MEMBERSHIP INTERESTS PURCHASE AGREEMENTLLC Membership Agreement |
|
|
You are currently viewing: This LLC Membership Agreement involves
MERCANTILE BANKSHARES CORPORATION | HARBOR GROUP INTERNATIONAL, L.L.C.,. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
|
EXHIBIT 10.QQ
EXECUTION VERSION
MEMBERSHIP INTERESTS PURCHASE AGREEMENT
(MBC Realty, LLC)
MERCANTILE BANKSHARES CORPORATION, Seller
and
HARBOR GROUP INTERNATIONAL, L.L.C., Buyer
Property:
Two Hopkins Plaza Baltimore, Maryland
TABLE OF CONTENTS
i
ii
iii
iv
MEMBERSHIP INTERESTS PURCHASE AGREEMENT
This Membership Interests Purchase Agreement (“ Agreement ”) is entered into as of October , 2004, by and between MERCANTILE BANKSHARES CORPORATION , a Delaware corporation (“ Seller ”), and HARBOR GROUP INTERNATIONAL, L.L.C. , a Virginia limited liability company, or its designee (“ Buyer ”). In consideration of the mutual agreements herein set forth, the parties hereto, intending to be legally bound, agree as follows:
DEFINITIONSDefinitions. As used in this Agreement, the following terms shall have the meanings set forth below:
“ Affiliates ” shall mean with respect to any Person (i) any other Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with such Person, (ii) any other Person owning or controlling 10% or more of the outstanding voting securities of or other ownership interests in such Person, (iii) any officer, director or partner of such Person, or (iv) if such Person is an officer, director or partner, any other company for which such Person acts in any such capacity.
“ Agreement ” shall mean this Membership Interests Purchase Agreement, as amended or supplemented from time to time by documents executed by both Seller and Buyer.
“ ALTA ” shall mean The American Land Title Association.
“ Books and Records ” is defined in Section 2(g).
“ Business Day ” shall mean any day other than a Saturday, a Sunday, or a holiday recognized by banks in the states of Maryland or New York or by the Federal government.
“ Buyer ” shall mean the Person identified as Buyer in the first paragraph of this Agreement and such Person’s Permitted Assignees.
“ Buyer Party ” or “ Buyer Parties ” shall mean Buyer, any Permitted Assignee of Buyer, and any partner or member in, or, as applicable, any shareholder or director of Buyer, or any Permitted Assignee of Buyer, as well as the officers, employees, attorneys, and agents of Buyer or any Permitted Assignee of Buyer.
“ Buyer’s actual knowledge ” and similar phrases are defined in Section 4.4.
“ Buyer’s Conditions Precedent ” is defined in Section 5.1.
“ Claim” or “Claims ” shall mean any suits, actions, proceedings, investigations, demands, claims, liabilities, fines, penalties, liens, judgments, losses, injuries, damages, expenses or costs, including, without limitation, attorneys’ and experts’ fees and costs of investigation.
“ Closing ” is defined in Section 10.1.
“ Closing Date ” shall mean the date on which Closing actually occurs.
“ Closing Documents ” shall mean all the documents, other than this Agreement, to be executed and delivered by the parties in order to complete Closing, as specified herein.
“ Closing Instructions ” is defined in Section 10.4(f).
“ Closing Month ” shall mean the calendar month in which Closing occurs.
“ Code ” shall mean the Internal Revenue Code of 1986, as amended, or any corresponding provision(s) of any succeeding law.
“ Contracts ” is defined in Section 2(d).
“ Cross Keys Lease ” is defined in Section 7.1(A)(iv).
“ Deposit ” is defined in Section 3.1(B).
“ Deposit Date ” shall mean the two Business Days after the Effective Date.
“ Deposit Escrow Agreement ” shall mean that certain Deposit Escrow Agreement among Seller, Buyer and the Title Insurance Company, a counterpart of which is attached hereto as Rider 1 .
“ Due Diligence Materials ” shall mean, collectively, the Seller Deliverables and all studies, reports and information obtained by the Buyer from any source prior to the end of the Due Diligence Period.
“ Due Diligence Period ” shall mean the period commencing on the Effective Date and ending at 11:59 P.M. (prevailing Eastern Time) on the date which is 30 days after the Effective Date (such date being herein referred to as the “ Due Diligence Period Expiration Date ”), during which period Buyer may, inter alia , conduct the due diligence activities contemplated by Section 4.
“ Effective Date ” shall mean the date appearing in the first paragraph of this Agreement, subject to Section 15.16.
“ Existing Leases ” shall mean all leases, license agreements and occupancy agreements pertaining to the Property on the Effective Date, including without limitation those identified in the Initial Rent Roll, together with all associated guaranties and
2
sureties, as the same may be amended or modified from time to time in accordance with the terms of this Agreement.
“ Federalsburg Call Center ” is defined in Section 7.1(A)(iv).
“GAAP” means United States generally accepted accounting principles, consistently applied.
“ Governmental Authority ” shall mean any federal, state, county or municipal government, or political subdivision thereof, any governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court or administrative tribunal.
“ Hazardous Materials ” shall mean materials, wastes or substances that are (a) included within the definition of any one or more of the terms “hazardous substances,” “hazardous materials,” “toxic substances,” “toxic pollutants” and “hazardous waste” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq .), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et seq .), the Clean Water Act (33 U.S.C. Section 1251, et seq .), the Safe Drinking Water Act (14 U.S.C. Section 1401, et seq .), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq .), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et seq .) and the regulations promulgated pursuant to such laws, (b) regulated, or classified as hazardous or toxic, under other federal, state or local environmental laws or regulations, (c) petroleum, (d) asbestos or asbestos-containing materials, (e) polychlorinated biphenyls, (f) flammable explosives or (g) radioactive materials.
“ Improvements ” is defined in Section 2(a).
“ Land ” is defined in Section 2(a).
“ Leases ” shall mean all Existing Leases and New Leases, collectively.
“ Licenses and Permits ” is defined in Section 2(h).
“ Linthicum Operations Center ” is defined in Section 7.1(A)(iv).
“ List of Security Deposits ” is defined in Section 4.1(a).
“ MBCR ” is defined in Section 2.
“ MBCR Financial Statements ” is defined in Section 7.1(A)(xxvii).
“ Membership Interests ” is defined in Section 2.
“ Mercantile Lease ” is defined in Section 5.1.6.
3
“ New Leases ” is defined in Section 9.1(A).
“ Non-Permitted Exceptions ” is defined in Section 8.1.
“ Order ” shall mean an order or decree of any Governmental Authority.
“ Other Properties ” is defined in Section 7.1(A)(iv).
“ Parties ” shall mean Seller and Buyer.
“ Permitted Assignee ” is defined in Section 15.6.
“ Person ” shall mean any individual, partnership, corporation, limited liability company, trust or other legal entity.
“ Personal Property ” is defined in Section 2(b).
“ Plans ” is defined in Section 2(f).
“ Prime Rate ” shall mean the prime rate of interest published in the Wall Street Journal from time to time.
“ Privileged Material ” shall mean (a) all communications between any Seller Party and any attorney for such Seller Party or any other Seller Party, (b) evaluations, analyses and communications among Seller Parties regarding the Property, Buyer, the transaction evidenced by this Agreement, or Seller’s marketing of the Property, which evaluations, analyses and communications are intended by any Seller Party to be confidential.
“ Property ” is defined in Section 2.
“ Purchase Price ” is defined in Section 3.1(A).
“ Real Estate Taxes ” is defined in Section 4.1(c).
“ Real Property ” is defined in Section 2(a).
“ Rent Roll ” is defined in Section 4.1(a).
“ Rents ” is described in Section 11.1.
“ Reznick ” is defined in Section 9.3.
“ Reznick Lease ” is defined in Section 9.3.
“ Scheduled Closing Date ” is defined in Section 10.2.
“ Seller ” shall mean the Person identified as Seller in the first paragraph of this Agreement and such Person’s successors and assigns.
4
“ Seller Caused Non-Permitted Exceptions ” is defined in Section 8.1.
“ Seller Deliverables ” is described in Section 4.1.
“ Seller Parties ” shall mean Seller and any partner or member in, or, as applicable, any shareholder or director of Seller, as well as the officers, employees, attorneys, and agents of Seller.
“ Seller’s Broker ” is defined in Section 13.1.
“ Seller’s Conditions Precedent ” is described in Section 6.1.
“ Seller Default ” is defined in Section 12.1.
“ Seller’s Knowledge ”, “MBCR’s Knowledge”, and similar phrases shall mean the actual knowledge, on any relevant date, of W. Joseph Smith, Edie Councilman or Ronald D. Mettam (W. Joseph Smith and Edie Councilman having principal operational authority for MBCR), without investigation or inquiry.
“ Seller’s Undertakings ” is defined in Section 4.5.
“ Survey ” is defined in Article 8.
“ Tenant ” shall mean the tenant, occupier or licensee under any Lease.
“ Title Policy ” is defined in Article 8.
“ Title Insurance Company ” shall mean LandAmerica Title Insurance Company
“ Venable ” is defined in Section 15.19.
“ Venable Lease ” is defined in Section 15.19.
“ Warranties ” is defined in Section 2(e).
Terms Generally . For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, (a) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or provision, (b) the words “including” and “include” and other words of similar import shall be deemed to be followed by the phrase “without limitation”. Whenever the context may require, any defined term or pronoun used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of defined terms, pronouns or nouns shall include the plural and vice versa. The captions of the Sections of this Agreement are for convenience only and have no meaning with respect to this Agreement or the rights or obligations of the parties. References herein to “Exhibit”, “Schedule”, “Rider”, “Article”, “Section” or “subsection” shall be deemed references to an Exhibit, Schedule, Rider, Article, Section or subsection attached to, or, as applicable, contained in, this Agreement.
5
membership interests; PROPERTYSeller owns one hundred percent (100%) of the membership interests (the “ Membership Interests ”) in MBC Realty, LLC, a Maryland limited liability company (“ MBCR ”), which owns all of the Property (as hereinafter defined). Seller hereby agrees to sell and cause to be conveyed to Buyer, and Buyer hereby agrees to purchase from Seller, all of Seller’s rights, title and interest in and to the Membership Interests and all of the benefits accruing to the owner thereof, including, but not limited to, MBCR’s interest in the following described property (herein collectively called the “ Property ”):
the parcel or parcels of land described in Exhibit “A” (“ Land ”), together with any and all rights, privileges and easements appurtenant thereto owned by MBCR, including, without limitation, any and all rights of MBCR in and to all air and development rights, roads, alleys, easements, streets and ways adjacent to the Land, all appurtenant rights of ingress and egress thereto or therefrom, any strips and gores within or bounding the Land and any profits, rights or appurtenances pertaining to the Land, together with all buildings, improvements and fixtures (other than fixtures owned or removable by any Tenant or other Person pursuant to a Lease or Contract) located thereon (collectively, “ Improvements ”; the Land, together with the Improvements, the “ Real Property ”);all equipment, furnishings, inventory and other tangible personal property owned by MBCR and not owned or removable by any Tenant or other Person pursuant to a Lease or Contract, if any, placed or located on the Real Property now or prior to Closing and used in the operation of the Real Property (the “ Personal Property ”);all the interest of the landlord in all Leases, any and all claims or rights to claim against a Tenant under any Lease and all security deposits paid or deposited by Tenants in respect of the Leases;all of MBCR’s rights in and to all service, maintenance and operating contracts, equipment leases and similar agreements relating to the operation, maintenance and repair of the Property, including service and maintenance agreements, utility agreements and other contractual arrangements, all to the extent assumed by Buyer in accordance with Section 4.6 of this Agreement (collectively, “ Contracts ”);all of MBCR’s rights, title and interest in and to any warranties, guaranties, entitlements to use, and all other property rights and interests relating to the Property made by or received from any Person with respect to any building component, machinery, equipment, furnishings, fixture or material comprising a part of any Improvement or with respect to any Personal Property or Contract (collectively, “ Warranties ”);to the extent in the possession of MBCR or Seller, and to the extent assignable, all as-built building plans and specifications relating to the Real Property (collectively, “ Plans ”);all current on-site books and records exclusively pertaining to the current operation of the Property, to the extent in MBCR’s or Seller’s possession, excluding Privileged Material (collectively, “ Books and Records ”);
6
all licenses, permits, building inspection approvals, certificates of occupancy, approvals, subdivision maps and entitlements, if any, issued, approved or granted by Governmental Authorities in connection with the Real Property (collectively, “ Licenses and Permits ”); andall rights to any award made or to be made or settlement in lieu thereof for damage to the Land or Improvements by reason of condemnation, eminent domain, exercise of police power or change of grade of any street.PURCHASE PRICEPurchase Price.
(A) The purchase price for the Membership Interests is Fifty-One Million Two Hundred Fifty Thousand Dollars ($51,250,000) (“ Purchase Price ”).
(B) The Purchase Price shall be paid by Buyer as follows:
On the Deposit Date, Buyer shall deposit by delivery of a bank draft or wire transfer of immediately available funds pursuant to the wire transfer instructions set forth in the Deposit Escrow Agreement, in escrow with the Title Insurance Company, a cash payment of Five Hundred Thousand Dollars ($500,000) (such cash payment, together with all interest earned on such funds, the “Deposit”). The Deposit shall be held in escrow, in an interest-bearing account with a federally insured bank (which may be an Affiliate of Seller), and disbursed by the Title Insurance Company pursuant to the provisions of this Agreement and the Deposit Escrow Agreement. At Closing, the Deposit (including all accrued interest) shall be paid to Seller as a credit against the Purchase Price.
The balance of the Purchase Price over and above the Deposit, plus or minus any apportionments, prorations, credits and costs in accordance with Section 11 hereof, shall be paid by Buyer at Closing, by wire transfer of immediately available funds to the Title Insurance Company, pursuant to the wire transfer instructions set forth in the Deposit Escrow Agreement, or any replacement instructions, for payment to Seller or on its behalf at Closing.
Failure to Pay Deposit. In the event that Buyer fails to fund the Deposit on the Deposit Date (with time being of the essence) for any reason whatsoever, this Agreement shall immediately and automatically terminate. Upon any termination of this Agreement pursuant to this Section 3.2, no party shall have any further rights, duties or obligations under this Agreement, except as otherwise expressly set forth herein.
DUE DILIGENCESeller Deliverables . Seller hereby represents and warrants to Buyer that, to Seller’s Knowledge, the copies previously or hereafter delivered to Buyer (collectively, the “ Seller
7
Deliverables ”) of the following items (which, to the extent not previously delivered by Seller, shall be delivered by Seller to Buyer promptly following the Effective Date or as otherwise expressly required herein), are or will be true, correct and complete copies of all such items as maintained or possessed by Seller and/or MBCR at the time of delivery in all material respects:
a rent roll for the Property for the current year and for past two calendar years, in the form currently maintained by MBCR (“ Rent Roll ”) and an accounting of all refundable security deposits made by Tenants under the Leases (the “ List of Security Deposits ”);annual operating, income and expense statements for the Property for calendar years 2002 and 2003, and for the first nine months of 2004, as well as operating, income and expense statements on a monthly basis for the trailing 12 month period ended September 30, 2004, together with such other financial information as is specified in Section 7.1(A)(xxvii) hereof;the bills issued for the most recent year and the preceding two (2) years for the Property for all real estate taxes and assessments (collectively, “ Real Estate Taxes ”) relating to the Property;the Leases and the Contracts;the Warranties;the Plans;the Books and Records and expense recovery worksheets and billings for the past two calendar years and first nine months of 2004;the Licenses and Permits;all environmental reports and studies in the possession of MBCR, Seller or its agents relating to the determination as to whether any Hazardous Materials exist at the Property and as to any work performed or proposed in connection with any Hazardous Materials at any time located at the Property, if any, and any engineering reports with respect to the Property to the extent in the possession of Seller or MBCR;all organizational documents related to the formation and operation of MCBR;all information in the possession of Seller or MBCR related to the transfer of title of the Property to MBCR;all information and documentation in the possession of Seller or MBCR related to MBCR’s tenancy under any lease or agreement, including the Cross Keys Lease;call reports for each of the years ended December 31, 2001, December 31, 2002 and December 31, 2003 for Mercantile-Safe Deposit and Trust Company as Tenant;
8
a complete and accurate list of all Seller Pension Plans, as such term is defined in Section 7.1(A)(xxx) and including true, correct and complete copies of the most recent Forms 5500 and any attached financial statements and any related actuarial report; andall information related to the sale or assignment of the Other Properties, including copies of the agreements for the purchase and sale thereof and any environmental reports to the extent in the possession of Seller or MBCR.Seller shall make the originals of all Leases available to Buyer at the Property for Buyer’s inspection at all times from and after the Effective Date through the Closing Date.
Independent Investigation . Notwithstanding any information which Seller may have provided to Buyer, Buyer may, during the Due Diligence Period, inspect and investigate each and every aspect of the Property, either independently or through agents, representatives or experts of Buyer’s choosing, as Buyer considers necessary or appropriate. Without limiting the generality of the foregoing but subject to the other provisions of this Article 4, Buyer shall have the right to have performed (i) a physical, mechanical and environmental inspection of the Property, including but not limited to soil borings, samplings and other tests and engineering inspections, as Buyer deems necessary to determine the physical condition of the Property, including but not limited to whether any Hazardous Materials exist at the Property, and, if so, to determine the appropriate manner and cost of removal or other corrective measures with respect to the same, and (ii) an inspection of all books and records and financial information pertaining thereto. During the Due Diligence Period, Seller shall cooperate with Buyer in its inspection of the Property, including but not limited to, furnishing to Buyer such information, materials and documents as Buyer may reasonably request and making W. Joseph Smith and other representatives and agents of Seller and MBCR available to Buyer at reasonable times and upon reasonable notice; Seller shall not, however, have any obligation to incur any cost not otherwise contemplated by this Agreement.
Termination During Due Diligence Period.
(A) At any time prior to the Due Diligence Period Expiration Date, Buyer shall have the right, in its sole and absolute discretion, and for any or no reason whatsoever, to terminate this Agreement by written notice to Seller given by Buyer on or prior to the Due Diligence Period Expiration Date, and, upon such election, the Deposit shall be immediately refunded to Buyer, other than Fifty Thousand Dollars ($50,000) which shall be paid to Seller as consideration for the aforementioned Due Diligence Period; provided, however, that the entire Deposit of Five Hundred Thousand Dollars ($500,000) shall be immediately refunded to Buyer upon Buyer’s election to terminate this Agreement by written notice to Seller given by Buyer on or prior to the Due Diligence Period Expiration Date on the grounds that: (i) the results of the environmental inspection are unacceptable to Buyer; (ii) the condition of title, including survey issues, is unacceptable to Buyer; (iii) the liabilities related to the Other Properties are in any respect unacceptable to Buyer; or (iv) Buyer and Seller are unable to agree on the terms of the Mercantile Lease. In addition, the entire Deposit of $500,000 shall be immediately refunded to Buyer, whether before or after the Due Diligence Period Expiration Date, in the event that Buyer is entitled to terminate this Agreement following the Due Diligence Period pursuant to the terms
9
of this Agreement. Upon Buyer’s election to terminate this Agreement as set forth in the preceding sentence, the parties hereto shall have no further liabilities one to the other (other than those that are expressly stated to survive the termination of this Agreement).
(B) Buyer agrees that it will exercise good faith efforts to advise Seller immediately if Buyer decides at any time prior to the Due Diligence Period Expiration Date not to proceed with the purchase contemplated hereunder.
Buyer’s Knowledge.
Seller shall have no liability whatsoever to Buyer with respect to any matter related to the Property disclosed by Seller in the Due Diligence Materials or of which Buyer or its agent or counsel obtains actual knowledge, by any means, prior to the Due Diligence Period Expiration Date. For purposes of this Section 4.4, Buyer’s actual knowledge shall mean the actual, conscious knowledge of T. Richard Litton, Jr., Jordan E. Slone or Michael H. Heinricher.
AS-IS SALE.
BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (a) EXCEPT FOR (I) THE REPRESENTATIONS, WARRANTIES AND COVENANTS MADE BY SELLER IN THIS AGREEMENT, AS QUALIFIED BY SECTION 4.4, AND SUBJECT TO THE SURVIVAL PROVISIONS OF THIS AGREEMENT, AND (II) THE REPRESENTATIONS, WARRANTIES AND COVENANTS MADE BY SELLER IN THE CLOSING DOCUMENTS (ALL THE FOREGOING BEING REFERRED TO, COLLECTIVELY, AS “ SELLER’S UNDERTAKINGS ”) , SELLER SHALL SELL AND BUYER SHALL PURCHASE THE MEMBERSHIP INTERESTS AND THEREBY THE PROPERTY “AS IS, WHERE IS AND WITH ALL FAULTS AND LATENT PATENT DEFECTS” AND WITH ALL VIOLATIONS OF LAWS AND ORDINANCES, AND (b) EXCEPT FOR SELLER’S UNDERTAKINGS, BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER, OR ANY SELLER PARTY AS TO ANY MATTER, CONCERNING THE PROPERTY, OR (EXCEPT TO THE EXTENT PROVIDED OTHERWISE IN SELLER’S UNDERTAKINGS) SET FORTH, CONTAINED OR ADDRESSED IN THE DUE DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATION, THE COMPLETENESS THEREOF), INCLUDING WITHOUT LIMITATION ANY WARRANTIES AS TO: (i) THE QUALITY, NATURE, HABITABILITY, MERCHANTABILITY, USE, OPERATION, VALUE, MARKETABILITY, ADEQUACY OR PHYSICAL CONDITION OF THE PROPERTY OR ANY ASPECT OR PORTION THEREOF, INCLUDING, WITHOUT LIMITATION, STRUCTURAL ELEMENTS, FOUNDATION, ROOF, APPURTENANCES, ACCESS, LANDSCAPING, PARKING FACILITIES, ELECTRICAL, MECHANICAL, HVAC, PLUMBING, SEWAGE, AND UTILITY SYSTEMS, FACILITIES AND APPLIANCES, SOILS, GEOLOGY AND GROUNDWATER, (ii) THE DIMENSIONS OR LOT SIZE OF THE PROPERTY OR THE SQUARE FOOTAGE OF THE IMPROVEMENTS THEREON OR OF ANY TENANT SPACE THEREIN, (iii) THE DEVELOPMENT OR INCOME POTENTIAL, OR RIGHTS OF OR RELATING TO, THE PROPERTY, OR THE PROPERTY’S USE, HABITABILITY,
10
MERCHANTABILITY, OR FITNESS, OR THE SUITABILITY, VALUE OR ADEQUACY OF THE PROPERTY FOR ANY PARTICULAR PURPOSE, THE ZONING OR OTHER LEGAL STATUS OF THE PROPERTY OR ANY OTHER PUBLIC OR PRIVATE RESTRICTIONS ON THE USE OF THE PROPERTY, THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE CODES, LAWS, REGULATIONS, STATUTES, ORDINANCES, COVENANTS, CONDITIONS AND RESTRICTIONS OF ANY GOVERNMENTAL AUTHORITY OR OF ANY OTHER PERSON OR ENTITY (INCLUDING, WITHOUT LIMITATION, THE AMERICANS WITH DISABILITIES ACT), THE ABILITY OF BUYER TO OBTAIN ANY NECESSARY GOVERNMENTAL APPROVALS, LICENSES OR PERMITS FOR BUYER’S INTENDED USE OR DEVELOPMENT OF THE PROPERTY, THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS ON, IN, UNDER, ABOVE OR ABOUT THE PROPERTY OR ANY ADJOINING OR NEIGHBORING PROPERTY, THE QUALITY OF ANY LABOR AND MATERIALS USED IN THE CONSTRUCTION OF ANY IMPROVEMENTS, THE CONDITION OF TITLE TO THE PROPERTY, THE LEASES, CONTRACTS OR ANY OTHER AGREEMENTS AFFECTING THE PROPERTY OR THE INTENTIONS OF ANY PARTY WITH RESPECT TO THE NEGOTIATION AND/OR EXECUTION OF ANY LEASE OR CONTRACT WITH RESPECT TO THE PROPERTY, SELLER’S TITLE TO OR OWNERSHIP OF THE PROPERTY OR ANY PORTION THEREOF OR THE ECONOMICS OF, OR THE INCOME AND EXPENSES, REVENUE OR EXPENSE PROJECTIONS OR OTHER FINANCIAL MATTERS, RELATING TO, THE OPERATION OF THE PROPERTY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUT EXCEPTING SELLER’S UNDERTAKINGS, BUYER EXPRESSLY ACKNOWLEDGES AND AGREES THAT BUYER IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF ANY SELLER PARTY, NOR ANY BROKER OR REPRESENTATIVE OF SELLER, WHETHER IMPLIED, PRESUMED OR EXPRESSLY PROVIDED AT LAW OR OTHERWISE, ARISING BY VIRTUE OF ANY STATUTE, COMMON LAW OR OTHER LEGALLY BINDING RIGHT OR REMEDY IN FAVOR OF BUYER. BUYER FURTHER ACKNOWLEDGES AND AGREES , BUT WITHOUT LIMITING SELLER’S UNDERTAKINGS, THAT SELLER IS UNDER NO DUTY TO MAKE ANY INQUIRY REGARDING ANY MATTER THAT MAY OR MAY NOT BE KNOWN TO ANY SELLER PARTY OR ANY BROKER OF SELLER. THIS SECTION SHALL SURVIVE THE CLOSING, OR, IF THE CLOSING DOES NOT OCCUR, SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT INDEFINITELY.
Service Contracts to be Assumed . Not later than the Due Diligence Period Expiration Date, Buyer will notify Seller in writing of those Contracts which Buyer at its discretion has elected to have terminated. Seller shall terminate the Contracts which Buyer has elected to have terminated, and Seller shall be responsible for all penalties, termination fees and other costs. Seller shall indemnify Buyer with respect to all Contracts that Buyer elects to have terminated and, with respect to those Contracts Buyer elects to have terminated, for the period before the Closing. This provision shall survive the Closing.
No Obligation to Repair or to Co mply. Except in the ordinary course of operating the Property in accordance with MBCR’s current practices, and except for Seller’s Undertakings (to the extent
11
applicable), neither Seller nor MBCR shall be obliged to make any changes, alterations or repairs to the Property. Except for Seller’s Undertakings (to the extent applicable), under no circumstances shall Seller or MBCR be obliged to cure any violations of law or to comply with the requirements of any insurer with respect to the Property or to make any capital improvements or repairs.
Buyer’s Entry and Indemnity; Li mits on Government Contact. (A) In connection with any entry by any Buyer Party or any of their contractors onto the Property, Buyer shall give to W. Joseph Smith at (410) 237-5451 or Seller’s Broker advance telephone notice of such entry and shall conduct such entry and any inspections in connection therewith so as to minimize, to the greatest extent possible, interference with MBCR’s business and the business and occupancy of the Tenants and otherwise in a manner reasonably acceptable to Seller. Without limiting the foregoing, prior to any entry to perform any on-site testing or inspection of structural, subsoil or engineering conditions of the Property, Buyer shall provide W. Joseph Smith or Seller’s Broker with the identity of the Persons who will perform such testing or inspections and the proposed scope thereof. Seller or its representative may, at Seller’s option, be present to observe any testing or other inspection performed on the Property.
(B) Buyer shall maintain or cause to be maintained at all times during the effectiveness of this Agreement, and for six months thereafter if such policy is a “claims made” policy, insurance insuring Buyer and Seller for acts or omissions by Buyer, its employees, agents or contractors occurring by virtue of any entry onto the Property by any Buyer Party, with limits of not less than $1,000,000. If Closing does not occur, Buyer shall repair any damage to the Property caused by any entry onto the Property by any Buyer Party or any of their contractors and the performance of any tests by any Buyer Party or any of their contractors. Buyer shall indemnify and hold the Seller Parties harmless from and against any Claims arising out of or relating to any entry on the Property by any Buyer Party or any of their contractors; provided, however, the indemnity which is the subject of this sentence shall not cover liability arising from any Hazardous Materials situated on or about the Property unless such Hazardous Materials are introduced onto the Property by Buyer, nor shall such indemnification cover any Claims arising from the negligence of Seller, its agents, employees, contractors or representatives. The foregoing indemnity shall survive the Closing, or, if the Closing does not occur, survive the termination of this Agreement.
(C) Notwithstanding any provision in this Agreement to the contrary, neither Buyer nor any other Buyer Party nor any of their contractors shall discuss with any Governmental Authority or any Tenant regarding any Hazardous Materials on or the environmental condition of the Property, except upon the prior written consent of Seller or as otherwise required by applicable law; provided, however, that Buyer or any Buyer Party may make customary and standard inquiry to any Governmental Authority as to the presence or history of Hazardous Materials or environmental conditions at the Property. Buyer shall give prior written notice to Seller before producing any records, reports or other data requested by any Governmental Authorities. Seller shall have the right to have a representative present when Buyer has, or causes to be had, any such contact with any Governmental Authority.
12
Release.
(A) Excepting Seller’s Undertakings, Buyer, for itself, all Buyer Parties and their successors and assigns, waives its right to recover from, and forever releases and discharges, and covenants not to sue, all Seller Parties and all Seller’s Affiliates with respect to any and all Claims, whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with the Property, the Membership Interests or this Agreement, including, without limitation, the physical, environmental and structural condition of the Property or any law or regulation applicable thereto, including, without limitation, but excepting Seller’s Undertakings, any Claim or matter relating to the use, presence, discharge or release of Hazardous Materials on, under, in, above or about the Property.
(B) This Section 4.9 shall survive Closing, and any termination of this Agreement, indefinitely.
BUYER’S CONDITIONS PRECEDENTConditions to Buyer’s Obligation to Purchase . Buyer’s obligation to complete Closing is conditioned upon the satisfaction (or Buyer’s written waiver at its sole discretion) on or prior to the Closing Date of all of the following conditions (collectively, “ Buyer’s Conditions Precedent ”):
Seller’s Representations and Warr anties . The representations and warranties of Seller herein contained, with such updates and changes as are herein expressly permitted, shall be true and correct in all material respects, except that those representations and warranties separately qualified by a materiality standard shall be true and correct in all respects.
Seller’s Performance . Seller shall have performed in all material respects all of Seller’s covenants, agreements and obligations required by this Agreement to be performed at or prior to Closing, except that those covenants, agreements and obligations separately qualified by a materiality standard shall have been performed by Seller in all respects.
Condition of Title . At Closing, the Real Property shall not be subject to any Seller Caused Non-Permitted Exceptions.
5.1.4 Estoppel Certificates . Seller shall have furnished to Buyer estoppel certificates in a form to be provided by Buyer, as approved by Buyer’s lender (without material modifications as to any estoppel certificate), from (i) all Tenants leasing five thousand (5,000) or more square feet of space in the Improvements and (ii) Tenants who in the aggregate lease at least eighty-five percent (85%) of the leased area of the Premises, which certificates shall be dated not earlier than thirty (30) days prior to the Closing Date, and none of the Leases shall have been terminated or cancelled and none of the Tenants shall have ceased operating its business at the Premises, or given Seller any notice of its intention to terminate its Lease or cease operating its business at the Premises. In addition, if required by Buyer’s lender, Seller shall have furnished to Buyer a subordination, nondisturbance and attornment agreement (“SNDA”), in a form provided by Buyer, executed by each of those Tenants under the Leases as required by Buyer’s lender. Prior to the Due Diligence Period Expiration Date, Buyer shall notify Seller in
13
writing whether or not Buyer’s lender requires SNDAs, and if it does, the Tenants from which it is so required. If Buyer fails to give such notice to Seller by the Due Diligence Period Expiration Date, this condition precedent to Buyer’s obligation to close the transaction contemplated hereunder shall be deemed null and void and of no further force or effect. Seller shall use commercially reasonable efforts to obtain and deliver to Buyer estoppel certificates from all Tenants and, if required, such SNDAs at least ten (10) days prior to the Closing. If, on the Closing Date, Seller shall not have obtained all required estoppel certificates and SNDAs and if Buyer does not waive such requirement, then, at Seller’s option, Seller may adjourn the Closing Date by up to fifteen (15) days (the “Adjourned Closing Date”) to try to obtain all required estoppel certificates and SNDAs. If, by the Adjourned Closing Date, Seller shall not have obtained and delivered to Buyer all required estoppel certificates and SNDAs, then Buyer shall have the right, at its option, to (i) waive such requirement and close without adjustment in the Purchase Price; or (ii) terminate this Agreement by written notice to Seller with a copy to the Title Insurance Company, with instructions to the Title Insurance Company, as escrow agent, to return the Deposit to Buyer (subject to the provisions of the Escrow Deposit Agreement), and upon return of the Deposit to Buyer, this Agreement shall terminate and neither party shall have any further liability or obligation to the other hereunder, except for Buyer’s obligations to treat Due Diligence Documents as confidential, proprietary information and return the same to Seller pursuant to Paragraph 15.15 hereof. Prior to the Adjourned Closing Date Buyer may at any time waive such requirement and close the transaction without adjustment or reduction in the Purchase Price.
Income and Expe nses . There shall have been no material adverse change in the income or expenses related to the Premises.
Mercantile Lease . Prior to the Due Diligence Period Expiration Date, Seller and Buyer shall negotiate in good faith and agree upon the text of a lease to be entered into by Mercantile Safe-Deposit and Trust Company, as Tenant, with MBCR (the “Mercantile Lease”) that shall be substantially in accordance with the terms set forth in the term sheet attached hereto as Exhibit “J” , and, on or prior to the Due Diligence Period Expiration Date, Seller shall cause Mercantile-Safe Deposit and Trust Company and MBCR to execute and deliver to Buyer the Mercantile Lease, which shall be effective as of the consummation of the Closing.
Disposition of Other Properties . Prior to the Due Diligence Period Expiration Date, (i) Seller shall convey the Federalsburg Call Center and the Linthicum Operations Center from MBCR to third parties and shall provide evidence of such disposition to Buyer and (ii) the Cross Keys Lease shall have been terminated or assigned by MBCR in accordance with its terms.
Failure of Conditions. If at the time of Closing any Buyer’s Conditions Precedent shall not have been satisfied in any material respect, then unless such lack of satisfaction has been caused by a Seller Default (in which case the provisions of Section 12.1 shall apply), Buyer shall have the right (as Buyer’s exclusive right and remedy, subject to the Sections 8.1 and 8.2 hereof) either (a) to proceed with Closing without any adjustment in the Purchase Price, in which case Buyer shall be deemed to have waived all unsatisfied Buyer’s Conditions Precedent, or (b) to terminate
14
this Agreement by giving Seller notice on or before the Scheduled Closing Date, in which case the Deposit shall be refunded to Buyer promptly and, thereupon, neither party shall have any further rights, duties, liabilities or obligations under this Agreement, except as otherwise expressly set forth herein.
SELLER’S CONDITIONS PRECEDENTConditions to Seller’s Obligations to Sell. Seller’s obligation to complete Closing is conditioned upon the satisfaction (or Seller’s written waiver) on or prior to the Closing Date of all of the following conditions (collectively, “ Seller’s Conditions Precedent ”):
Purchase Price . The Title Insurance Company shall have received the entire Purchase Price, plus or minus any prorations, deduction, apportionments or costs in accordance with Section 11 hereof, and Buyer shall have executed and delivered the Closing Instructions directing the Title Insurance Company to disburse the same.
Buyer’s Representations and Warranties . The representations and warranties of Buyer herein contained shall be true and correct in all material respects.
Buyer’s Performance . Buyer shall have performed, in all material respects, all of Buyer’s covenants, agreements and obligations required by this Agreement to be performed at or prior to Closing.
REPRESENTATIONS AND WARRANTIES
Representations and Warranties of Seller.
(A) In addition to the representations, warranties and covenants contained elsewhere in this Agreement, Seller hereby represents, warrants, and covenants to Buyer as follows, which representations and warranties shall survive Closing except to the extent otherwise set forth herein:
(i) Seller is and will at Closing be duly organized, validly existing and in good standing under the laws of the state of its formation. MBCR is and will at Closing be duly organized, validly existing and in good standing under the laws of its state of formation. Seller owns of record and beneficially 100% of the membership interests in MBCR free and clear of all liens, claims and encumbrances. Seller has delivered to Buyer true, correct and complete copies of the Articles of Organization of MBCR, the operating agreement of MBCR (the “ Operating Agreement ”) and the minute books and records of transfer of membership interests of MBCR. MBCR was formed as a Maryland limited liability company on December 17, 1998 pursuant to the Articles of Organization and the Operating Agreement described in the preceding sentence. The membership interests of MBCR are not subject to any restriction with
15
respect to their transferability (other than restrictions on transfer under applicable federal and state securities laws). No third party has grounds for any claim (i) against the membership interests, or (ii) that it has any ownership interest in MBCR . No person is entitled to any preemptive rights with respect to the purchase or sale of any membership or ownership interest in MBCR, and as of the Closing Date there will be no outstanding options, warrants or other rights, commitments or arrangements, written or oral to purchase or otherwise acquire any membership or ownership interest in MBCR or any security directly or indirectly convertible into or exchangeable or exercisable for any membership or ownership interest in MBCR. MBCR does not presently own or control, directly or indirectly, any interest in any other corporation, association or other business entity and MBCR does not own or hold any assets other than the Property. MBCR is not a participant in any joint venture, partnership or other similar arrangement.
(ii) This Agreement and all Closing Documents to which Seller is a party (a) are, and at the time of Closing will be, duly authorized, executed and delivered by Seller, (b) do not, and at the time of Closing will not, violate any provision of any agreement to which Seller is a party or to which Seller is subject, (c) constitute (or in the case of Closing Documents will constitute) a valid and legally binding obligation of Seller, enforceable in accordance with its terms, and (d) do not, and at the time of Closing, will not require the consent of any third parties to be a valid and legally binding obligation of Seller.
(iii) At closing, MBCR shall not be obligated under any Contract other than those Contracts that Buyer elects not to have terminated pursuant to Section 4.6 of this Agreement.
(iv) Seller represents that in addition to the Property, MBCR has owned only two other properties, one being known as the Linthicum Operations Center and one being known as the Federalsburg Call Center, and has leased only one property, being a lease of approximately 839 square feet at the Village at Cross Keys, Baltimore, Maryland pursuant to a lease, dated March 19, 2004, between MBCR, as tenant, and VCK Business Trust, as landlord (the “Cross Keys Lease,” and together with the Linthicum Operations Center and the Federalsburg Call Center, the “Other Properties”).
(v) MBCR has not at any time had any assets or liabilities, other than assets and liabilities directly related to the ownership and operation of the Property and the Other Properties in the ordinary course of business, and liabilities to employees involved in such business.
(vi)
(a) Neither Seller nor MBCR has within the past five years received written notice of any violation of law with respect to Hazardous Materials at the Property. To Seller’s Knowledge and MBCR’s Knowledge, the Property does not contain any Hazardous Materials which might subject MBCR to any liability on or after the date hereof. To Seller’s Knowledge and MBCR’s Knowledge, the Property does not violate any law with respect
16
to Hazardous Materials in any material respect. This Section 7.1(A)(vi)(a) shall not survive the Closing.
(b) Neither Seller nor MBCR has received written notice of any violation of law with respect to Hazardous Materials at the Other Properties. The Other Properties do not contain any Hazardous Materials which might subject MBCR to any liability on or after the date hereof. None of the Other Properties violate any law with respect to Hazardous Materials in any material respect.
(vii)
(a) Neither Seller nor MBCR has received any written notice which remains outstanding from any governmental body having jurisdiction over the Property as to any violation of any building, fire, environmental, health or any governmental law or ordinance affecting the Property which might constitute a liability of MBCR at or after Closing, nor do Seller or MBCR have knowledge of any such violations. This Section 7.1(A)(vii)(a) shall not survive the Closing.
(b) Neither Seller nor MBCR has received any written notice which remains outstanding from any governmental body having jurisdiction over the Other Properties as to any violation of any building, fire, environmental, health or any governmental law or ordinance affecting the Other Properties which might constitute a liability of MBCR at or after Closing, and no such violations exist for which Seller or MBCR may become liable.
(viii) On or before the Closing Date, all expenses of the Other Properties shall have been paid current or the liability therefor shall have been assumed by the transferee owners of each of the Other Properties or the Seller.
(ix) MBCR shall have no liabilities as of the Effective Date, whether fixed or contingent, or arising subsequent to the Closing Date as a result of MBCR’s ownership and operation of the Other Properties, with the exception of the worker’s compensation claim described on Exhibit “F” attached hereto, for which MBCR and Seller are fully insured and for which Seller agrees to be liable in the event that its insurance fails to cover such claim, and with the exception of liabilities described in the MBCR Financial Statements, for which Seller shall be responsible.
(x) At and after Closing MBCR shall not be subject to any liabilities or obligations pertaining to its prior ownership of the Other Properties, whether known or unknown, fixed or contingent, liquidated or unliquidated, except such as have been assumed by and will be paid by the transferees of the Other Properties. MBCR has not received written notice of any litigation that is pending or threatened against MBCR and, to the knowledge of Seller and MBCR, no such litigation is pending or threatened.
(xi) As of the Effective Date, MBCR shall have no employees and MBCR shall have no liability to or with respect to any employee, including without limitation no obligations for salary, wages or benefits for any accrued vacation pay, sick leave, contributions to pension or profit-sharing plans, cafeteria plans or any other employee benefit whatsoever.
17
(xii) As of Closing, MBCR shall have filed all tax returns and paid all taxes theretofore due or payable. Seller represents and warrants that for United States federal income tax purposes (and also, to the extent applicable, for all state and local income tax purposes) MBCR is and since its formation has been classified and properly characterized as an entity disregarded as separate from its owner under Treasury Regulation Sections 301.7701-2 and 301.7701-3, and that all tax returns, filings and elections made by MBCR and Seller to date have been consistent with said classification, and further (for avoidance of doubt) that MBCR is not and never has been classified or properly characterized as a corporation, as an association taxable as a corporation, or as a “publicly traded partnership” treated as a corporation under Internal Revenue Code Section 7704 or any similar tax law.
(xiii) MBCR holds all licenses, franchises, permits and other governmental authorizations the absence of any of which could have a material adverse effect on MBCR, and MBCR or Seller has delivered to Buyer an accurate list and description of all governmental licenses, franchises, permits and other governmental authorizations, including permits, titles, licenses, franchises and certificates, which, to Seller’s Knowledge, exist. All of those licenses, franchises, permits and other governmental authorizations are valid, and MBCR has not received any notice that any Governmental Authority intends to cancel, terminate or not renew any such license, franchise, permit or other governmental authorization. MBCR has conducted and is conducting its business in compliance with the requirements, standards, criteria and conditions set forth in all licenses, franchises, permits and other governmental authorizations, and is not in violation of any of the foregoing except where such non-compliance or violation would not have a material adverse effect on MBCR. This Section 7.1(A)(xiii) shall not survive the Closing.
(xiv) Except as otherwise set forth in this Agreement and the Exhibits hereto, (aa) all of the Leases are in full force and effect, (bb) not more than one (1) month’s rent under any of the Leases has been collected in advance, (cc) Seller is not in default under any of the Leases, (dd) Seller has not assigned or pledged the Leases or the rent due thereunder, and (ee) Seller has no obligation to provide any Tenant any allowances or credits except as set forth in the Leases. Other than the Leases, there are no leases or occupancy agreements in force with respect to the Property. As of the Effective Date, no Tenant is in default in any material respect under any Lease. This Section 7.1(A)(xiv) shall not survive the Closing.
(xv) As of the Effective Date, neither Seller nor MBCR has actual notice, or has received from any Person any written notice, of any pending or threatened condemnation or similar proceeding and, to Seller’s knowledge, there is no change or proposed change in the route, grade, or width of, or otherwise affecting, and street or road that is contiguous to the Property or any portion of the Property or of pending public improvements in or adjoining the Property which will in any manner affect the Property. This Section 7.1(A)(xv) shall not survive the Closing.
(xvi) As of the Effective Date, neither Seller nor MBCR has actual notice, or has received written notice, of any litigation that is pending or threatened with respect to the Property or MBCR which could affect the Property or MBCR upon or subsequent to the Closing, except for the worker’s compensation claim described on Exhibit “F”, which is fully
18
insured and for which Seller agrees to be liable in the event its insurance fails to cover such claim. This Section 7.1(A)(xvi) shall not survive the Closing.
(xvii) The rent roll and List of Security Deposits annexed hereto as Exhibit “E” (the “ Initial Rent Roll and List of Security Deposits ”) are true and accurate as of their date, and there are no Tenants at the Property as of the date of such rent roll except as set forth thereon. There are no rent concessions presently in effect other than a rent-free occupancy agreement for square feet of space for a barbershop for the use and convenience of the Tenants and a rent-free occupancy agreement for square feet of space for a café for the use and convenience of the Tenants..
(xviii) All payments due on or before Closing in respect of lease commissions for existing Leases, including commissions with respect to renewals or extensions thereof which have heretofore been exercised, are or will be paid current by Seller or MBCR at or before the Closing.
(xix) A correct and complete list of the Contracts which affect the Property is set forth on Exhibit “G” annexed hereto, and such Contracts have been delivered to Buyer. On the Closing Date, all Contracts, except for those Buyer has elected not to have terminated in accordance with Section 4.6 hereof, shall be terminated and of no further force and effect, and any payments due thereunder shall have been paid by Seller. Each of the Contracts are valid and in full force and effect, and, neither MBCR nor, to Seller’s Knowledge, the other party thereto is in default thereunder.
(xx) The schedule of Personal Property annexed hereto as Exhibit “H” contains a correct and substantially complete list of all Personal Property and fixtures owned by MBCR and located at or used in connection with the operation of the Property. All Personal Property is owned by MBCR free from encumbrances or liens, or is the subject of a Lease.
(xxi) The Property is free and clear of all mechanics’ and materialmen’s liens and all work performed or materials furnished up to Closing which are or might become a lien against the Property shall be paid for or bonded off at or prior to the Closing, or an amount sufficient to pay for the same shall be escrowed with the Title Insurance Company at Closing.
(xxii) To Seller’s Knowledge, the Property does not contain any Hazardous Materials other than as set forth in any reports delivered by Seller to Buyer pursuant to the provisions of Section 4.1, or such limited quantities of substances used for cleaning and maintenance as are customarily used in the operation of office buildings such as the Property. This Section 7.1(A)(xxii) shall not survive the Closing.
(xxiii) Neither Seller nor MBCR, nor, to Seller’s Knowledge, any Tenant at the Property is the subject of any existing, pending, threatened or contemplated bankruptcy, solvency or other debtor’s relief proceeding. This Section 7.1(A)(xxiii) shall not survive the Closing.
(xxiv) Neither Seller nor MBCR has received any written notice which remains outstanding from any governmental body having jurisdiction over the Property as to any
19
violation of any building, fire, environmental, health or other governmental law or ordinance affecting the Property, or any written notice which remains outstanding from any insurance company or inspection or rating bureau setting forth any requirements as a condition to the continuation to any insurance coverage on or with respect to the Property or the continuation thereof at the existing premium rates. This Section 7.1(A)(xxiv) shall not survive the Closing.
(xxv) Seller is not a “foreign person” as such term is defined in Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended (the “Code”).
(xxvi) To Seller’s Knowledge, Seller is in compliance with all laws, statutes, rules and regulations of any federal, state or local governmental authority in the United States of America applicable to such Persons (as hereinafter defined), including, without limitation, the requirements of Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the “Order”) and other similar requirements contained in the rules and regulations of the Office of Foreign Asset Control, Department of the Treasury (“OFAC”) and in any enabling legislation or other Executive Orders in respect thereof (the Order and such other rules, regulations, legislation, or orders are collectively called the “Orders”), to the extent that noncompliance would have a material adverse effect on Seller’s ability to convey the Membership Interests or would cause Buyer to incur a liability. For purposes of this subsection, “Person” shall mean any corporation, partnership, limited liability company, joint venture, individual, trust, real estate investment trust, banking association, federal or state savings and loan institution and any other legal entity, whether or not a party hereto; and Seller:
(a) is not listed on the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to the Order and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Orders (such lists are collectively referred to as the “ Lists ”);
(b) has not been indicted or arrested for money laundering or for predicate crimes to money laundering, convicted or pled nolo contendere to charges involving money laundering or predicate crimes to money laundering;
(c) has not been determined by competent authority to be subject to the prohibitions contained in the Orders;
(d) is not owned or controlled by, nor acts for or on behalf of, any Person on the Lists or any other Person who has been determined by competent authority to be subject to the prohibitions contained in the Orders; or
(e) shall not assign this Agreement or any interest herein, to any Person who is listed on the Lists or who is engaged in illegal activities.
If prior to Closing, Seller becomes listed on the Lists or is indicted, arraigned, or custodially detained on charges involving money laundering or predicate crimes to money laundering (each, a “Triggering Event”), Seller shall immediately notify Buyer, but in no event later than five (5) business days after the occurrence of the Triggering Event. In the event of a
20
Triggering Event, Buyer may terminate this Agreement upon written notice to Seller, whereupon the Deposit, shall be returned to Buyer, and neither party shall have any further obligation hereunder. At Seller’s option, Seller shall have ten (10) business days after receipt of Buyer’s notice to remove such party from any interest in Seller.
(xxvii) Seller has delivered, or shall deliver within two (2) Business Days following the Effective Date, to Buyer copies of the following financial statements: balance sheets and income statements, at and for each of the years ended December 31, 2000, 2001, 2002 and 2003, and for the nine-month period ended September 30, 2004 prepared by or on behalf of MBCR and all balance sheets and income and expense statements prepared in connection with the Property and Other Properties (such income and expense statements, but not such balance sheets, shall be prepared on a property by property or stand alone basis) (collectively, the “MBCR Financial Statements”). Each of the MBCR Financial Statements is consistent with the books and records of MBCR (which, in turn, are accurate and complete in all material respects) and fairly presents MBCR’s financial condition, assets and liabilities as of their respective dates and the results of operations and cash flows for the periods related thereto in compliance with GAAP, consistently applied throughout the periods which are the subject of MBCR Financial Statements. All books and records relating to operating income and expenses of the Property furnished or made available to Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGREEMENTS / CONTRACTS
CLAUSES
| Get Email Updates |
