PURCHASE AND SALE AGREEMENT-WEST VIRGINIA PROPERTY

 

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                                                                   Exhibit 10.11

 

                           PURCHASE AND SALE AGREEMENT

 

         THIS AGREEMENT, made as of the 7th day of November, 2003, is by and

between ADA REALTY LLC, a West Virginia Limited Liability Company, with an

address at P.O. BOX 2043 PARKERSBURG, WV 26102 ("Seller"), and GEN-NET LEASE

INCOME TRUST, INC., a Michigan corporation with an address at 24081 WEST RIVER

ROAD, 1ST FLOOR, GROSSE ISLE, MICHIGAN 48138 ("Buyer").

 

         SECTION 1. SALE OF THE PROPERTY

 

        1.1 On the terms and conditions contained in this Agreement, Seller

agrees to sell and Buyer agrees to purchase that certain tract or parcel of land

consisting of one 35,894 sq. ft. warehouse and storage building, known as BUREAU

OF PUBLIC DEBT located at 457 PETTYVILLE ROAD, MINERAL WELLS, WV, more

particularly described on EXHIBIT A attached hereto and by this reference made a

part hereof, together with the buildings and improvements thereon and together

with all appurtenant rights of way, easements, water rights and covenants (said

land, building together with the alternate electric power source described in

Section 1.4 hereof, and appurtenances hereinafter sometimes collectively

referred to as the "Property").

 

        1.2 All of Seller's right, title and interest in and to any fixtures and

items of intangible or tangible personal property attached to the improvements

on the Property and owned by Seller are included in the sale and shall be

conveyed "as is."

 

        1.3 If required by the Lease of the Premises to the General Services

Administration, Buyer will form a single asset entity of its choosing to take

title to the Property. Such entity shall be formed prior to Closing. Seller

hereby consents to the assignment of this contract to such single asset entity

at Closing.

 

        1.4 The Property, as herein defined, includes without limitation the

existing 35854 square foot warehouse facility with an alternate source of

electric power now under construction. The alternate electric power source

project is currently under contract with the United States General Services

Administration ("GSA") (the "Power Contract"). The Power Contract will be

completed at the time of Closing. All costs associated with the Power Contract

are being paid by and are the responsibility of the General Services

Administration ("GSA"). Completion of the Power Contract or receipt by Buyer of

satisfactory assurances from Seller and the GSA regarding completion of and

payment for the Power Contract shall be a condition precedent to Buyer's

obligation to close hereunder.

 

        SECTION 2. PURCHASE PRICE.

 

        2.1 The purchase price for the Property (the "Purchase Price") shall be

FIVE MILLION THIRTY-FIVE THOUSAND AND 00/DOLLARS ($5,035,000.00), and shall be

payable as follows:

 

                (a) One Hundred Thousand Dollars ($100,000.00) shall be paid

        into with an Escrow Agent selected by Buyer (the "Title Company") on or

        before the date that is five (5) business days after the Effective Date

        (see Section 16.13 hereof) of this Agreement. Such amount shall be held

        and released by the Title Company in accordance with the

 

 

 

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        provisions of this Agreement and the escrow provisions attached as

        EXHIBIT B. Such payments shall be non-refundable, except as expressly

        set forth herein. Such payment is referred to herein as the "Deposit."

 

                (b) The balance of the Purchase Price, subject to adjustment as

        provided herein, shall be deposited into escrow by Buyer with the Title

        Company no later than 11:00 a.m. on the date that the closing of title

        pursuant to Section 7 takes place (the "Closing Date") by wire transfer

        of good federal funds.

 

        2.2 The Deposit shall be placed in an interest-bearing escrow account.

All interest accruing on the Deposit, not otherwise applied to escrow costs

pursuant to Section 3.1(b), shall be credited against the Purchase Price payable

at the closing of title pursuant to Section 7 (the "Closing"). If the Closing

does not take place, the interest accrued on the Deposit shall be paid to the

party entitled to receive the Deposit pursuant to the terms of this Agreement.

The Title Company shall serve as custodian of all documents to be delivered into

escrow pursuant to this Agreement and to handle the recordation of all documents

to be admitted to record.

 

        SECTION 3. ADJUSTMENTS AND APPORTIONMENTS

 

        3.1 The following are to be apportioned or adjusted as of the date of

Closing (the "Closing Date"):

 

                (a) Any charges, which are not paid by the UNITED STATES

        GOVERNMENT GENERAL SERVICES ADMINISTRATION ("Tenant"), including but not

        limited to, real estate taxes, water and sewer charges, electricity,

        fuel and other utility charges shall be apportioned as of the Closing

        Date in accordance with local custom for transactions of this type.

 

                (b) Any escrow fees charged by the Title Company for acting as

        the escrow agent hereunder shall be offset by the total interest income

        from the escrowed funds, and any excess shall be shared equally by the

        parties.

 

                (c) Rental payments from the Tenant shall be apportioned as of

        the Closing Date. Rental deposits, if any, shall be paid to Buyer.

 

                (d) The following closing costs shall be paid by Buyer:

 

                        i. documentary stamps, transfer and intangible taxes, if

                any, on Buyer's mortgages and notes;

 

                        ii. recording costs on the deed, Buyer's mortgage and

                financing statements;

 

                        iii. the cost of the Lender's and one-half (1/2) of the

                cost of the Buyer's title insurance commitment and policy;

 

                        iv. survey update, if any;

 

 

 

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                        v. Buyer's loan costs;

 

                        vi. all expenses of due diligence and all fees and

                expenses related to Buyer's financing;

 

                        vii. all other expenses incurred by Buyer including

                without limitation, all legal fees and expenses of Buyer's

                counsel;

 

                 (e) The following closing costs shall be paid by Seller:

 

                        i. documentary stamps, transfer and intangible taxes on

                the deed;

 

                        ii. one-half (1/2) the cost of the Buyer's title

                 insurance commitment and policy;

 

                        iii. all costs associated with curative or remedial

                title work and the recording of any corrective title instruments

                and releases;

 

                         iv. all other expenses incurred by Seller, including

                without limitation all fees and expenses of Seller's counsel.

 

        3.2 The terms and provisions of this Section 3 shall survive the Closing

Date.

 

        SECTION 4. TITLE

 

         4.1 Within seven (7) days following the Effective Date, Seller shall

obtain a commitment for title insurance under an Extended Coverage Policy of

Title Insurance (ALTA form acceptable to Buyer) issued by Escrow Company on

behalf of a title insurance company acceptable to Buyer (the "Commitment"). Such

Commitment shall commit to insure that marketable title in fee simple will vest

in Buyer at Closing subject to standard ALTA printed policy exceptions (Schedule

B, Section 2 Exceptions) and such other exceptions as will not interfere with

the contemplated use, leasing, financing, or resale of the Property ("Permitted

Exceptions"). Provided, however, that the standard exceptions for mechanic's

liens, construction liens and survey shall not be deemed Permitted Exceptions

and shall be removed prior to Closing. All costs associated with the commitment

and issuance of the Owner's policy shall divided equally between Seller and

Buyer. Seller shall convey the Property to Buyer by General Warranty Deed in a

form reasonably acceptable to Buyer.

 

        4.2 Buyer shall have ten (10) days after receipt of the commitment to

notify Seller, in writing, of any matter identified in the commitment or

otherwise known to Buyer which would render the title conveyed to Buyer other

than good, clear, record and marketable other than Permitted Exceptions ("Defect

of Title"). Failure by Buyer to give such notice within the prescribed time

period shall be deemed a waiver of any Defect of Title disclosed by the

commitment or otherwise known to Buyer which existed on the Effective Date and

such Defect of Title shall be deemed a Permitted Exception.

 

 

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                Buyer shall notify Seller of any Defect of Title which does not

exist at the Effective Date but which arises prior to Closing. Such notice shall

be in writing and shall be given on or prior to the Closing Date.

 

                Any notice from Buyer to Seller identifying one or more

Defect(s) of Title shall be referred to herein as a "Title Objection Notice".

 

        4.3 Upon receipt of a Title Objection Notice, Seller shall use

reasonable good faith efforts to cure any such Defect(s) of Title. Seller shall

have the right to delay the Closing for up to 45 days to permit such remedy or

cure (such period as provided herein to Seller to cure any such Defect(s) of

Title is referred to herein as the "Title Cure Period"). As part of such cure,

Seller shall remove any consensual liens securing the payment of money. If

Seller remedies or cures such Defect(s) of Title, Seller shall notify Buyer of

such remedy or cure and if Buyer deems such remedy or cure to be satisfactory,

Seller shall have the right to set the Closing Date by giving Buyer written

notice thereof; provided that such Closing Date shall be no sooner than ten (10)

business days after such notice. If the Defect(s) of Title set forth in the

Title Objection Notice are not corrected or remedied within the Title Cure

Period, then Buyer shall elect, by written notice to Seller within five (5)

business days after the end of the Title Cure Period either (i) to accept title

to the Property subject to the uncured Defect(s) of Title without reduction of

the Purchase Price (other than Seller's obligation to pay off any consensual

liens securing the payment of money) and without any right to damages and

without any other liability on the part of Seller, or (ii) to terminate this

Agreement, whereupon all obligations of the parties hereunder shall cease and

neither party shall have any claim against the other by reason of this

Agreement, except with respect to any provision hereof that expressly survives

the termination of this Agreement. If Seller does not remedy or cure such

Defect(s) of Title within the Title Cure Period, and if Buyer elects to proceed

with the Closing, the Closing Date shall be the tenth business day after the end

of the Title Cure Period.

 

        4.4 If, on the Closing Date, there are any liens or encumbrances

securing the payment of a fixed liquidated amount of money, that Seller is

obligated to pay or discharge in order to convey good, clear, record and

marketable title to the Property to Buyer. Seller may elect to use any portion

of the Purchase Price to satisfy the same, provided Seller shall authorize the

Title Company to retain a sufficient portion of the Purchase Price to ensure the

payment in full of such liens and encumbrances and the obtaining and the

recording of such satisfactions and releases. Buyer shall be entitled to verify

the sufficiency of any amounts retained to satisfy or discharge of the

obligation to which they are assigned. Assuming due verification of the

sufficiency of the amounts retained to satisfy or discharge the obligation to

which they are assigned, the existence of any such liens or encumbrances shall

not be deemed objections to title if Seller shall comply with the foregoing and

the Title Company is willing to insure the Property without exception for such

lien or encumbrance.

 

        SECTION 5. DELIVERY OF SELLER'S DOCUMENTS

 

        5.1 Within ten (10) business days after the Effective Date, Seller shall

deliver to Buyer, to the extent Seller has not already done so, copies of all

title policies, plans, surveys, engineering and environmental reports, operating

and financial documents, records, reports, audits, agreements, contracts for

services, leases, construction and development documents,

 

 

 

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warranties, tests, reports, studies, notices, advisories, permits, certification

for occupancy, and anything else in its possession material to the status or

condition of the Property, to the extent the same are in the possession or

control of Seller.

 

        5.2 Seller shall deliver an ALTA/ACSM Land Survey of the Property within

five (5) days following the end of the Due Diligence Period. Such survey shall

bear a creation or recertification date not more than thirty (30) days prior to

the Closing Date.

 

        5.3 Buyer agrees that any and all information delivered by Seller or its

agents and representatives with respect to the Property shall be held by Buyer

in confidence and not released or shared with anyone except such employees,

lenders and professional advisors as are reasonably necessary to allow Buyer to

evaluate the Property. If for any reason this transaction does not close, any

such information and any copies that have been made by Buyer shall be promptly

returned to Seller. The provisions of this Section 5.3 shall survive the

termination of this Agreement.

 

        SECTION 6. DUE DILIGENCE.

 

        6.1 Unless extended by written agreement of Seller and Buyer, Buyer

shall have a period of forty-five (45) days from the Effective Date to conduct

an inspection of the Property. Such period shall hereinafter be referred to as

the "Due Diligence Period". During the Due Diligence Period during normal

business hours and after reasonable notice to Seller or its designated agents,

Buyer, or its engineers, architects, building consultants, environmental

investigators, or other representatives, at Buyer's sole cost and expense, may

inspect and test the Property. Seller shall reasonably cooperate by allowing

Buyer's representatives reasonable access to the Property. Buyer's right of

inspection shall include entry upon the Property, in the company of

representatives of Seller, with its agents and their equipment for the purpose

of making such environmental tests as Buyer deems appropriate, including without

limitation soil borings, provided that Buyer shall be responsible for the prompt

restoration of the Property to its condition prior to making such tests. The

obligation to return the Property to its prior condition shall survive the

termination of this Agreement. Buyer shall comply with all laws, rules and

regulations of any governmental authority and obtain all licenses and permits

required in connection with such activities. Buyer agrees to indemnify and hold

Seller harmless from and against any property damage or personal injury or claim

or lien against the Property resulting from any such access or inspection by

Buyer or its representatives. Such indemnification shall survive the Closing or

earlier termination of this Agreement. Buyer shall also have the right during

such Due Diligence Period to examine and review environmental conditions of the

Property, zoning and land use regulations, governmental entitlements,

governmental approvals and any restrictions, agreements, obligations and

liabilities affecting the Property. If Seller fails to provide the documentation

identified in Section 5 hereof within the prescribed 10-day period, the Due

Diligence Period will be extended one (1) day for each day or partial day delay

in the delivery of such documentation.

 

        6.2 Buyer shall have the right to extend the Due Diligence Period for an

additional period of forty five (45) days by giving written notice to Seller,

not later than fifteen (15) days prior to the end of the initial Due Diligence

Period, of its intent to extend and by declaring that the Deposit is non

refundable, on or before the last day of the initial Due Diligence Period. If

the

 

 

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Seller extends the Due Diligence Period, the Deposit shall be non refundable in

the event Buyer terminates this Agreement based on matters discovered during the

Due Diligence Period. Nothing contained in this Section 6.2 shall be deemed to

make the Deposit non refundable if this Agreement is terminated due to the

inability of Seller to convey good, clear, unencumbered and marketable title to

the Property to Buyer, the inaccuracy of any warranties or representations made

by Seller or for any other breach of this breach of this Agreement by Seller.

 

        6.3 Buyer shall have the right to terminate this Agreement at any time

during the Due Diligence Period or during any extension thereof in its sole and

absolute discretion for any reason or no reason by giving written notice to

Seller on or before the last day of the Due Diligence Period. If Buyer timely

gives notice of termination under this Section, all obligations of the parties

hereunder shall cease and neither party shall have any claim against the other

by reason of this Agreement, except with respect to any provision hereof that

expressly survives the termination of this Agreement. Except as provided in

Section 6.2, upon restoration of the Property as provided in Section 6.1, the

Deposit shall be returned to the Buyer; provided, however, that in the event of

termination following the initial Due Diligence Period, as set forth in Section

6.2, the Deposit, together with any accrued interest, shall be paid to Seller.

If Buyer fails to give such written notice of termination on or before the last

day of the Due Diligence Period, Buyer shall be deemed to have waived its right

to terminate this Agreement pursuant to this Section.

 

        6.4 If Buyer terminates this Agreement in accordance with Section 6.3

above, Buyer shall return to Seller all documents provided to Buyer by Seller,

and any copies thereof made by Buyer and shall provide Seller with copies of all

reports, surveys, plans, studies and analysis prepared by or for Buyer with

respect to the Property. Buyer agrees that any and all information obtained by

it or its agents and representatives with respect to the Property, including

without limitation all reports, surveys, plans, studies and analysis prepared by

or for Buyer with respect to the Property, shall be held by Buyer in confidence

and not released or shared with anyone other than Seller, except for such

employees, lenders and professional advisors as are reasonably necessary to

allow Buyer to evaluate the Property. The provisions of this Section 6.4 shall

survive the termination of this Agreement. If Buyer waives its right to

terminate as provided above, Buyer shall be deemed to have accepted the Property

in an "as is" condition, without any representations or warranties, except as

specifically provided herein, and without abatement or reduction of the Purchase

Price.

 

        SECTION 7. CLOSING AND ESCROW.

 

        7.1 Upon execution of this Agreement, the parties shall deliver an

executed counterpart of this Agreement to the Title Company. This Agreement

shall serve as the instructions to the Title Company as the escrow holder for

consummation of the purchase and sale contemplated hereby. Seller shall promptly

notify the Title Company and Buyer in writing as to the Effective Date and the

date that the Due Diligence Period ends, which dates shall be controlling unless

Buyer objects in writing within three (3) business days after receipt of such

notice or unless the parties otherwise agree. Seller and Buyer agree to execute

such additional and supplementary escrow instructions as may be appropriate to

enable the escrow holder to comply with the terms of this Agreement; provided,

however, that in the event of any conflict

 

 

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between the provisions of this Agreement and any supplementary escrow

instructions, the terms of this Agreement shall control.

 

        7.2 The consummation of the transactions contemplated hereby shall be

held and delivery of all items to be made at the Closing under the terms of this

Agreement shall be made at the office of the Title Company, on a date which is

fifteen (15) days following the end of the Due Diligence Period, or such later

date as provided in Section 4.3 or as may be agreed by the parties in writing.

 

        7.3 At least one business day prior to the Closing Date, Seller shall

deliver the following into escrow with the Title Company (all in form reasonably

acceptable to the Title Company and Buyer's counsel):

 

                (a) A duly executed and acknowledged General Warranty Deed

        (herein referred to as the "Deed") in recordable form conveying the

        Property to Buyer as grantee therein, subject only to Permitted

        Exceptions.

 

                (b) A duly executed bill of sale ("Bill of Sale") transferring

        all of Seller's right, title and interest in and to the fixtures and

        personal property described in Section 1.2.

 

                (c) An affidavits dated as of the date of Closing, duly

        executed, certifying that Seller is not a foreign person within the

        meaning of the Internal Revenue Code and its regulations.

 

                (d) Such customary affidavits or certificates, duly executed, as

        shall be reasonably required by the Title Insurance Company for the

        purpose of issuing an Seller's title insurance policy without exception

        for parties in possession or mechanics and materialmen's or construction

         liens claiming by, through or under any contract, agreement or

        understanding with Seller or any entity affiliated with Seller.

 

                (e) A certificate, duly executed, updating the representations

        and warranties of Seller set forth in this Agreement through Closing,

        which certificate shall state that there has been no material change in

        such representations and warranties, or if so, what changes have taken

        place.

 

                (f) A duly executed Closing Statement setting forth the Purchase

        Price and the various adjustments and prorations set forth herein,

        identical to the Closing Statement signed by Buyer pursuant to Section

        7.4.

 

                (g) A duly executed 1099-S Designation Form.

 

                (h) Such other documents as are reasonably necessary to

        consummate this Agreement including, without limitation, such events as

        may be required by Lease with the General Services Administration

        ("Tenant") including without limitation, an Estoppel Certificate and

        Subordination Agreement by Tenant.

 

 

 

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Buyer may waive compliance on Seller's part under any of the foregoing items by

an instrument in writing.

 

                7.4 Buyer shall deliver the following into escrow with the Title

        Company, at least one business day prior to the Closing Date, unless

        otherwise specified:

 

                        (a) The balance of the Purchase Price as required by

                Section 2.1(b), which will be wired to the Title Company no

                later than 11:00 a.m. on the Closing Date.

 

                        (b) A duly executed certificate updating the

                representations and warranties of Buyer set forth in this

                Agreement through such Closing Date, which certificate shall

                state that there has been no material change in said

                representations and warranties, or if so, what changes have

                taken place.

 

                        (c) A certificate from the Michigan Secretary of State

                dated no more than sixty (60) days prior to the Closing,

                confirming that Buyer is duly formed and in good standing under

                the laws of such state.

 

                        (d) Such resolutions, authorizations, bylaws or other

                documents relating to Buyer as shall be reasonably requested to

                e