EXHIBIT 10.2
PURCHASE AND SALE
AGREEMENT
3D HEADQUARTERS
ROCK HILL, SOUTH CAROLINA
BETWEEN
KDC-CAROLINA INVESTMENTS 3,
LP
AS SELLER
AND
3D SYSTEMS CORPORATION
AS PURCHASER
December 18, 2006
TABLE OF CONTENTS
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Page
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1.
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THE PROPERTY.
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1
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1.1.
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Description
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1
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1.2.
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“As-Is” Purchase
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2
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2.
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PRICE AND PAYMENT.
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3
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2.1.
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Purchase Price
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3
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2.2.
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Payment
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4
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2.3.
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Closing
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4
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3.
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INSPECTIONS AND APPROVALS.
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5
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3.1.
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Inspections.
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5
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3.2.
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Title and Survey
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7
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3.3.
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Contracts
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7
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3.4.
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Permitted Encumbrances
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8
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3.5.
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Delivery of Title Policy at Closing
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8
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4.
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CONDITIONS PRECEDENT TO PURCHASER’S
OBLIGATIONS
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8
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4.1.
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Marketability of Property
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8
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4.2.
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Seller Agreements
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8
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4.3.
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Notice of Eminent Domain
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9
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4.4.
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Seller’s Authority
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9
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4.5.
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Purchaser’s Authorizations
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9
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4.6.
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Environmental Matters
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9
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5.
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SELLER’S COVENANTS FOR PERIOD PRIOR TO
CLOSING.
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10
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5.1.
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Insurance
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10
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5.2.
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Operation
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10
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5.3.
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New Contracts
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10
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5.4.
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New Leases
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10
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5.5.
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Listing and Other Offers
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10
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6.
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REPRESENTATIONS AND WARRANTIES.
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10
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6.1.
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By Seller
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10
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6.2.
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By Purchaser
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11
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6.3.
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Mutual
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12
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7.
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COSTS AND PRORATIONS.
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12
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7.1.
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Closing Costs
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12
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7.2.
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Seller’s Costs
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12
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7.3.
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Prorations
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13
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7.4.
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Taxes
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13
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7.5.
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Incentives Payments
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13
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7.6.
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In General
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13
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7.7.
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Purpose and Intent
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13
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8.
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DAMAGE, DESTRUCTION OR CONDEMNATION.
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13
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8.1.
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Material Event
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14
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8.2.
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Immaterial Event
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14
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8.3.
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Termination and Return of Deposit
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14
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9.
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NOTICES.
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14
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10.
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CLOSING AND ESCROW.
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15
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10.1.
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Escrow Instructions
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15
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10.2.
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Seller’s Deliveries
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16
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10.3.
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Purchaser’s Deliveries
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17
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10.4.
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Possession
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17
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10.5.
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Insurance
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17
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i
TABLE OF CONTENTS
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Page
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11.
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DEFAULT; FAILURE OF CONDITION.
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17
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11.1.
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Purchaser Default
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17
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11.2.
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Seller Default
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17
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11.3.
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Failure of Condition
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18
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12.
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MISCELLANEOUS.
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18
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12.1.
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Entire Agreement
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18
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12.2.
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Severability
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19
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12.3.
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Applicable Law
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19
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12.4.
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Assignability
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19
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12.5.
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Successors Bound
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19
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12.6.
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Breach
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19
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12.7.
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No Public Disclosure
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19
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12.8.
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Captions
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20
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12.9.
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Attorneys’ Fees
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20
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12.10.
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No Partnership
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20
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12.11.
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Time of Essence
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20
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12.12.
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Counterparts
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20
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12.13.
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Recordation
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20
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12.14.
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Proper Execution
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20
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12.15.
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Tax Protest
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20
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12.16.
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Survival and Limitation of Representations and
Warranties
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20
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12.17.
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Time to Execute and Deliver
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21
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12.18.
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Calculation of Time Periods
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21
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12.19.
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Limitation of Liability
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21
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12.20.
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Jury Waiver
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21
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ii
LIST OF
EXHIBITS
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Exhibit 1.1.1
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Legal Description
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Exhibit 1.1.3
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Inventory of Personal Property
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Exhibit 2.1
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Computation of Purchase Price
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Exhibit 3.1.2
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Property Reports
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Exhibit 3.3.1
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Schedule of Service Contracts
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Exhibit 3.3.2
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Schedule of Warranties
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Exhibit 10.2.1
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Form of Special Warranty Deed
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Exhibit 10.2.2
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Affidavit of Value
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Exhibit 10.2.3
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Form of Bill of Sale
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Exhibit 10.2.4
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Form of Assignment and Assumption of
Contracts
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Exhibit 10.2.6
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Form of FIRPTA Affidavit
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Exhibit 10.2.10
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Form of Seller’s Affidavit, South Carolina
Withholding
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Exhibit 10.2.11
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Form of Termination of Lease
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Exhibit 12.21
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Incentives Agreement and Fee-in-Lieu-of-Taxation
Agreement
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iii
3D Systems Corporation
Headquarters Building
Rock Hill, South Carolina
PURCHASE AND SALE
AGREEMENT
THIS PURCHASE AND SALE AGREEMENT
(this “ Agreement ”), dated as of the
18th day of December, 2006 (the “ Effective
Date ”), is made by and between KDC-CAROLINA
INVESTMENTS 3, LP, a Delaware limited partnership (“
Seller ”), and 3D SYSTEMS CORPORATION, a
Delaware corporation (“ Purchaser
”).
R E C I T A L S:
Seller, as landlord, and Purchaser,
as tenant, have entered into that certain Lease Agreement dated
February 8, 2006, by and between Seller and Purchaser with respect
to the lease by Seller of the Premises described therein to
Purchaser, as amended by that certain First Amendment to Lease
Agreement dated August 7, 2006, but effective as of June 15, 2006,
that certain Second Amendment to Lease Agreement entered into
effective as of October 6, 2006 (the “ Second
Amendment ”) and that certain Third Amendment to
Lease Agreement entered into simultaneously with the date hereof
(the “ Third Amendment ”) (collectively,
the “ Lease ”).
NOW, THEREFORE, in consideration of
the foregoing, of the covenants, promises and undertakings set
forth herein, and for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Seller and
Purchaser agree as follows:
1.
THE
PROPERTY .
1.1.
Description
. Subject to the
terms and conditions of this Agreement, and for the consideration
herein set forth, Seller agrees to sell and transfer, and Purchaser
agrees to purchase and acquire, all of Seller’s right, title
and interest in the real property and personalty constituting the
Premises as defined in the Lease, including without limitation the
following (collectively, the “ Property ”):
1.1.1.
Certain land (the
“ Land
”) located
on the western side of Overview Drive in Waterford Business Park,
City of Rock Hill, York County, South, and more specifically
described in Exhibit 1.1.1 attached hereto, which Land
specifically includes the Expansion Land (as defined in the
Lease);
1.1.2.
The buildings,
parking areas, improvements, and fixtures now situated or being
constructed on the Land pursuant to the Lease (the “
Improvements
”);
1.1.3.
All furniture,
personal property, machinery, apparatus, and equipment owned by
Seller and currently used in the operation, repair and maintenance
of the Land and Improvements and situated thereon (collectively,
the “ Personal
Property ”), and generally
described on Exhibit 1.1.3 attached hereto. The Personal
Property to be conveyed is subject to depletions, replacements and
additions in the ordinary course of Seller’s
business;
1.1.4.
All easements,
hereditaments, and appurtenances belonging to or inuring to the
benefit of Seller and pertaining to the Land, if any;
1
1.1.5.
Any street or
road abutting the Land;
1.1.6.
Subject to
Section 3.3.1 , all contracts and agreements relating to the
operation or maintenance of the Land, Improvements or Personal
Property the terms of which extend beyond midnight of the day
preceding the Closing Date (as hereinafter defined);
and
1.1.7.
Subject to
Section 3.3.2 , all engineer’s, designer’s,
manufacturer’s and builder’s guaranties and warranties
relating to the Land, Improvements or Personal
Property.
1.2.
“As-Is”
Purchase . Seller warrants the
Improvements including, without limitation, the foundations, slab,
structural frame, roof deck, and exterior walls of the Improvements
against defective design, workmanship, and materials, latent or
otherwise, for a period of one year from the date of Substantial
Completion (the “ Warranty Period ”). Seller shall
repair or replace at its sole cost and expense any defective item
of Improvements occasioned by defective design, workmanship, or
materials that Purchaser discovers during the Warranty Period. Upon
the expiration of the Warranty Period, Seller shall cause the
material and labor warranties for the general contractor, the roof
on the Improvements, the window glazing and the mechanical,
including HVAC, electric and plumbing systems to be assigned to
Purchaser. In addition, Seller shall deliver to Purchaser all other
continuing assignable guaranties and warranties received by Seller
in connection with the construction of the Improvements and shall
perform (or cause the performance of) for the benefit of Purchaser
but at Purchaser’s expense any continuing, non-assignable
guaranties and warranties. Notwithstanding the foregoing, Seller
has no obligation to assign any warranty or guaranty to Purchaser
if Purchaser is obligated to but has not maintained an item covered
by the warranty or guaranty in good condition and repair. The
obligations Seller undertakes under the terms of this subsection
shall survive the Closing hereof and shall not merge into the Deed.
“ Substantial
Completion ” or “
Substantially Complete
” means
that (i) the Improvements are substantially completed in accordance
with the Final Plans and Specifications (as defined in the Lease)
except for minor details of construction, decoration or mechanical
adjustments which do not interfere in any material respect with
Purchaser’s access to or use or enjoyment of the Improvements
and (ii) a temporary or conditional certificate of occupancy or its
equivalent permitting fixturing and occupancy of the Improvements
has been obtained. Notwithstanding anything in this Agreement to
the contrary, a certificate of occupancy from the applicable
governmental authority and a certificate from Seller’s
architect that the Improvements have been completed in substantial
compliance with the Final Plans and Specifications shall confirm
that Substantial Completion of the Improvements has occurred,
absent manifest error.
Except as set
forth above in this Section 1.2 , the Property is being sold
in an “AS IS, WHERE IS” condition and “WITH ALL
FAULTS” as of the date of this Agreement and as of Closing.
Except as expressly set forth in this Agreement, including but not
limited to the limitations set forth in the next paragraph of this
Section 1.2 , no representations or warranties have been
made or are made and no responsibility has been or is assumed by
Seller or by any partner, officer, person, firm, agent, attorney or
representative acting or purporting to act on behalf of Seller as
to (i) the condition or state of repair of the Property;
(ii) the compliance or non-compliance of the Property with any
applicable laws, regulations or ordinances (including, without
limitation, any applicable zoning, building or development codes);
(iii) the value, expense of operation, or income potential of
the Property; (iv) any other fact or condition which has or
might affect the Property or the condition, state of repair,
compliance, value, expense of
2
operation or
income potential of the Property or any portion thereof; or
(v) whether the Property contains asbestos or harmful or toxic
substances (“ Substances ”) or pertaining to the
extent, location or nature of Substances. The parties agree that
all understandings and agreements heretofore made between them or
their respective agents or representatives are merged in this
Agreement and the Exhibits hereto annexed, which alone fully and
completely express their agreement, and that this Agreement has
been entered into after full investigation, or with the parties
satisfied with the opportunity afforded for full investigation,
neither party relying upon any statement or representation by the
other unless such statement or representation is specifically
embodied in this Agreement or the Exhibits annexed
hereto.
Purchaser waives its right to
recover from, and forever releases and discharges Seller,
Seller’s affiliates, Seller’s investment advisor and
manager, the partners, trustees, shareholders, directors, officers,
attorneys, employees and agents of each of them, and their
respective heirs, successors, personal representatives and assigns
(collectively, the “ Releasees ”) from
any and all demands, claims (including, without limitation, causes
of action in tort), legal or administrative proceedings, losses,
liabilities, damages, penalties, fines, liens, judgments, costs or
expenses whatsoever (including, without limitation,
attorneys’ fees and costs), whether direct or indirect, known
or unknown, foreseen or unforeseen (collectively, “
Claims ”), that may arise on account of or in
any way be connected with the Property, the physical condition
thereof, or any law or regulation applicable thereto (including,
without limitation, claims under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Section 6901, et seq. ), the Resources
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 (49
U.S.C. Section 1801, et seq. ), the Hazardous
Transportation Act (42 U.S.C. Section 6901, et seq.
), and the Toxic Substance Control Act (15 U.S.C. Section 2601,
et seq. ) (collectively, the “ Statutes
and Laws ”), except, however, any claims arising
under the Statutes and Laws for violations thereof caused by Seller
or Seller’s agents or conditions created by Seller or
Seller’s agents in the construction of the Project which were
not disclosed by Seller to Purchaser through reasonably diligent
efforts in conducting its investigations. Except with regard to the
foregoing limitation in the preceding sentence, but without
otherwise limiting the foregoing, Purchaser, upon Closing, shall be
deemed to have waived, relinquished and released Seller and all
other Releasees from any and all Claims, matters arising out of
latent or patent defects or physical conditions, violations of
applicable laws (including, without limitation, the Statutes and
Laws) and any and all other acts, omissions, events, circumstances
or matters affecting the Property. Purchaser agrees that should any
cleanup, remediation or removal of hazardous substances or other
environmental conditions on or about the Property be required after
the date of Closing, such clean-up, removal or remediation shall
not be the responsibility of Seller unless Seller’s actions
have caused such contamination of the Property.
1.2.1.
Agreement to
Convey . Seller agrees to convey,
and Purchaser agrees to accept, title to the Land and Improvements
by Special Warranty Deed (the “ Deed ”) in the condition described
in Section 3.4 and title to the Personal Property by Bill of
Sale without warranty as to the title or the physical condition of
such personalty.
2.
PRICE AND
PAYMENT .
2.1.
Purchase
Price . The purchase price for the
Property (the “ Purchase Price ”) is the sum of (a)
TEN MILLION FORTY-EIGHT THOUSAND AND NO/100 DOLLARS
3
($10,048,000)
U.S, to be adjusted pursuant to Section 7.5 below. For
purposes of making the adjustments provided in such Section,
attached as Exhibit 2.1 is a computation of the Purchase
Price.
2.2.
Payment
. Payment of the
Purchase Price is to be made in cash as follows:
2.2.1.
On or before
December 19, 2006, Purchaser shall make an earnest money deposit
with the Title Company of THREE HUNDRED ONE THOUSAND FOUR HUNDRED
FORTY AND NO/100 DOLLARS ($301,440.00) (the “
Initial Deposit
”). On or
before January 2, 2007, Purchaser shall make an additional earnest
money deposit with the Title Company of SEVEN HUNDRED THREE
THOUSAND THREE HUNDRED SIXTY AND NO/100 DOLLARS ($703,360.00) (the
“ Subsequent
Deposit ”). If Purchaser fails
to deposit either the Initial Deposit or Subsequent Deposit
(collectively, the “ Deposit ”) on or before such dates,
Seller may terminate this Agreement by written notice to Purchaser.
The Deposit will be placed with and held in escrow by Chicago Title
Insurance Company (“ Title Company ”), as an agent for
Purchaser and Seller, at 2001 Bryan St., Ste. 1700, Dallas, TX
75201, Attention: Joycelyn Armstrong, in immediately available
funds (to the extent the Deposit is in cash) in an interest-bearing
account at a mutually acceptable financial institution. Any
interest earned by the Deposit shall be considered as part of the
Deposit. Except as otherwise provided in this Agreement, the
Deposit will be applied to the Purchase Price at
Closing.
2.2.2.
Unless Purchaser
has theretofore terminated this Contract pursuant to the provisions
of Section 3.1 hereof, on January 2, 2007 (the
“ Deposit Release
Date ”) the Deposit shall be deemed
fully earned by Seller and be non-refundable to Purchaser, and the
Title Company shall release same to Seller.
2.2.3.
At Closing,
Purchaser shall pay Seller the balance of the Purchase Price,
subject to adjustment for the prorations as provided herein and the
adjustments pursuant to Section 7.5 below to the Title
Company for disbursement to Seller via wire transfer in immediately
available funds.
2.3.
Closing
. Payment of the
Purchase Price and the closing hereunder (the “
Closing ”) will take place
pursuant to an escrow closing on or before January 31, 2007 (the
“ Closing Date
”)
unless Purchaser
desires to hold the Closing on an earlier date. The Closing will
take place at the offices of the Title Company at 10:00 a.m. local
Rock Hill, South Carolina time or at such other time and place as
may be agreed upon in writing by Seller and Purchaser. Closing
shall occur through an escrow with the Title Company. Funds shall
be deposited into and held by the Title Company in a closing escrow
account with a bank satisfactory to Purchaser and Seller. Upon
satisfaction or completion of all closing conditions and
deliveries, the parties shall direct the Title Company to
immediately record and deliver the closing documents to the
appropriate parties and make disbursements according to the closing
statements executed by Seller and Purchaser. As a condition
precedent to the Closing, Purchaser shall not at such time be in
default under the Lease and shall have paid all sums required under
the Lease through such date to Seller including, but not limited
to, the amount of any excess in (i) the Amended Project Costs,
which must be approved by Purchaser, over (ii) the total Project
Costs set forth in the Development Budget attached to the Lease, as
provided in Exhibit F to the Lease. The Lease shall remain in
effect until the Closing, but except as set
4
forth in Section
41 of the Lease (which Section of the Lease shall explicitly
survive the Closing), the Lease shall terminate and be of no
further force and effect after the Closing.
3.
INSPECTIONS
AND APPROVALS .
3.1.
Inspections
.
3.1.1.
From the
Effective Date until the Closing, Purchaser, Purchaser’s
authorized agents and employees, as well as others authorized by
Purchaser (“ Purchaser’s Agents ”), shall have full and
complete access to the Property upon reasonable notice to Seller
and shall be entitled upon reasonable notice to Seller to enter
upon the Property to conduct and complete such investigations,
inspections, evaluations, studies, tests and measurements
(collectively, the “ Investigations ”) as Purchaser, in
Purchaser’s sole discretion, deems necessary or advisable
(including the removal of trees, shrubs, and other natural growth
and features reasonably necessary in connection with such
Investigations); provided, however, none of the Investigations so
conducted will result in any material adverse change to the
physical characteristics of the Property. If Purchaser is not
satisfied with the Investigations or for any other reason, or no
reason, determines that Purchaser does not want to close the
acquisition of the Property pursuant to this Agreement, Purchaser
shall, on or before 5:00 PM Rock Hill, South Carolina time on
January 2, 2007 (the period from the Effective Date until such date
being the “ Inspection Period ”), provide written
notice of termination of this Agreement to Seller and the Title
Company, in which event the Deposit shall be returned to Purchaser
and thereafter neither Purchaser nor Seller shall have any further
rights or obligations hereunder, other than those that expressly
survive the termination of this Agreement.
3.1.2.
Seller has
heretofore delivered to Purchaser the items related to the Property
as set forth on Exhibit 3.1.2 (the “
Property Reports
”).
3.1.3.
Purchaser agrees
that, in making any non-intrusive physical or environmental
inspections of the Property, Purchaser and all of Purchaser’s
Agents entering onto the Property shall carry not less than Two
Million Dollars ($2,000,000) comprehensive general liability
insurance insuring all activity and conduct of Purchaser and such
representatives while exercising such right of access and naming
Seller as an additional insured. Purchaser represents and warrants
that it carries not less than Two Million Dollars ($2,000,000)
commercial general liability insurance with contractual liability
endorsement which insures Purchaser’s indemnity obligations
hereunder, and will provide Seller with written evidence of same
prior to entry on the Property.
3.1.4.
Purchaser agrees
that in exercising its right of access hereunder, Purchaser will
use and will cause Purchaser’s Agents to use all reasonable
efforts not to interfere with the activity of any persons
performing construction activities at the Property. Purchaser
agrees to cooperate with any reasonable request by Seller in
connection with any such inspection. Purchaser agrees (which
agreement shall survive Closing or termination of this Agreement)
to provide Seller with a copy of any and all information, materials
and data that Purchaser and/or Purchaser’s Agents discover,
obtain or generate in connection with or resulting from its
inspection of the Property under Section 3.1
hereof.
5
3.1.5.
Purchaser shall,
at its sole cost and expense, promptly restore any physical damage
or alteration of the physical condition of the Property which
results from any inspections conducted by or on behalf of
Purchaser. All inspections shall be conducted at Purchaser’s
sole cost and expense and in strict accordance with all
requirements of applicable law.
3.1.6.
PURCHASER AGREES
(WHICH AGREEMENT SHALL SURVIVE CLOSING OR TERMINATION OF THIS
AGREEMENT) TO INDEMNIFY, DEFEND, AND HOLD SELLER FREE AND HARMLESS
FROM ANY LOSS, INJURY, DAMAGE, CLAIM, LIEN, COST OR EXPENSE,
INCLUDING ATTORNEYS’ FEES AND COSTS, ARISING OUT OF A BREACH
OF THE FOREGOING AGREEMENTS BY PURCHASER IN CONNECTION WITH THE
INSPECTION OF THE PROPERTY, OR OTHERWISE FROM THE EXERCISE BY
PURCHASER OR PURCHASER’S AGENTS OF THE RIGHT OF ACCESS ONTO
THE PROPERTY (COLLECTIVELY, “ PURCHASER’S INDEMNITY
OBLIGATIONS ”). THIS
SECTION 3.1.6 SHALL SURVIVE CLOSING OR THE TERMINATION
OF THIS AGREEMENT. PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT IN
THE EVENT THAT PRIOR TO THE EFFECTIVE DATE, PURCHASER, OR ANY OF
ITS EMPLOYEES, AGENTS, CONTRACTORS, CONSULTANTS, OR OTHER
REPRESENTATIVES, HAVE ENTERED ONTO THE PROPERTY TO INSPECT, TEST,
SURVEY OR OTHERWISE EXAMINE THE PROPERTY, AND THE RECORDS RELATING
THERETO, THE INDEMNITY SET FORTH IN THIS SECTION 3.1.6 OF
THE AGREEMENT SHALL APPLY RETROACTIVELY TO THE DATE OF SUCH
INSPECTIONS, TESTING, SURVEYING AND EXAMINATION.
3.1.7.
Except as
specifically set forth herein, and the Seller’s
representations and warranties regarding the Property and
specifically the Plans and Specifications for the Improvements as
set forth under Section 3(h) of the Lease, Seller makes no
representations or warranties as to the truth, accuracy,
completeness, methodology of preparation or otherwise concerning
any engineering or environmental reports or any other materials,
data or other information supplied to Purchaser in connection with
Purchaser’s inspection of the Property (e.g., that such
materials are complete, accurate or the final version thereof, or
that such materials are all of such materials as are in
Seller’s possession). It is the parties’ express
understanding and agreement that any materials which Purchaser is
allowed to review are provided only for Purchaser’s
convenience in making its own examination of the Property, and, in
doing so, Purchaser shall rely exclusively on its own independent
investigation and evaluation of every aspect of the Property and
not on any materials supplied by Seller. Purchaser expressly
disclaims any intent to rely on any such materials provided to it
by Seller in connection with its inspection and agrees that it
shall rely solely on its own independently developed or verified
information.
3.1.8.
Purchaser shall
keep the Property free from any liens arising out of any work
performed, materials furnished or obligations incurred by or on
behalf of Purchaser or Purchaser’s Agents with respect to any
inspection or testing of the Property. If any such lien at any time
shall be filed, Purchaser shall cause the same to be discharged of
record within ten (10) days thereafter by satisfying the same or,
if Purchaser, in its discretion and in good faith determines that
such lien should be contested, by recording a bond. Failure by
Purchaser to discharge or provide for the discharge of such lien
shall be a material breach of this Agreement.
6
3.1.9.
Attached hereto
as Exhibit 3.1.9 is an architect generated punch list (the
“ Punch List
”) of
remaining construction items with respect to the Improvements. On
or before December 8, 2006, Purchaser shall provide to Seller in
writing any additions to the Punch List desired by Purchaser (the
“ Purchaser
Additions ”), which shall be
deemed to be the final, complete list of Purchaser’s required
items to complete the Improvements under the Lease and this
Agreement (and the provisions of this sentence shall survive the
termination of this Agreement). By December 11, 2006 Seller shall
notify Purchaser as to the which Purchaser Additions are acceptable
and shall present Purchaser with a revised Punch List based on the
Purchaser Additions that are acceptable to Seller (as so amended,
the “ Revised Punch
List ”). If Purchaser deems
that any Seller deletions from the Purchaser Additions are not
acceptable to Purchaser, or determines that the Revised Punch List
Items are not on or before December 15, 2006 completed by Seller to
the satisfaction of Purchaser, then Purchaser may terminate this
Agreement as set forth in Section 3.1.1 above.
3.2.
Title and
Survey . Within five (5) business
days after the full execution of this Agreement, Seller shall cause
to be delivered to Purchaser a commitment for title insurance on
the Land, together with copies of all items shown as exceptions to
title therein, issued by the Title Company, and a current as-built
survey of the Land showing all the Improvements and the Permitted
Encumbrances thereon (the “ Survey ”). Within seven (7)
days after Purchaser receives the last of the Title Commitment and
the Survey, Purchaser shall deliver to Seller a letter (the
“ Title/Survey
Objection Letter ”) outlining any
objections that Purchaser has to any matters contained in the Title
Commitment or Survey. Within four (4) days after Seller receives
the Title/Survey Objection Letter, Seller shall then respond to the
Title/Survey Objection Letter by providing Purchaser a letter (the
“ Title/Survey Response
Letter ”) stating those
matters in the Title/Survey Objection Letter that Seller is willing
to cure prior to Closing (the “ Seller Cure Items ”). Purchaser shall
then three (3) business days in which to inform Seller that
Purchaser is either (a) accepting the Seller Cure Items as the only
items in the Title/Survey Objection Letter that will be cured, and
waiving all other matters set forth in the Title/Survey Objection,
or (b) terminating this Agreement, and in the event of such
termination (i) neither Purchaser nor Seller shall have any further
rights or obligations hereunder other than those rights and
obligations that expressly survive such termination and (ii) the
Lease shall remain in full force and effect. All of those items
shown in the Title Commitment and Survey, other than the Seller
Cure Items, shall be deemed to be approved by Purchaser and are
“ Permitted
Encumbrances ” as provided in
Section 3.4 hereof.
3.3.
Contracts
. Seller has
heretofore furnished to Purchaser:
3.3.1.
All contracts and
agreements relating to the operation or maintenance of the Property
executed by Seller the terms of which extend beyond midnight of the
day preceding the Closing Date which are identified on Exhibit
3.3.1 attached hereto (collectively, the “
Service Contracts
”). On or
before the Closing Date, Purchaser shall notify Seller in writing
if Purchaser elects not to assume at Closing any of the service,
maintenance, supply or other contracts relating to the operation of
the. Seller shall give notice of termination of such disapproved
contract(s).
3.3.2.
All
engineer’s, designer’s, manufacturer’s and
builder’s guaranties and warranties relating to the Land,
Improvements or Personal Property which are identified on
Exhibit 3.3.2 (the “ Warranties) . To the extent that any of
the Warranties are not transferable to
7
Purchaser, and at
no cost or expense to Seller and at Purchaser’s cost and
expense, Seller covenants to assist Purchaser in the enforcement of
all such Warranties, which shall survive the Closing as a Surviving
Obligation defined in Section 12.16 below .
3.4.
Permitted
Encumbrances . Purchaser shall be deemed
to have approved and to have agreed to purchase the Property
subject to the following:
3.4.1.
All exceptions to
title shown in the Title Commitment or matters shown on the Survey
which Purchaser has approved or is deemed to have approved pursuant
to Section 3.2 hereof;
3.4.2.
All contracts
which Purchaser has approved or is deemed to have approved pursuant
to Sections 3.3 and 5.3 hereof; and
3.4.3.
The lien of
non-delinquent real and personal property taxes and
assessments.
All of the foregoing are referred to
herein collectively as “ Permitted Encumbrances
.”
3.5.
Delivery of
Title Policy at Closing . As a condition to
Purchaser’s obligation to close, the Title Company shall
deliver to Purchaser at Closing an ALTA Owner’s Policy of
Title Insurance (the “ Title Policy ”) issued by the Title
Company as of the date and time of the recording of the Deed, in
the amount of the Purchase Price, insuring Purchaser as owner of
indefeasible fee simple title to the Property, and subject only to
the Permitted Encumbrances. Seller shall execute at Closing
Seller’s standard owner’s affidavit to facilitate the
issuance of the Title Policy (but not additional matters required
for any endorsements required by Purchaser). The Title Policy may
be delivered after the Closing if at the Closing the Title Company
issues a currently effective, duly-executed “marked-up”
Title Commitment and irrevocably commits in writing to issue the
Title Policy in the form of the “marked-up” Title
Commitment promptly after the Closing Date. Purchaser may elect to
obtain additional coverage or endorsements to the Title Policy at
Purchaser’s sole cost and expense but obtaining such
additional coverage or endorsements shall not be a condition
precedent to Purchaser’s Closing obligations under this
Agreement.
4.
CONDITIONS
PRECEDENT TO PURCHASER’S OBLIGATIONS . In addition to any other
conditions precedent to the performance of Purchaser’s
obligations under this Agreement, the obligations and liabilities
of Purchaser hereunder shall in all respects be conditioned upon
satisfaction of each of the following conditions precedent (the
conditions precedent set forth in this Section 4 being collectively
referred to as the “ Conditions Precedent ”) as of Closing (any
of which may be waived by written notice from Purchaser to
Seller):
4.1.
Marketability
of Property . Seller shall own
indefeasible fee simple and insurable title to the Property,
subject only to the Permitted Encumbrances.
4.2.
Seller
Agreements . Seller shall have entered
into no agreement, oral or written, not referred to herein, with
reference to the Property that will survive Closing other than the
Service Contracts, and neither Seller nor the Property shall be
subject to any judgment or decree of a court of competent
jurisdiction, or to any litigation or administrative
proceeding
8
which would in
any way affect the Property or which would in any way be binding
upon Purchaser, or Purchaser’s assigns, or affect or limit
Purchaser’s or Purchaser’s assigns’ full use and
enjoyment of the Property or which would limit or restrict in any
way Seller’s right or ability to enter into this Agreement
and consummate the transactions contemplated hereby. In addition,
no further action shall be required as a prerequisite to the
enforceability of this Agreement against Seller, in accordance with
its terms.
4.3.
Notice of
Eminent Domain . Neither Seller nor any
agent of Seller shall have received any notices from any city,
county or other governmental authority of any taking of the
Property, or any portion thereof, by eminent domain or similar
proceeding, and no such taking or other condemnation of the
Property, or any portion thereof, shall be threatened or
contemplated by any such governmental authority.
4.4.
Charges and
Assessments . Seller shall be responsible
for all charges and assessments (other than ad valorem property
taxes for the year of Closing, which shall be prorated on a
calendar year basis to the date of Closing) for sewer, water,
streets, sidewalks and similar improvements by any governmental
authority affecting the Property through and including November 21,
2006, and all such charges and assessments, whether or not due and
payable prior to Closing, shall have been paid in full.
4.5.
Seller’s
Authority. Seller shall have presented
evidence satisfactory to Purchaser, Purchaser’s attorney and
the Title Company with respect to the right, power and authority of
designated representative(s) of Seller to execute the closing
documents and consummate the sale of the Property.
4.6.
Purchaser’s
Authorizations. Purchaser shall have received
by the date of Closing all necessary and appropriate licenses,
permits, approvals and authorizations (collectively, the
“ Authorizations ”) from all
governmental agencies, authorities, boards, commissions,
departments and bodies (collectively, the “
Agencies ”) having or claiming
to have jurisdiction over the Property and/or Purchaser in order to
allow Purchaser to develop and use the Property as contemplated and
in accordance with the Intended Use (as defined in the Lease).
Seller agrees to fully cooperate with Purchaser in obtaining all
necessary or appropriate Authorizations from the
Agencies.
4.7.
Environmental
Matters . There shall have been no
adverse changes, and no notice shall have been served on or
delivered to Seller from any entity, governmental body or
individual claiming any violation of any Statutes and Laws or
demanding payment or contribution for environmental cleanup costs,
environmental damage, harm to endangered species, or injury to
natural resources, or asserting liability with respect to same,
first arising from and after the end of the Inspection
Period.
Seller agrees to use its good faith,
diligent efforts to cause each Condition Precedent that is
Seller’s responsibility to attempt to satisfy under this
Agreement to be satisfied as soon as reasonably possible after the
Effective Date and to continue such efforts thereafter (if and as
necessary to achieve such satisfaction). Purchaser agrees to use
its good faith, diligent efforts to cause each Condition Precedent
that is Purchaser’s responsibility to attempt to satisfy
under this Agreement to be satisfied as soon as reasonably possible
after the Effective Date and to continue such efforts thereafter
(if and as necessary to achieve such satisfaction). In the
event
9
Purchaser is not satisfied
concerning the Conditions Precedent (or any of them), in
Purchaser’s sole discretion, Purchaser shall so notify Seller
in writing as to each Condition Precedent that is not then
satisfied, and such written notice shall provide reasonable
guidance as to what must be completed for each such Condition
Precedent to be satisfied. If any such Condition Precedent that
Purchaser notifies Seller in writing is not satisfied as of the
Closing Date after reasonable, good faith effort on the part of
Seller and Purchaser (as applicable) and if Purchaser does not
waive any such unsatisfied Condition(s) Precedent, Purchaser may
terminate this Agreement and the entire Deposit shall be returned
to Purchaser; and the parties hereto, unless otherwise provided
herein, shall thereafter have no further rights, obligations or
liabilities hereunder.
5.
SELLER’S
COVENANTS FOR PERIOD PRIOR TO CLOSING .
Until Closing, Seller or
Seller’s agent shall:
5.1.
Insurance
. Keep the
Property insured under its current or comparable policies against
fire and other hazards covered by extended coverage endorsement and
commercial general liability insurance against claims for bodily
injury, death and property damage occurring in, on or about the
Property.
5.2.
Operation
. Operate and
maintain the Property substantially in accordance with
Seller’s past practices with respect to the Property, normal
wear and tear excepted, provided that in the event of any loss or
damage to the Property as described in Section 7 , Seller
shall have an obligation to Purchaser to repair the Property in
accordance with the parties’ obligations under the
Lease.
5.3.
New
Contracts . Enter into only those
third-party contracts which are necessary to carry out its
obligations under Section 5.2 and which shall be cancelable
on thirty (30) days written notice. If Seller enters into any such
contract, it shall promptly provide written notice thereof to
Purchaser and unless Purchaser, within three (3) days thereafter,
notifies Seller in writing of its intention to not assume such
contract, it shall be treated as a contract approved by Purchaser
under Section 3.3.1 hereof.
5.4.
New
Leases . Seller will not execute new
leases of the Property without the prior consent of
Purchaser.
5.5.
Listing and
Other Offers . From the date hereof until
the termination of this Agreement, Seller will not list the
Property with any broker or otherwise solicit or make or accept any
offers to sell the Property or enter into any contracts or
agreements regarding any disposition of the Property.
6.
REPRESENTATIONS AND
WARRANTIES .
6.1.
By
Seller . Seller represents and
warrants to Purchaser as follows:
6.1.1.
Seller is a
limited partnership duly organized and validly existing under the
laws of the State of Delaware, is authorized to do business in the
State of South Carolina, has duly authorized the execution and
performance of this Agreement, and such execution and performance
will not violate any material term of its articles of incorporation
or bylaws.
10
6.1.2.
To the best of
Seller’s knowledge, performance of this Agreement will not
result in any breach of, or constitute any default under, or result
in the imposition of any lien or encumbrance upon the Property
under, any agreement to which Seller is a party.
6.1.3.
To the best of
Seller’s knowledge, the list of Service Contracts to be
delivered to Purchaser pursuant to this Agreement will be true,
correct and complete as of the date of delivery.
6.1.4.
Seller is not a
“foreign person” within the meaning of Sections 1445
and 7701 the Internal Revenue Code of 1986, as amended
(hereinafter, the “ Code ”).
6.2.
By
Purchaser . Purchaser represents and
warrants to Seller as follows:
6.2.1.
Purchaser is a
corporation, duly organized, validly existing and in good standing
under the laws of the State of Delaware, is authorized to do
business in the State of South Carolina, has duly authorized the
execution and performance of this Agreement, and such execution and
performance will not violate any material term of its
organizational documents.
6.2.2.
Purchaser is
acting as principal in this transaction with authority to close the
transaction.
6.2.3.
No petition in
bankruptcy (voluntary or otherwise), assignment for the benefit of
creditors, or petition seeking reorganization or arrangement or
other action under federal or state bankruptcy laws is pending
against or contemplated by Purchaser.
6.2.4.
Purchaser
acknowledges that, by the Closing Date, Purchaser will have had
sufficient opportunity to inspect the Property fully and completely
at its expense in order to ascertain to its satisfaction the extent
to which the Property complies with applicable zoning, building,
environmental, health and safety and all other laws, codes and
regulations.
6.2.5.
Prior to Closing,
Purchaser will have had sufficient opportunity to review the
contracts, expenses and other matters relating to the Property in
order to determine, based upon its own investigations, inspections,
tests and studies, whether to purchase the Property and to assume
Seller’s obligations under the contracts and otherwise with
respect to the Property.
6.2.6.
Neither Purchaser
nor any affiliate of or principal in Purchaser is other than a
citizen of, or partnership, corporation or other form of legal
person domesticated in, the United States of America.
6.2.7.
Purchaser will
not use the assets of an employee benefit plan as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974
(“ ERISA
”) and
covered under Title I, Part 4 of ERISA or Section 4975 of the
Internal Revenue Code of 1986, as amended, in the performance or
discharge of its obligations hereunder, including the acquisition
of the Property. Purchaser shall not assign its interest hereunder
to any person or entity which does not expressly make this covenant
and warranty for
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