interim financial data for the nine months ended September 30, 1998
is unaudited; however, in the opinion of the Trust, the interim data
includes all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the
interim periods. The results for the period presented are not
necessarily indicative of the results for the full year.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. ACQUISITION OF PROPERTIES BY THE TRUST
On October 16, 1998, the Trust purchased the Virginia Properties along
with one light industrial property and purchased another light
industrial property on October 14, 1998, located in Virginia and managed
by Cambridge, from a group of related sellers for an aggregate purchase
price of $40,170,000. The acquisition of the five properties was funded
with $22,421,000 in assumed debt and the remainder in borrowings from
Developers Diversified Realty Corporation, a strategic investor in the
Trust. The aggregate purchase price related to the Virginia Properties
was $19,946,000 including assumed debt of $10,033,000.
F-9
<PAGE> 13
AMERICAN INDUSTRIAL PROPERTIES REIT
PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
The following Pro Forma Condensed Consolidated Balance Sheet of the Trust
as of September 30, 1998 has been prepared as if each of the following
transactions had occurred as of September 30, 1998: (i) the acquisition of a
portfolio consisting of five affiliated industrial properties (the "A&A
Portfolio"); (ii) the acquisition of three unrelated properties (the "Other
Recent Acquisitions"); (iii) the probable acquisition, through DDR/Tech 29 L.
P., a limited partnership in which the Trust will have a controlling ownership
interest, of Tech 29 ("Tech 29"), a 290,991 square foot light industrial project
consisting of three buildings in Silver Spring, Maryland; (iv) probable
acquisition of two unrelated properties (the "Other Probable Acquisitions"); and
(v) the sale of an additional 1,958,003 Common Shares for $15.50 per share to
DDR (the "DDR Stock Transaction").
The properties in the A&A Portfolio are as follows:
<TABLE>
<CAPTION>
PROPERTY LOCATION TOTAL SQUARE FEET
- -------- -------- -----------------
<S> <C> <C>
AT&T - Battlefield Manassas, Virginia 154,226
Greenbrier Circle Chesapeake, Virginia 228,690
Greenbrier Tech Chesapeake, Virginia 95,162
Northpointe B Sterling, Virginia 36,654
Northpointe C Sterling, Virginia 46,080
</TABLE>
The Other Recent Acquisitions are as follows:
<TABLE>
<CAPTION>
PROPERTY LOCATION TOTAL SQUARE FEET
- -------- -------- -----------------
<S> <C> <C>
Technipark Ten Houston, Texas 71,635
Columbia Corporate Center Aliso Viejo, California 128,122
Winter Park Castleberry, Florida 119,684
</TABLE>
The following Pro Forma Condensed Consolidated Statement of Operations of
the Trust for the year ended December 31, 1997 has been prepared as if each of
the following transactions had occurred as of January 1, 1997: (i) the
acquisition of 15 industrial real estate properties; (ii) the sale of two
industrial real estate properties; (iii) the merger with four publicly traded
real estate limited partnerships; (iv) the acquisition of the Spieker Portfolio;
(v) the acquisition of North Austin; and (vi) the acquisition, through AIP
Operating, L.P., a limited partnership in which the Trust has a 99% controlling
ownership interest, of Spring Valley #6 (together with North Austin, the "1998
Acquisitions"), all of the transactions listed in clauses (i) through (vi) are
defined and described in Amendment No. 1 to the Current Report on Form 8-K/A of
the Trust dated April 30, 1998 and filed
F-10
<PAGE> 14
with the SEC on July 13, 1998 (the "April 30, 1998 Form 8-K/A"), which is
incorporated herein by reference; (vii) the acquisition of Norfolk Commerce
Park ("Norfolk"), a 323,731 square foot light industrial project consisting of
three buildings in Norfolk, Virginia; (viii) the acquisition of the A&A
Portfolio, described above; (ix) the acquisition of the Other Recent
Acquisitions, described above; (x) the probable acquisition of Tech 29,
described above; (xi) the sale to DDR of 949,147 Common Shares at $15.50 per
share; (xii) the acquisition of five Acquired Properties through the Merger
with a subsidiary of DDR and issuance of 1,258,471 Common Shares to DDR; (xiii)
the acquisition of the Other Probable Acquisitions; and (xiv) the DDR Stock
Transaction.
The following Pro Forma Condensed Consolidated Statement of Operations of
the Trust for the nine months ended September 30, 1998 has been prepared as if
each of the following transactions had occurred as of January 1, 1998: (i) the
1998 Acquisitions, described above; (ii) the acquisition of the Spieker
Portfolio, described in the April 30, 1998 Form 8-K/A; (iii) the acquisition of
Norfolk, described above; (iv) the acquisition of the A&A Portfolio, described
above; (v) the acquisition of the Other Recent Acquisitions, described above;
(vi) the probable acquisition of Tech 29, described above; (vii) the sale to DDR
of 949,147 Common Shares at $15.50 per share, described above; (viii) the
acquisition of the Acquired Properties through the Merger with a subsidiary of
DDR and issuance of 1,258,471 Common Shares to DDR, described above (ix) the
acquisition of the Other Probable Acquisitions, described above; and (x) the
DDR Stock Transaction.
The Pro Forma Condensed Balance Sheet as of September 30, 1998 and the Pro
Forma Condensed Consolidated Statements of Operations of the Trust for the year
ended December 31, 1997 and the nine months ended September 30, 1998 exclude any
effect from the option of the Trust to require DDR to purchase additional shares
with a total purchase price not to exceed $200 million to fund property
acquisitions (less $31 million identified to purchase the Other Probable
Acquisitions), as no further probable acquisitions have been identified by the
Trust.
The Pro Forma Financial Information of the Trust has been prepared using
the purchase method of accounting for the acquisition of the Acquired Properties
and other property acquisitions, whereby the assets and liabilities of the
properties were adjusted to estimated fair value, based upon preliminary
estimates, which are subject to change as additional information is obtained.
The allocations of purchase costs are subject to final determination based upon
estimates and other evaluations of fair value. Therefore, the allocations
reflected in the following Pro Forma Financial Information may differ from the
amounts ultimately determined.
Such Pro Forma Financial Information is based in part upon (i) the
Consolidated Financial Statements of the Trust for the year ended December 31,
1997 included in the Trust's Annual Report on Form 10-K for the year ended
December 31, 1997; (ii) the Consolidated Financial Statements of the Trust for
the nine months ended September 30,
F-11
<PAGE> 15
1998 included in the Trust's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998; (iii) the Combined Statement of Revenue and Certain Expenses
of Developers Diversified Realty Corporation Properties for the year ended
December 31, 1997 and the six months ended June 30, 1998 filed with the SEC with
Amendment No. 1 to the Trust's Current Report on Form 8-K, dated July 30, 1998;
(iv) the Combined Statement of Revenue and Certain Expenses of the Norfolk
Commerce Park Properties for the year ended December 31, 1997 and the six months
ended June 30, 1998 filed with the SEC with the Trust's Current Report on Form
8-K, dated July 30, 1998; (v) the combined statement of revenue and certain
expenses of The A&A Virginia Properties for the year ended December 31, 1997 and
the nine months ended September 30, 1998, included elsewhere herein; and (vi)
the Pro Forma Financial Information presented in the April 30, 1998 Form 8-K/A.
The Pro Forma Financial Information is presented for information purposes
only and is not necessarily indicative of the financial position or results of
operations of the Trust that would have occurred if such transactions had been
completed on the dates indicated, nor does it purport to be indicative of future
financial position or results of operations. In the opinion of the Trust's
management, all material adjustments necessary to reflect the effect of these
transactions have been made.
F-12
<PAGE> 16
AMERICAN INDUSTRIAL PROPERTIES REIT
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
Trust Recent Probable DDR Stock Pro
Historical (A) Transactions(B) Acqusitions(C) Transaction(D) Forma
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Real estate, net $ 372,796 $ 66,555 $ 173,338 $ -- $ 612,689
Cash - unrestricted 7,639 -- -- 24,588
(21,859)
(2,729) 7,639
Cash - restricted 4,391 -- -- -- 4,391
Other assets, net 8,304 -- -- -- 8,304
------------ ------------ ------------ ------------ ------------
$ 393,130 $ 66,555 $ 173,338 $ -- $ 633,023
============ ============ ============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable $ 207,106 $ 27,521 $ 100,701 $ -- $ 335,328
Notes payable to affiliates -- 29,659 -- (21,859) 7,800
Accrued interest payable 1,146 -- -- -- 1,146
Accounts payable, accrued
expenses and other 5,509 -- -- -- 5,509
Distributions payable 2,945 -- -- -- 2,945
Tenant security deposits 1,644 -- -- -- 1,644
------------ ------------ ------------ ------------ ------------
218,350 57,180 100,701 (21,859) 354,372
Minority interests 7,239 -- -- -- 7,239
Shareholders' equity:
Shares of beneficial interest
($0.10 par value) 1,348 60 469 196 2,073
Additional paid-in capital 275,430 9,315 72,168 24,392 381,305
Less Shares in treasury, at cost (2,226) -- -- -- (2,226)
Accumulated distributions (65,358) -- -- -- (65,358)
Accumulated loss from operations
and extraordinary gains (losses) (44,964) -- -- (2,729) (47,693)
Accumulated net realized gain
on sales of real estate 3,311 -- -- -- 3,311
------------ ------------ ------------ ------------ ------------
167,541 9,375 72,637 21,859 271,412
------------ ------------ ------------ ------------ ------------
$ 393,130 $ 66,555 $ 173,338 $ -- $ 633,023
============ ============ ============ ============ ============
</TABLE>
(A) Represents the historical financial position of the Trust as of September
30, 1998.
(B) Represents adjustments for (i) the acquisition of the A&A Portfolio,
$22,421 of which was financed with the assumption of existing mortgages on
the properties, which bear interest at rates ranging from 7.375% to 8.13%
and mature from October 2004 to March 2016, and $17,749 of which was
financed with borrowings on the Trust's demand note with DDR (the "DDR
Note"), which bears interest at 10.25% and (ii) the Other Recent
Acquisitions, $5,100 of which were financed with borrowings on the Trust's
acquisition line of credit (the "Credit Facility"), which bears interest at
the 30 day LIBOR rate plus 1.75% and which matures in one year, $11,910 of
which was financed with borrowings on the DDR Note, which bears interest at
10.25%, and
F-13
<PAGE> 17
$9,375 which was financed with the proceeds of the sale of 604,838 Common
Shares to DDR at $15.50 per share.
(C) Represents adjustments for (i) the probable acquisition, through DDR/Tech
29 L.P., a limited partnership in which the Trust has a controlling
ownership interest, of Tech 29, expected to be financed with the assumption
of existing mortgages of $10,201 on Tech 29, which bear interest at a
weighted average rate of 8.74% and mature in 2003 and 2006 and the proceeds
from the sale of 1,034,645 Common Shares to DDR at $15.50 per share and
(ii) the Other Probable Acquisitions in the amount of $147,100, which are
expected to be financed with borrowings of $90,500 on the Credit Facility
and the proceeds from the sale of 3,651,613 Common Shares to DDR at $15.50
per share. There can be no assurance that the acquisition of Tech 29 or the
other Probable Acquisitions will occur. In addition, there can be no
assurance that the Board of Trust Managers will approve the sale of Common
Shares to DDR related to DDR's $200 million commitment, of which $31,349
(or 2,022,516 Common Shares), is assumed to be issued. Further, there can
be no assurance that the Common Shares will be sold for $15.50 per share.
(D) Represents adjustments for the investment by DDR in the Trust, as approved
by the Trust's shareholders at the Special Meeting held on November 20,
1998, and the repayment of borrowings under the DDR Note with proceeds from
the investment. These adjustments exclude any effect from the option of the
Trust to require DDR to purchase additional shares to fund property
acquisitions, as no further probable acquisitions have been identified by
the Trust, other than as previously disclosed.
(E) Represents adjustments to reflect the sale of 1,958,003 Common Shares for
$15.50 per share (or $30,349) to DDR, less estimated costs of issuance of
$5,761, for the DDR Stock Transaction, the previous issuance of 1,258,471
Common Shares related to the Merger with a subsidiary of DDR, and the sale
of 949, 147 Common Shares to DDR, as follows:
<TABLE>
<CAPTION>
<S> <C>
Placement fees..................................... $4,600
Advisory fees (fairness opinion)................... 600
Other (legal, proxy, etc.)......................... 561
------
Issuance costs..................................... $5,761
======
</TABLE>
(F) Represents adjustments for the application of the cash proceeds from DDR as
follows: (i) $17,749 to the DDR Note for the A&A Portfolio and(ii) $4,110
to the DDR Note for the Other Recent Acquisitions.
(G) Represents adjustments for payments to management under the Change in
Control Agreements, including payments equal to 2.5 times each individual
officer's base salary and targeted bonus.
No adjustment is required for the vesting of dividend equivalent rights, as
the amounts have been accrued at September 30, 1998. No compensation
expense would
F-14
<PAGE> 18
be recorded related to the immediate vesting of the options to purchase
75,000 Shares at $15.00 per share and the options to purchase 326,000
Shares at $13.625 per share, as the exercise price exceeds the current
price per Common Share.
AMERICAN INDUSTRIAL PROPERTIES REIT
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Trust Recent Probable DDR Stock Pro Forma
Historical(A) Transactions(B) Acquisitions(C) Transaction(D) Total
----------- ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C> <C>
INCOME
Rents and tenant reimbursements $ 31,822 $ 13,696 $ 14,555 -- $ 60,073
Interest and other income 500 34 70 -- 604
---------- ---------- ---------- ---------- ----------
32,322 13,730 14,625 -- 60,677
---------- ---------- ---------- ---------- ----------
EXPENSES
Property operating expenses 10,128 3,572 3,416 -- 17,116
Depreciation and amortization 5,821 2,162(E) 2,601(E) -- 10,584
Interest expense 10,112 5,638(F) 5,689(G) (1,676)(H) 19,763
General and administrative 2,596 76 137 -- 2,809
---------- ---------- ---------- ---------- ----------
Total expenses 28,657 11,448 11,843 (1,676) 50,272
---------- ---------- ---------- ---------- ----------
Income (loss) from operations before
minority interest 3,665 2,282 2,782 1,676 10,405
Minority interest (177) -- -- -- (177)
---------- ---------- ---------- ---------- ----------
Income (loss) from operations $ 3,488 $ 2,282 $ 2,782 1,676 $ 10,228
========== ========== ========== ========== ==========
Income from operations
per share:
Basic and diluted $ 0.30 $ 0.50
========== ==========
Weighted average number of
Common Shares outstanding-basic 11,390 2,311 4,686 1,976 20,363(I)
========== ========== ========== ========== ==========
Weighted average number of
Common Shares outstanding-diluted 11,408 2,311 4,686 1,958 20,363(I)
========== ========== ========== ========== ==========
</TABLE>
(A) Represents the historical results of operations of the Trust for the nine
months ended September 30, 1998. Certain reclassifications have been made
to the historical statements of operations of the Trust for purposes of
this pro forma financial information presentation.
(B) Represents adjustments for: (i) the 1998 Acquisitions; (ii) the acquisition
of the Spieker Portfolio; (iii) the acquisition of Norfolk; (iv) the
acquisition of the A&A Portfolio; (v) the acquisition of the Acquired
Properties through the Merger with a subsidiary of DDR and issuance of
1,258,471 Common Shares to DDR; (vi) the sale to DDR of 949,147 Common
Shares to DDR at $15.50 per share; and (vii) the acquisition of the Other
Recent Acquisitions, which are derived from the historical operating
results of the respective properties, except for depreciation and interest,
F-15
<PAGE> 19
which are based on the Trust's investment in the acquisitions and method of
financing the acquisitions.
(C) Represents adjustments for the probable acquisition of Tech 29 and the
Other Probable Acquisitions based on historical operating results, except
for depreciation and interest, which are based on the Trust's investment in
the acquisitions and method of financing the acquisitions. There can be no
assurance that the acquisition of Tech 29 or the Other Probable
Acquisitions will occur.
(D) Represents adjustments for the DDR Stock Transaction. Since the intent of
the pro forma condensed statement of operations is to reflect the expected
continuing impact of the sale of 949,147 Common Shares to DDR at $15.50
per share, the acquisition of the Acquired Properties, and the DDR Stock
Transaction, the one-time adjustment for payments to management under the
Change in Control Agreements has been excluded. Upon consummation of the
DDR Stock Transaction, this expense will be recognized on the Trust's
statements of operations.
(E) Represents adjustment for depreciation which is calculated based on the
allocation of the purchase price, with buildings depreciated using the
straight-line method over a 40-year period.
(F) Represents adjustments for interest expense related to mortgages assumed
and borrowings under the Trust's Credit Facility and the DDR Note in
connection with the purchase of the 1998 Acquisitions, the Spieker
Portfolio, Norfolk, the A&A Portfolio, the Acquired Properties and the
Other Recent Acquisitions, offset by the reduction in interest expense
incurred under the DDR Note which was repaid with proceeds received from
the sale of 949,147 Shares to DDR at $15.50 per share. The assumed
mortgages bear interest at fixed rates ranging from 7.28% to 8.13%, the
Credit Facility bears interest at a floating rate of the average 30-day
LIBOR rate plus 1.75%, and the DDR Note bears interest at a fixed rate of
10.25%.
(G) Represents adjustments for interest expense related to mortgages assumed
and borrowings under the Trust's Credit Facility in connection with the
purchase of Tech 29 and the Other Probable Acquisitions. The assumed
mortgages have a weighted average interest rate of 8.74%, and the Credit
Facility bears interest at a floating rate of the average 30-day LIBOR rate
plus 1.75%.
(H) Represents adjustments for the reduction in interest expense from the
repayment of notes with proceeds received from the sale of 1,958,003 Common
Shares to DDR for net proceeds of $21,859, as follows: (i) $17,749 to the
DDR Note for the A&A Portfolio and (ii) $4,110 to the DDR Note for the
Other Recent Acquisitions.
(I) The pro forma weighted average shares outstanding include 18,000 weighted
average Common Shares related to the 27,000 restricted shares issued to
members of management on April 1, 1998, which become fully vested under the
terms of the
F-16
<PAGE> 20
Change in Control Agreements. The pro forma weighted average shares
outstanding -- diluted is the same as the pro forma weighted average shares
outstanding -- basic upon full vesting of the restricted Shares. Excluded
from the weighted average shares outstanding -- diluted are outstanding
options to acquire Common Shares which have an exercise price greater than
the average market price per Common Share during the period and, therefore,
their effect would be antidilutive; nor are partnership units in the
operating partnerships included in the weighted average shares outstanding
-- diluted as their effective would be antidilutive. In addition, these
adjustments exclude any effect from the option of the Trust to require DDR
to purchase additional shares to fund property acquisitions, as no further
probable acquisitions have been identified by the Trust.
AMERICAN INDUSTRIAL PROPERTIES REIT
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
8-K/A No.1 DDR
Pro Forma Recent Probable Stock Pro
Total (A) Transactions(B) Acquisitions(C) Transaction(D) Forma
----------- ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C> <C>
INCOME
Rents and tenant reimbursements $ 41,239 13,002 13,555 -- $ 67,796
Interest and other income 500 16 49 -- 565
---------- ---------- ---------- ---------- ----------
41,739 13,018 13,604 -- $ 68,361
---------- ---------- ---------- ---------- ----------
EXPENSES
Property operating expenses 15,262 3,367 4,427 -- 23,056
Depreciation and amortization 7,605 2,515 (E) 3,467 (E) -- 13,587
Interest expense 14,990 6,078 (F) 7,634 (G) (2,240)(H) 26,462
General and administrative 3,964 194 58 -- 4,216
---------- ---------- ---------- ---------- ----------
Total expenses 41,821 12,154 15,586 (2,240) 67,321
---------- ---------- ---------- ---------- ----------
Income (loss) from operations before
minority interest (82) 864 (1,982) 2,240 1,040
Minority interest 208 -- -- -- 208
---------- ---------- ---------- ---------- ----------
Income (loss) from operations $ 126 $ 864 $ (1,982) $ 2,240 $ 1,248
========== ========== ========== ========== ==========
Income (loss) from operations per share:
Basic and diluted $ 0.01 $ 0.06
========== ==========
Weighted average number of
Common Shares outstanding 11,193 2,813 4,686 1,985 20,677(I)
========== ========== ========== ========== ==========
</TABLE>
(A) Reference is made to the April 30 Form 8-K/A, which is incorporated herein
by reference, for the source of the Trust's pro forma statement of
operations for the year ended December 31, 1997, which gives pro forma
effect to the following transactions as if the transactions had occurred on
January 1, 1997:
F-17
<PAGE> 21
(i) the acquisition of 15 industrial real estate properties;
(ii) the sale of two industrial real estate properties;
(iii) the merger with four publicly traded real estate limited
partnerships;
(iv) the acquisition of the Spieker Portfolio;
(v) the acquisition of North Austin; and
(vi) the acquisition, through AIP Operating, L.P., a limited partnership
in which the Trust has a 99% controlling ownership interest, of
Spring Valley #6.
(B) Represents adjustments for: (i) the 1998 Acquisitions; (ii) the acquisition
of the Spieker Portfolio; (iii) the acquisition of Norfolk; (iv) the
acquisition of the A&A Portfolio; (v) the acquisition of the Acquired
Properties through the Merger with a subsidiary of DDR and issuance of
1,258,471 Common Shares to DDR; (vi) the sale to DDR of 949,147 Common
Shares to DDR at $15.50 per share; and (vii) the acquisition of the Other
Recent Acquisitions, which are derived from the historical operating
results of the respective properties, except for depreciation and interest,
which are based on the Trust's investment in the acquisitions and method of
financing the acquisitions.
(C) Represents adjustments for the probable acquisition of Tech 29 and the
Other Probable Acquisitions based on historical operating results, except
for depreciation and interest, which are based on the Trust's investment in
the acquisitions and method of financing the acquisitions. There can be no
assurance that the acquisition of Tech 29 or the Other Probable
Acquisitions will occur.
(D) Represents adjustments for the DDR Stock Transaction. Since the intent of
the pro forma condensed statement of operations is to reflect the expected
continuing impact of the sale of 949,147 Common Shares to DDR at $15.50
per share, the acquisition of the Acquired Properties, and the DDR Stock
Transaction, the one-time adjustment for payments to management under the
Change in Control Agreements has been excluded. Upon consummation of the
DDR Stock Transaction, this expense will be recognized on the Trust's
statements of operations.
(E) Represents adjustment for depreciation which is calculated based on the
allocation of the purchase price, with buildings depreciated using the
straight-line method over a 40-year period.
(F) Represents adjustments for interest expense related to mortgages assumed
and borrowings under the Trust's Credit Facility and the DDR Note in
connection with the purchase of the 1998 Acquisitions, the Spieker
Portfolio, Norfolk, the A&A Portfolio, the Acquired Properties and the
Other Recent Acquisitions, offset by the reduction in interest expense
incurred under the DDR Note, which was repaid with proceeds received from
the sale of 949,147 Shares to DDR at $15.50 per share. The assumed
mortgages bear interest at fixed rates ranging from 7.28% to 8.13%, the
Credit
<PAGE> 22
Facility bears interest at a floating rate of the average 30-day LIBOR rate
plus 1.75%, and the DDR Note bears interest at a fixed rate of 10.25%.
(G) Represents adjustments for interest expense related to mortgages assumed
and borrowings under the Trust's Credit Facility in connection with the
purchase of Tech 29 and the Other Probable Acquisitions. The assumed
mortgages have a weighted average interest rate of 8.74%, and the Credit
Facility bears interest at a floating rate of the average 30-day LIBOR rate
plus 1.75%.
(H) Represents adjustments for the reduction in interest expense from the
repayment of notes with proceeds received from the sale of 1,958,003 Common
Shares to DDR for net proceeds of $21,859, as follows: (i) $17,749 to the
DDR Note for the A&A Portfolio and (ii) $4,110 to the DDR Note for the
Other Recent Acquisitions.
(I) The pro forma weighted average shares outstanding include 27,000 restricted
Common Shares issued to members of management on April 1, 1998, which
become fully vested under the terms of the Change in Control Agreements.
The pro forma weighted average shares outstanding -- diluted equal the pro
forma weighted average shares outstanding -- basic upon full vesting of the
restricted shares. Excluded from the weighted average shares outstanding
are outstanding options to acquire Common Shares which have an exercise
price greater than the average market price per Common Share during the
period and, therefore, their effect would be antidilutive; nor are
partnership units in the operating partnerships included in the weighted
average shares outstanding as their effect would be antidilutive. In
addition, these adjustments exclude any effect from the option of the Trust
to require DDR to purchase additional shares to fund property acquisitions,
as no further probable acquisitions have been identified by the Trust.
<PAGE> 23
EXHIBIT LIST
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
10.1 Purchase and Sale Agreement, dated as of May 10, 1998, by and between
A&A Greenbrier, Inc., A&A Northpointe B, Inc., A&A Northpointe C, Inc.
and A&A Greenbrier Tech, Inc. and DDR Office Flex Corporation.
10.2 Purchase and Sale Agreement, dated as of May 10, 1998, by and between
Battlefield/Virginia, Inc. and DDR Office Flex Corporation.
10.3 Amendment to Purchase and Sale Agreement dated July 8, 1998, by and
between A&A Greenbrier, Inc., A&A Northpointe B, Inc., A&A Northpointe
C, Inc. and A&A Greenbrier Tech, Inc. and DDR Office Flex Corporation.
10.4 Amendment to Purchase and Sale Agreement dated July 8, 1998, by and
between Battlefield/Virginia, Inc. and DDR Office Flex Corporation.
10.5 Second Amendment to Purchase and Sale Agreement dated September 30,
1998, by and between A&A Greenbrier, Inc., A&A Northpointe B, Inc., A&A
Northpointe C, Inc. and A&A Greenbrier Tech, Inc. and DDR Office Flex
Corporation.
10.6 Second Amendment to Purchase and Sale Agreement dated September 30,
1998, by and between Battlefield/Virginia, Inc. and DDR Office Flex
Corporation.
10.7 Special Warranty Deed, dated as of October 14, 1998, by and between A&A
Greenbrier, Inc. and American Industrial Properties REIT.
10.8 Special Warranty Deed, dated as of October 14, 1998, by and between A&A
Northpointe B, Inc. and American Industrial Properties REIT.
10.9 Special Warranty Deed, dated as of October 14, 1998, by and between A&A
Northpointe C, Inc. and American Industrial Properties REIT.
10.10 Special Warranty Deed, dated as of October 14, 1998, by and between A&A
Greenbrier Tech, Inc. and American Industrial Properties REIT.
23.1 Consent of PricewaterhouseCoopers LLP
</TABLE>
<PAGE> 1
EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement"), dated as of this
10th day of May, 1998, by and between (a)(i) A&A Greenbrier, Inc. ("AAG") as to
the portion of the Project (hereinafter defined) listed on Exhibit A-1 attached
hereto, (ii) A&A Northpointe B, Inc. ("AANB") as to the portion of the Project
listed on Exhibit A-2 attached hereto, (iii) A&A Northpointe C, Inc. ("AANC") as
to the portion of the Project listed on Exhibit A-3 attached hereto and (iv) A&A
Greenbrier Tech, Inc. ("AAGT") as to the portion of the Project listed on
Exhibit A-4 attached hereto (AAG, AANB, AANC and AAGT shall hereinafter be
referred to, individually and collectively, as the context may require, as
"Seller"), and (b) DDR OFFICEFLEX CORPORATION, an Ohio corporation, or its
permitted assignee or designee ("Buyer").
WITNESSETH:
WHEREAS, each Seller is the owner of certain real property, together
with all improvements located upon such real property and all personal property
of each Seller located thereon or used in connection therewith; and
WHEREAS, each Seller desires to sell to Buyer all of each Seller's
undivided interest in such real and personal property, upon the terms more
particularly set forth below.
NOW THEREFORE, in consideration of the mutual undertakings and
covenants herein contained, Seller and Buyer hereby covenant and agree as
follows:
SECTION 1
SALE OF PREMISES AND ACCEPTABLE TITLE
1.01 Agreement to Buy and to Sell; Project. Each Seller shall
sell to Buyer, and Buyer shall purchase from each Seller, at the price and upon
the terms and conditions set forth in this Agreement, all of such Seller's
undivided interest in the following:
(a) (i) that certain real property more particularly
described on Exhibits A-1 through A-4 attached hereto and made a part hereof
(the "Land");
(b) all buildings, structures and improvements on the Land
and all related improvements, facilities, amenities, structures, driveways,
fixtures, landscaping, paving, site work, walkways, plumbing and heating pipes,
culverts, and mains located on the Land (collectively, the "Improvements");
<PAGE> 2
(c) all right, title and interest of Seller in and to any
alleys, strips or gores adjoining the Land, and any easements, rights-of-way,
water rights or other interests in, on, under or to, any land, highway, street,
road, right-of-way or avenue, open or proposed, in, on, under, across, in front
of, abutting or adjoining the Land, and all right, title and interest of Seller
in and to any awards for damage thereto by reason of a change of grade thereof;
(d) the accessions, appurtenant rights, privileges,
appurtenances and all the estate and rights of Seller in and to the Land and the
Improvements, as applicable, or otherwise appertaining to any of the property
described in the immediately preceding subparagraphs (a), (b) and/or (c);
(e) the fixtures, equipment, machinery, supplies,
equipment, furniture, chattels, furnishings, and other personal property located
and/or used in connection with the operation and maintenance of the Project, as
defined below, or otherwise owned by Seller (collectively, the "Personal
Property");
(f) all intangible property now or hereafter owned by
Seller and used in connection with the Land, Improvements and Personal Property,
including without limitation, the right to use any trade style or name now used
in connection with the same, any contract rights, tenant security deposits to
the extent in Seller's possession, utility agreements, guarantees, licenses,
approvals, certificates, certificates of occupancy, plans and specifications,
logos, permits, warranties or other rights related to the development of,
construction of, ownership of, or use and operation of, the Project, as
hereinafter defined and any other funds, deposits or monies of Seller; and
(g) all of Seller's interest as lessor in all leases
(herein defined in Section 5.02(a) hereof) covering the Land and Improvements,
including all tenant security and other deposits and interest earned thereon and
prepaid rents and interest earned thereon.
All of the items described in subparagraphs (a), (b), (c) and (d) above
are hereinafter collectively referred to as the "Premises". All of the items
described in subparagraphs (a), (b), (c), (d), (e), (f) and (g) above are
hereinafter collectively referred to as the "Project".
1.02 Title. (a) Each Seller shall convey to Buyer by a duly
executed special warranty deed (the "Deed"), and Buyer shall accept fee simple
title to such Seller's undivided interest in the Premises in accordance with
the terms of this Agreement, and Buyer's obligation to accept said title shall
be conditioned upon Buyer then being conveyed good and clear record, marketable
and insurable title to the Land, excepting only the Permitted Exceptions
(hereinafter defined). It shall be a condition precedent to Buyer's obligation
to close hereunder that a title insurance company (the "Title Company")
acceptable to Buyer and
2
<PAGE> 3
any lender providing Buyer's financing stands ready to issue, at the Closing
(herein defined) an ALTA owner's policy of title insurance, insuring Buyer's
interest in the Premises, dated the day of Closing, with liability in the amount
of the Purchase Price (herein defined), subject only to the Permitted Exceptions
(the "Title Policy"). The Title Policy shall insure against all mechanics' liens
and, provided Buyer elects to obtain a Survey (hereinafter defined), shall have
full survey coverage and shall be an extended coverage policy insuring against,
among other things, mechanics' liens, easements and claims of parties in
possession not shown by the public records with all general and standard
exceptions deleted, all at no additional premium to be paid by Buyer.
(b) Simultaneously with the delivery of the Deed, each
Seller shall execute and deliver to Buyer a special warranty bill of sale and
instrument of transfer and assignment (the "Bill of Sale"), in form and
substance reasonably satisfactory to Buyer's counsel, assigning and transferring
all of the tangible and intangible personal property constituting a portion of
the Project owned by such Seller, including, without limitation, such Seller's
undivided interest in (i) any proceeds under any insurance policies or
condemnation proceedings affecting any portion of the Premises owned by such
Seller, (ii) any licenses, permits, variances (if any), governmental approvals
and consents pertaining to the portion of the Project owned by such Seller,
(iii) any warranties and guaranties relating to the portion of the Project owned
by such Seller, (iv) any contracts and agreements which relate to the portion of
the Project owned by such Seller, that Buyer has elected in writing to assume,
and (v) all leases and deposits relating to any portion of the Premises owned by
such Seller, free and clear of all liens and encumbrances, except the Permitted
Exceptions, and indemnifying Buyer from obligations under all of the items
assigned arising prior to Closing and with Buyer's indemnifying Seller from
obligations under all of the items assigned arising from and after the Closing.
(c) Buyer shall, promptly after the Effective Date, order
(i) a commitment for title insurance (the "Commitment") by the terms of which
Buyer's Title Company agrees to issue to Buyer at Closing the Title Policy; (ii)
a photocopy of all documents ("Title Documents") describing all title exceptions
shown on the Commitment (the "Title Exceptions"), and (iii) if Buyer so elects,
an ALTA Land Title Survey of the Land (the "Survey"). If Buyer objects to any
matters disclosed by the Commitment, Title Documents or Survey, Buyer shall
furnish Seller with a written statement thereof within ten (10) days following
receipt by Buyer of the last of the Commitment, Title Documents and Survey. All
matters shown on the Title Exceptions which are not objected to by Buyer within
said ten (10) day period following receipt shall be "Permitted Exceptions".
Seller agrees to use its reasonable efforts to satisfy such objections noted by
Buyer, provided that Seller shall obtain a satisfaction and release of any
monetary liens, including, without limitation, any and all mortgages, mechanics
liens and judgment liens other than the assumable financing, as hereinafter
defined (collectively, "Monetary Liens") and with respect to matters other than
Monetary Liens, Sellers shall be obligated to collectively spend up to $80,000
in the aggregate to cure any
3
<PAGE> 4
title objection. Seller shall, within five (5) days after receipt of Buyer's
objections, notify Buyer of Seller's proposed actions to satisfy such
objections, and shall have a reasonable time, not to exceed fifteen (15) days,
to satisfy such objections. If, despite its reasonable efforts to do so, Seller
cannot satisfy such objections (other than the Monetary Liens, which shall be
satisfied by Seller and matters other than Monetary Liens which cost up to
$80,000 in the aggregate to cure) on or before the expiration of such fifteen
(15) day period, as the same may be extended in Buyer's sole discretion, Buyer
shall have the following options: (i) to extend such fifteen (15) day period for
such additional period up to Closing that Buyer may elect, during which Seller
shall continue to use its reasonable efforts to satisfy such objections; (ii) to
waive its objection to such title defect and proceed to Closing; or (iii) to
terminate this Agreement by written notice to Seller and obtain an immediate
refund of the Deposit, as defined in Section 2.02. Notwithstanding any term or
provision contained herein to the contrary, except with respect to Monetary
Liens, the procurement by Seller of a commitment for the issuance of a Title
Policy or an endorsement thereto insuring Buyer against any Title Exception
which Buyer has disapproved pursuant to this Section shall be deemed a cure by
Seller of such objection, subject to Buyer's approval not to be unreasonably
withheld or delayed.
(d) Notwithstanding anything to the contrary contained in
Section 3.01 of this Agreement, if Buyer's objections to title matters are not
satisfied prior to expiration of the Study Period, Closing shall occur on the
later of (a) the date described in Section 3.01 and (b) five (5) business days
following satisfaction of Buyer's title objections in accordance with this
Section.
SECTION 2
PURCHASE PRICE AND ESCROW DEPOSIT
2.01 Purchase Price.
(a) The total purchase price ("Purchase Price") to be
paid by Buyer to Seller for the Project shall be TWENTY SEVEN MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($27,500,000.00). Such Purchase Price shall
be paid to Seller at Closing, as set forth in Section 2.01(b) below, of which
the Deposit (as hereinafter defined) shall constitute a part, subject to
prorations and adjustments as hereinafter provided in this Agreement.
(b) The Purchase Price shall consist of and be payable as
follows:
(i) Buyer shall have the option, which option
must be exercised no later than the end of the Study Period (as defined in
Section 9.01 hereof), either to (A) pay the entire Purchase Price in cash at
Closing, by wire transfer of immediately available funds
4
<PAGE> 5
(provided Seller and Buyer mutually agree as to the allocation of payment of any
prepayment penalties to Lenders), or (B) subject to the terms and conditions of
this Agreement and further subject to Lender's prior approval, assume the
existing loans on the Project with those Lenders (collectively, the "Lenders")
and in those amounts as more particularly disclosed on Exhibit B attached hereto
(collectively, the "Loans") of approximately $____________ in the aggregate,
which is the projected balance of the Loans as of May 1, 1998, on the same terms
and conditions as set forth in the loan documents evidencing the Loans
(collectively, the "Loan Documents"), except Seller and any guarantor of the
Loans shall be fully and completely released from the Loan Documents except for
liability with respect to matters which first arose and pertain to the period of
time during which Seller owned the Project (the "Assumable Financing"). If Buyer
is approved for all or any portion of the Assumable Financing, then, at Closing,
Buyer shall execute and deliver to the Escrow Agent, the Lenders and Seller such
documents as are necessary for Buyer to consummate Buyer's assumption of the
Loans. The projected balance of each of said Loans after the debt service
payment due on May 1, 1998, the annual interest rate of each Loan, the amount of
the monthly payments of principal and interest and the amortization schedule are
set forth on Exhibit B,
Buyer shall file, within ten (10) days after the Effective
Date, a complete application seeking to obtain the requisite approvals from each
Lender to assume the Loans on such terms and conditions as each of the Lenders
may require. If prior to the end of the Study Period (a) Buyer does not elect to
assume the Loans, (b) Buyer is not approved for the Assumable Financing which
approval must include each Lender's agreement to release Seller and any
guarantor from the Loan Documents, or (c) Buyer does not accept and approve of
the terms and conditions of the Assumable Financing within five (5) days of each
Lender's offer of such terms and conditions, which terms and conditions must
provide for the release of the Seller and all guarantors from the Loan
Documents, which acceptance or rejection by Buyer must in all events occur by
the end of the Study Period, then either the Buyer or the Seller can elect to
terminate this Agreement within five (5) days of any Lender's rejection of
Buyer's assumption of the Loan in question or Buyer's rejection of such Lender's
terms and conditions. Failure of Buyer to notify Seller of Buyer's election to
assume or reject the Loans by the end of the Study Period shall be deemed to
mean that Buyer has elected to accept the Loans. Notwithstanding any term or
provision contained herein to the contrary, in the event Buyer for whatever
reason does not assume all of the Loans, including, without limitation, in the
event Buyer elects to proceed with an entire cash purchase, Seller shall have
the option to terminate this Agreement. Such termination pursuant to this
Section 2.01(b)(i) shall (w) not be considered a breach of the Agreement; (x)
not result in the assessment of damages or penalties to either party; (y) not
result in either party having liability to the other hereunder; and (z) result
in the return of the Deposit to the Buyer.
If neither the Buyer nor the Seller elects to terminate the
Agreement pursuant to this Section 2.01(b)(i), then the cash portion of the
Purchase Price shall, at the option of Seller, (i) be increased to the full
Purchase Price such that the purchase described in this
5
<PAGE> 6
Agreement shall be an all cash transaction or (ii) be increased to reflect the
amount of the Loan not being assumed.
Seller shall pay any and all fees, expenses and other costs
associated with Buyer's application and assumption of the Loans including,
without limitation, any application fees, review fees, processing fees,
transfer/assumption fees and Lender's reasonable costs and expenses, except for
any recordation or mortgage tax and any legal fees of Buyer. Furthermore, if
this transaction is an all cash transaction without an assumption by Buyer of
all of the Loans, Buyer and Seller shall hereafter mutually agree as to which of
Buyer or Seller shall pay any prepayment fees, premiums and other costs and
expenses required in connection with the prepayment of the Loans.
(ii) If Buyer assumes all of the Loans, the
balance of the cash portion of the Purchase Price shall be paid by Buyer at
Closing by wire transfer of immediately available funds. If Buyer does not
assume the Loans, the entire Purchase Price shall be paid by Buyer on or before
12:00 p.m. (ET) at Closing by wire transfer of immediately available funds.
2.02 Deposit; Escrow Agent
(a) Within three (3) business days following the date
that Commercial Title Group, Limited, 8605 Westwood Center Drive, Suite 401,
Tyson's Corner, Vienna, Virginia 22182, Attention: Douglas Nichols ("Escrow
Agent") receives a copy of this Agreement executed by both Seller and Buyer,
Buyer shall deposit with the Escrow Agent the amount of $67,500.00, either by
certified bank or cashier's check or by wire transfer, as a good faith deposit
hereunder. Such $67,500.00 deposit, and all interest earned thereon, shall be
referred to as the "Initial Deposit". All interest on any deposit shall be
deemed income of Buyer. Escrow Agent shall maintain the Initial Deposit in an
FDIC-insured interest-bearing account. The Initial Deposit shall be applied to
the Purchase Price at Closing and shall be non-refundable to the Seller
except as otherwise provided herein. The Initial Deposit shall be released in
accordance with the terms and provisions of this Agreement.
(b) Provided Buyer has not elected to terminate this
Agreement during the Study Period (as defined in Section 9.01), Buyer shall
within two (2) business days after the end of the Study Period deliver to the
Escrow Agent the amount of $236,500.00, via certified bank check or cashier's
check or wire transfer, as an additional earnest money deposit hereunder. Such
$236,500.00, and all interest earned thereon, shall be referred to as the
"Additional Deposit". Escrow Agent shall maintain the Additional Deposit in an
FDIC-insured interest-bearing account. The Initial Deposit together with the
Additional Deposit shall be referred to herein as the "Deposit". The term
"Deposit" a used herein shall, in addition to referring to both the Initial
Deposit and the Additional Deposit may also be deemed to refer to either the
Initial Deposit or the Additional Deposit, as the context requires. Upon receipt
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of the Additional Deposit by the Escrow Agent, both Deposits shall become
non-refundable to Buyer, and shall be applied to the Purchase Price, unless
Seller otherwise defaults in its obligations to close the transaction
contemplated by this Agreement in which event the Deposits, together with all
accrued interest thereupon, shall be refunded to Buyer. The failure of Buyer to
timely deliver any Deposit hereunder shall be a material default, and shall
entitle Seller, at Seller's sole option, to terminate this Agreement
immediately.
(c) Notwithstanding any other provision in this Agreement
to the contrary, if prior to the end of the Study Period (as defined in Section
9.01) Buyer should discover one or more condition(s) or defect(s) in or to the
Project, or have any objection to the Project, which arises pursuant to or in
connection with (i) the title commitment, or (ii) the Survey, then Buyer shall
immediately notify Seller in writing of any such condition(s) requesting that
Seller cure or remedy said condition(s) prior to the Closing date hereof at
Seller's sole expense, said written notice also to include all documentation
reasonably required by Seller in support of Buyer's estimate to remedy the
condition(s) (the "Cure Notice"). Within three (3) business days after receipt
of the Cure Notice, Seller shall notify Buyer in writing whether or not Seller
elects to cure or remedy any condition(s) which is the subject of a Cure Notice.
If Seller elects not to cure or remedy such condition(s), or if Seller fails to
notify Buyer of its election to cure any condition(s) which is the subject of a
Cure Notice within three (3) business days as provided hereinabove, then Buyer
shall have the right to (i) terminate this Agreement by written notice to Seller
and obtain an immediate refund of any Deposit, together with any interest
thereon, in which case neither party shall have any further rights or
obligations hereunder (except for any indemnity obligations of either party
pursuant to the other provisions of this Agreement), and each party shall bear
its own costs incurred hereunder, or (ii) Buyer may elect to proceed with the
purchase of the Project subject to such condition(s) specified in any such Cure
Notice, and in such event, the Purchase Price shall be adjusted at Closing by
the amount set forth in the Cure Notice with respect to the estimated cost to
remedy such condition(s) subject to the dollar limitation (the "Cap") set forth
in Section 1.02(c) hereof; provided however, nothing herein shall obligate
Seller to institute litigation to satisfy any such condition(s), except for the
release of the Loans, subject to the provisions of Section 2.01(b) hereof. In
the event Seller has expended any portion of the Cap pursuant to its obligations
under Section 1.02(c) ("Seller's Prior Expenditures"), any adjustment to the
Purchase Price shall be subject to the Cap as reduced by Seller's Prior
Expenditures.
(d) The Escrow Agent joins in the execution of this
Agreement for the purpose of acknowledging receipt of the Deposit and agreeing
to hold and release the Deposit in accordance with the terms and provisions of
this Agreement.
(e) If there is a dispute between Seller and Buyer
concerning Seller's or Buyer's right to receive the Deposit, or the proceeds of
collection thereof, Escrow Agent shall continue to hold the Deposit until the
dispute is resolved by Seller and Buyer or until
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otherwise directed by a court of competent jurisdiction. Upon termination of the
escrow, all interest earned on the investments shall be paid to the party
entitled to receive the principal thereof.
SECTION 3
THE CLOSING
3.01 Closing. All documents necessary or appropriate to transfer
the Project shall be delivered and closing (the "Closing") shall be held on, or
in Buyer's sole discretion, provided that Seller is furnished with at least five
(5) business days prior written notice of the earlier closing date, before, the
date that is thirty (30) days after expiration of the Study Period. Closing
shall occur at the offices of Hale and Dorr LLP, 1455 Pennsylvania Avenue, N.W.,
Washington, D.C. 20004.
3.02 Conditions to Closing. It is a condition precedent to Buyer's
obligation to close hereunder that as of the Closing (i) Seller shall have
performed all of its covenants contained in this Agreement, and all of Seller's
representations and warranties contained in this Agreement shall be true and
accurate in all material respects on and as of the date of Closing as if made
anew on that date, (ii) Title Company shall stand ready to issue the Title
Policy in the form described in Section 1.02(a) hereof, and (iii) Seller shall
have delivered to the Title Company the items described in Section 10.
3.03 Other Agreement. Contemporaneously with this Agreement, Buyer
shall execute a Purchase and Sale Agreement substantially similar in form to
this Agreement for the property owned by Battlefield/Virginia, Inc. (the
"Battlefield Property") and identified on Exhibit H attached hereto (the "Other
Agreement"). Notwithstanding anything in this Agreement or the Other Agreement
to the contrary, Buyer acknowledges and agrees that in the event Buyer fails or
refuses to close on any property which is listed on Exhibits A and H (including,
without limitation, in the event Buyer cannot close under the Other Agreement as
a result of the tenant leasing the Battlefield Property exercising its option to
purchase the Battlefield Property) then Seller's obligations under this
Agreement and the Other Agreement to sell any of the above-referenced properties
to Buyer shall be null and void at Seller's option. Costs incurred to the date
of such default or failure shall be born by Buyer, and the Deposit hereunder and
the Deposit under the Other Agreement shall be retained by Seller as liquidated
damages and shall be non-refundable to Buyer.
In the event that the condition in this Section 3.03 is not satisfied,
Seller may elect, at its sole discretion, to terminate this Agreement or waive
satisfaction of the condition and close escrow. In the event of such
termination, the Deposit shall be retained by Seller and shall be non-refundable
to the Buyer.
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SECTION 4
SELLER'S PRE-CLOSING DELIVERIES
Seller shall deliver to Buyer, at Seller's sole cost and expense,
within five (5) days after execution of this Agreement, copies of the following
documents relating to the Project (all of the following documents and other
items, together with the Additional Deliverables (hereinafter defined) shall be
referred to herein collectively as the "Pre-Closing Deliverables"):
4.01 Leases. True and correct copies of the Leases and all proposed
additional Leases of space in the Premises currently being negotiated by Seller.
4.02 Permits. To the extent in Seller's possession, copies of all
building permits, certificates of occupancy and governmental permits.
4.03 Taxes. A copy of the most recent available real estate and
personal property tax statements for the Project.
4.04 Plans and Specifications. To the extent in Seller's possession
(i) originals (or copies, if originals are not available) of the "as-built"
plans and specifications for the existing, and any proposed, improvements to the
Project (the "Plans and Specifications") and (ii) a copy of all guaranties and
warranties currently in effect made by any person for the benefit of Seller with
respect to all or any part of the Project in connection with the construction
and equipping of the Project.
4.05 Title Matters/Survey. To the extent in Seller's possession, a
copy of Seller's existing Owner's Title Insurance Policy insuring Seller's
ownership of the Land, a copy of Seller's most recent survey of the Land and a
copy of the site plans of the Project, all of which, if available, are attached
hereto as Exhibit C.
4.06 Utility Bills. Copies of all utility bills relating to the
Project for the prior 12-month period.
4.07 Personal Property. A list of all Personal Property currently
used in the maintenance and operation of the Project.
4.08 Service/Equipment Contracts. Copies of all Service/Equipment
Contracts (hereinafter defined in Section 5.03).
4.09 Insurance Policies. Copies of all insurance policies
(collectively, the "Insurance Policies") pertaining to the Project.
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4.10 Loan Documents. Copies of all documents evidencing the Loans.
4.11 Financial Statements of the Project. A copy of the financial
statements for the most recently concluded fiscal year showing all items of
income and expenses, and monthly operating statements for the Project for the
year-to-date.
From time to time thereafter, Seller shall deliver to Buyer all
information pertaining to the Project prepared by or on behalf of Seller, which
is in Seller's possession and which may reasonably be requested by Buyer
(collectively, the "Additional Deliverables").
SECTION 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Each Seller represents and warrants to Buyer as of the date hereof and
as of the Closing as to itself only and the portion only of the Project owned by
such Seller as follows:
5.01 Ownership. Seller is the owner of the Project of record and in
fact, legally and beneficially, and, to the best of its knowledge, has good,
marketable and insurable title to the Project. There are no options to purchase
the Project which are effective, nor has Seller previously entered into any
other contract of sale or agreement of any kind with a party other than Buyer
which is presently effective and which will not be terminated before the date of
this Agreement.
5.02 Leases.
(a) As of the date of the Agreement there are no leases,
subleases, licenses or other rental agreements or occupancy agreements (written
or verbal) which grant any possessory interest in and to any space situated on
or in any of the Premises or that otherwise give rights with regard to use of
any portions of any of the Premises other than the Leases delivered pursuant to
Section 4.01 hereof (said leases, together with any and all amendments,
modifications and supplements thereto and guarantees thereof and leases entered
into after the date hereof in accordance with this Agreement, are herein
referred to collectively as the "Leases");
(b) The copies of the Leases provided to Buyer pursuant to
Section 4.01 are true, accurate and complete as of the date hereof, are, to the
best of Seller's knowledge, in full force and effect and none of them has been
modified, amended or extended; attached as Exhibit D is a Certified Rent Roll,
which Seller hereby certifies is true, accurate and complete in all material
respects, setting forth the Leases;
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(c) No renewal or extension options have been granted to
tenants other than as now set forth in the Leases;
(d) No tenant, or any other person, entity or association
has an option to purchase, right of first refusal, right of first offer or other
similar right in respect of all or any other portion of the Premises;
(e) No tenant is entitled to rental concessions or
abatements for any period subsequent to the Closing other than as set forth or
permitted in the Leases;
(f) To the best of Seller's knowledge, no parties to any of
the Leases are in default nor do any conditions exist that with the passage of
time, or giving of notice shall constitute a default;
(g) To the best of Seller's knowledge, Seller has received
no notice of any action or proceeding instituted against Seller by any tenant of
any portion of the Project;
(h) There are no security deposits or other deposits other
than those set forth in the Leases; and
(i) No rent has been paid more than one month in advance
under any Lease.
5.03 Service and Management Contracts. To the best of Seller's
knowledge, the agreements provided under Section 4.09 are all of the agreements
concerning the operation and maintenance of the Project entered into by Seller
and affecting the Project (collectively, "Service/Equipment Contracts"). Seller
is not in default under any of the Service/Equipment Contracts and, to the best
of Seller's knowledge, no other parties to any of the Service/Equipment
Contracts are in default, nor do any conditions exist that, with the passage of
time, or giving of notice, or both, shall constitute a default. To the best of
Seller's knowledge, the copies of the Service/Equipment Contracts provided to
Buyer pursuant to Section 4.08 are true, accurate and complete as of the date
hereof, are in full force and effect and none of them has been modified, amended
or extended.
5.04 Hazardous Substances. The Project has not been used by Seller
for the generation, treatment, storage or disposal of any hazardous substances
during the period in which Seller has owned the Project and, to the best of
Seller's knowledge, during the period of time prior to Seller's ownership and,
to the best of Seller's knowledge, there exist no hazardous substances on, under
or at the Premises. Except as disclosed in Exhibit F, attached hereto, or on the
surveys of the Project delivered by Seller to Buyer, to the best of Seller's
knowledge, there are no underground storage tanks located on or under the
Premises. For the purposes of this Section 5.04, "hazardous substances" shall
include "hazardous substances" as defined in the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections
9601 et seq., and regulations adopted pursuant to said Act, or any similar
environmental protection law of the or its political subdivisions.
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5.05 Ability to Perform. AAG is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Virginia. AANB is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Virginia. AANC is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia. AAGT is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Virginia. Seller has
full power and authority to execute, deliver and carry out the terms and
provisions of this Agreement and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of Seller enforceable in
accordance with its terms, subject to creditors' rights, bankruptcy and any
other equitable principles. The execution and delivery of this Agreement by the
party signing on behalf of Seller has been duly authorized. To the best of
Seller's knowledge, no order, permission, consent, approval, license,
authorization, registration or validation of, or filing with, or exemption by,
any governmental agency, commission, board or public authority is required to
authorize, or is required in connection with, the execution, delivery and
performance of this Agreement by Seller or the taking by Seller of any action
contemplated by this Agreement.
5.06 Compliance with Laws. Neither the entering into of this
Agreement nor the consummation of the transaction contemplated hereby will
constitute or result in a violation or breach by Seller of any judgment, order,
writ, injunction or decree issued against or imposed upon it, or will result in
a violation of any applicable law, order, rule or regulation of any governmental
authority. There are no actions, suits, proceedings, arbitrations or
investigations pending or, to the best of Seller's knowledge, threatened (i)
against, relating to or affecting Seller which might interfere in a material
respect with the transaction contemplated by this Agreement, become a cloud on
the title to the Project or any portion thereof or otherwise affect the Project
or Seller's ability to consummate the transaction contemplated hereby or (ii)
against, relating to or affecting the Project.
5.07 No Violation Notice. To the best of its knowledge, Seller has
not received written notice:
(a) from any federal, state, county or municipal authority
alleging any material fire, health, safety, building, pollution, environmental,
zoning or other violation of law in respect of the Premises or any part thereof,
including, without limitation, the occupancy or operation thereof, which has not
been corrected;
(b) concerning the possible or anticipated condemnation of
any part of the Project, or the widening, change of grade or limitation on use
of streets abutting the same or concerning any special taxes or assessments
levied or to be levied against the Premises or any part thereof;
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(c) concerning any change in the zoning classification of
the Premises or any part thereof.
If any such notice is received prior to the Closing, Seller shall
promptly notify Buyer thereof and comply with any requirements of such notice
pursuant to Section 6 hereof prior to the Closing.
5.08 Assessments. To the best of Seller's knowledge, there are no
pending or proposed special assessments affecting or which may affect the
Project or any portion thereof.
5.09 Loans. Seller has provided true, correct and complete copies
of all documents evidencing the Loans, the Loans are in full force and effect,
and there are no defaults under the Loans.
5.10 Miscellaneous Representations and Warranties.
(a) The business operations of the Project will be
conducted in the usual and normal manner until the Closing. After the expiration
of the Study Period, Seller shall not, without the prior written consent thereto
of Buyer, which consent shall not be unreasonably withheld, delayed or
conditioned, make (or knowingly permit) any material physical change in the
Project.
(b) Prior to the expiration of the Study Period, Seller
shall not, without the prior written consent thereto of Buyer, which consent
shall not be unreasonably withheld, delayed or conditioned, enter into any lease
affecting the Project or alter, modify, terminate or renew any existing Lease.
After the expiration of the Study Period, Seller shall not, without the prior
written consent of Buyer, which consent may be withheld by Buyer for any reason
or no reason at all, enter into any lease affecting the Project or alter,
modify, terminate or renew any existing Lease.
(c) Seller is not a "foreign person", as defined in the
Internal Revenue Code.
(d) The premiums are paid and current for the Insurance
Policies and to the best of Seller's knowledge, the Insurance Policies are in
full force and effect.
(e) Except as disclosed in Exhibit G attached hereto and
as otherwise described in Section 10.03 hereof, there are no brokerage fees
pursuant to agreements entered into by Seller which will be Buyer's
responsibility after Closing.
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(f) As of the Closing there will be no employees of
Seller employed at the Project.
5.11 Notice of Change. In the event that Buyer becomes aware at any
time prior to Closing that a representation or warranty made by Seller herein,
while true as of the date made, no longer remains true in all material respects,
due to a change of circumstances beyond the reasonable control of Seller
subsequent to the date of this Agreement, Buyer shall promptly give written
notice of such fact to Seller. Seller shall use its reasonable efforts to remedy
such change of circumstances that causes the representation or warranty to be
untrue. In the event Seller is unable to remedy such change of circumstances by
the Closing, then Buyer shall have the option to (a) terminate this Agreement,
whereupon all obligations of all parties hereto shall cease except for those
obligations which survive a termination, and the Deposit shall be returned to
Buyer, or (b) proceed with Closing notwithstanding such change of circumstances
with no adjustment to the Purchase Price.
5.12 No Other Representations or Warranties. Except as set forth in
Sections 5.01 through 5.11 hereof, Seller disclaims the making of any
representations or warranties, express or implied, regarding the Project or
matters affecting the Project, including, without limitation, the physical
condition of the Project, the existence of certain wetlands on the Project, the
quality of any work or materials used in connection with the improvements on the
Project, title to or the boundaries of the Project, pest control matters, soil
condition, hazardous waste, toxic substance or other environmental matters,
compliance with building, health, safety, land use and zoning laws, regulations
and orders, structural and other engineering characteristics, traffic patterns,
the development potential of the Project and the Project's use, fitness, value
or adequacy for any particular purpose, and all other information pertaining to
he Project. Buyer, moreover, acknowledges (i) that Buyer has entered into this
Agreement with the intention of making and relying upon its own independent
investigation, inspection, analysis, examination and evaluation of the physical,
environmental, economic and legal condition of the Project and all other
relevant facts and circumstances and (ii) that, except as set forth in Sections
5.01 through 5.11 hereof, Buyer is not relying upon any representations and
warranties made by Seller, Seller's agents, brokers, management agent or anyone
else acting or claiming to act on Seller's behalf concerning the Project. Buyer
further acknowledges that it has not received from Seller any investment,
accounting, tax, legal, environmental, architectural, engineering, property
management or other advice with respect to this transaction and is relying
solely upon the advice of its own investment, accounting, tax, legal
environmental, architectural, engineering, property management and other
advisors. Subject to the provisions of Sections 5.01 through 5.11 of this
Agreement, Buyer shall accept the Project in its "as-is, where-is" condition,
with all faults, on the Closing, and assumes the risk that adverse physical,
environmental, economic or legal conditions may not have been revealed by its
investigation.
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Buyer hereby specifically acknowledges that Buyer has carefully
reviewed this Section 5.12 and discussed its import with legal counsel and that
the provisions of this Section 5.12 are a material part of this Agreement. The
disclaimer contained in this Section 5.12 shall not merge with the transfer of
the Project and shall survive Closing, without any limitation as to a survival
period.
SECTION 5A
Buyer represents, warrants and covenants to Seller as of the date
hereof and as of the Closing as follows:
5.01A Ability to Perform. Buyer is a corporation organized, validly
existing and in good standing under the laws of the State of Ohio. Buyer has
full power and authority to execute, deliver and carry out the terms and
provisions of this Agreement and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of Buyer enforceable in
accordance with its terms, subject to creditors' rights, bankruptcy and other
equitable principles. The execution and delivery of this Agreement by the party
signing on behalf of Buyer has been duly authorized. No order, permission,
consent, approval, license, authorization, registration or validation of, or
filing with, or exemption by, any governmental authority or agency, commission,
board or public authority is required to authorize, or is required in connection
with, the execution, delivery and performance of this Agreement by Buyer or the
taking by Buyer of any action contemplated by this Agreement.
5.02A Compliance with Laws, etc. Neither the entering into of this
Agreement nor the consummation of the transaction contemplated hereby will
constitute or result in a violation or breach by Buyer of any judgment, order,
writ, injunction or decree issued against or imposed upon it, or will result in
a violation of any applicable law, order, rule or regulation of any governmental
authority. There are no actions, suits, proceedings, arbitrations or
investigations pending or, to the best of Buyer's knowledge, threatened against,
relating to or affecting Buyer which might interfere in a material respect with
the transaction contemplated by this Agreement or otherwise affect Buyer's
ability to consummate the transaction contemplated hereby. There are no facts,
events, conditions or occurrences by reason of which any such action, suit,
proceeding, arbitration or investigation may be brought by any person or entity
against Buyer.
5.03A Bankruptcy. No attachment, execution, assignment, for the
benefit of creditors or voluntary proceedings in bankruptcy has been commenced
by the Buyer and, to the best of Buyer's knowledge, no such action has been
contemplated or threatened, nor has any involuntary proceedings in bankruptcy
been commenced against the Buyer.
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5.04A Miscellaneous Agreements. Buyer acknowledges that all
information with respect to the Project furnished to Buyer, including, without
limitation, Pre-Closing Deliverables (collectively, the "Confidential
Information"), is and has been so furnished on the condition that Buyer
maintains the confidentiality thereof. Accordingly, Buyer shall, and shall cause
its directors, officers, employees, agents, contractors and representatives to,
hold in strict confidence, and not disclose to any other person or entity
without the prior written consent of Seller until the Closing shall have been
consummated, any of the Confidential Information in respect of the Project
delivered to Buyer by Seller or any of its agents, representatives, directors,
officers or employees. If the Closing does not occur and this Agreement is
terminated, Buyer shall promptly return, or cause to be returned, to Seller all
copies of such Confidential Information without retaining, or permitting
retention of, any copy thereof. Notwithstanding anything to the contrary
hereinabove set forth, Buyer may disclose such Confidential Information (i) on a
need-to-know basis to its employees, its title insurer and members of
professional firms serving it in connection with this transaction, including,
without limitation, its attorneys, architects, environmental consultants and
engineers, and its clients; (ii) as any governmental agency or authority may
require in order to comply with applicable laws or regulations; and (iii) if
required by an order of any court of competent jurisdiction, and this provision
shall survive Closing.
SECTION 6
VIOLATIONS OF LAW
6.01 Responsibility for Violations. All notices of violations of
laws, ordinances, or regulations ("Violations of Law"), which are issued or sent
prior to the Closing by any governmental department, agency or bureau having
jurisdiction as to conditions affecting the Project shall be remedied or
complied with by Seller prior to Closing; provided, however, that if Seller is
unable to remedy such Violations of Law or comply with such notices by the
Closing then Buyer shall have the option to (a) terminate this Agreement,
whereupon all obligations of all parties hereto shall cease, the Deposit shall
be returned to Buyer and this Agreement shall be void and without recourse to
the parties hereto, except for provisions which are expressly stated to survive
such termination; or (b) proceed with Closing notwithstanding such Violations of
Law. Notwithstanding any term or provision contained herein to the contrary, in
no event shall the Sellers collectively be obligated to spend more than $16,000
to remedy any Violations of Law. In the event the Violations of Law require
Sellers to spend collectively more than $16,000 in the aggregate to remedy,
Seller shall notify Buyer of its election not to remedy such Violations of Law,
and Buyer shall elect, by written notice to Seller within five (5) days of
receipt of such notification from Seller, to either (i) waive its objection to
such Violations of Law and proceed to Closing or (ii) terminate this Agreement
and obtain a refund of the Deposit.
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SECTION 7
INSURANCE
7.01 Maintenance of Insurance. Until the Closing, Seller shall
maintain its present insurance on the Project, which insurance in respect of
fire and casualty shall be covered by a standard All-Risk Policy in an amount at
least equal to the full replacement value of the Project. Subject to the
provisions of Section 7.02, the risk of loss in and to the Project shall remain
vested in Seller until the recordation of the Deed to Buyer.
7.02 Casualty or Condemnation. If prior to the Closing, the Project
or any "material" portion thereof is damaged or destroyed by fire or casualty,
or any part of the Project is taken or threatened to be taken by eminent domain
by any governmental entity, then Buyer shall have the option, exercisable by
written notice given to Seller at or prior to the Closing, either to (a)
terminate this Agreement, whereupon all obligations of all parties hereto shall
cease, the Deposit shall be returned to Buyer and this Agreement shall be void
and without recourse to the parties hereto except for provisions which are
expressly stated to survive such termination; or (b) proceed with the purchase
of the Project, and in such case, unless Seller shall have previously restored
the Project to its condition prior to the occurrence of any such damage or
destruction, Seller shall pay over or assign to Buyer, without recourse, all
amounts received or due (plus an amount equal to the sum of any deductible under
any insurance policy covering the Project) from, and all claims against, any
insurance company or governmental entity as a result of such destruction or
taking. Within thirty (30) days after receipt of written notice of such casualty
or condemnation, Buyer will advise Seller in writing whether Buyer desires to
proceed with this transaction in light of such casualty or condemnation. The
term "material" as used in this Section 7.02 shall mean damage or destruction in
an amount equal to or greater than $200,000 per portion of the Project owned by
any individual Seller.
SECTION 8
SELLER'S OBLIGATIONS PRIOR TO CLOSING
Seller covenants that between the date of this Agreement and the
Closing (all of which must be true and correct in all material respects as of
the Closing and shall constitute conditions precedent to Buyer's obligation to
close hereunder):
8.01 Replacement of Personal Property; Inventory. No material
personal property included as part of the Project shall be removed from the
Project unless the same is replaced with similar items of at least equal quality
prior to the Closing.
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8.02 Prudent Business Practices. Each Seller shall maintain the
portion of the Project owned by such Seller in good operating condition and
repair, shall not commit or allow to occur waste of the Project so that the
Project, except for normal wear and tear, is in good repair on the date of
Closing and substantially the same state of repair and condition as existed as
of the Effective Date.
8.03 Tenant Estoppels. Seller shall use reasonable efforts to
obtain and deliver to Buyer at least (5) business days prior to the Closing an
executed estoppel letter dated within sixty (60) days of the Closing, in form
reasonably satisfactory to both Seller's and Buyer's counsels, a pro-forma copy
being attached hereto as Exhibit E (the "Tenant Estoppels"), from tenants whose
leases constitute in the aggregate not less than eighty percent (80%) of the
rentable square footage of the Improvements, or in the form described or
contemplated in the lease, the substance and content of which must be consistent
in all material respects with the Lease, and the Certified Rent Roll. It is
expressly understood and agreed that if Seller agrees under any circumstance to
extend the Closing date as referenced in Section 3.01 hereof to a date which
would cause the Tenant Estoppels to be dated more than sixty (60) days prior to
the Closing, that the Tenant Estoppels shall be deemed satisfactory provided
they are dated within the sixty (60) day period prior to the originally stated
Closing date. In no event shall the preceding sentence imply any obligation or
agreement on the part of Seller to extend the Closing date.
Upon delivery to Buyer prior to or after Closing of a Tenant
Estoppel confirming the matters set forth in Section 5.02 hereof as to such
tenant's Lease, the representations and warranties of the Seller set forth in
Section 5.02 hereof shall be deemed terminated and the Seller shall have no
liability to the Buyer therefor.
Notwithstanding the foregoing, Buyer acknowledges and agrees
that, with respect to any Lease with any U.S. governmental agency and Leases
with State agencies, Seller shall be deemed to have satisfied its obligation to
deliver an estoppel certificate if it uses reasonable efforts to obtain from
such U.S. governmental agency a Lease Status Report or from the State agencies
their form of estoppel certificate or lease status report. If Buyer does not
terminate this Agreement prior to the expiration of the Study Period, Buyer
shall be deemed to have accepted the Tenant Estoppels for all purposes and
Seller shall be deemed to have satisfied this covenant. Seller shall reasonably
cooperate with Buyer and any lender of Buyer in connection with obtaining
subordination, non-disturbance and attornment agreements and tenant estoppels
required by any lender of Buyer from the tenants occupying space within the
Project.
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SECTION 9
STUDY PERIOD
9.01 Study Period. Buyer shall have until 6:00 p.m. on the date
that is sixty (60) days following the Effective Date, as defined below (the
"Study Period") to perform a feasibility study of the Project, including, but
not limited to, test borings, soil analyses, hydrologic and environmental
surveys, marketing and feasibility studies, structural and engineering
investigations, reviewing the books and records of the Seller and the Project,
financial analyses and verifications of existing zoning and status of title and
conferences with governmental staff members. In the event that any such
examinations, studies, tests, reviews and/or inspections cause Buyer, in its
sole and absolute discretion, to believe that it is not prudent to proceed to
Closing, then Buyer may, at any time during the Study Period, terminate this
Agreement by giving written notice of such termination to Seller, whereupon the
parties hereto shall be released from any and all further liability and
obligation hereunder and the Initial Deposit shall promptly be returned to
Buyer. In the event Buyer does not provide written notification to Seller during
the Study Period of termination of this Agreement, Buyer shall be deemed not to
have elected to terminate this Agreement and the parties hereto shall remain
subject to the terms and conditions of this Agreement. In the event Buyer does
not terminate the Agreement as provided in this Section 9.01, Buyer and/or its
designees shall have the continued right until Closing, as hereinafter defined,
to inspect, survey and make other tests of the Project.
9.02 Access. Upon execution of this Agreement, Buyer and its agents
shall have full access to the Project, subject to the rights of tenants with
reasonable notice to them, and full access during business hours upon reasonable
advance notice to Seller to all books, records, files, financial data, leases
and contracts relating to the Project. Seller reserves the right to have a
representative present during any such inspections. Buyer and its agents shall
have the right to inspect and copy the foregoing documents, conduct all surveys,
tests, test borings, soil analyses, engineering, hazardous waste and
environmental studies, studies, examinations and to make such inquiries
concerning the Project as Buyer may determine necessary or desirable. Seller
shall use reasonable efforts to cooperate in such examinations and shall
instruct Seller's agents, servants, employees, and representatives to cooperate
in assisting Buyer in the exercise of Buyer's study rights including, without
limitation, allowing Buyer access to such materials in the Project Manager's
office or elsewhere. In the event Buyer enters upon the Project for purposes of
this Section 9.02, Buyer will indemnify, defend and hold harmless Seller and its
agents, servants and employees from and against any loss, cost, expense, claim
or liability made against Seller or its agents, servants or employees as a
result of such entry, including, without limitation, the costs of restoring the
Project to its original condition existing immediately prior to Buyer's action,
or death or injury to any person which occurs as a result of the acts or
omissions of Buyer or any of its employees, consultants, engineers, agents and
representatives, during any entry onto or inspection of the Project, or during
the conduct of any of the Feasibility Studies, by Buyer or any of its employees,
agents or representatives. Buyer agrees to restore the Project to its condition
existing immediately prior to Buyer's or its agent's actions. This Section 9.02
shall survive any termination of this Agreement or Closing hereunder. Seller
shall also
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furnish Buyer, within the Study Period, all additional information in
Seller's possession which Buyer may reasonably request with respect to the
Seller, the Project or the operation of the Project.
SECTION 10
SELLER'S CLOSING OBLIGATIONS
10.01 Closing, Deliveries and Obligations. At or prior to the
Closing, Seller shall deliver the following to Buyer (all of which shall
constitute condition precedents to Buyer's obligation to close hereunder):
(a) Deed; Bill of Sale. The Deed and Bill of Sale, all
in form reasonably satisfactory to Buyer's counsel, duly executed and
acknowledged, which together convey the Project to Buyer, subject only to the
Permitted Exceptions.
(b) Assignment of Leases. An assignment of the Leases,
in form reasonably satisfactory to Buyer's counsel.
(c) Lease Records. The original Leases, or to the extent
not in Seller's possession, photocopies, certified by Seller as true and
complete, of Leases, and all rent records and related documents in the
possession or under the control of Seller. To the extent any deposits are in a
form other than cash, such deposits shall be transferred to Buyer at Closing in
a manner reasonably acceptable to Buyer.
(d) Plans, Specifications, Warranties, Guaranties and
Licenses. To the extent in Seller's possession, copies of all current site
plans, surveys, soil and substrata studies, architectural drawings, plans and
specifications, engineering plans and studies, floor plans, landscape plans and
other plans or studies of any kind that relate to all or any part of the
Project. Seller shall also deliver (i) originals (or copies, if originals are
not then available) of all then effective assignable guaranties, warranties
and/or payment and performance bonds made by any person for the benefit of
Seller, with respect to the Project or any of its components, together with an
instrument assigning such guaranties and warranties to Buyer and (ii) originals
(or copies, if originals are not then available) of all certificates, Licenses,
permits, authorizations and approvals issued for or with respect to the Project
by governmental and quasi-governmental authorities having jurisdiction, to the
extent such items are in Seller's possession.
(e) Title Affidavits. Such affidavits, indemnities and
lien waivers as Buyer's title insurer may reasonably require.
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(f) Files. To the extent available, originals (or
copies, if originals are not available) of all documents and books and records
necessary for the continued operation of the Project, other than proprietary
information, including without limitation, lease files, rent records, escalation
records and statements and maintenance records.
(g) Notices of Sale. Sufficient original letters,
executed by Seller in form and substance reasonably satisfactory to Buyer,
advising tenants under the Leases of the sale of the Project to Buyer and
directing that all rents and other payments thereafter becoming due be sent to
Buyer or as Buyer may direct.
(h) Certificate as to Representations, Warranties and
Covenants. A certificate by each Seller to the effect that all of the
representations, warranties and covenants of such Seller as it relates to the
portion of the Project owned by such Seller set forth in Sections 5 and 8 remain
true and correct in all material respects as of the Closing.
(i) Notices. Any required approval or notice required by
any federal, state or local government authority required in connection with the
transfer of the title hereunder.
(j) Evidence of Tax Payments. A receipt or receipts from
the appropriate taxing authorities evidencing that all real estate taxes and
personal property taxes affecting the Project are not delinquent.
(k) Organizational Documents. The organizational
documents of Seller together with an original resolution of Seller authorizing
the execution of this Agreement, the conveyance documents and all other
documents to be executed by Seller and the performance by Seller hereunder and
thereunder together with a good standing certificate of Seller.
(l) Assumable Financing. The Loan Documents, if any, and
an assignment thereto.
10.02 Possession. At the Closing and as a condition precedent to
Closing, Seller shall deliver full possession of the Project, free of all
tenants or occupants other than under the Leases, which Leases shall be in full
force and effect.
10.03 Covenant and Indemnity. (a) As additional consideration for
Buyer's purchasing the Project and paying the Purchase Price to the Seller, each
Seller hereby covenants and agrees as it relates to the portion of the Project
owned by such Seller to remain fully liable for the performance and payment of
all tenant improvements and the payment of all leasing commissions currently due
and owing (including any delinquent amounts) under any of the Leases or under
any leasing/commission agreement or which shall hereafter be due and owing under
any of the Leases or under any leasing/commission agreement, excluding, however,
tenant
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improvement costs and leasing commissions with respect to any option to renew or
extend leases and leasing commissions and tenant improvements costs which shall
hereafter be owing under any leases or leasing/commission agreements for any new
Leases approved by Buyer after the Effective Date or new Leases executed by
Buyer subsequent to the Closing (collectively, the "Buyer's Commissions and
Costs"). It is expressly understood and agreed that Buyer is assuming and
agreeing to be bound by and liable for such Buyer's Commissions and Costs. Buyer
is not assuming the obligations to perform or pay for any tenant improvements or
to pay for any leasing commissions which have heretofore accrued, and which are
now owing under any of the Leases or under any leasing/commission agreement
other than as aforesaid. Notwithstanding anything to the contrary contained
herein, Buyer shall pay, by reimbursing Seller for any amount it has paid
therefor prior to Closing and assuming any amount which is unpaid as of Closing
those items described in Exhibit G, attached hereto.
(b) Buyer and Seller shall each indemnify, defend and hold the
other party (together with its officers, directors, partners, and employees)
harmless from and against all claims, demands, causes of actions, judgments,
damages, costs and expenses (including, without limitation, reasonable, actual
attorneys' fees and court costs), deficiencies, settlements and investigations
which relate to matters, actions or omissions which arise out of or are based
upon any of the following during such parties' period of ownership, which for
Seller shall be the period of time prior to Closing and for Buyer shall be the
period of time on and after Closing:
(i) any obligation under any contracts, agreements and
writings entered into by or on behalf of such party in respect of the use,
construction, operation, ownership, occupancy or maintenance of any portion of
the Project arising out of an event occurring during such parties' period of
ownership;
(ii) any accident, injury, death or damage whatsoever
caused to any person or entity or loss of property, occurring in or about the
Premises or any part thereof, or on any other property connected with or
adjacent thereto during such parties' period of ownership; or
(iii) any breach of the covenant set forth in Section
10.03(a), above, or with respect to any payment or performance obligation under
any of the Leases for tenant improvements or under any of the Leases and/or
leasing/commission agreements for leasing commissions which have heretofore
accrued, which are now due and owing or which shall hereafter accrue.
(iv) any breach of a representation or warranty set forth
in this Agreement.
This Section 10.03 shall survive the Closing until the first
anniversary of the Closing; provided, however, subject to the terms of Section
8.03, the representations set forth in Section 5.02, above, shall survive until
the expiration of each lease currently in effect at the Project.
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SECTION 11
BUYER'S CLOSING OBLIGATIONS
At the Closing, Buyer shall:
11.01 Payment of Purchase Price. Deliver to Seller the Purchase
Price, as adjusted for apportionments under Section 12, and any other
adjustments thereto required pursuant to the express provisions of this
Agreement.
11.02 Assumable Financing. Deliver the assumption, if applicable, of
the Loan Documents and other documents relative thereto as required by Lender
and the Escrow Agent, together with causing each Lender to deliver such
documents as are necessary to release Seller and the new guarantor of the Loans
from any and all liability under the Loans except for liabilities with respect
to matters which first arose and pertain to the period of time during which the
Seller owned the Project.
11.03 Closing Certificate. A certificate by Buyer (i) to the effect
that all of the representations, warranties and covenants of Buyer set forth in
Section 5A remain true and correct in all material respects as of the Closing
and (ii) confirming the waivers and acknowledgments set forth in Section 5.12
hereof.
11.04 Indemnity. Buyer hereby covenants and agrees to indemnify,
defend and hold Seller (and its officers, directors and employees) harmless from
and against all claims, demands, causes of actions, judgments, damages, costs
and expenses (including, without limitation, reasonable attorneys' fees and
court costs), deficiencies, settlements and investigations which relate to
matters, actions or omissions which arise out of or are based upon any
obligations under any of the Loan Documents (except for liability with respect
to matters which first arose and pertain to the period of time during which
Seller owned the Project).
11.05 Other Documents. Deliver any other documents required by this
Agreement to be delivered by Buyer, including, without limitation, the Bill of
Sale and Assignment of Leases.
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SECTION 12
APPORTIONMENTS AND ADJUSTMENTS TO PURCHASE PRICE;
CLOSING EXPENSES
12.01 Apportionments. The following items shall be prorated as of
12:01 A.M. on the Closing and the net amount thereof shall be added to or
deducted from, as the case may be, the amount of the Purchase Price to be paid
at the Closing;
(a) general real estate, personal property and ad valorem
taxes and assessments for the current tax year of the Project. If any such taxes
or assessments are payable in installments all installments due through the
Closing together with the accrued but unpaid portion of any other installments
not yet due as of the Closing shall be paid for by the Seller;
(b) taxes, water, sewer and front foot benefit charges, and
charges for electricity, gas, telephone and other utilities and license fees;
(c) rent and other charges under the Leases (to the extent
monies have actually been collected therefor);
(d) all other income and expenses relating to the Project,
including principal and interest payable under each of the Loans; and
(e) any other items that are customarily prorated in
transactions of this nature excluding, however, insurance premiums under the
Insurance Policies.
Any and all security deposits, prepaid rent and all interest earned
thereon shall be a credit to Buyer at Closing. Seller shall be fully liable for
any wages and other amounts due and owing any employees at the Project. Seller
shall retain, and shall not be entitled to any credit for, the deposits, if any,
made by Seller in connection with the provision of electric, sewer, water,
telephone and other utility services to the Project.
Seller shall retain any and all deposits and escrows relating to the
Loans.
For purposes of calculating prorations, Buyer shall be deemed to be in
title to the Project, and, therefore, entitled to the income therefrom and
responsible for the expenses thereof for the entire day upon which the Closing
occurs. All such prorations shall be made on the basis of the actual number of
days of the month which shall have elapsed as of the day of the Closing and
based upon the actual number of days in the month and a three hundred sixty-five
(365) day year. The amount of such prorations shall be initially performed by
Title Company at Closing but shall be subject to adjustment in cash after the
Closing outside
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of escrow as and when complete and accurate information becomes available, if
such information is not available at the Closing. Seller and Buyer agree to
cooperate and use their best efforts to make such adjustments no later than
sixty (60) days after the Closing (except with respect to property taxes, which
shall be adjusted within sixty (60) days after the tax bills for the applicable
period are received).
Without limiting the generality of the foregoing, Seller and Buyer
hereby agree that with respect to any year-end reconciliations of reimbursable
expenses under the Leases, Seller and Buyer shall cooperate to complete such
reconciliations as soon as possible after the Closing, with Seller responsible
for amounts owing to tenants under the Leases, and entitled to Rents
(hereinafter defined) payable by tenants under the Leases (as the case may be),
with respect to periods prior to the Closing, and with Buyer responsible for
amounts owing to tenants under the Leases, and entitled to Rents payable by
tenants under the Leases (as the case may be), with respect to periods from and
after the Closing (and, with respect to any such amounts payable to Seller,
Buyer shall have no obligation to collect such Rents, including having no
obligation to institute legal proceedings, including any action for unlawful
detainer, against a tenant owing any such Rents, other than to use commercially
reasonable efforts to collect such rents and to respond to any periodic
inquiries made by Seller relating to the collection of such rents and to the
extent Buyer actually receives any delinquent Rents owing to Seller Buyer shall
tender the same to Seller to the extent of amounts delinquent and actually due
Seller but only after (y) reimbursing Buyer for its actual out-of-pocket costs
and expenses of collection incurred with respect to such tenant, and (z) all
Rents due and owing to Buyer have been paid to Buyer in full (including, without
limitation, the payment to Buyer of delinquencies in Rent owing to Buyer)).
The term "Rent" as used herein shall mean all rents, including any
percentage rent and any accrued tax and operating expense escalation, charges,
and other revenue of any kind generated from or in connection with the Leases.
Except as set forth in this Section 12.01, all items of income and expense which
accrue for the period prior to the Closing will be for the account of Seller and
all items of income and expense which accrue for the period on and after the
Closing will be for the account of Buyer. Buyer shall receive a credit against
the Purchase Price for all amounts of Rent which are allocable to the period on
and after the Closing and which have been prepaid as of the Closing Date. The
provisions of this Section 12.01 shall survive the Closing.
12.02 Operating Expense Pass-throughs. With respect to expenses of
the Project which are chargeable to the tenants pursuant to the provisions of
the Leases (the "CAM Charges"), Seller shall determine (1) the amount of those
expenses paid or payable by Seller from January 1 in the year in which the
Closing occurs through the date of Closing (or, with regard to taxes and
assessments, the amount of the proration thereof charged to Seller) and (2) the
amount tenants have paid to Seller from January 1 in the year in which Closing
occurs until the date of Closing as the tenants' pro rata share of such tenant
expenses. Buyer shall be
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entitled to a credit at Closing equal to the amount Seller has received as of
the Closing Date as pro rata expense payments from tenants in excess of the
expenses paid or payable by Seller through the Closing Date. If accurate
allocations of CAM Charges cannot be made at Closing because current bills are
not obtainable, the parties shall allocate such expenses at Closing on the best
and most current information available, subject to adjustment in cash after the
Closing outside of escrow as and when final bills or other evidence of the
applicable expense are received. Buyer shall also be entitled to a credit at
Closing equal to any CAM Charges for 1997 and prior years which are owing to any
of the tenants (to the extent collected from such tenants) of the Project which
are presently in occupancy. The provisions of this Section 12.02 shall survive
the Closing.
12.03 Closing Expenses. Buyer shall pay for all of its diligence
costs and expenses including, without limitation, the costs of the survey of the
Premises, the charges for the title commitment and report, and the premium for
the Title Policy. Buyer shall also pay for one-half of any escrow charges and
for any and all state and local transfer, recordation and documentary taxes and
any and all recording costs applicable to the transactions contemplated herein
except for the Virginia Grantor's Tax which shall be paid for by Seller. Each
party will be responsible for its own legal fees, consultant's fees and costs of
inspection. Seller shall pay for one-half of any escrow charges, the Virginia
Grantor's Tax and any and all fees, expenses and other costs associated with
Buyer's application and assumption of the Loan including, without limitation,
any application fees, review fees, processing fees, transfer/assumption fees and
Lender's costs and expenses, excluding, however, Buyer's legal fees and expenses
incurred in connection with such application and assumption and excluding any
mortgage or other taxes incurred in connection therewith. The provisions of this
Section 12.03 shall survive the Closing.
SECTION 13
FAILURE TO PERFORM
13.01 Seller's Default. If at the Closing, Seller is unable to give
title or to make conveyance, or to deliver possession of the Project, or to
satisfy all of the terms and conditions precedent to Closing as set forth in
this Agreement, all as herein stipulated, or if on such date the Project does
not conform with the provisions hereof, and Buyer does not elect to take title,
Seller shall be in default under this Agreement and Buyer shall have the right
to terminate the Agreement and the Deposit shall be forthwith returned to Buyer,
and Buyer may pursue the right to compel specific performance and the right to
collect its costs and expenses incurred in connection therewith as its sole and
exclusive remedy. Buyer hereby waives and releases all other claims for damages
and other remedies against Seller for non-performance and expressly acknowledges
and agrees that in no event shall any officer, director, member, partner or
shareholder of Seller ever have any liability hereunder.
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13.02 Buyer's Default. The parties acknowledge that in the event of
Buyer's failure to fulfill its obligations hereunder it is impossible to compute
exactly the damages which would accrue to the Seller in such event. The parties
have taken these facts into account in setting the amount of the Deposit,
required pursuant to Section 2.02, and hereby agree that: (i) such amount is the
pre-estimate of such damages which would accrue to Seller from a default by
Buyer; (ii) such amount represents damages and not any penalty against Buyer;
and (iii) if this Agreement shall be terminated by Seller by reason of Buyer's
failure to fulfill Buyer's obligations hereunder, the Deposit shall be Seller's
full and liquidated damages in lieu of all other rights and remedies (including
the right of specific performance) which Seller may have against Buyer at law or
in equity. Seller's sole and exclusive remedy for Buyer's default shall be to
receive the Deposit as liquidated damages in lieu of all other rights and
remedies which Seller may have against Buyer at law or in equity. Seller hereby
waives and releases all other claims for damages and other remedies against
Buyer for non-performance and expressly acknowledges and agrees that in no event
shall any officer, director or shareholder of Buyer ever have any liability
hereunder.
SECTION 14
BROKERAGE FEES
14.01 For the Seller. The Seller represents and warrants that it has
not engaged any broker or finder or incurred any liability for brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement. The Seller agrees to indemnify and hold harmless the Buyer
against any claims or liabilities asserted against Buyer by any person acting or
claiming to act as a broker or finder in connection with the transaction
described in this Agreement.
14.02 For the Buyer. The Buyer represents and warrants that it has
not engaged any broker or finder or incurred any liability for brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement. The Buyer agrees to indemnify and hold harmless the Seller
against any other claims or liabilities asserted against it by any person acting
or claiming to act as a broker or finder on behalf of the Buyer.
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SECTION 15
NOTICES
15.01 Effective Notices. Any notices or other communications
required or permitted hereunder shall be sufficiently given if delivered
personally or sent by telecopy machine, Federal Express or other recognized
overnight courier, registered or certified mail, postage prepaid, addressed as
follows or to such other address of which the parties may have given notice:
To the Seller: Samnan Trading Establishment
P.O. Box 28008
Alsour Street
Alnaser Building
Safat, Kuwait
Attention: Dr. Louai Alassar
Phone No.: 011 965-240-5701/2
Telecopy No.: 011 965-240-5703
With a copy to: Cambridge Holdings
560 Herndon Parkway
Suite 210
Herndon, Virginia 20170
Attention: Mr. Andrew J. Czekaj
Phone No.: 703-709-8866
Telecopy No.: 703-847-9611
With a copy to: Hale and Dorr LLP
1455 Pennsylvania Avenue, N.W.
Suite 1000
Washington, D.C. 20004
Attention: Steven S. Snider, Esq.
Phone No.: (202) 942-8494
Telecopy No.: (202) 942-8484
To the Buyer: DDR OfficeFlex Corporation
c/o Developer's Diversified Realty Corporation
34555 Chagrin Boulevard
Moreland, Ohio 44022
Attention: James A. Schoff, Esq.
Executive Vice-President and
Chief Operating Officer
Phone No.: (216) 247-4700
Telecopy No.: (216) 247-1118
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With a copy to: Developer's Diversified Realty Corporation
34555 Chagrin Boulevard
Moreland Hills, OH 44022
Attention: Joan Allgood, Esq.
General Counsel
Phone No.: (440) 247-1731
Telecopy No.: (440) 247-2385
To Escrow Agent: Commercial Title Group, Ltd.
8605 Westwood Center Drive
Suite 401, Tysons Corner
Vienna, Virginia 22182
Attention: Mr. Douglas Nichols
Phone No.: (703) 506-1520
Telecopy No.: (703) 506-9615
Unless otherwise specified herein, such notices or other communications shall be
deemed to be effective: (a) one (1) business day after deposit with the courier
if sent by Federal Express or other recognized overnight delivery service; or
(b) upon receipt if accomplished by hand delivery or by telecopied delivery.
Either party may, from time to time, by notice in writing served upon the other
party, in the same manner as prescribed in this Section, designate a different
mailing address or a different or additional person to which all such notices
are thereafter to be addressed.
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SECTION 16
MISCELLANEOUS PROVISIONS
16.01 Integration. This Agreement embodies and constitutes the
entire understanding between the parties with respect to the transaction
contemplated herein, and all prior agreements, understandings, representations
and statements, oral or written, are merged into this Agreement. Neither this
Agreement nor any provision hereof may be waived, modified, amended, discharged
or terminated except by an instrument signed by the party against whom the
enforcement of such waiver, modification, amendment, discharge or termination is
sought, and then only to the extent set forth in such instrument.
16.02 Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of, the Commonwealth of Virginia.
16.03 Captions. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Agreement or any of the provisions hereof.
16.04 Escrow Agent. Escrow Agent shall hold the Deposit in
accordance with the terms and provisions of this Agreement, subject to the
following:
(a) Escrow Agent undertakes to perform only such duties as
are expressly set forth in this Agreement and no implied duties or obligations
shall be read into this Agreement against Escrow Agent.
(b) Escrow Agent may act in reliance upon any writing or
instrument or signature which it, in good faith, believes of any statement or
assertion contained in such writing or instrument, and may assume that any
person purporting to give any writing, notice, advice or instrument in
connection with the provisions of this Agreement has been duly authorized to do
so. Escrow Agent shall not be liable in any manner for the sufficiency or
correctness as to form, manner and execution, or validity of any instrument
deposited in escrow, nor as to the identity, authority, or right of any person
executing the same, and Escrow Agent's duties under this Agreement shall be
limited to those provided in this Agreement.
(c) Unless Escrow Agent discharges any of its duties under
this Agreement in a negligent manner or is guilty of willful misconduct with
regard to its duties under this Agreement, Seller and Buyer shall indemnify
Escrow Agent and hold it harmless from any and all claims, liabilities, losses,
actions, suits or proceedings at law or in equity, or other expenses, fees, or
charges of any character or nature, which it may incur or with which it may
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be threatened by reason of its acting as Escrow Agent under this Agreement; and
in such connection Seller and Buyer shall indemnify Escrow Agent against any and
all expenses including reasonable attorneys' fees and the cost of defending any
action, suit or proceeding or resisting any claim in such capacity.
(d) If the parties (including Escrow Agent) shall be in
disagreement about the interpretation of this Agreement, or about their
respective rights and obligations, or the propriety of any action contemplated
by Escrow Agent, Escrow Agent may, but shall not be required to, file an action
in interpleader to resolve the disagreement. Escrow Agent shall be indemnified
for all costs and reasonable attorneys' fees in its capacity as Escrow Agent in
connection with any such interpleader action and shall be fully protected in
suspending all or part of its activities under this Agreement until a final
judgment in the interpleader action is received.
(e) Escrow Agent may consult with counsel of its own choice
and have full and complete authorization and protection in accordance with the
opinion of such counsel. Escrow Agent shall otherwise not be liable for any
mistakes of fact or errors of judgment, or for any acts or omissions of any
kind, unless caused by its negligence or willful misconduct.
(f) The Escrow Agent may in its sole discretion resign by
giving thirty (30) days' written notice thereof to the Buyer and Seller. The
Buyer and Seller shall furnish to the Escrow Agent written instructions for the
release of the escrow funds and escrow documents in such event. If the Escrow
Agent shall not have received such written instructions, the Escrow Agent may
petition any court of competent jurisdiction for the appointment of a successor
Escrow Agent, and upon such appointment deliver the escrow funds and escrow
documents to such successor.
16.05 Bind and Inure. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
16.06 Drafts. This Agreement shall not be binding or effective until
properly executed and delivered by both Seller and Buyer. The delivery by Buyer
to Seller of an executed counterpart of this Agreement shall constitute an offer
which may be accepted by the delivery to Buyer of a duly executed counterpart of
this Agreement and the satisfaction of all conditions under which such offer is
made, but such offer may be revoked by Buyer by written notice given at any time
prior to such acceptance and satisfaction.
16.07 Number and Gender. As used in this Agreement, the masculine
shall include the feminine and neuter, the singular shall include the plural and
the plural shall include the singular, as the context may require.
31
<PAGE> 32
16.08 Attachments. If the provisions of any exhibit, schedule or
rider to this contract are inconsistent with the provisions of this Agreement,
the provisions of such schedule or rider shall prevail. The Exhibits attached
are hereby incorporated as integral parts of this Agreement.
16.09 Survival of Representations. Subject to the terms and
conditions of Section 8.03, above, all representations and warranties made by
the parties herein or in any instrument or document furnished in connection
herewith shall survive the Closing and any investigation at any time made by or
on behalf of the parties hereto for a period of twelve (12) months from the
Closing.
16.10 Dates. Whenever used herein, unless expressly provided
otherwise, the term "days" shall mean consecutive calendar days, except that if
the expiration of any time period measured in days occurs on a Saturday, Sunday,
legal holiday or other day when federal offices are closed in Washington, D.C.,
such expiration shall automatically be extended to the next business day.
16.11 Time of the Essence. Time is of the essence of this Agreement.
16.12 Assignment. This Agreement may not be assigned by Buyer
without the prior written consent of Seller not to be unreasonably withheld. Any
assignment approved by Seller shall be subject to the assignor remaining liable
under this Agreement. Prior to any request for an assignment hereunder, Buyer
and the proposed assignee shall provide Seller with such information as Seller
may need in order to evaluate the proposed assignment.
16.13 Effective Date. The Effective Date of this Agreement (the
"Effective Date") shall be the date on which this Agreement has been executed by
both Seller and Buyer. The execution hereof by Buyer shall constitute an offer
by Buyer to Seller to purchase the Project on the terms and conditions herein
stated, which must be accepted by Seller on or before 5:00 p.m. on May ____,
1998 by the execution hereof by Seller. If Buyer's offer is not timely accepted,
this Agreement shall be thereafter null and void.
16.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
32
<PAGE> 33
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above written.
SELLER:
A&A Greenbrier, Inc.
By:
--------------------------
Name: Louai Alassar
Title: President
A&A Northpointe B, Inc.
By:
--------------------------
Name: Louai Alassar
Title: President
A&A Northpointe C, Inc.
By:
--------------------------
Name: Louai Alassar
Title: President
A&A Greenbrier Tech, Inc.
By:
--------------------------
Name: Louai Alassar
Title: President
- ------------------
Date
33
<PAGE> 34
BUYER:
DDR OFFICEFLEX
CORPORATION, an Ohio corporation
By:
- ---------------- --------------------------------
Date James A. Schoff
Executive Vice President and
Chief Operating Officer
34
<PAGE> 35
JOINDER BY ESCROW AGENT
Commercial Title Group, Limited, referred to in this Agreement as the
"Escrow Agent," hereby acknowledges that it received this Agreement executed by
Seller and Buyer on the ____ day of ________, 1998, and accepts the obligations
of the Escrow Agent as set forth herein. It further acknowledges that it
received the Deposit on the _____ day of __________ 1998. The Escrow Agent
hereby agrees to hold and distribute the Deposit in accordance with the terms
and provisions of this Agreement. It further acknowledges that it hereby assumes
all responsibilities for information reporting required under Section 6045(e) of
the Internal Revenue Code.
COMMERCIAL TITLE GROUP, LIMITED
By:
-------------------------------
Name: Douglas Nichols
Title: Vice President
Address: 8605 Westwood Center Drive
Suite 401
Tyson's Corner
Vienna, Virginia 22182
35
<PAGE> 36
SCHEDULE OF EXHIBITS
Exhibit A-1 through Exhibit A-4 - breakdown of land ownership on a
Seller by Seller basis
Exhibit B - Information on Loans
Exhibit C - Title/Survey
Exhibit D - Certified Rent Roll
Exhibit E - Form of Tenant Estoppel Certificate
Exhibit F - Underground Storage Tanks
Exhibit G - Buyer Leasing and Tenant Improvement Payments
Exhibit H - ATT Property
36
<PAGE> 37
EXHIBIT A-1 THROUGH A-4
LAND
37
<PAGE> 38
EXHIBIT B
INFORMATION ON LOANS
38
<PAGE> 39
EXHIBIT C
TITLE/SURVEY
39
<PAGE> 40
EXHIBIT D
CERTIFIED RENT ROLL
40
<PAGE> 41
EXHIBIT E
TENANT'S ESTOPPEL CERTIFICATE
41
<PAGE> 42
EXHIBIT F
UNDERGROUND STORAGE TANKS
[AS DESCRIBED IN COPIES OF EXISTING ENVIRONMENTAL REPORT, PROVIDED BY SELLER TO
BUYER]
42
<PAGE> 43
EXHIBIT G
BUYER LEASING AND TENANT IMPROVEMENT PAYMENTS
<TABLE>
<CAPTION>
GREENBRIER CIRCLE Leasing Ti's Total
- -----------------
<S> <C> <C> <C>
Huntsman Chemicals 17,608.48 71,880.90 89,489.38
Gramman/Northrop Corp. 8,490.83 -0- 8,490.83
Applied Technical Services 31,254.11 134,591.97 165,846.08
NORTHPOINTE-B
- -------------
Orbital Sciences 35,092.78 82,640.00 117,732.78
</TABLE>
43
<PAGE> 44
EXHIBIT H
ATT PROPERTY
44
<PAGE> 1
EXHIBIT 10.2
AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Amendment") is entered
into as of the ______ day of July, 1998 by and between the undersigned parties.
W I T N E S S E T H:
WHEREAS, the undersigned entered into that certain Purchase and Sale
Agreement, dated as of May 10, 1998 (the "Agreement"), regarding the sale of
certain real property located in Prince William County, Virginia, which property
is more particularly described in the Agreement (the "Property");
WHEREAS, the parties desire to amend the Agreement as set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The undersigned hereby agree that Section 2.02 is hereby
amended as follows:
a. The Initial Deposit (in the amount of $32,500 together with
all interest earned thereon) currently held by Escrow Agent shall,
simultaneously with the execution of this Amendment, be wire transferred to
Seller in accordance with the instructions set forth in Exhibit A, attached
hereto and made a part hereof, to be held by Seller in accordance with the terms
set forth in the Agreement;
b. Section 2.02(b) is hereby deleted and the following is
substituted in lieu thereof:
"(b) Buyer shall upon execution of this Amendment, deliver
to Seller via cure transfer an additional earnest money
deposit in the amount of $113,500 (the "Additional Deposit")"
c. Section 2.02 (e) of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"(e) At the time of execution of this Amendment, Buyer shall
deliver to Seller (in accordance with the wire transfer
instructions set forth in Exhibit A) the Additional Deposit
(in the amount of $113,500) and a supplemental deposit in the
amount of $64,000 (the "Supplemental Deposit"). The Initial
Deposit, Additional Deposit and Supplemental Deposit shall
hereinafter be referred to as the "Deposit." The term
"Deposit" as used herein shall, in addition to referring to
the Initial Deposit, the Additional Deposit and the
Supplemental Deposit may also be deemed to refer to any one of
the terms Initial Deposit, Additional Deposit or Supplemental
Deposit, as the context requires. The Deposit, together with
all interest earned through the date hereof with respect
<PAGE> 2
to the Initial Deposit, if any, shall be applied to the
Purchase Price at Closing and shall be non-refundable to the
Buyer unless Seller shall default in tendering the Deed and
other closing documents described in Section 10.01 to Buyer at
Closing."
2. The Escrow Agent is hereby authorized and instructed to
transfer the Initial Deposit, together with any interest earned thereon, to the
Seller as described in paragraph 1. above and is hereby released from any and
all obligations or responsibilities relating to the Deposit.
3. Section 3.01 of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"3.01 Closing. All documents necessary or appropriate to
transfer the Project shall be delivered and closing (the
"Closing") shall be held on, or in Buyer's sole discretion,
provided that Seller is furnished with five (5) days prior
written notice of the earlier Closing Date, before September
30, 1998 at the offices of Hale and Dorr LLP, 1455
Pennsylvania Avenue, N.W., Washington, D.C. 20004.
4. Section 3.02 of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"3.02 Conditions to Closing. There are no conditions
precedent to Buyer's obligation to close hereunder.
Notwithstanding anything to the contrary contained in the
Agreement, any and all conditions precedent to Closing, or any
provisions set forth in the Agreement whereby Buyer has the
option to terminate the Agreement, are hereby waived and
deemed satisfied by Buyer and Buyer shall proceed to Closing
on or before September 30, 1998. In the event Buyer does not
close on or before September 30, 1998, Seller shall retain the
Deposit, including all interest earned thereon, in accordance
with Section 13.04."
5. Except as amended herein, the Agreement is hereby confirmed to
remain in full force and effect.
6. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agreement.
7. This Amendment may be executed in counterparts, each of which
shall be deemed to be an original but all of which shall be one and the same
document.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
Battlefield/Virginia, Inc., a Virginia corporation
By:
---------------------------------
Louai Alassar
President
DDR Office Flex Corporation, an Ohio corporation
By:
---------------------------------
James A. Schoff
Executive Vice President and Chief
Operating Officer
JOINDER BY ESCROW AGENT
Commercial Title Group, Ltd., referred to in the Agreement as the "Escrow Agent"
hereby acknowledges the instructions set forth above to transfer the Initial
Deposit, together with all interest earned thereon, to Seller in accordance with
the provisions set forth above.
Commercial Title Group, Ltd.
By:
--------------------------
Douglas Nichols
President
3
<PAGE> 1
EXHIBIT 10.3
AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Amendment") is entered
into as of the ______ day of _____________, 1998 by and between the undersigned
parties.
W I T N E S S E T H:
WHEREAS, the undersigned entered into that certain Purchase and Sale
Agreement, dated as of May 10, 1998 (the "Agreement"), regarding the sale of
certain real property located in Chesapeake, Virginia (Greenbrier Industrial
Center) , Loudoun county, Virginia (Lots 2-A and 3-A of Le Bourget Business
Park), and Chesapeake, Virginia (Greenbrier Technology Center ), which property
is more particularly described in the Agreement (the "Property");
WHEREAS, the parties desire to amend the Agreement as set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The undersigned hereby agree that Section 2.02 is hereby
amended as follows:
a. The Initial Deposit (in the amount of $67,500 together with
all interest earned thereon) currently held by Escrow Agent shall,
simultaneously with the execution of this Amendment, be wire transferred to
Seller in accordance with the instructions set forth in Exhibit A, attached
hereto and made a part hereof, to be held by Seller in accordance with the terms
set forth in the Agreement;
b. Section 2.02(b) is hereby deleted and the following is
substituted in lieu thereof:
"(b) Buyer shall upon execution of this Amendment, deliver
to Seller, via wire transfer, an additional earnest money
deposit in the amount of $236,500 (the "Additional Deposit")"
c. Section 2.02 (e) of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"(e) At the time of execution of this Amendment, Buyer shall
deliver to Seller (in accordance with the wire transfer
instructions set forth in Exhibit A) the Additional Deposit
and a supplemental deposit in the amount of $136,000 (the
"Supplemental Deposit"). The Initial Deposit, Additional
Deposit and Supplemental Deposit shall hereinafter be referred
to as the "Deposit." The term "Deposit" as used herein shall,
in addition to referring to the Initial Deposit, the
Additional Deposit and the Supplemental Deposit may also be
deemed to refer to any one of the terms Initial Deposit,
Additional Deposit or Supplemental Deposit, as the context
requires. The Deposit, together with all interest earned
through the date hereof with respect to the Initial Deposit,
if
<PAGE> 2
any, shall be applied to the Purchase Price at Closing and
shall be non-refundable to the Buyer unless Seller shall
default in tendering the Deed and other closing documents
described in Section 10.01 to Buyer at Closing."
2. The Escrow Agent is hereby authorized and instructed to
transfer the Initial Deposit, together with any interest earned thereon, to the
Seller as described in paragraph 1. above and is hereby released from any and
all obligations or responsibilities relating to the Deposit.
3. Section 3.01 of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"3.01 Closing. All documents necessary or appropriate to
transfer the Project shall be delivered and closing (the
"Closing") shall be held on, or in Buyer's sole discretion,
provided that Seller is furnished with five (5) days prior
written notice of the earlier Closing Date, before September
30, 1998 at the offices of Hale and Dorr LLP, 1455
Pennsylvania Avenue, N.W., Washington, D.C. 20004.
4. Section 3.02 of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"3.02 Conditions to Closing. There are no conditions
precedent to Buyer's obligation to close hereunder.
Notwithstanding anything to the contrary contained in the
Agreement, any and all conditions precedent to Closing, or any
provisions set forth in the Agreement whereby Buyer has the
option to terminate the Agreement, are hereby waived and
deemed satisfied by Buyer and Buyer shall proceed to Closing
on or before September 30, 1998. In the event Buyer does not
close on or before September 30, 1998, Seller shall retain the
Deposit, including all interest earned thereon, in accordance
with Section 13.04."
5. Except as amended herein, the Agreement is hereby confirmed to
remain in full force and effect.
6. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agreement.
7. This Amendment may be executed in counterparts, each of which
shall be deemed to be an original but all of which shall be one and the same
document.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
A & A Greenbrier, Inc., a Virginia corporation
By:
---------------------------
Louai Alassar
President
A & A Northpointe B, Inc., a Virginia corporation
By:
---------------------------
Louai Alassar
President
A & A Northpointe C, Inc., a Virginia corporation
By:
---------------------------
Louai Alassar
President
A & A Greenbrier Tech, Inc., a Virginia corporation
By:
---------------------------
Louai Alassar
President
DDR Office Flex Corporation, an Ohio corporation
By:
----------------------------------
James A. Schoff
Executive Vice President and Chief
Operating Officer
3
<PAGE> 4
JOINDER BY ESCROW AGENT
Commercial Title Group, Ltd., referred to in the Agreement as the "Escrow Agent"
hereby acknowledges the instructions set forth above to transfer the Initial
Deposit, together with all interest earned thereon, to Seller in accordance with
the provisions set forth above.
Commercial Title Group, Ltd.
By:
--------------------------
Douglas Nichols
President
4
<PAGE> 1
EXHIBIT 10.4
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement"), dated as of this
____ day of April, 1998, by and between Battlefield/Virginia, Inc. (hereinafter
referred to as "Seller"), and (B) DDR OFFICEFLEX CORPORATION, an Ohio
corporation, or its permitted assignee or designee ("Buyer").
WITNESSETH:
WHEREAS, Seller is the owner of certain real property, together with
all improvements located upon such real property and all personal property of
Seller located thereon or used in connection therewith; and
WHEREAS, Seller desires to sell to Buyer all of such real and personal
property upon the terms more particularly set forth below.
NOW THEREFORE, in consideration of the mutual undertakings and
covenants herein contained, Seller and Buyer hereby covenant and agree as
follows:
SECTION 1
SALE OF PREMISES AND ACCEPTABLE TITLE
1.1 Agreement to Buy and to Sell; Project. Seller shall sell to Buyer,
and Buyer shall purchase from Seller, at the price and upon the terms and
conditions set forth in this Agreement, all of the following:
(a) (i) that certain real property more particularly described
on Exhibits A attached hereto and made a part hereof (the "Land");
(b) all buildings, structures and improvements on the Land and
all related improvements, facilities, amenities, structures, driveways,
fixtures, landscaping, paving, site work, walkways, plumbing and heating pipes,
culverts, and mains located on the Land (collectively, the "Improvements");
(c) all right, title and interest of Seller in and to any
alleys, strips or gores adjoining the Land, and any easements, rights-of-way,
water rights or other interests in, on, under or to, any land, highway, street,
road, right-of-way or avenue, open or proposed, in, on, under, across, in front
of, abutting or adjoining the Land, and all right, title and interest of Seller
in and to any awards for damage thereto by reason of a change of grade thereof;
(d) the accessions, appurtenant rights, privileges,
appurtenances and all the estate and rights of Seller in and to the Land and the
Improvements, as applicable, or otherwise
<PAGE> 2
appertaining to any of the property described in the immediately preceding
subparagraphs (a), (b) and/or (c);
(e) the fixtures, equipment, machinery, supplies, equipment,
furniture, chattels, furnishings, and other personal property located and/or
used in connection with the operation and maintenance of the Project, as defined
below, or otherwise owned by Seller (collectively, the "Personal Property");
(f) all intangible property now or hereafter owned by Seller
and used in connection with the Land, Improvements and Personal Property,
including without limitation, the right to use any trade style or name now used
in connection with the same, any contract rights, tenant security deposits to
the extent in Seller's possession, utility agreements, guarantees, licenses,
approvals, certificates, certificates of occupancy, plans and specifications,
logos, permits, warranties or other rights related to the development of,
construction of, ownership of, or use and operation of, the Project, as
hereinafter defined and any other funds, deposits or monies of Seller; and
(g) all of Seller's interest as lessor in all leases (herein
defined in Section 5.02(a) hereof) covering the Land and Improvements, including
all tenant security and other deposits and interest earned thereon and prepaid
rents and interest earned thereon.
All of the items described in subparagraphs (a), (b), (c) and (d) above
are hereinafter collectively referred to as the "Premises". all of the items
described in subparagraphs (a), (b), (c), (d), (e), (f) and (g) above are
hereinafter collectively referred to as the "Project".
1.2 Title. (a) Seller shall convey to Buyer by a duly executed special
warranty deed (the "Deed"), and Buyer shall accept fee simple title to the
Premises in accordance with the terms of this Agreement, and Buyer's obligation
to accept said title shall be conditioned upon Buyer then being conveyed good
and clear record, marketable and insurable title to the Land, excepting only the
Permitted Exceptions (hereinafter defined). It shall be a condition precedent to
Buyer's obligation to close hereunder that a title insurance company (the "Title
Company") acceptable to Buyer and any lender providing Buyer's financing stands
ready to issue, at the Closing (herein defined) an ALTA owner's policy of title
insurance, insuring Buyer's interest in the Premises, dated the day of Closing,
with liability in the amount of the Purchase Price (herein defined), subject
only to the Permitted Exceptions (the "Title Policy"). The Title Policy shall
insure against all mechanics' liens and, provided Buyer elects to obtain a
Survey (hereinafter defined), shall have full survey coverage and shall be an
extended coverage policy insuring against, among other things, mechanics' liens,
easements and claims of parties in possession not shown by the public records
with all general and standard exceptions deleted, all at no additional premium
to be paid by Buyer.
(b) Simultaneously with the delivery of the Deed, Seller shall
execute and deliver to Buyer a special warranty bill of sale and instrument of
transfer and assignment (the "Bill of Sale"), in form and substance reasonably
satisfactory to Buyer's counsel, assigning and transferring all of the tangible
and intangible personal property, including, without limitation, such Seller's
interest in
2
<PAGE> 3
(i) any proceeds under any insurance policies or condemnation proceedings
affecting the Premises, (ii) any licenses, permits, variances (if any),
governmental approvals and consents pertaining to the Project, (iii) any
warranties and guaranties relating to the Project, (iv) any contracts and
agreements which relate to the Project that Buyer has elected in writing to
assume, and (v) all leases and deposits relating to the Premises, free and clear
of all liens and encumbrances, except the Permitted Exceptions, and indemnifying
Buyer from obligations under all of the items assigned arising prior to Closing
and with Buyer's indemnifying Seller from obligations under all of the items
assigned arising from and after the Closing.
(c) Buyer shall, promptly after the Effective Date, order (i)
a commitment for title insurance (the "Commitment") by the terms of which
Buyer's Title Company agrees to issue to Buyer at Closing the Title Policy; (ii)
a photocopy of all documents ("Title Documents") describing all title exceptions
shown on the Commitment (the "Title Exceptions"), and (iii) if Buyer so elects,
an ALTA Land Title Survey of the Land (the "Survey"). If Buyer objects to any
matters disclosed by the Commitment, Title Documents or Survey, Buyer shall
furnish Seller with a written statement thereof within ten (10) days following
receipt by Buyer of the last of the Commitment, Title Documents and Survey. All
matters shown on the Title Exceptions which are not objected to by Buyer within
said ten (10) day period following receipt shall be "Permitted Exceptions".
Seller agrees to use its reasonable efforts to satisfy such objections noted by
Buyer, provided that Seller shall obtain a satisfaction and release of any
monetary liens, including, without limitation, any and all mortgages, mechanics
liens and judgment liens other than the assumable financing, as hereinafter
defined (collectively, "Monetary Liens") and with respect to matters other than
Monetary Liens, Seller shall be obligated to collectively spend up to $20,000 in
the aggregate to cure any title objection. Seller shall, within five (5) days
after receipt of Buyer's objections, notify Buyer of Seller's proposed actions
to satisfy such objections, and shall have a reasonable time, not to exceed
fifteen (15) days, to satisfy such objections. If, despite its reasonable
efforts to do so, Seller cannot satisfy such objections (other than the Monetary
Liens, which shall be satisfied by Seller and matters other than Monetary Liens
which cost up to 420,000 in the aggregate to cure) on or before the expiration
of such fifteen (15) day period, as the same may be extended in Buyer's sole
discretion, Buyer shall have the following options: (i) to extend such fifteen
(15) day period for such additional period up to Closing that Buyer may elect,
during which Seller shall continue to use its reasonable efforts to satisfy such
objections; (ii) to waive its objection to such title defect and proceed to
Closing or (iii) to terminate this Agreement by written notice to Seller and
obtain an immediate refund of the Deposit, as defined in Section 2.02.
Notwithstanding any term or provision contained herein to the contrary, except
with respect to Monetary Liens, the procurement by Seller of a commitment for
the issuance of a Title Policy or an endorsement thereto insuring Buyer against
any Title Exception which Buyer has disapproved pursuant to this Section shall
be deemed a cure by Seller of such objection, subject to Buyer's approval not to
be unreasonably withheld or delayed.
(d) Notwithstanding anything to the contrary contained in
Section 3.01 of this Agreement, if Buyer's objections to title matters are not
satisfied prior to expiration of the Study Period, Closing shall occur on the
later of (a) the date described in Section 3.01 and (b) five (5) business days
following satisfaction of Buyer's title objections in accordance with this
Section.
3
<PAGE> 4
SECTION 2
PURCHASE PRICE AND ESCROW DEPOSIT
2.1 Purchase Price.
(a) The total purchase price ("Purchase Price") to be paid by
Buyer to Seller for the Project shall be THIRTEEN MILLION TWO HUNDRED THOUSAND
AND NO/100 DOLLARS ($13,200,000.00). Such Purchase Price shall be paid to Seller
at Closing, as set forth in Section 2.01(b) below, of which the Deposit (as
hereinafter defined) shall constitute a part, subject to prorations and
adjustments as hereinafter provided in this Agreement.
(b) The Purchase Price shall consist of and be payable as
follows:
(i) Buyer shall have the option, which option must be
exercised no later than the end of the Study Period (as defined in Section 9.01
hereof), either to (A) pay the entire Purchase Price in cash at Closing by wire
transfer of immediately available funds (provided Seller and Buyer mutually
agree as to the allocation of payment of any prepayment penalties to Lenders),
or (B) subject to the terms and conditions of this Agreement and further subject
to Lender's prior approval, assume the existing loan on the Project with the
Lender (the "Lender") and in the amount as more particularly disclosed on
Exhibit B attached hereto (the "Loan") of approximately $8,114,573.46, which is
the projected balance of the Loan as of May 1, 1998, on the same terms and
conditions as set forth in the loan documents evidencing the Loan (collectively,
the "Loan Documents"), except Seller and any guarantor of the Loan shall be
fully and completely released from the Loan Documents except for liability with
respect to matters which first arose and pertain to the period of time during
which Seller owned the Project (the "Assumable Financing"). If Buyer is approved
for the Assumable Financing, then, at Closing, Buyer shall execute and deliver
to the Escrow Agent, the Lender and Seller such documents as are necessary for
Buyer to consummate Buyer's assumption of the Loan. The projected balance of
said Loan after the debt service payment due on May 1, 1998, the annual interest
rate of the Loan, the amount of the monthly payments of principal and interest
and the amortization schedule are set forth on Exhibit .
Buyer shall file, within ten (10) days after the Effective
Date, a complete application seeking to obtain the requisite approval from the
Lender to assume the Loan on such terms and conditions as the Lender may
require. If prior to the end of the Study Period (a) Buyer does not elect to
assume the Loan, (b) Buyer is not approved for the Assumable Financing which
approval must include the Lender's agreement to release Seller and any guarantor
from the Loan Documents, or (c) Buyer does not accept and approve of the terms
and conditions of the Assumable Financing within five (5) days of the Lender's
offer of such terms and conditions, which terms and conditions must provide for
the release of the Seller and all guarantors from the Loan Documents, which
acceptance or rejection by Buyer must in all events occur by the end of the
Study Period, then either the Buyer or the Seller can elect to terminate this
Agreement within five (5) days of any Lender's rejection of Buyer's assumption
of the Loan or Buyer's rejection of the Lender's terms and conditions.
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Failure of Buyer to notify Seller of Buyer's election to assume or reject the
Loan by the end of the Study Period shall be deemed to mean that Buyer has
elected to accept the Loan. Notwithstanding any term or provision contained
herein to the contrary, in the event Buyer for whatever reason does not assume
the Loan, including, without limitation, in the event Buyer elects to proceed
with an entire cash purchase, Seller shall have the option to terminate this
Agreement. Such termination pursuant to this Section 2.01(b)(i) shall (w) not be
considered a breach of the Agreement; (x) not result in the assessment of
damages or penalties to either party; (y) not result in either party having
liability to the other hereunder; and (z) result in the return of the Deposit to
the Buyer.
If neither the Buyer nor the Seller elects to terminate the
Agreement pursuant to this Section 2.01(b)(i), then the cash portion of the
Purchase Price shall, at the option of Seller, (i) be increased to the full
Purchase Price such that the purchase described in this Agreement shall be an
all cash transaction or (ii) be increased to reflect the amount of the Loan not
being assumed.
Seller shall pay any and all fees, expenses and other costs
associated with Buyer's application and assumption of the Loan including,
without limitation, any application fees, review fees, processing fees,
transfer/assumption fees and Lender's reasonable costs and expenses, except for
any recordation or mortgage tax and any legal fees of Buyer. Furthermore, if
this transaction is an all cash transaction without an assumption by Buyer of
the Loan, Buyer and Seller shall hereafter mutually agree as to which of Buyer
or Seller shall pay any prepayment fees, premiums and other costs and expenses
required in connection with the prepayment of the Loan.
(ii) If Buyer assumes the Loan, the balance of the
cash portion of the Purchase Price shall be paid by Buyer at Closing by wire
transfer of immediately available funds. If Buyer does not assume the Loan, the
entire Purchase Price shall be paid by Buyer on or before 12:00 p.m. (ET) at
Closing by wire transfer of immediately available funds.
2.2 Deposit; Escrow Agent
(a) Within three (3) business days following the date that
Commercial Title Group, Limited, 8605 Westwood Center Drive, Suite 401, Tyson's
Corner, Vienna, Virginia 22182, Attention: Douglas Nichols ("Escrow Agent")
receives a copy of this Agreement executed by both Seller and Buyer, Buyer shall
deposit with the Escrow Agent the amount of $32,500.00, either by certified bank
or cashier's check or by wire transfer, as a good faith deposit hereunder. Such
$32,500.00 deposit, and all interest earned thereon, shall be referred to as the
"Initial Deposit". All interest on any deposit shall be deemed income of Buyer.
Escrow Agent shall maintain the Initial Deposit in an FDIC-insured
interest-bearing account. The Initial Deposit shall be applied to the Purchase
Price at Closing and shall be non-refundable to the Seller except as otherwise
provided herein. The Initial Deposit shall be released in accordance with the
terms and provisions of this Agreement.
(b) Provided Buyer has not elected to terminate this Agreement
during the Study Period (as defined in Section 9.01), Buyer shall within two (2)
business days after the end of the
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Study Period deliver to the Escrow Agent the amount of $113,500.00, via
certified bank check or cashier's check or wire transfer, as an additional
earnest money deposit hereunder. Such $113,500.00, and all interest earned
thereon, shall be referred to as the "Additional Deposit". Escrow Agent shall
maintain the Additional Deposit in an FDIC-insured interest-bearing account. The
Initial Deposit together with the Additional Deposit shall be referred to herein
as the "Deposit". The term "Deposit" a used herein shall, in addition to
referring to both the Initial Deposit and the Additional Deposit may also be
deemed to refer to either the Initial Deposit or the Additional Deposit, as the
context requires. Upon receipt of the Additional Deposit by the Escrow Agent,
both Deposits shall become non-refundable to Buyer, and shall be applied to the
Purchase Price, unless Seller otherwise defaults in its obligations to close the
transaction contemplated by this Agreement in which event the Deposits, together
with all accrued interest thereupon, shall be refunded to Buyer. The failure of
Buyer to timely deliver any Deposit hereunder shall be a material default, and
shall entitle Setter, at Seller's sole option, to terminate this Agreement
immediately.
(c) Notwithstanding any other provision in this Agreement to
the contrary, if prior to the end of the Study Period (as defined in Section
9.01) Buyer should discover one or more condition(s) or defect(s) in or to the
Project, or have any objection to the Project, which arises pursuant to or in
connection with (i) the title commitment, or (ii) the Survey, then Buyer shall
immediately notify Seller in writing of any such condition(s) requesting that
Seller cure or remedy said condition(s) prior to the Closing date hereof at
Seller's sole expense, said written notice also to include all documentation
reasonably required by Seller in support of Buyer's estimate to remedy the
condition(s) (the "Cure Notice"). Within three (3) business days after receipt
of the Cure Notice, Seller shall notify Buyer in writing whether or not Seller
elects to cure or remedy any condition(s) which is the subject of a Cure Notice.
If Seller elects not to cure or remedy such condition(s), or if Seller fails to
notify Buyer of its election to cure any condition(s) which is the subject of a
Cure Notice within three (3) business days as provided hereinabove, then Buyer
shall have the right to (i) terminate this Agreement by written notice to Seller
and obtain an immediate refund of any Deposit, together with any interest
thereon, in which case neither party shall have any further rights or
obligations hereunder (except for any indemnity obligations of either party
pursuant to the other provisions of this Agreement), and each party shall bear
its own costs incurred hereunder, or (ii) Buyer may elect to proceed with the
purchase of the Project subject to such condition(s) specified in any such Cure
Notice, and in such event, the Purchase Price shall be adjusted at Closing by
the amount set forth in the Cure Notice with respect to the estimated cost to
remedy such condition(s) subject to the dollar limitation (the "Cap) set forth
in Section 1.02(c) hereof; provided however nothing herein shall obligate Seller
to institute litigation to satisfy any such condition(s), except for the release
of the Loan, subject to the provisions of Section 2.01(b) hereof. In the event
Seller has expended any portion of the Cap pursuant its obligations under
Section 1.02(c) ("Seller's Prior Expenditures"), any adjustment to the Purchase
Price shall be subject to the Cap as reduced by Seller's Prior Expenditures.
(d) The Escrow Agent joins in the execution of this Agreement
for the purpose of acknowledging receipt of the Deposit and agreeing to hold and
release the Deposit in accordance with the terms and provisions of this
Agreement.
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(e) If there is a dispute between Seller and Buyer concerning
Seller's or Buyer's right to receive the Deposit, or the proceeds of collection
thereof, Escrow Agent shall continue to hold the Deposit until the dispute is
resolved by Seller and Buyer or until otherwise directed by a court of competent
jurisdiction. Upon termination of the escrow, all interest earned on the
investments shall be paid to the party entitled to receive the principal
thereof.
SECTION 3
THE CLOSING
3.1 Closing. All documents necessary or appropriate to transfer the
Project shall be delivered and closing (the "Closing") shall be held on, or in
Buyer's sole discretion, provided that Seller is furnished with at least five
(5) business days prior written notice of the earlier closing date, before, the
date that is thirty (30) days after expiration of the Study Period. Closing
shall occur at the offices of Hale and Dorr LLP, 1455 Pennsylvania Avenue, N.W.,
Washington, D.C. 20004.
3.2 Conditions to Closing. It is a condition precedent to Buyer's
obligation to close hereunder that as of the Closing (i) Seller shall have
performed all of its covenants contained in this Agreement, and all of Seller's
representations and warranties contained in this Agreement shall be true and
accurate in all material respects on and as of the date of Closing as if made
anew on that date, (ii) Title Company shall stand ready to issue the Title
Policy in the form described in Section 1.02(a) hereof, and (iii) Seller shall
have delivered to the Title Company the items described in Section 10.
3.3 Other Agreement. Contemporaneously with this Agreement, Buyer shall
execute a Purchase and Sale Agreement substantially similar in form to this
Agreement for the property owned by certain other entities and identified on
Exhibit H attached hereto (the "Other Agreement"). Notwithstanding anything in
this Agreement or the Other Agreement to the contrary, Buyer acknowledges and
agrees that in the event Buyer fails or refuses to close on any property which
is listed on Exhibits A and H then Seller's obligations under this Agreement and
the Other Agreement to sell any of the above-referenced properties to Buyer
shall be null and void at Seller's option. Costs incurred to the date of such
default or failure shall be born by Buyer, and the Deposit hereunder and the
Deposit under the Other Agreement shall be retained by Seller as liquidated
damages and shall be nonrefundable to Buyer.
In the event that the condition in this Section 3.03 is not satisfied,
Seller may elect, at its sole discretion, to terminate this Agreement or waive
satisfaction of the condition and close escrow. In the event of such
termination, the Deposit shall be retained by Seller and shall be non-refundable
to the Buyer.
Seller and AT&T, Inc. ("AT&T) have entered into a certain lease
pertaining to the Premises (the "AT&T Lease") whereby AT&T has an option to
purchase the Project (the "Option"). Seller's obligation to sell the Project to
Buyer is contingent upon AT&T not exercising the Option. In the
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event AT&T exercises the Option this Section 3.03 shall not be applicable to
AT&T and the acquisition of the Project by AT&T shall not be conditioned upon or
subject to any of the terms or conditions of the Other Agreement.
SECTION 4
SELLER'S PRE-CLOSING DELIVERIES
Seller shall deliver to Buyer, at Seller's sole cost and expense,
within five (5) days after execution of this Agreement, copies of the following
documents relating to the Project (all of the following documents and other
items, together with the Additional Deliverables (hereinafter defined) shall be
referred to herein collectively as the "Pre-Closing Deliverables"):
4.1 Leases. True and correct copies of the Leases and all proposed
additional Leases of space in the Premises currently being negotiated by Seller.
4.2 Permits. To the extent in Seller's possession, copies of all
building permits, certificates of occupancy and governmental permits.
4.3 Taxes. A copy of the most recent available real estate and personal
property tax statements for the Project.
4.4 Plans and Specifications. To the extent in Seller's possession (1)
originals (or copies, if originals are not available) of the "as-built" plans
and specifications for the existing, and any proposed, improvements to the
Project (the "Plans and Specifications ") and (ii) a copy of all guaranties and
warranties currently in effect made by any person for the benefit of Seller with
respect to all or any part of the Project in connection with the construction
and equipping of the Project.
4.5 Title Matters/Survey. To the extent in Seller's possession, a copy
of Seller's existing Owner's Title Insurance Policy insuring Seller's ownership
of the Land, a copy of Seller's most recent survey of the Land and a copy of the
site plans of the Project, all of which, if available, are attached hereto as
Exhibit C.
4.6 Utility Bills. Copies of all utility bills relating to the Project
for the prior 12-month period.
4.7 Personal Property. A list of all Personal Property currently used
in the maintenance and operation of the Project.
4.8 Service/Equipment Contracts. Copies of all Service/ Equipment
Contracts (hereinafter defined in Section 5.03).
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4.9 Insurance Policies. Copies of all insurance policies (collectively,
the "Insurance Policies") pertaining to the Project.
4.10 Loan Documents. Copies of all documents evidencing the Loans.
4.11 Financial Statements of the Project. A copy of the financial
statements for the most recently concluded fiscal year showing all items of
income and expenses, and monthly operating statements for the Project for the
year-to-date.
From time to time thereafter, Seller shall deliver to Buyer all
information pertaining to the Project prepared by or on behalf of Seller, which
is in Seller's possession and which may reasonably be requested by Buyer
(collectively, the "Additional Deliverables").
SECTION 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of the date hereof and as of
the Closing as follows:
5.1 Ownership. Seller is the owner of the Project of record and in
fact, legally and beneficially, and, to the best of its knowledge, has good,
marketable and insurable title to the Project. Except as set forth in the AT&T
Lease, there are no options to purchase the Project which are effective, nor has
Seller previously entered into any other contract of sale or agreement of any
kind with a party other than Buyer which is presently effective and which will
not be terminated before the date of this Agreement.
5.2 Leases.
(a) As of the date of the Agreement there are no leases,
subleases, licenses or other rental agreements or occupancy agreements (written
or verbal) which grant any possessory interest in and to any space situated on
or in any of the Premises or that otherwise give rights with regard to use of
any portions of any of the Premises other than the Leases delivered pursuant to
Section 4.01 hereof (said leases, together with any and all amendments,
modifications and supplements thereto and guarantees thereof and leases entered
into after the date hereof in accordance with this Agreement, are herein
referred to collectively as the "Leases");
(b) The copies of the Leases provided to Buyer pursuant to
Section 4.01 are true, accurate and complete as of the date hereof, are, to the
best of Seller's knowledge, in full force and effect and none of them has been
modified, amended or extended; attached as Exhibit D is a Certified Rent Roll,
which Seller hereby certifies is true, accurate and complete in all material
respects, setting forth the Leases;
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(c) No renewal or extension options have been granted to
tenants other than as now set forth in the Leases;
(d) No tenant, or any other person, entity or association has
an option to purchase, right of first refusal, right of first offer or other
similar right in respect of all or any other portion of the Premises other than
AT&T;
(e) No tenant is entitled to rental concessions or abatements
for any period subsequent to the Closing other than as set forth or permitted in
the Leases;
(f) To the best of Seller's knowledge, no parties to any of
the Leases are in default nor do any conditions exist that with the passage of
time, or giving of notice shall constitute a default;
(g) To the best of Seller's knowledge, Seller has received no
notice of any action or proceeding instituted against Seller by any tenant of
any portion of the Project;
(h) There are no security deposits or other deposits other
than those set forth in the Leases; and
(i) No rent has been paid more than one month in advance under
any Lease.
5.3 Service and Management Contracts. To the best of Seller's
knowledge, the agreements provided under Section 4.09 are all of the agreements
concerning the operation and maintenance of the Project entered into by Seller
and affecting the Project (collectively, "Service/ Equipment Contracts'). Seller
is not in default under any of the Service/Equipment Contracts and, to the best
of Seller's knowledge, no other parties to any of the Service/Equipment
Contracts are in default, nor do any conditions exist that, with the passage of
time, or giving of notice, or both, shall constitute a default. To the best of
Seller's knowledge, the copies of the Service/Equipment Contracts provided to
Buyer pursuant to Section 4.08 are true, accurate and complete as of the date
hereof, are in full force and effect and none of them has been modified, amended
or extended.
5.4 Hazardous Substances. The Project has not been used by Seller for
the generation, treatment, storage or disposal of any hazardous substances
during the period in which Seller has owned the Project and, to the best of
Seller's knowledge, during the period of time prior to Seller's ownership and,
to the best of Seller's knowledge, there exist no hazardous substances on, under
or at the Premises. Except as disclosed in Exhibit F attached hereto, or the
surveys of the Project delivered by Seller to Buyer, to the best of Seller's
knowledge, there are no underground storage tanks located on or under the
Premises. For the purposes of this Section 5.04, "hazardous substances" shall
include "hazardous substances" as defined in the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended, 42 U.S.C.[][]9601
et seq., and regulations adopted pursuant to said Act, or any similar
environmental protection law of the or its political subdivisions.
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5.5 Ability to Perform. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Virginia.
Seller has full power and authority to execute, deliver and carry out the terms
and provisions of this Agreement and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of Seller enforceable in
accordance with its terms, subject to creditors' rights, bankruptcy and any
other equitable principles. The execution and delivery of this Agreement by the
party signing on behalf of Seller has been duly authorized. To the best of
Seller's knowledge, no order, permission, consent, approval, license,
authorization, registration or validation of, or filing with, or exemption by,
any governmental agency, commission, board or public authority is required to
authorize, or is required in connection with, the execution, delivery and
performance of this Agreement by Seller or the taking by Seller of any action
contemplated by this Agreement.
5.6 Compliance with Laws. Neither the entering into of this Agreement
nor the consummation of the transaction contemplated hereby will constitute or
result in a violation or breach by Seller of any judgment, order, writ,
injunction or decree issued against or imposed upon it, or will result in a
violation of any applicable law, order, rule or regulation of any governmental
authority. There are no actions, suits, proceedings, arbitrations or
investigations pending or, to the best of Seller's knowledge, threatened (i)
against, relating to or affecting Seller which might interfere in a material
respect with the transaction contemplated by this Agreement, become a cloud on
the title to the Project or any portion thereof or otherwise affect the Project
or Seller's ability to consummate the transaction contemplated hereby or (ii)
against, relating to or affecting the Project.
5.7 No Violation Notice. To the best of its knowledge, Seller has not
received written notice:
(a) from any federal, state, county or municipal authority
alleging any material fire, health, safety, building, pollution, environmental,
zoning or other violation of law in respect of the Premises or any part thereof,
including, without limitation, the occupancy or operation thereof, which has not
been corrected;
(b) concerning the possible or anticipated condemnation of any
part of the Project, or the widening, change of grade or limitation on use of
streets , abutting the same or concerning any special taxes or assessments
levied or to be levied against the Premises or any part thereof;
(c) concerning any change in the zoning classification of the
Premises or any part thereof.
If any such notice is received prior to the Closing, Seller shall
promptly notify Buyer thereof and comply with any requirements of such notice
pursuant to Section 6 hereof prior to the Closing.
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5.8 Assessments. To the best of Seller's knowledge, there are no
pending or proposed special assessments affecting or which may affect the
Project or any portion thereof.
5.9 Loans. Seller has provided true, correct and complete copies of all
documents evidencing the Loans, the Loans are in full force and effect, and
there are no defaults under the Loans.
5.10 Miscellaneous Representations and Warranties.
(a) The business operations of the Project will be conducted
in the usual and normal manner until the Closing. After the expiration of the
Study Period, Seller shall not, without the prior written consent thereto of
Buyer, which consent shall not be unreasonably withheld, delayed or conditioned,
make (or knowingly permit) any material physical change in the Project.
(b) Prior to the expiration of the Study Period, Seller shall
not, without the prior written consent thereto of Buyer, which consent shall not
be unreasonably withheld, delayed or conditioned, enter into any lease affecting
the Project or alter, modify, terminate or renew any existing Lease. After the
expiration of the Study Period, Seller shall not, without the prior written
consent of Buyer, which consent may be withheld by Buyer for any reason or no
reason at all, enter into any lease affecting the Project or alter, modify,
terminate or renew any existing Lease.
(c) Setter is not a "foreign person", as defined in the
internal Revenue Code.
(d) The premiums are paid and current for the insurance
Policies and to the best of Seller's knowledge, the insurance Policies are in
full force and effect.
(e) Except as disclosed in Exhibit G attended hereto and as
otherwise described in Section 10.03 hereof, there are no brokerage fees
pursuant to agreements entered into by Seller which will be Buyer's
responsibility after Closing.
(f) As of the Closing there will be no employees of Seller
employed at the Project.
5.11 Notice of Change. In the event that Buyer becomes aware at any
time prior to Closing that a representation or warranty made by Seller herein,
while true as of the date made, no longer remains true in all material respects,
due to a change of circumstances beyond the reasonable control of Seller
subsequent to the date of this Agreement, Buyer shall promptly give written
notice of such fact to Seller. Seller shall use its reasonable efforts to remedy
such change of circumstances that causes the representation or warranty to be
untrue. In the event Seller is unable to remedy such change of circumstances by
the Closing, then Buyer shall have the option to (a) terminate this Agreement,
whereupon all obligations of all parties hereto shall cease except for those
obligations which survive a termination, and the Deposit shall be returned to
Buyer, or (b) proceed with Closing notwithstanding such change of circumstances
with no adjustment to the Purchase Price.
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5.12 No Other Representations or Warranties. Except as set forth in
Sections 5.01 through 5.11 hereof, Seller disclaims the making of any
representations or warranties, express or implied, regarding the Project or
matters affecting the Project, including, without limitation, the physical
condition of the Project, the existence of certain wetlands on the Project, the
quality of any work or materials used in connection with the improvements on the
Project, title to or the boundaries of the Project, pest control matters, soil
condition, hazardous waste, toxic substance or other environmental matters,
compliance with building, health, safety, land use and zoning laws, regulations
and orders, structural and other engineering characteristics, traffic patterns,
the development potential of the Project and the Project's use, fitness, value
or adequacy for any particular purpose, and all other information pertaining to
he Project. Buyer, moreover, acknowledges (i) that Buyer has entered into this
Agreement with the intention of making and relying upon its own independent
investigation, inspection, analysis, examination and evaluation of the physical,
environmental, economic and legal condition of the Project and all other
relevant facts and circumstances and (ii) that, except as set forth in Sections
5.01 through 5.11 hereof, Buyer is not relying upon any representations and
warranties made by Seller, Seller's agents, brokers, management agent or anyone
else acting or claiming to act on Seller's behalf concerning the Project. Buyer
further acknowledges that it has not received from Setter any investment,
accounting, tax, legal, environmental, architectural, engineering, property
management or other advice with respect to this transaction and is relying
solely upon the advice of its own investment, accounting, tax, legal
environmental, architectural, engineering, property management and other
advisors. Subject to the provisions of Sections 5.01 through 5.11 of this
Agreement, Buyer shall accept the Project in its "as-is, where-is" condition,
with all faults, on the Closing, and assumes the risk that adverse physical,
environmental, economic or legal conditions may not have been revealed by its
investigation.
Buyer hereby specifically acknowledges that Buyer has carefully
reviewed this Section 5.12 and discussed its import with legal counsel and that
the provisions of this Section 5.12 are a material part of this Agreement. The
disclaimer contained in this Section 5.12 shall not merge with the transfer of
the Project and shall survive Closing, without any limitation as to a survival
period.
SECTION 5A
Buyer represents, warrants and covenants to Seller as of the date
hereof and as of the Closing as follows:
5.01A Ability to Perform. Buyer is a corporation organized, validly
existing and in good standing under the laws of the State of Ohio. Buyer has
full power and authority to execute, deliver and carry out the terms and
provisions of this Agreement and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of Buyer enforceable in
accordance with its terms, subject to creditors' rights, bankruptcy and other
equitable principles. The execution and delivery of this Agreement by the party
signing on behalf of Buyer has been duly authorized. No order, permission,
consent, approval, license, authorization, registration or validation of, or
filing with, or exemption by, any governmental authority or agency, commission,
board or public authority is required to
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authorize, or is required in connection with, the execution, delivery and
performance of this Agreement by Buyer or the taking by Buyer of any action
contemplated by this Agreement.
5.02A Compliance with Laws, etc. Neither the entering into of this
Agreement nor the consummation of the transaction contemplated hereby will
constitute or result in a violation or breach by Buyer of any judgment, order,
writ, injunction or decree issued against or imposed upon it, or will result in
a violation of any applicable law, order, rule or regulation of any governmental
authority. There are no actions, suits, proceedings, arbitrations or
investigations pending or, to the best of Buyer's knowledge, threatened against,
relating to or affecting Buyer which might interfere in a material respect with
the transaction contemplated by this Agreement or otherwise affect Buyer's
ability to consummate the transaction contemplated hereby. There are no facts,
events, conditions or occurrences by reason of which any such action, suit,
proceeding, arbitration or investigation may be brought by any person or entity
against Buyer.
5.03A Bankruptcy. No attachment, execution, assignment, for the benefit
of creditors or voluntary proceedings in bankruptcy has been commenced by the
Buyer and, to the best of Buyer's knowledge, no such action has been
contemplated or threatened, nor has any involuntary proceedings in bankruptcy
been commenced against the Buyer.
5.04A Miscellaneous Agreements. Buyer acknowledges that all information
with respect to the Project furnished to Buyer, including, without limitation,
Pre-Closing Deliverables (collectively, the "Confidential Information"), is and
has been so furnished on the condition that Buyer maintains the confidentiality
thereof. Accordingly, Buyer shall, and shall cause its directors, officers,
employees, agents, contractors and representatives to, hold in strict
confidence, and not disclose to any other person or entity without the prior
written consent of Seller until the Closing shall have been consummated, any of
the Confidential Information in respect of the Project delivered to Buyer by
Seller or any of its agents, representatives, directors, officers or employees.
If the Closing does not occur and this Agreement is terminated, Buyer shall
promptly return, or cause to be returned, to Seller all copies of such
Confidential Information without retaining, or permitting retention of, any copy
thereof. Notwithstanding anything to the contrary hereinabove set forth, Buyer
may disclose such Confidential Information (1) on a need-to-know basis to its
employees, its title insurer and members of professional firms serving it in
connection with this transaction, including, without limitation, its attorneys,
architects, environmental consultants and engineers, and its clients; (ii) as
any governmental agency or authority may require in order to comply with
applicable laws or regulations; and (iii) if required by an order of any court
of competent jurisdiction, and this provision shall survive Closing.
SECTION 6
VIOLATIONS OF LAW
6.1 Responsibility for Violations. All notices of violations of laws,
ordinances, or regulations ("Violations of Law"), which are issued or sent prior
to the Closing by any governmental department, agency or bureau having
jurisdiction as to conditions affecting the Project shall be
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remedied or complied with by Seller prior to Closing; provided, however, that if
Seller is unable to remedy such Violations of Law or comply with such notices by
the Closing then Buyer shall have the option to (a) terminate this Agreement,
whereupon all obligations of all parties hereto shall cease, the Deposit shall
be returned to Buyer and this Agreement shall be void and without recourse to
the parties hereto, except for provisions which are expressly stated to survive
such termination; or (b) proceed with Closing notwithstanding such Violations of
Law. Notwithstanding any term or provision contained herein to the contrary, in
no event shall the Seller be obligated to spend more than $4,000 to remedy any
Violations of Law. In the event the Violations of Law require Seller to spend
more than $4,000 in the aggregate to remedy, Seller shall notify Buyer of its
election not to remedy such Violations of Law, and Buyer shall elect, by written
notice to Seller within five (5) days of receipt of such notification from
Seller, to either (i) waive its objection to such Violations of Law and proceed
to Closing or (ii) terminate this Agreement and obtain a refund of the Deposit.
SECTION 7
INSURANCE
7.1 Maintenance of Insurance. Until the Closing, Seller shall maintain
its present insurance on the Project, which insurance in respect of fire and
casualty shall be covered by a standard All-Risk Policy in an amount at least
equal to the full replacement value of the Project. Subject to the provisions of
Section 7.02, the risk of loss in and to the Project shall remain vested in
Seller until the recordation of the Deed to Buyer.
7.2 Casualty or Condemnation. If prior to the Closing, the Project or
any "material" portion thereof is damaged or destroyed by fire or casualty, or
any part of the Project is taken or threatened to be taken by eminent domain by
any governmental entity, then Buyer shall have the option, exercisable by
written notice given to Seller at or prior to the Closing, either to (a)
terminate casualty or condemnation, Buyer will advise Seller in writing whether
Buyer desires to proceed with this transaction in light of such casualty or
condemnation. The term "material" as used in this Section 7.02 shall mean damage
or destruction in an amount equal to or greater than $200,000. This Agreement,
whereupon all obligations of all parties hereto shall cease, the Deposit shall
be returned to Buyer and this Agreement shall be void and without recourse to
the parties hereto except for provisions which are expressly stated to survive
such termination; or (b) proceed with the purchase of the Project, and in such
case, unless Seller shall have previously restored the Project to its condition
prior to the occurrence of any such damage or destruction, Seller shall pay over
or assign to Buyer, without recourse, all amounts received or due (plus an
amount equal to the sum of any deductible under any insurance policy covering
the Project) from, and all claims against, any insurance company or governmental
entity as a result of such destruction or taking. Within thirty (30) days after
receipt of written notice of such casualty or condemnation, Buyer will advise
Seller in writing whether Buyer desires to proceed with this transaction in
light of such casualty or condemnation. The term "material" as used in this
Section 7.02 shall mean damage or destruction in an amount equal to or greater
than $200,000.
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SECTION 8
SELLER'S OBLIGATIONS PRIOR TO CLOSING
Seller covenants that between the date of this Agreement and the
Closing (all of which must be true and correct in all material respects as of
the Closing and shall constitute conditions precedent to Buyer's obligation to
close hereunder):
8.1 Replacement of Personal Property; Inventory. No material personal
property included as part of the Project shall be removed from the Project
unless the same is replaced with similar items of at least equal quality prior
to the Closing.
8.2 Prudent Business Practices. Seller shall maintain the Project in
good operating condition and repair, shall not commit or allow to occur waste of
the Project so that the Project, except for normal wear and tear, is in good
repair on the date of Closing and substantially the same state of repair and
condition as existed as of the Effective Date.
8.3 Tenant Estoppels. Seller shall use reasonable efforts to obtain and
deliver to Buyer at least (5) business days prior to the Closing an executed
estoppel letter dated within sixty (60) days of the Closing, in form reasonably
satisfactory to both Seller's and Buyer's counsels, a pro-forma copy being
attached hereto as Exhibit E (the "Tenant Estoppels"), from tenants whose leases
constitute in the aggregate not less than eighty percent (80%) of the rentable
square footage of the Improvements, or in the form described or contemplated in
the lease, the substance and content of which must be consistent in all material
respects with the Lease, and the Certified Rent Roll. It is expressly understood
and agreed that if Seller agrees under any circumstance to extend the Closing
date as referenced in Section 3.01 hereof to a date which would cause the Tenant
Estoppels to be dated more than sixty (60) days prior to the Closing, that the
Tenant Estoppels shall be deemed satisfactory provided they are dated within the
sixty (60) day period prior to the originally stated Closing date. In no event
shall the preceding sentence imply any obligation or agreement on the part of
Seller to extend the Closing date.
Upon delivery to Buyer prior to or after Closing of a Tenant Estoppel confirming
the matters set forth in Section 5.02 hereof as to such tenant's Lease, the
representations and warranties of the Setter set forth in Section 5.02 hereof
shall be deemed terminated and the Seller shall have no liability to the Buyer
therefor.
Notwithstanding the foregoing, Buyer acknowledges and agrees that with
respect to any Lease with any U.S. governmental agency and Leases with State
agencies, Seller shall be deemed to have satisfied its obligation to deliver an
estoppel certificate if it uses reasonable efforts to obtain from such U.S.
governmental agency a Lease Status Report or from the State agencies their form
of estoppel certificate or lease status report. If Buyer does not terminate this
Agreement prior to the expiration of the Study Period, Buyer shall be deemed to
have accepted the Tenant Estoppels for all purposes and Seller shall be deemed
to have satisfied this covenant. Seller shall reasonably
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cooperate with Buyer and any lender of Buyer in connection with obtaining
subordination, non-disturbance and attornment agreements and tenant estoppels
required by any lender of Buyer from the tenants occupying space within the
Project.
SECTION 9
STUDY PERIOD
9.1 Study Period. Buyer shall have until 6:00 p.m. on the date that is
sixty (60) days following the Effective Date, as defined below (the "Study
Period") to perform a feasibility study of the Project, including, but not
limited to, test borings, soil analyses, hydrologic and environmental surveys,
marketing and feasibility studies, structural and engineering investigations,
reviewing the books and records of the Setter and the Project, financial
analyses and verifications of existing zoning and status of title and
conferences with governmental staff members. In the event that any such
examinations, studies, tests, reviews and/or inspections cause Buyer, in its
sole and absolute discretion, to believe that it is not prudent to proceed to
Closing, then Buyer may, at any time during the Study Period, terminate this
Agreement by giving written notice of such termination to Seller, whereupon the
parties hereto shall be released from any and all further liability and
obligation hereunder and the Initial Deposit shall promptly be returned to
Buyer. In the event Buyer does not provide written notification to Seller during
the Study Period of termination of this Agreement, Buyer shall be deemed not to
have elected to terminate this Agreement and the parties hereto shall remain
subject to the terms and conditions of this Agreement. In the event Buyer does
not terminate the Agreement as provided in this Section 9.01, Buyer and/or its
designees shall have the continued right until Closing, as hereinafter defined,
to inspect, survey and make other tests of the Project.
9.2 Access. Upon execution of this Agreement, Buyer and its agents
shall have full access to the Project, subject to the rights of tenants with
reasonable notice to them, and full access during business hours upon reasonable
advance notice to Seller to all books, records, files, financial data, leases
and contracts relating to the Project. Seller reserves the right to have a
representative present during any such inspections. Buyer and its agents shall
have the right to inspect and copy the foregoing documents, conduct all surveys,
tests, test borings, soil analyses, engineering, hazardous waste and
environmental studies, studies, examinations and to make such inquiries
concerning the Project as Buyer may determine necessary or desirable. Seller
shall use reasonable efforts to cooperate in such examinations and shall
instruct Seller's agents, servants, employees, and representatives to cooperate
in assisting Buyer in the exercise of Buyer's study rights including, without
limitation, allowing Buyer access to such materials in the Project Manager's
office or elsewhere. In the event Buyer enters upon the Project for purposes of
this Section 9.02, Buyer will indemnify, defend and hold harmless Seller and its
agents, servants and employees from and against any loss, cost, expense, claim
or liability made against Seller or its agents, servants or employees as a
result of such entry, including, without limitation, the costs of restoring the
Project to its original condition existing immediately prior to Buyer's action,
or death or injury to any person which occurs as a result of the acts or
omissions of Buyer or any of its employees, consultants, engineers, agents and
representatives, during any entry onto or inspection of the Project, or during
the conduct of any
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of the Feasibility Studies, by Buyer or any of its employees, agents or
representatives. Buyer agrees to restore the Project to its condition existing
immediately prior to Buyer's or its agent's actions. This Section 9.02 shall
survive any termination of this Agreement or Closing hereunder. Seller shall
also furnish Buyer, within the Study Period, all additional information in
Seller's possession which Buyer may reasonably request with respect to the
Seller, the Project or the operation of the Project.
SECTION 10
SELLER'S CLOSING OBLIGATIONS
10.1 Closing, Deliveries and Obligations. At or prior to the Closing,
Seller shall deliver the following to Buyer (all of which shall constitute
condition precedents to Buyer's obligation to close hereunder):
(a) Deed; Bill of Sale . The Deed and Bill of Sale, all in
form reasonably satisfactory to Buyer's counsel, duly executed and acknowledged,
which together convey the Project to Buyer, subject only to the Permitted
Exceptions.
(b) Assignment of Leases . An assignment of the Leases, in
form reasonably satisfactory to Buyer's counsel.
(c) Lease Records. The original Leases, or to the extent not
in Seller's possession, photocopies, certified by Seller as true and complete,
of Leases, and all rent records and related documents in the possession or under
the control of Seller. To the extent any deposits are in a form other than cash,
such deposits shall be transferred to Buyer at Closing in a manner reasonably
acceptable to Buyer.
(d) Plans, Specifications, Warranties, Guaranties and
Licenses. To the extent in Seller's possession, copies of all current site
plans, surveys, soil and substrata studies, architectural drawings, plans and
specifications, engineering plans and studies, floor plans, landscape plans and
other plans or studies of any kind that relate to all or any part of the
Project. Seller shall also deliver (i) originals (or copies, if originals are
not then available) of all then effective assignable guaranties, warranties
and/or payment and performance bonds made by any person for the benefit of
Seller, with respect to the Project or any of its components, together with an
instrument assigning such guaranties and warranties to Buyer and (ii) originals
(or copies, if originals are not then available) of all certificates, Licenses,
permits, authorizations and approvals issued for or with respect to the Project
by governmental and quasi-governmental authorities having jurisdiction, to the
extent such items are in Seller's possession.
(e) Title Affidavits . Such affidavits, indemnities and lien
waivers as Buyer's title insurer may reasonably require.
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(f) Files. To the extent available, originals (or copies, if
originals are not available) of all documents and books and records necessary
for the continued operation of the Project, other than proprietary information,
including without limitation, lease files, rent records, escalation records and
statements and maintenance records.
(g) Notices of Sale. Sufficient original letters, executed by
Seller in form and substance reasonably satisfactory to Buyer, advising tenants
under the Leases of the sale of the Project to Buyer and directing that all
rents and other payments thereafter becoming due be sent to Buyer or as Buyer
may direct.
(h) Certificate as to Representations, Warranties and
Covenants . A certificate by Seller to the effect that all of the
representations, warranties and covenants of Seller set forth in Sections 5 and
8 remain true and correct in all material respects as of the Closing.
(i) Notices . Any required approval or notice required by any
federal, state or local government authority required in connection with the
transfer of the title hereunder.
(j) Evidence of Tax Payments . A receipt or receipts from the
.appropriate taxing authorities evidencing that all real estate taxes and
personal property taxes affecting the Project are not delinquent.
(k) Organizational Documents . The organizational documents of
Seller together with an-original resolution of Seller authorizing the execution
of this Agreement, the conveyance documents and all other documents to be
executed by Seller and the performance by Seller hereunder and thereunder
together with a good standing certificate of Seller.
(l) Assumable Financing. The Loan Documents, if any, and an
assignment thereto.
(m) Option . In the event the Option is recorded in the real
property records, a waiver of the Option executed by AT&T in recordable form.
10.2 Possession. At the Closing and as a condition precedent to
Closing, Seller shall deliver full possession of the Project, free of all
tenants or occupants other than under the Leases, which Leases shall be in full
force and effect.
10.3 Covenant and Indemnity. (a) As additional consideration for
Buyer's purchasing the Project and paying the Purchase Price to the Seller,
Seller hereby covenants and agrees to remain fully liable for the performance
and payment of all tenant improvements and the payment of all leasing
commissions currently due and owing (including any delinquent amounts) under any
of the Leases or under any leasing/commission agreement or which shall hereafter
be due and owing under any of the Leases or under any leasing/commission
agreement, excluding, however, tenant
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improvement costs and leasing commissions with respect to any option to renew or
extend leases and leasing commissions and tenant improvements costs which shall
hereafter be owing under any leases or leasing/ commission agreements for any
new Leases approved by Buyer after the Effective Date or new Leases executed by
Buyer subsequent to the Closing (collectively, the "Buyer's Commissions and
Costs"). It is expressly understood and agreed that Buyer is assuming and
agreeing to be bound by and liable for such Buyer's Commissions and Costs. Buyer
is not assuming the obligations to perform or pay for any tenant improvements or
to pay for any leasing commissions which have heretofore accrued, and which are
now owing under any of the Leases or under any leasing/ commission agreement
other than as aforesaid. Notwithstanding anything to the contrary contained
herein, Buyer shall pay, by reimbursing Seller for any amount it has paid
therefor prior to Closing and assuming any amount which is unpaid as of Closing
those items described in Exhibit G attached hereto.
(b) Buyer and Seller shall each indemnify, defend and hold the
other party (together with its officers, directors, partners, and employees)
harmless from and against all claims, demands, causes of actions, judgments,
damages, costs and expenses (including, without limitation, reasonable, actual
attorneys' fees and-court costs), deficiencies, settlements and investigations
which relate to matters, actions or omissions which arise out of or are based
upon any of the following during such parties' period of ownership, which for
Seller shall be the period of time prior to Closing and for Buyer shall be the
period of time on and after Closing:
(i) any obligation under any contracts, agreements
and writings entered into by or on behalf of such party in respect of the use,
construction, operation, ownership, occupancy or maintenance of any portion of
the Project arising out of an event occurring during such parties' period of
ownership;
(ii) any accident, injury, death or damage whatsoever
caused to any person or entity or loss of property, occurring in or about the
Premises or any part thereof, or on any other property connected with or
adjacent thereto during such parties' period of ownership; or
(iii) any breach of the covenant set forth in Section
10.03(a) above, or with
respect to any payment or performance obligation under any of the Leases for
tenant improvements or under any of the Leases and/or leasing/commission
agreements for teasing commissions which have heretofore accrued, which are now
due and owing or which shall hereafter accrue.
(iv) any breach of a representation or warranty set
forth in this Agreement.
This Section 10.03 shall survive the Closing until the first
anniversary of the Closing; provided, however, subject to the terms of Section
8.03, the representations set forth in Section 5.02, above, shall survive until
the expiration of each lease currently in effect at the Project.
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SECTION 11
BUYER'S CLOSING OBLIGATIONS
At the Closing, Buyer shall:
11.1 Payment of Purchase Price. Deliver to Seller the Purchase Price,
as adjusted for apportionments under Section 12 and any other adjustments
thereto required pursuant to the express provisions of this Agreement.
11.2 Assumable Financing. Deliver the assumption, if applicable, of the
Loan Documents and other documents relative thereto as required by Lender and
the Escrow Agent, together with causing the Lender to deliver such documents as
are necessary to release Setter and the new guarantor of the Loan from any and
liability under the Loan except for liabilities with respect to matters which
first arose and pertain to the period of time during which the Seller owned the
Project.
11.3 Closing Certificate. A certificate by Buyer (i) to the effect that
all of the representations, warranties and covenants of Buyer set forth in
Section 5A remain true and correct in all material respects as of the Closing
and (ii) confirming the waivers and acknowledgments set forth in Section 5.12
hereof.
11.4 Indemnity. Buyer hereby covenants and agrees to indemnify, defend
and hold Seller (and its officers, directors and employees) harmless from and
against all claims, demands, causes of actions, judgments, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees and court
costs), deficiencies, settlements and investigations which relate to matters,
actions or omissions which arise out of or are based upon any obligations under
any of the Loan Documents (except for liability with respect to matters which
first arose and pertain to the period of time during which Seller owned the
Project).
11.5 Other Documents. Deliver any other documents required by this
Agreement to be delivered by Buyer, including, without limitation, the Bill of
Sale and Assignment of Leases.
SECTION 12
APPORTIONMENTS AND ADJUSTMENTS TO PURCHASE PRICE;
CLOSING EXPENSES
12.1 Apportionments. The following items shall be prorated as of 12:01
A.M. on the Closing and the net amount thereof shall be added to or deducted
from, as the case may be, the amount of the Purchase Price to be paid at the
Closing;
(a) general real estate, personal property and ad valorem
taxes and assessments for the current tax year of the Project. If any such taxes
or assessments are payable in installments all installments due through the
Closing together with the accrued but unpaid portion of any other installments
not yet due as of the Closing shall be paid for by the Seller;
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(b) taxes, water, sewer and front foot benefit charges, and
charges for electricity, gas, telephone and other utilities and license fees;
(c) rent and other charges under the Leases (to the extent
monies have actually been collected therefor);
(d) all other income and expenses relating to the Project,
including principal and interest payable under each of the Loans; and
(e) any other items that are customarily prorated in
transactions of this nature excluding, however, insurance premium under the
Insurance Policies.
Any and all security deposits, prepaid rent and all interest earned
thereon shall be a credit to Buyer at Closing. Seller shall be fully liable for
any wages and other amounts due and owing any employees at the Project. Seller
shall retain, and shall not be entitled to any credit for, the deposits, if any,
made by Seller in connection with the provision of electric, sewer, water,
telephone and other utility services to the Project.
Seller shall retain any and all deposits and escrows relating to the
Loans.
For purposes of calculating prorations, Buyer shall be deemed to be in
title to the Project, and, therefore, entitled to the income therefrom and
responsible for the expenses thereof for the entire day upon which the Closing
occurs. All such prorations shall be made on the basis of the actual number of
days of the month which shalt have elapsed as of the day of the Closing and
based upon the actual number of days in the month and a three hundred sixty-five
(365) day year. The amount of such prorations shall be initially performed by
Title Company at Closing but shall be subject to adjustment in cash after the
Closing outside of escrow as and when complete and accurate information becomes
available, if such information is not available at the Closing. Seller and Buyer
agree to cooperate and use their best efforts to make such adjustments no later
than sixty (60) days after the Closing (except with respect to property taxes,
which shall be adjusted within sixty (60) days after the tax bills for the
applicable period are received).
Without limiting the generality of the foregoing, Seller and Buyer
hereby agree that with respect to any year-end reconciliations of reimbursable
expenses under the Leases, Seller and Buyer shall cooperate to complete such
reconciliations as soon as possible after the Closing, with Seller responsible
for amounts owing to tenants under the Leases, and entitled to Rents
(hereinafter defined) payable by tenants under the Leases (as the case may be),
with respect to periods prior to the Closing, and with Buyer responsible for
amounts owing to tenants under the Leases, and entitled to Rents payable by
tenants under the Leases (as the case may be), with respect to periods from and
after the Closing (and, with respect to any such amounts payable to Seller,
Buyer shall have no obligation to collect such Rents, including having no
obligation to institute legal proceedings, including any action for unlawful
detainer, against a tenant owing any such Rents, other than to use
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commercially reasonable efforts to collect such rents and to respond to any
periodic inquiries made by Seller relating to the collection of such rents and
to the extent Buyer actually receives any delinquent Rents owing to Seller Buyer
shall tender the same to Seller to the extent of amounts delinquent and actually
due Seller but only after (y) reimbursing Buyer for its actual out-of-pocket
costs and expenses of collection incurred with respect to such tenant, and (z)
all Rents due and owing to Buyer have been paid to Buyer in full (including,
without limitation, the payment to Buyer of delinquencies in Rent owing to
Buyer)).
The term "Rent" as used herein shall mean all rents, including any
percentage rent and any accrued tax and operating expense escalation, charges,
and other revenue of any kind generated from or in connection with the Leases.
Except as set forth in this Section 12.01, all items of income and expense which
accrue for the period prior to the Closing will be for the account of Seller and
all items of income and expense which accrue for the period on and after the
Closing will be for the account of Buyer. Buyer shall receive a credit against
the Purchase Price for all amounts of Rent which are allocable to the period on
and after the Closing and which have been prepaid as of the Closing Date. The
provisions of this Section 12.01 shall survive the Closing.
12.2 Operating Expense Pass-throughs. With respect to expenses of the
Project which are chargeable to the tenants pursuant to the provisions of the
Leases (the "CAM Charges"), Seller shall determine (1) the amount of those
expenses paid or payable by Seller from January 1 in the year in which the
Closing occurs through the date of Closing (or, with regard to taxes and
assessments, the amount of the proration thereof charged to Seller) and (2) the
amount tenants have paid to Seller from January 1 in the year in which Closing
occurs until the date of Closing as the tenants' pro rata share of such tenant
expenses. Buyer shall be entitled to a credit at Closing equal to the amount
Seller has received as of the Closing Date as pro rata expense payments from
tenants in excess of the expenses paid or payable by Seller through the Closing
Date. If accurate allocations of CAM Charges cannot be made at Closing because
current bills are not obtainable, the parties shall allocate such expenses at
Closing on the best and most current information available, subject to
adjustment in cash after the Closing outside of escrow as and when final bills
or other evidence of the applicable expense are received. Buyer shall also be
entitled to a credit at Closing equal to any CAM Charges for 1997 and prior
years which are owing to any of the tenants (to the extent collected from such
tenants) of the Project which are presently in occupancy. The provisions of this
Section 12.02 shall survive the Closing.
12.3 Closing Expenses. Buyer shall pay for all of its diligence costs
and expenses including, without limitation, the costs of the survey of the
Premises, the charges for the title commitment and report, and the premium for
the Title Policy. Buyer shall also pay for one-half of any escrow charges and
for any and all state and local transfer, recordation and documentary taxes and
any and all recording costs applicable to the transactions contemplated herein
except for the Virginia Grantor's Tax which shall be paid for by Seller. Each
party will be responsible for its own legal fees, consultant's fees and costs of
inspection. Seller shall pay for one-half of any escrow charges, the Virginia
Grantor's Tax and any and all fees, expenses and other costs associated with
Buyer's application and assumption of the Loan including, without limitation,
any application fees,
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review fees, processing fees, transfer/ assumption fees and Lender's costs and
expenses, excluding, however, Buyer's legal fees and expenses incurred in
connection with such application and assumption and excluding any mortgage or
other taxes incurred in connection therewith. The provisions of this Section
12.03 shall survive the Closing.
SECTION 13
FAILURE TO PERFORM
13.1 Seller's Default. If at the Closing, Seller is unable to give
title or to make conveyance, or to deliver possession of the Project, or to
satisfy all of the terms and conditions precedent to Closing as set forth in
this Agreement, all as herein stipulated, or if on such date the Project does
not conform with the provisions hereof, and Buyer does not elect to take title,
Seller shall be in default under this Agreement and Buyer shall have the right
to terminate the Agreement and the Deposit shall be forthwith returned to Buyer,
and Buyer may pursue the right to compel specific performance and the right to
collect its costs and expenses incurred in connection therewith as its sole and
exclusive remedy. Buyer hereby waives and releases all other claims for damages
and other remedies against Seller for non-performance and expressly acknowledges
and agrees that in no event shall any officer, director, member, partner or
shareholder of Seller ever have any liability hereunder.
13.2 Buyer's Default. The parties acknowledge that in the event of
Buyer's failure to fulfill its obligations hereunder it is impossible to compute
exactly the damages which would accrue to the Seller in such event. The parties
have taken these facts into account in setting the amount of the Deposit,
required pursuant to Section 2.02 and hereby agree that: (i) such amount is the
pre-estimate of such damages which would accrue to Seller from a default by
Buyer; (ii) such amount represents damages and not any penalty against Buyer;
and (iii) if this Agreement shall be terminated by Seller by reason of Buyer's
failure to fulfill Buyer's obligations hereunder, the Deposit shall be Seller's
full and liquidated damages in lieu of all other rights and remedies (including
the right of specific performance) which Seller may have against Buyer at law or
in equity. Seller's sole and exclusive remedy for Buyer's default shall be to
receive the Deposit as liquidated damages in lieu of all other rights and
remedies which Seller may have against Buyer at law or in equity. Seller hereby
waives and releases all other claims for damages and other remedies against
Buyer for non-performance and expressly acknowledges and agrees that in no event
shall any officer, director or shareholder of Buyer ever have any liability
hereunder.
SECTION 14
BROKERAGE FEES
14.1 For the Seller. The Seller represents and warrants that it has not
engaged any broker or finder or incurred any liability for brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement. The Seller agrees to indemnify and hold harmless
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the Buyer against any claims or liabilities asserted against Buyer by any person
acting or claiming to act as a broker or finder in connection with the
transaction described in this Agreement.
14.2 For the Buyer. The Buyer represents and warrants that it has not
engaged any broker or finder or incurred any liability for brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement. The Buyer agrees to indemnify and hold harmless the Seller
against any other claims or liabilities asserted against it by any person acting
or claiming to act as a broker or finder on behalf of the Buyer.
SECTION 15
NOTICES
15.1 Effective Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if delivered personally or sent
by telecopy machine, Federal Express or other recognized overnight courier,
registered or certified mail, postage prepaid, addressed as follows or to such
other address of which the parties may have given notice:
To the Seller: Samnan Trading Establishment
P.O. Box 28008
Alsour Street
Ainaser Building
Safat, Kuwait
Attention: Dr. Louai Alassar
Phone No.: 011965-240-5701/2
Telecopy No.: 011965-240-5703
With a copy to: Cambridge Holdings
560 Herndon Parkway
Suite 210
Herndon, Virginia 20170
Attention: Mr. Andrew J. Czekaj
Phone No.: 703-709-8866
Telecopy No.: 703-847-9611
With a copy to: Hale and Dorr LLP
1455 Pennsylvania Avenue, N.W.
Suite 1000
Washington, D.C. 20004
Attention: Steven S. Snider, Esq.
Phone No.: (202) 942-8494
Telecopy No.: (202) 942-8484
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With a copy to: DDR OfficeFlex Corporation
c/o Developer's Diversified Realty
Corporation
34555 Chagrin Boulevard
Moreland, Ohio 44022
Attention: James A. Schoff, Esq.
Executive Vice-President and
Chief Operating Officer
Phone No.: (216) 247-4700
Telecopy No.: (216) 247-1118
With a copy to: Developer's Diversified Realty
Corporation
34555 Chagrin Boulevard
Moreland Hills, OH 44022
Attention: Joan Allgood, Esq.
General Counsel
Phone No.: (440) 247-1731
Telecopy No.: (440) 247-2385
To Escrow Agent: Commercial Title Group, Ltd.
8605 Westwood Center Drive
Suite 401, Tysons Corner
Vienna, Virginia 22182
Attention: Mr. Douglas Nichols
Phone No.: (703) 506-1520
Telecopy No.: (703) 506-9615
Unless otherwise specified herein, such notices or other communications shall be
deemed to be effective: (a) one (1) business day after deposit with the courier
if sent by Federal Express or other recognized overnight delivery service; or
(b) upon receipt if accomplished by hand delivery or by telecopied delivery.
Either party may, from time to time, by notice in writing served upon the other
party, in the same manner as prescribed in this Section, designate a different
mailing address or a different or additional person to which all such notices
are thereafter to be addressed.
SECTION 16
MISCELLANEOUS PROVISIONS
16.1 Integration. This Agreement embodies and constitutes the entire
understanding between the parties with respect to the transaction contemplated
herein, and all prior agreements, understandings, representations and
statements, oral or written, are merged into this Agreement. Neither this
Agreement nor any provision hereof may be waived, modified, amended, discharged
or terminated except by an instrument signed by the party against whom the
enforcement of such
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waiver, modification, amendment, discharge or termination is sought, and then
only to the extent set forth in such instrument.
16.2 Governing Law. This Agreement shall be governed by, and construed
in accordance with the laws of, the Commonwealth of Virginia.
16.3 Captions. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Agreement or any of the provisions hereof.
16.4 Escrow Agent. Escrow Agent shall hold the Deposit in accordance
with the terms and provisions of this Agreement, subject to the following:
(a) Escrow Agent undertakes to perform only such duties as are
expressly set forth in this Agreement and no implied duties or obligations shalt
be read into this Agreement against Escrow Agent.
(b) Escrow Agent may act in reliance upon any writing or
instrument or signature which it, in good faith, believes of any statement or
assertion contained in such writing or instrument, and may assume that any
person purporting to give any writing, notice, advice or instrument in
connection with the provisions of this Agreement has been duty authorized to do
so. Escrow Agent shall not be liable in any manner for the sufficiency or
correctness as to form, manner and execution, or validity of any instrument
deposited in escrow, nor as to the identity, authority, or right of any person
executing the same, and Escrow Agent's duties under this Agreement shall be
limited to those provided in this Agreement.
(c) Unless Escrow Agent discharges any of its duties under
this Agreement in a negligent mariner or is guilty of willful misconduct with
regard to its duties under this Agreement, Seller and Buyer shall indemnify
Escrow Agent and hold it harmless from any and all claims, liabilities, losses,
actions, suits or proceedings at law or in equity, or other expenses, fees, or
charges of any character or nature, which it may incur or with which it may be
threatened by reason of its acting as Escrow Agent under this Agreement; and in
such connection Seller and Buyer shall indemnify Escrow Agent against any and
all expenses including reasonable attorneys' fees and the cost of defending any
action, suit or proceeding or resisting any claim in such capacity
(d) If the parties (including Escrow Agent) shall be in
disagreement about the interpretation of this Agreement, or about their
respective rights and obligations, or the propriety of any action contemplated
by Escrow Agent, Escrow Agent may, but shall not be required to, file an action
in interpleader to resolve the disagreement. Escrow Agent shall be indemnified
for all costs and reasonable attorneys' fees in its capacity as Escrow Agent in
connection with any such interpleader action and shall be fully protected in
suspending all or part of its activities under this Agreement until a final
judgment in the interpleader action is received.
27
<PAGE> 28
(e) Escrow Agent may consult with counsel of its own choice
and have full and complete authorization and protection in accordance with the
opinion of such counsel. Escrow Agent shall otherwise not be liable for any
mistakes of fact or errors of judgment, or for any acts or omissions of any
kind, unless caused by its negligence or willful misconduct.
(f) The Escrow Agent may in its sole discretion resign by
giving thirty (30) days' written notice thereof to the Buyer and Seller. The
Buyer and Seller shall furnish to the Escrow Agent written instructions for the
release of the escrow funds and escrow documents in such event. If the Escrow
Agent shall not have received such written instructions, the Escrow Agent may
petition any court of competent jurisdiction for the appointment of a successor
Escrow Agent, and upon such appointment deliver the escrow funds and escrow
documents to such successor.
16.5 Bind and Inure. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
16.6 Drafts. This Agreement shall not be binding or effective until
property executed and delivered by both Seller and Buyer. The delivery by Buyer
to Seller of an executed counterpart of this Agreement shall constitute an offer
which may be accepted by the delivery to Buyer of a duly executed counterpart of
this Agreement and the satisfaction of all conditions under which such offer is
made, but such offer may be revoked by Buyer by written notice given at any time
prior to such acceptance and satisfaction.
16.7 Number and Gender. As used in this Agreement, the masculine shall
include the feminine and neuter, the singular shall include the plural and the
plural shall include the singular, as the context may require.
16.8 Attachments. If the provisions of any exhibit, schedule or rider
to this contract are inconsistent with the provisions of this Agreement, the
provisions of such schedule or rider shall prevail. The Exhibits attached are
hereby incorporated as integral parts of this Agreement.
16.9 Survival of Representations. Subject to the terms and conditions
of Section 8.03, above, all representations and warranties made by the parties
herein or in any instrument or document furnished in connection herewith shall
survive the Closing and any investigation at any time made by or on behalf of
the parties hereto for a period of twelve (12) months from the Closing.
16.10 Dates. Whenever used herein, unless expressly provided otherwise,
the term "days" shall mean consecutive calendar days, except that if the
expiration of any time period measured in days occurs on a Saturday, Sunday,
legal holiday or other day when federal offices are closed in Washington, D.C.,
such expiration shall automatically be extended to the next business day.
16.11 Time of the Essence. Time is of the essence of this Agreement.
28
<PAGE> 29
16.12 Assignment. This Agreement may not be assigned by Buyer without
the prior written consent of Seller not to be unreasonably withheld. Any
assignment approved by Seller shall be subject to the assignor remaining liable
under this Agreement. Prior to any request for an assignment hereunder, Buyer
and the proposed assignee shall provide Seller with all information that Seller
may need in order to evaluate the proposed assignment.
16.13 Effective Date. The Effective Date of this Agreement (the
"Effective Date") shall be the date on which this Agreement has been executed by
both Seller and Buyer. The execution hereof by Buyer shall constitute an offer
by Buyer to Seller to purchase the Project on the terms and conditions herein
stated, which must be accepted by Seller on or before 5:00 p.m. on May ___, 1998
by the execution hereof by Seller. If Buyer's offer is not timely accepted, this
Agreement shall be thereafter null and void.
16.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above written.
SELLER:
Battlefield/Virginia, Inc.
By:/s/ Louai Alassar
---------------------------
Name: Louai Alassar
Title: President
BUYER:
DDR OFFICEFLEX CORPORATION,
an Ohio corporation
/s/ 5/6/98 By:/s/ James A. Schoff
- ----------- ---------------------------------------
Date James A. Schoff
Executive Vice President and
Chief Operating Officer
29
<PAGE> 30
JOINDER BY ESCROW AGENT
Commercial Title Group, Limited, referred to in this Agreement as the
"Escrow Agent," hereby acknowledges that it received this Agreement executed by
Seller and Buyer on the ___ day of ___________, 1998, and accepts the
obligations of the Escrow Agent as set forth herein. It further acknowledges
that it received the Deposit on the ___ day of _____________, 1998. The Escrow
Agent hereby agrees to hold and distribute the Deposit in accordance with the
terms and provisions of this Agreement. It further acknowledges that it hereby
assumes all responsibilities for information reporting required under Section
6045(e) of the Internal Revenue Code.
COMMERCIAL TITLE GROUP, LIMITED
By:
-------------------------
Name: Douglas Nichols
Title: Vice President
Address: 8605 Westwood Center Drive
Suite 401
Tyson's Corner
Vienna, Virginia 22182
30
<PAGE> 31
SCHEDULE OF EXHIBITS
Exhibit A - Land
Exhibit B - Information on Loan
Exhibit C - Title/Survey
Exhibit D - Certified Rent Roll
Exhibit E - Form of Tenant Estoppel Certificate
Exhibit F - Underground Storage Tanks
Exhibit G - Buyer leasing and Tenant Improvement Payments
Exhibit H - Other Property
31
<PAGE> 32
EXHIBIT A
LAND
32
<PAGE> 1
EXHIBIT 10.5
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Second
Amendment") is entered into as of the 30th day of September, 1998 by and between
the undersigned parties.
W I T N E S S E T H:
WHEREAS, the undersigned entered into that certain Purchase and Sale
Agreement, dated as of May 10, 1998 (the "Agreement"), regarding the sale of
certain real property located in Chesapeake, Virginia (Greenbrier Industrial
Center) , Loudoun County, Virginia (Lots 2-A and 3-A of Le Bourget Business
Park), and Chesapeake, Virginia (Greenbrier Technology Center ), which property
is more particularly described in the Agreement (the "Property");
WHEREAS, the Agreement was amended pursuant to that certain Amendment
to Purchase and Sale Agreement, by and between the undersigned parties, dated as
of July 8, 1998 (the "First Amendment"); and
WHEREAS, the parties desire to amend the Agreement and the First
Amendment as set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Section 3.01 of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"3.01 Closing. All documents necessary or appropriate to
transfer the Project shall be delivered and closing (the
"Closing") shall be held on, or in Buyer's sole discretion,
provided that Seller is furnished with two (2) days prior
written notice of the earlier Closing Date, before October 15,
1998 at the offices of Hale and Dorr LLP, 1455 Pennsylvania
Avenue, N.W., Washington, D.C. 20004. Closing shall not occur
any later than October 15, 1998, as time is of the essence.
2. Notwithstanding anything to the contrary contained in the
Agreement, the First Amendment or this Second Amendment, in the event the
documentation regarding the loan assumptions is not executed as of the Closing
Date, the Buyer and Seller shall proceed to Closing on the Closing Date, with
all conveyance documents being delivered to the Escrow Agent to be held in
escrow until the loan assumption documents have been fully-executed by all
parties; provided, however, that on the Closing Date, Seller shall remit payment
of the Purchase Price to Buyer. The conveyance documents shall be held in escrow
until the fully-executed loan assumption documents are delivered to the Escrow
Agent, at which time the Deed shall be recorded along with any and all loan
assumption documents which need to be recorded in the land records in the
appropriate jurisdiction and the fully-executed conveyance documents shall be
released by the Escrow Agent to the Seller and the Buyer.
<PAGE> 2
3. Notwithstanding anything to the contrary contained herein, the
Deposit (in the total amount of $440,000, but with no interest thereon) shall
continue to be held by Seller until the Closing of the sale of the Property has
been consummated, at which time, the Deposit shall continue to be held by Seller
and shall be added to the Deposit under that certain Purchase and Sale
Agreement, dated as of May 10, 1998, regarding the sale of certain real property
located in Prince William County, Virginia (the "Battlefield Agreement")
(hereinafter, the Deposit under the Agreement and the Deposit under the
Battlefield Agreement shall be referred to as the "Aggregate Deposit"). The
Aggregate Deposit (in the amount of $1,000,0000) shall be non-refundable to the
Buyer unless Seller shall default in tendering the Deed and other conveyance
documents to Buyer at Closing under the Battlefield Agreement.
4. Provided Closing occurs under the Agreement and under the
Battlefield Agreement, the parties hereto agree to a reduction in the Purchase
Price in the amount of $300,000 (the "Reduction"), which reduction shall be paid
at such time (and only at such time, if any) that the sale of the property under
the Battlefield Agreement is consummated; provided, however, that in order for
the Reduction to be effective, the sale of the property under the Battlefield
Agreement and the sale of the Property under the Agreement must be consummated
no later than the Closing Date set forth in this Second Amendment and in the
Second Amendment to Purchase and Sale Agreement to the Battlefield Agreement, as
time is of the essence for such Closings. In the event the sale of the Property
under the Battlefield Agreement is not consummated, the Purchase Price under the
Agreement shall remain the amount originally set forth in the Agreement and
there shall be no retroactive reduction in the Purchase Price.
5. Section 13.02 of the Agreement is hereby deleted and the
following is inserted in lieu thereof:
"13.02 Buyer's Default. In the event of Buyer's failure to
fulfill its obligations hereunder, Seller may elect either to
(i) compel specific performance and shall have the right to
collect its costs and expenses incurred in connection
therewith or (ii) terminate this Agreement and retain the
deposit as Seller's full and liquidated damages in lieu of
other rights and remedies which Seller may have against Buyer
at law or in equity. In the event Seller determines not to
compel specific performance and to retain the Deposit, both
parties acknowledge that the Deposit represents a pre-estimate
of damages which would accrue to Seller from a default by
Buyer and is not a penalty against Buyer.
6. Except as amended herein, the Agreement and the First
Amendment are hereby confirmed to remain in full force and effect.
7. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agreement.
2
<PAGE> 3
8. This Second Amendment may be executed in counterparts, each of
which shall be deemed to be an original but all of which shall be one and the
same document.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the date first above written.
A & A Greenbrier, Inc., a Virginia corporation
By:
---------------------------
Louai Alassar
President
A & A Northpointe B, Inc., a Virginia corporation
By:
---------------------------
Louai Alassar
President
A & A Northpointe C, Inc., a Virginia corporation
By:
---------------------------
Louai Alassar
President
A & A Greenbrier Tech, Inc., a Virginia corporation
By:
---------------------------
Louai Alassar
President
American Industrial Properties REIT, successor by
merger to DDR Office Flex Corporation
By:
---------------------------------
Name:
Title:
3
<PAGE> 1
EXHIBIT 10.6
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Second
Amendment") is entered into as of the 30th day of September, 1998 by and between
the undersigned parties.
W I T N E S S E T H:
WHEREAS, the undersigned entered into that certain Purchase and Sale
Agreement, dated as of May 10, 1998 (the "Agreement"), regarding the sale of
certain real property located in Prince William County, Virginia, which property
is more particularly described in the Agreement (the "Battlefield Property");
WHEREAS, the Agreement was amended pursuant to that certain Amendment
to Purchase and Sale Agreement, by and between the undersigned parties, dated as
of July 8, 1998 (the "First Amendment"); and
WHEREAS, the parties desire to amend the Agreement and the First
Amendment as set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Section 3.01 of the Agreement, as modified by the First
Amendment, is hereby deleted in its entirety and the following is substituted in
lieu thereof:
"3.01 Closing. All documents necessary or appropriate to
transfer the Project shall be delivered and closing (the
"Closing") shall be held on, or in Buyer's sole discretion,
provided that Seller is furnished with two (2) days prior
written notice of the earlier Closing Date, before November
16, 1998 at the offices of Hale and Dorr LLP, 1455
Pennsylvania Avenue, N.W., Washington, D.C. 20004. Closing
shall not occur any later than November 16, 1998, as time is
of the essence.
2. Notwithstanding anything to the contrary contained in the
Agreement, the First Amendment or this Second Amendment, in the event the
documentation regarding the loan assumptions is not executed as of the Closing
Date, the Buyer and Seller shall proceed to Closing on the Closing Date, with
all conveyance documents being delivered to the Escrow Agent to be held in
escrow until the loan assumption documents have been fully-executed by all
parties; provided, however, that on the Closing Date, Seller shall remit payment
of the Purchase Price to Buyer. The conveyance documents shall be held in escrow
until the fully-executed loan assumption documents are delivered to the Escrow
Agent, at which time the Deed shall be recorded along with any and all loan
assumption documents which need to be recorded in the land records in the
appropriate jurisdiction and the fully-executed conveyance documents shall be
released by the Escrow Agent to the Seller and the Buyer.
<PAGE> 2
3. Notwithstanding anything to the contrary contained herein, the
Deposit (in the total amount of $210,000, but with no interest thereon) shall
continue to be held by Seller and shall be applied to the Purchase Price at
Closing. Notwithstanding anything to the contrary contained herein, the Deposit
shall be non-refundable to the Buyer unless Seller shall default in tendering
the Deed and other conveyance documents to Buyer at Closing.
4. Notwithstanding anything to the contrary contained in the
Agreement, the First Amendment or this Second Amendment, the Buyer shall, at the
time of execution of this Second Amendment, deliver to Seller (in accordance
with wire transfer instructions set forth in Exhibit A attached hereto) a second
supplemental deposit in the amount of $350,000 (the "Second Supplemental
Deposit"). Hereinafter, the term "Deposit" shall, in addition to referring to
the Initial, the Additional Deposit and the Supplemental Deposit, shall also
include the Second Supplemental Deposit. The Deposit, including the Second
Supplemental Deposit, shall be applied to the Purchase Price at Closing and
shall be non-refundable to the Buyer unless Seller shall default in tendering
the Deed and other conveyance documents to Buyer at Closing.
5. Upon the Closing of the sale of certain properties under that
certain Purchase and Sale Agreement, dated as of May 10, 1998 by and between the
Buyer and DDR Office Flex Corporation, or its permitted assignee or designee,
regarding real property located in Chesapeake, Virginia (Greenbrier Industrial
Center), Loudoun County, Virginia (Lots 2-A and 3-A of Le Bourget Business Park)
and Chesapeake, Virginia (Greenbrier Technology Center) (the "Other Agreement"),
the Deposit being held by the Seller pursuant to the Other Agreement (in the
amount of $440,000 but with no interest thereon) shall be added to the Deposit
under the Agreement, thereby increasing the Deposit currently held by Seller
under the Agreement, the First Amendment and this Second Amendment to
$1,000,000. Such Deposit shall be applied to the Purchase Price under the
Agreement and shall be non-refundable to the Buyer unless Seller shall default
in tendering the Deed and other conveyance documents to Buyer at Closing under
the Agreement.
6. Section 13.02 of the Agreement is hereby deleted and the
following is inserted in lieu thereof:
"13.02 Buyer's Default. In the event of Buyer's failure
to fulfill its obligations hereunder, Seller may elect either
to (i) compel specific performance and shall have the right to
collect its costs and expenses incurred in connection
therewith, or (ii) terminate this Agreement and retain the
Deposit as Seller's full and liquidated damages in lieu of
other rights and remedies which Seller may have against Buyer
at law or in equity. In the event Seller determines not to
compel specific performance and to retain the Deposit, both
parties acknowledge that the Deposit represents a pre-estimate
of damages which would accrue to Seller from a default by
Buyer and is not a penalty against Buyer.
2
<PAGE> 3
7. Except as amended herein, the Agreement and the First
Amendment are hereby confirmed to remain in full force and effect.
8. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agreement.
9. This Second Amendment may be executed in counterparts, each of
which shall be deemed to be an original but all of which shall be one and the
same document.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the date first above written.
Battlefield/Virginia, Inc., a Virginia corporation
By:
---------------------------
Louai Alassar
President
American Industrial Properties REIT, successor by
merger to DDR Office Flex Corporation
By:
---------------------------------
Name:
Title:
3
<PAGE> 1
EXHIBIT 10.7
This document was prepared outside of the Commonwealth of Virginia
SPECIAL WARRANTY DEED
THIS DEED, made and entered into this ____ day of October, 1998 by and
between A&A GREENBRIER, INC., a Virginia corporation ("Grantor"), with an
address of c/o Cambridge Holdings Limited Partnership, 560 Herndon Parkway,
Suite 210, Herndon, Virginia 20170, and AMERICAN INDUSTRIAL PROPERTIES REIT, a
Texas real estate investment trust ("Grantee"), with an address of 6210 North
Beltline Road, Suite 170, Irving, Texas 75063-2656.
WITNESSETH:
That for and in consideration of the sum of Ten Dollars ($10.00) in
hand paid and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Grantor does hereby grant, bargain, sell and
convey unto Grantee, in fee simple, with Special Warranty of title, that certain
real property located in the City of Chesapeake, Virginia and more particularly
described in Exhibit A attached hereto and made a part hereof.
Together with all improvements located thereon, and all title, right,
privilege, alleys, ways, easements, appurtenances and advantages thereunto
belonging, or in anywise appertaining thereto.
Subject only to those matters set forth and identified on Exhibit B
attached hereto and made a part hereof.
AND FURTHER SUBJECT TO (pursuant to Grantee's assumption thereof) that
certain promissory note in the original principal amount of $7,400,000, dated
November 12,
<PAGE> 2
1996, executed by Grantor and payable to the order of Jackson National Life
Insurance Company (the "Note") and secured by a Deed of Trust, Security
Agreement and Financing Statement, dated of even date therewith, and recorded on
November 13, 1996 in Deed Book 3424, Page 104 in the Clerk's Office of the
Circuit Court of the City of Chesapeake, Virginia (the "Deed of Trust") upon
which Note there now remains an outstanding principal balance of $7,219,922.06.
To have and to hold the property hereby conveyed to the Grantee, its
successors and assigns, in fee simple forever.
IN TESTIMONY WHEREOF, the said Grantor has, as of the date first
written above, caused these presents to be signed, acknowledged and delivered,
under seal, by its duly authorized representative as its act and deed.
A&A Greenbrier, Inc., a
Virginia corporation
By:
----------------------
Dr. Louai Alassar
President
<PAGE> 3
DISTRICT OF )
) SS:
COLUMBIA )
The undersigned, a Notary Public in and for the jurisdiction aforesaid,
does hereby certify that Dr. Louai Alassar, the President of A&A Greenbrier,
Inc./Virginia, Inc., a Virginia corporation, known to me (or satisfactory
proven) to be the person whose name is subscribed to the within instrument and
acknowledged that he executed the same on behalf of A&A Greenbrier, Inc., for
the purpose therein contained.
GIVEN under my hand and seal _____ this day of October, 1998.
(SEAL)
-------------------
Notary Public
My commission expires:
------------
<PAGE> 4
EXHIBIT A
(Legal Description)
<PAGE> 5
EXHIBIT B
(Permitted Encumbrances)
<PAGE> 1
EXHIBIT 10.8
This document was prepared outside of the Commonwealth of Virginia
SPECIAL WARRANTY DEED
THIS DEED, made and entered into this ____ day of October, 1998 by and
between A&A NORTHPOINTE B, INC., a Virginia corporation ("Grantor"), with an
address of c/o Cambridge Holdings Limited Partnership, 560 Herndon Parkway,
Suite 210, Herndon, Virginia 20170, and AMERICAN INDUSTRIAL PROPERTIES REIT, a
Texas real estate investment trust ("Grantee"), with an address of 6210 North
Beltline Road, Suite 170, Irving, Texas 75063-2656.
WITNESSETH:
That for and in consideration of the sum of Ten Dollars ($10.00) in
hand paid and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Grantor does hereby grant, bargain, sell and
convey unto Grantee, in fee simple, with Special Warranty of title, that certain
real property located in Loudoun County, Virginia and more particularly
described in Exhibit A attached hereto and made a part hereof.
Together with all improvements located thereon, and all title, right,
privilege, alleys, ways, easements, appurtenances and advantages thereunto
belonging, or in anywise appertaining thereto.
Subject only to those matters set forth and identified on Exhibit B
attached hereto and made a part hereof.
AND FURTHER SUBJECT TO (pursuant to Grantee's assumption thereof) that
certain promissory note in the original principal amount of $3,000,000 dated
February 27, 1996, executed by Grantor and A&A Northpointe C, Inc., jointly and
severally, and payable to the order of Security Life of Denver Insurance Company
(the "Note") and secured by a Deed of Trust,
<PAGE> 2
Assignment of Rents and Leases, and Security Agreement, dated of even date
therewith, and recorded on February 28, 1996 in Deed Book 1416, Page 998 in the
Land Records of Loudoun County, Virginia (the "Deed of Trust") upon which Note
there now remains an outstanding principal balance of $2,812,754.95.
To have and to hold the property hereby conveyed to the Grantee, its
successors and assigns, in fee simple forever.
IN TESTIMONY WHEREOF, the said Grantor has, as of the date first
written above, caused these presents to be signed, acknowledged and delivered,
under seal, by its duly authorized representative as its act and deed.
A&A Northpointe B, Inc.,
a Virginia corporation
By:
-----------------------
Dr. Louai Alassar
President
<PAGE> 3
DISTRICT OF )
) SS:
COLUMBIA )
The undersigned, a Notary Public in and for the jurisdiction aforesaid,
does hereby certify that Dr. Louai Alassar, the President of A&A Northpointe B,
Inc., a Virginia corporation, known to me (or satisfactory proven) to be the
person whose name is subscribed to the within instrument and acknowledged that
he executed the same on behalf of A&A Northpointe B, Inc., for the purpose
therein contained.
GIVEN under my hand and seal this ____ day of October, 1998.
(SEAL)
---------------------
Notary Public
My commission expires:
----------------
<PAGE> 4
EXHIBIT A
(Legal Description)
<PAGE> 5
EXHIBIT B
(Permitted Encumbrances)
<PAGE> 1
EXHIBIT 10.9
This document was prepared outside of the Commonwealth of Virginia
SPECIAL WARRANTY DEED
THIS DEED, made and entered into this ____ day of October, 1998 by and
between A&A NORTHPOINTE C, INC., a Virginia corporation ("Grantor"), with an
address of c/o Cambridge Holdings Limited Partnership, 560 Herndon Parkway,
Suite 210, Herndon, Virginia 20170, and AMERICAN INDUSTRIAL PROPERTIES REIT, a
Texas real estate investment trust ("Grantee"), with an address of 6210 North
Beltline Road, Suite 170, Irving, Texas 75063-2656.
WITNESSETH:
That for and in consideration of the sum of Ten Dollars ($10.00) in
hand paid and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Grantor does hereby grant, bargain, sell and
convey unto Grantee, in fee simple, with Special Warranty of title, that certain
real property located in Loudoun County, Virginia and more particularly
described in Exhibit A attached hereto and made a part hereof.
Together with all improvements located thereon, and all title, right,
privilege, alleys, ways, easements, appurtenances and advantages thereunto
belonging, or in anywise appertaining thereto.
Subject only to those matters set forth and identified on Exhibit B
attached hereto and made a part hereof.
AND FURTHER SUBJECT TO (pursuant to Grantee's assumption thereof) that
certain promissory note in the original principal amount of $3,000,000.00 dated
<PAGE> 2
February 27, 1996, executed by Grantor and A&A Northpointe B, Inc., jointly and
severally, and payable to the order of Security Life of Denver Insurance Company
(the "Note") and secured by a Deed of Trust, Assignment of Rents and Leases, and
Security Agreement, dated of even date therewith, and recorded on February 28,
1996 in Deed Book 1416, Page 998 in the Land Records of Loudoun County, Virginia
(the "Deed of Trust") upon which Note there now remains an outstanding principal
balance of $2,812,754.95.
To have and to hold the property hereby conveyed to the Grantee, its
successors and assigns, in fee simple forever.
IN TESTIMONY WHEREOF, the said Grantor has, as of the date first
written above, caused these presents to be signed, acknowledged and delivered,
under seal, by its duly authorized representative as its act and deed.
A&A Northpointe C, Inc., a
Virginia corporation
By:
----------------------
Dr. Louai Alassar
President
<PAGE> 3
DISTRICT OF )
) SS:
COLUMBIA )
The undersigned, a Notary Public in and for the jurisdiction aforesaid,
does hereby certify that Dr. Louai Alassar, the President of A&A Northpointe C,
Inc., a Virginia corporation, known to me (or satisfactory proven) to be the
person whose name is subscribed to the within instrument and acknowledged that
he executed the same on behalf of A&A Northpointe C, Inc., for the purpose
therein contained.
GIVEN under my hand and seal this ____ day of October, 1998.
(SEAL)
-----------------------
Notary Public
My commission expires:
----------------
<PAGE> 4
EXHIBIT A
(Legal Description)
<PAGE> 5
EXHIBIT B
(Permitted Encumbrances)
<PAGE> 1
EXHIBIT 10.10
This document was prepared outside of the Commonwealth of Virginia
SPECIAL WARRANTY DEED
THIS DEED, made and entered into this ____ day of October, 1998 by and
between A&A GREENBRIER TECH, INC., a Virginia corporation ("Grantor"), with an
address of c/o Cambridge Holdings Limited Partnership, 560 Herndon Parkway,
Suite 210, Herndon, Virginia 20170, and AIP/GREENBRIER GP, INC., a Texas
corporation ("Grantee"), with an address of 6210 North Beltline Road, Suite 170,
Irving, Texas 75063-2656.
WITNESSETH:
That for and in consideration of the sum of Ten Dollars ($10.00) in
hand paid and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Grantor does hereby grant, bargain, sell and
convey unto Grantee, in fee simple, with Special Warranty of title, that certain
real property located in the City of Chesapeake, Virginia and more particularly
described in Exhibit A attached hereto and made a part hereof.
Together with all improvements located thereon, and all title, right,
privilege, alleys, ways, easements, appurtenances and advantages thereunto
belonging, or in anywise appertaining thereto.
Subject only to those matters set forth and identified on Exhibit B
attached hereto and made a part hereof.
AND FURTHER SUBJECT TO (pursuant to Grantee's assumption thereof) that
certain secured promissory notes in the original principal amounts of $3,147,000
and $1,253,000, each dated July 29, 1997, executed by Grantor and payable to the
order of
<PAGE> 2
Principal Mutual Life Insurance Company (the "Notes") and secured by a Deed of
Trust, Security Agreement and Assignment of Rents, dated of even date therewith,
and recorded on July 30, 1997 in Deed Book 3530, Page 145 in the Clerk's Office
of the Circuit Court of the City of Chesapeake, Virginia (the "Deed of Trust")
upon which Notes there now remains an aggregate outstanding principal balance of
$4,304,140.77.
To have and to hold the property hereby conveyed to the Grantee, its
successors and assigns, in fee simple forever.
IN TESTIMONY WHEREOF, the said Grantor has, as of the date first
written above, caused these presents to be signed, acknowledged and delivered,
under seal, by its duly authorized representative as its act and deed.
A&A Greenbrier Tech, Inc., a Virginia
corporation
By:
------------------------
Dr. Louai Alassar
President
<PAGE> 3
DISTRICT OF )
) SS:
COLUMBIA )
The undersigned, a Notary Public in and for the jurisdiction aforesaid,
does hereby certify that Dr. Louai Alassar, the President of A&A Greenbrier
Tech, Inc., a Virginia corporation, known to me (or satisfactory proven) to be
the person whose name is subscribed to the within instrument and acknowledged
that he executed the same on behalf of A&A Greenbrier Tech, Inc., for the
purpose therein contained.
GIVEN under my hand and seal this ____ day of October, 1998.
(SEAL)
-------------------------
Notary Public
My commission expires:
----------------
<PAGE> 4
EXHIBIT A
(Legal Description)
<PAGE> 5
EXHIBIT B
(Permitted Encumbrances)
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-3 (No. 333-46699),
Form S-3 (No. 333-48555) and Form S-3 (No. 333-52879) of American Industrial
Properties REIT of our reports dated December 10, 1998 relating to the combined
statement of revenue and certain expenses of The A&A Portfolio Properties and
The A&A Virginia Properties, both of which appear in the Current Report on Form
8-K/A of American Industrial Properties REIT dated October 14, 1998.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Cleveland, Ohio
December 28, 1998
