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EXHIBIT 10.8
PURCHASE AND SALE AGREEMENT
(Phase 1)
THIS
AGREEMENT is made and entered into this 24TH DAY OF DECEMBER,
2003,
by and between BPD
PARKERSBURG, LLC, a Delaware limited liability company
("SELLER"), and GEN-NET LEASE
INCOME TRUST, INC., a Michigan corporation
("BUYER").
W I T N E S S E T H:
1.
AGREEMENT TO SELL AND PURCHASE. For and in consideration of the
mutual
covenants and agreements
contained herein and other good and valuable
consideration, the receipt
and sufficiency of which are hereby acknowledged by
Seller and Buyer, Seller
hereby agrees to sell and convey to Buyer, and Buyer
hereby agrees to purchase and
take from Seller, subject to and in accordance
with all of the terms and
conditions of this Agreement, the following:
(A) All that certain lot, tract or parcel of real estate
more
particularly described on
EXHIBIT "A" attached hereto, together with all plants,
shrubs and trees located
thereon, and together with all rights, ways and
easements appurtenant thereto
(collectively, the "LAND"); and
(B) Seller's right, title and interest in and to all
buildings,
structures and other
improvements located on the Land (including, without
limitation, any parking
facilities located within the easement area described in
the Parking Easement
Agreement (as hereinafter defined) or other portions of
the
Land), and all fixtures
attached or affixed, actually or constructively, to the
Land or to any such
buildings, structures or other improvements, as of the
Closing Date (collectively,
the "IMPROVEMENTS") (including, without limitation,
the building shell, tenant
improvements, and parking spaces to be constructed
and installed by Seller under
the BPD Lease (as hereinafter defined)); and
(C) All of the right, title and interest of Seller as "lessor"
or
"landlord" in, to and under
that certain U.S. Government Lease for Real Property
dated June 13, 2003 by and
between Seller, as "lessor" or "landlord", and the
United States of America, as
"lessee" or "tenant" (GSA Lease No. GS-03B-03382),
as supplemented by that
certain Supplemental Lease Agreement No. 1 dated August
4, 2003 (the "BPD LEASE");
and
(D) All of the right, title and interest of Seller in, to and
under
those management, service and
other contracts and agreements, if any, scheduled
and identified on EXHIBIT "B"
attached hereto (collectively, the "SERVICE
AGREEMENTS").
The Land and the Improvements
are herein sometimes collectively referred to as
the "PROPERTY".
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2.
PURCHASE PRICE; METHOD OF PAYMENT; EARNEST MONEY.
(A) Purchase Price. The purchase price for the Property shall be
TWENTY
MILLION TWO HUNDRED SEVENTY
THOUSAND AND NO/100 DOLLARS ($20,270,000.00) (the
"PURCHASE PRICE"). In the
event that, prior to Closing, the BPD Tenant exercises
any rights under the BPD
Lease that would increase the annual rent thereunder
(by way of example, and
without limitation, by increasing the tenant improvement
allowance), then the Purchase
Price shall be adjusted to account for such
increased rent, using a cap
rate equal to 8.25%.
(B) Method of Payment. At the Closing, the remaining balance of
the
Purchase Price, after
crediting the Earnest Money, subject to the prorations
and
adjustments herein described,
shall be paid by Buyer to Seller by wire delivery
of good and immediately
available funds through the Federal Reserve System to an
account designated in writing
by Seller.
(C) Earnest Money.
(I) Within three (3) business days after the execution and
delivery
of this Agreement by Seller
and Buyer, Buyer shall deliver to Chicago Title
Company, 16969 Von Karman
Avenue, Irvine, California 92606, Attention: Charles
C. Mette, as escrow agent
(herein called "ESCROW AGENT"), the sum of TWO HUNDRED
THOUSAND AND NO/100 DOLLARS
($200,000.00) (which sum, together with all interest
actually earned thereon
during the term of this Agreement, is herein called the
"INITIAL EARNEST MONEY"). On
or before the date three (3) business days after
the Secondary Offering
Completion Date (as defined in SECTION 22, below), Buyer
shall deliver to Escrow Agent
the additional sum of THREE HUNDRED THOUSAND AND
NO/100 DOLLARS ($300,000.00)
(which sum, together with all interest actually
earned thereon during the
term of this Agreement, is herein called the
"ADDITIONAL EARNEST MONEY").
The Initial Earnest Money and the Additional
Earnest Money are herein
sometimes collectively called the "EARNEST MONEY".
(II) If Buyer shall fail to deliver any Earnest Money deposit
to
Escrow Agent on or before the
date herein required, then, at Seller's option,
Seller may terminate this
Agreement by giving written notice to Buyer on or
before the date on which such
Earnest Money deposit is actually delivered to
Escrow Agent; in the event of
any such termination by Seller, the Earnest Money
theretofore deposited shall
be paid to Seller as consideration for Seller's
execution of and entry into
this Agreement, all rights and obligations of the
parties under this Agreement
shall expire, and this Agreement shall become null
and void. All deposits by
Buyer required pursuant to this SECTION 2(C) shall be
in the form of a certified or
cashier's check, payable to Escrow Agent, or
deposited via wire transfer
through the Federal Reserve system pursuant to wire
transfer instructions
heretofore provided to Buyer by Seller, and no such
deposit shall be deemed
timely unless actually received by the date therefor set
forth in this SECTION
2.
(III) Throughout the term of this Agreement, Escrow Agent shall
hold
and disburse the Earnest
Money in accordance with the terms and conditions of
this Agreement,
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including, without
limitation, the terms and conditions set forth on EXHIBIT
"C"
attached hereto, and to
invest the Earnest Money with a national bank whose
depositors are insured by the
Federal Deposit Insurance Corporation or other
financial institutions
located in the Irvine, California metropolitan area as
are reasonably acceptable to
Buyer.
(IV) On the Closing Date, the Earnest Money will be applied as
part
payment of the Purchase
Price.
3.
CONSTRUCTION HOLDBACK.
(A) The parties acknowledge that the Phase 1 Substantial
Completion
Date (as hereinafter defined)
may occur notwithstanding that certain portions of
the Improvements may not have
been finally completed as of such date, and that,
in such event, it is
anticipated that the BPD Tenant will compile a punch
list
of work to be completed
pursuant to Section 3.24 of the BPD Lease (the "BPD
TENANT PUNCH LIST") and give
such list to Seller. In the event that the BPD
Tenant so gives the BPD Punch
List to Seller and any items thereon have not been
completed on or before the
date THIRTY (30) DAYS prior to the Closing Date, then
Seller shall give written
notice to Buyer ("SELLER'S PUNCH LIST NOTICE") of the
remaining items to be
completed and of the amount (as reasonably determined by
Seller and Seller's
Architect, as such term is hereinafter defined) (the
"CONSTRUCTION HOLDBACK
AMOUNT") as may be necessary to (A) satisfactorily
complete such remaining BPD
Tenant Punch List items that will not be finally
completed as of the Closing
Date, other than the Seasonal Punch List Work
referred to below (the
"REGULAR PUNCH LIST WORK"); (B) satisfactorily complete
any landscaping required by
the Plans and Specifications which cannot be
completed, or which it is not
practical to complete, prior to the Closing Date
on account of weather or the
season (the "SEASONAL PUNCH LIST WORK") (the
Regular Punch List Work and
the Seasonal Punch List Work are herein collectively
referred to as the "PUNCH
LIST WORK").
In such event, if Buyer's Architect (as hereinafter defined)
disagrees
with the Construction
Holdback Amount (as so determined by Seller and Seller's
Architect) for the Punch List
Work, Buyer shall promptly give written notice
thereof to Seller, together
with the amount of the Construction Holdback Amount
(as determined by Buyer's
Architect) for such remaining Punch List Work and
reasonable supporting
calculations with respect thereto ("BUYER'S DISPUTE
NOTICE"); if Seller does not
actually receive Buyer's Dispute Notice on or
before the date TWENTY-THREE
(23) DAYS prior to the Closing Date, then Buyer and
Buyer's Architect shall be
deemed to have accepted and agreed to such
Construction Holdback Amount,
as so determined by Seller and Seller's Architect.
In the event Seller does
actually receive Buyer's Dispute Notice on or before
the date TWENTY-THREE (23)
DAYS prior to the Closing Date, however, then Seller,
Seller's Architect, Buyer,
and Buyer's Architect shall thereafter attempt to
agree upon the Construction
Holdback Amount for the Punch List Work. In the
event the Construction
Holdback Amount is not so agreed upon on or before the
date SIXTEEN (16) DAYS prior
to the Closing Date, then the Construction Holdback
Amount shall be determined as
follows:
(I) if the greater of the two Construction Holdback Amounts
(i.e.,
the amounts set forth in
Seller's Punch List Notice and in Buyer's Dispute
Notice) is not more
than
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five percent (5%) greater
than the lower, then, for the purposes hereof, the
Construction Holdback Amount
shall be the average of the two amounts; or
(II) if the greater of the two Construction Holdback Amounts
(i.e.,
the amount set forth in
Seller's Punch List Notice and in Buyer's Dispute
Notice) is more than five
percent (5%) greater than the lower, then, on or
before the date SIXTEEN (16)
DAYS prior to the Closing Date, each of the two
architects shall submit to
the Third Architect (as hereinafter defined) the two
Construction Holdback Amounts
(i.e., the amounts set forth in Seller's Punch
List Notice and in Buyer's
Dispute Notice), together with reasonable supporting
calculations and information
and a description of the Punch List Work. The Third
Architect may consult such
contractors and other persons as the Third Architect
may elect in connection with
the Construction Holdback Amounts, and, on or
before the date FIVE (5)
BUSINESS DAYS prior to the Closing Date, the Third
Architect shall select one of
the two submittals as the more reasonable and give
written notice of such
selection to Seller and Buyer, and the amount so
selected
shall be the Construction
Holdback Amount. The cost of the Third Architect shall
be borne and paid by the
party whose submittal (i.e., the submittal of such
party's architect) was not so
selected.
The Construction Holdback Amount, as such amount shall be
reduced
for any Punch List Work
included therein which is actually completed prior to
Closing, shall be deducted
from the amount of the Purchase Price to be disbursed
to Seller at the Closing. The
Construction Holdback Amount shall be deposited in
an escrow account (the
"CONSTRUCTION HOLDBACK ESCROW") with Escrow Agent or
another escrow agent
reasonably satisfactory to Seller and Buyer to be
released
in accordance with the
provisions hereinafter set forth. As used herein, the
following terms shall have
the indicated meanings: (I) "SELLER'S ARCHITECT"
shall mean Studios
Architecture or, in the event Seller, at its option,
replaces
any such architect, the
replacement architect; (II) "BUYER'S ARCHITECT" shall
mean an architect selected by
Buyer and reasonably acceptable to Seller; and
(III) the "THIRD ARCHITECT"
shall mean an architect selected by Seller's
Architect, and reasonably
acceptable to Buyer's Architect and Buyer, for
purposes of resolving any
dispute regarding the Construction Holdback Amount, as
set forth in this SECTION
2(D); without limiting the foregoing, each of Seller's
Architect, Buyer's Architect,
and the Third Architect shall be licensed in the
State of West Virginia or
licensed in at least ten (10) other States, have at
least ten (10) years'
experience in designing buildings and improvements
similar
to the Improvements, and be a
reputable architectural firm consisting of not
less than ten (10) licensed
architects.
Seller agrees that if the Construction Holdback Amount is less
than
the amount of the costs and
expenses of completing the Punch List Work, Seller
shall be solely responsible
to fund such deficiency, thereby increasing the
Construction Holdback Amount
to the reasonable amount of such costs and
expenses.
(B) As expeditiously and prudently as reasonably practical after
the
Closing Date, Seller shall
promptly complete, or cause to be promptly completed,
all of the Punch List Work.
From time to time after the Closing Date (but in no
event more frequently than
monthly) amounts on deposit in the Construction
Holdback Escrow shall be
disbursed to Seller, or at the direction of Seller to
contractors employed by
Seller in connection with the construction and
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installation of the
Improvements, at such time as (i) the portion of the
Punch
List Work for which the
respective funds have been withheld and deposited in the
Construction Holdback Escrow
has been completed without material deviation from
the Plans and Specifications
and (in the reasonable opinion of Seller's
Architect and Buyer's
Architect) in a good and workmanlike manner and invoiced
(it being agreed that such
portion of the Punch List Work shall be deemed to
have been so completed upon
acceptance thereof by the BPD Tenant); (ii) all
costs and expenses in
connection therewith have been paid by Seller (or
instructed by Seller to be
paid directly to the contractor from the Construction
Holdback Escrow), and Seller
has provided Buyer with invoices and lien waivers
therefor. The amount to be
disbursed shall be an amount equal to the actual
costs of the Punch List Work
as to which the disbursement is being made. Any
amount remaining in the
Construction Holdback Escrow upon final completion of
all Punch List Work shall be
disbursed to Seller. Any interest earned on the
Construction Holdback Escrow
shall be for the account of Seller and may be
disbursed from time to time
as earned. Amounts deposited in the Construction
Holdback Escrow shall, for
all purposes, be deemed to have been paid by Buyer as
part of the Purchase Price on
the Closing Date.
(C) In the event any Punch List Work is not completed in
substantial
accordance with the BPD Lease
within sixty (60) days after the Closing Date or
such shorter period of time
within which such Punch List Work is required to be
completed under the BPD Lease
(the "INITIAL PUNCH LIST PERIOD") (or, with
respect to any Punch List
Work that, whether by its nature or as a result of
materials required or
otherwise, is not of the type that would reasonably be
expected to be so completed
within the Initial Punch List Period, then within
such longer period of time as
may be reasonable for such completion, so long as
Seller commences such items
of Punch List Work within the Initial Punch List
Period and thereafter
prosecutes same with reasonable diligence), and such
Punch
List Work is not thereafter
completed within ten (10) days after Buyer gives
written notice thereof to
Seller, then Buyer may so complete same and charge the
reasonable third-party costs
incurred by Buyer in connection therewith against
the Construction Holdback
Escrow.
4.
CLOSING. The closing of the purchase and sale of the Property
(the
"CLOSING"), shall occur on
the date ten (10) business days after the Phase 1
Substantial Completion Date
(as hereinafter defined) (the "CLOSING DATE");
PROVIDED, HOWEVER, that the
Closing Date shall be not later than 10:00 a.m.,
Washington, D.C. time, on
December 15, 2004 (the "FINAL CLOSING DATE"). The
parties acknowledge and agree
that they intend to conduct Closing via overnight
courier or similar delivery
method, using the Washington, D.C. office of
Seller's counsel (i.e.,
Kilpatrick Stockton LLP, 607 14th Street, N.W., Suite
900, Washington, D.C. 20005)
as the closing and escrow agent, but if so
conducting Closing in such a
manner is impractical, then Closing shall be held
at 10:00 a.m., Eastern time,
on the Closing Date at such Washington, D.C. office
of Seller's counsel. If any
of the conditions set forth in SECTION 21, below,
shall not have been satisfied
or performed or waived in writing by Buyer on or
as of the Closing Date, then
Seller may extend the Closing Date (and the Final
Closing Date) for up to sixty
(60) days by giving written notice of such
extension to Buyer on or
before the then-scheduled Closing Date.
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5. ACCESS
AND INSPECTION; EXAMINATION BY BUYER; APPROVAL BY BUYER'S
BOARD
OF DIRECTORS.
(A) Between the date of this Agreement and the Closing Date, Buyer
and
Buyer's agents, employees,
contractors, representatives and other designees
(collectively, "BUYER'S
DESIGNEES") shall have the right to enter the Property
for the purposes of
inspecting the Property, conducting soil tests,
conducting
surveys, mechanical and
structural engineering studies, and conducting any other
investigations, examinations,
tests and inspections as Buyer may reasonably
require to assess the
condition of the Property; PROVIDED, HOWEVER, that (I)
any
activities by or on behalf of
Buyer, including, without limitation, the entry by
Buyer or Buyer's Designees
onto the Property, or the other activities of Buyer
or Buyer's Designees with
respect to the Property (collectively, "BUYER'S
ACTIVITIES") shall not damage
the Property in any manner whatsoever or disturb
or interfere with the rights
or possession of any tenant of the Property and
shall not result in, and
Buyer shall not permit, any lien or other encumbrance
with respect to the Property
or any portion thereof, (II) in the event the
Property is altered or
disturbed in any manner in connection with any Buyer's
Activities, Buyer shall
immediately return the Property to the condition
existing prior to Buyer's
Activities, and (III) Buyer shall indemnify, defend
and hold Seller harmless from
and against any and all claims, liabilities,
damages, losses, costs and
expenses of any kind or nature whatsoever (including,
without limitation,
attorneys' fees and expenses and court costs) suffered,
incurred or sustained by
Seller as a result of, by reason of, or in connection
with any Buyer's Activities.
Notwithstanding any provision of this Agreement to
the contrary, Buyer shall not
have the right to undertake any environmental
studies or testing beyond the
scope of a standard "Phase 1" evaluation without
the prior written consent of
Seller, which consent shall not be unreasonably
withheld.
(B) Buyer shall
have until JANUARY 5, 2004 (the "DUE DILIGENCE DATE"),
to perform such
investigations, examinations, tests and inspections as
Buyer
shall deem necessary or
desirable to determine whether the Property is suitable
and satisfactory to Buyer and
to request and obtain from Seller such documents
and records in Seller's
possession that are necessary for Buyer to satisfy any
disclosure obligations that
must be satisfied by Buyer pursuant to applicable
law as a result of Buyer
being a public company. In the event Buyer shall
determine that the Property
is not suitable and satisfactory to Buyer or that
all such documents and
records have not been obtained by Buyer, Buyer shall
have
the right to terminate this
Agreement by: (I) giving written notice to Seller on
or before the Due Diligence
Date; and (II) delivering to Seller, on or before
Due Diligence Date, the items
required by SUBPARAGRAPH (D) of this SECTION 4 and
SECTION 15(B) of this
Agreement. In the event Buyer gives Seller the notice
and
delivers to Seller the items
required by the immediately preceding sentence, all
rights and obligations of the
parties under this Agreement shall expire, and
this Agreement shall become
null and void. If Buyer does not terminate this
Agreement in accordance with
this SECTION 4 on or before the Due Diligence Date,
then Buyer shall have no
further right to terminate this Agreement pursuant to
this SECTION 4 and, subject
to SECTIONS 13(B), 14(A), 14(B), 21 AND 22 of this
Agreement, the Initial
Earnest Money shall become nonrefundable to Buyer.
(C) Prior to any entry by Buyer or any of Buyer's Designees onto
the
Property, Buyer shall: (I) if
Buyer does not then have such a policy in force,
procure a policy
of
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commercial general liability
insurance, issued by an insurer reasonably
satisfactory to Seller,
covering all Buyer's Activities, with a single limit of
liability (per occurrence and
aggregate) of not less than $1,000,000.00; and
(II) deliver to Seller a
Certificate of Insurance, evidencing that such
insurance is in force and
effect, and evidencing that Seller has been named as
an additional insured
thereunder with respect to any Buyer's Activities (such
Certificate of Insurance
shall be delivered to Seller, at the address for
notices set forth below
Seller's execution of this Agreement). Such insurance
shall be written on an
"occurrence" basis, and shall be maintained in force
until the earlier to occur of
(I) the termination of this Agreement and the
conclusion of all Buyer's
Activities, or (II) the Closing.
(D) Buyer acknowledges that Seller may have heretofore delivered,
or
may hereafter deliver, to
Buyer certain documents and information in Seller's
possession with regard to the
Property (collectively, the "DUE DILIGENCE
MATERIALS"). The Due
Diligence Materials will be provided to Buyer without
any
representation or warranty of
any kind or nature whatsoever and are merely
provided to Buyer for Buyer's
informational purposes. Until Closing, Buyer and
Buyer's Designees shall
maintain all Due Diligence Materials as confidential
information. If the purchase
and sale of the Property is not consummated in
accordance with this
Agreement, regardless of the reason or the party at
fault,
Buyer shall immediately
re-deliver to Seller all copies of the Due Diligence
Materials delivered by Seller
and shall use all reasonable good faith efforts to
obtain and deliver to Seller
any duplicate copies of the Due Diligence Materials
made by Buyer or Buyer's
Designees. If Buyer terminates this Agreement pursuant
to any provision of this
Agreement permitting such termination by Buyer, no
portion of any Earnest Money
to be refunded to Buyer as a result of such
termination shall be so
refunded unless and until Buyer shall have substantially
complied with the preceding
sentence.
(E) Seller acknowledges that Buyer has executed and delivered
this
Agreement prior to the
approval of the transaction that is the subject hereof
by
Buyer's Board of Directors.
Buyer anticipates that its Board of Directors will
approve this Agreement and
such transaction, if at all, or on or before the Due
Diligence Date. If Buyer's
Board of Directors does not so approve this Agreement
and such transaction on or
before the Due Diligence Date, Buyer may terminate
this Agreement pursuant to
the terms and provisions of this SECTION 4 on or
before the Due Diligence
Date; if Buyer does not so terminate this Agreement in
accordance with this SECTION
4 on or before the Due Diligence Date, then Buyer
shall have no further right
to terminate this Agreement by reason of the failure
of its Board of Directors to
approve this Agreement and the transaction that is
the subject
hereof.
6.
PRORATIONS AND ADJUSTMENTS TO PURCHASE PRICE. The following
prorations
and adjustments shall be made
between Buyer and Seller at the Closing, or
thereafter if Buyer and
Seller shall agree:
(A) All city, state and county ad valorem taxes and similar
impositions
levied or imposed upon or
assessed against the Property (collectively, herein
referred to as the "TAXES"),
for the year in which the Closing occurs shall be
prorated as of the Closing
Date. In the event that Seller has heretofore
protested or appealed, or,
prior to the Closing Date, protests or appeals, the
Taxes for the tax billing
period in which the Closing occurs, and such protest
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results in a reduction in the
Taxes payable, Buyer shall reimburse Seller for
its pro rata share of the
reasonable and actual costs incurred by Seller in
pursuing such protest or
appeal. Buyer acknowledges and agrees that any
"rollback" or similar Taxes
imposed because of a change in use or ownership of
the Property shall be the
sole and exclusive responsibility of Buyer, and that
Seller shall have no
obligation in connection therewith.
(B) All utility charges for the Property (including,
without
limitation, telephone, water,
storm and sanitary sewer, electricity, gas,
garbage and waste removal)
shall be prorated as of the Closing Date, transfer
fees required with respect to
any such utility shall be paid by or charged to
Buyer, and Seller shall be
credited with any deposits transferred to the account
of Buyer; PROVIDED, HOWEVER,
that at either party's election any one or more of
such utility accounts shall
be closed as of the Closing Date, in which event
Seller shall be liable and
responsible for all charges for service through the
Closing Date and shall be
entitled to all deposits theretofore made by Seller
with respect to such utility,
and Buyer shall be responsible for reopening and
reinstituting such service in
Buyer's name, and shall be responsible for any
fees, charges and deposits
required in connection with such new account.
(C) All rents (including base rent, percentage rent and all
other
rentals), payments for taxes,
payments for insurance, payments for common area
maintenance charges, payments
for operating expenses and other payments on
account of financial
obligations of the BPD Tenant under the BPD Lease
(herein
called the "TENANT FINANCIAL
OBLIGATIONS") which have actually been paid as of
the Closing Date shall be
prorated as of the Closing Date. In the event that, at
the time of the Closing,
there are any past due or delinquent Tenant Financial
Obligations, Buyer shall be
charged and Seller shall be credited therefor at
Closing (not to exceed one
month's past due or delinquent Tenant Financial
Obligations), and, after
Closing, Buyer shall undertake such efforts as it may
elect to collect such past
due or delinquent Tenant Financial Obligations from
the BPD Tenant, up to the
amount thereof so charged to Buyer and credited to
Seller; Seller shall be
entitled to exercise all rights or remedies available at
law or in equity to collect
any such past due or delinquent Tenant Financial
Obligations in excess of such
amount so charged and credited at Closing, and
Seller shall retain such
rights and remedies, notwithstanding the assignment of
the BPD Lease to Buyer at
Closing. In the event that any Tenant Financial
Obligations paid by the BPD
Tenant under the BPD Lease shall be based upon
estimates of actual amounts
due and are subject to subsequent adjustment with
the BPD Tenant, Seller and
Buyer shall make between themselves any equitable
adjustment required by reason
of any such subsequent adjustment with the BPD
Tenant at the time of such
subsequent adjustment. In the event that any Tenant
Financial Obligations payable
by the BPD Tenant under the BPD Lease shall be
payable after the Closing for
periods prior to the Closing, Seller and Buyer
shall make between themselves
any equitable adjustment required by reason of
such payments at the time of
actual payment. Further, in the event that,
subsequent to the Closing,
Seller receives any payments of Tenant Financial
Obligations due under the BPD
Lease for periods of time after the Closing,
Seller shall properly endorse
such payments to Buyer, and shall promptly forward
such payments to
Buyer.
(D) Notwithstanding the foregoing, the following shall be paid
by
Buyer: (I) any construction
of alterations, improvements, or additions or the
provision of any
tenant
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improvement allowances, free,
reduced or abated rent, and any other concessions
(such commissions,
construction, allowances, free, reduced, or abated rent,
and
other concessions are herein
collectively referred to as the "CONCESSIONS") for
any renewals or extensions of
the term of the BPD Lease; (II) any Concessions
for any expansion of the
"premises" under the BPD Lease (including, without
limitation, any Concessions
payable in connection with any exercise by the BPD
Tenant of its option for the
Phase 2 Expansion Building, as set forth in the BPD
Lease); and (III) any
Concessions payable with respect to periods of time
after
the Closing.
(F) All amounts payable under any of the Service Agreements shall
be
prorated as of the applicable
Closing Date.
(G) Any other items which are customarily prorated in connection
with
the purchase and sale of
properties similar to the Property shall be prorated as
of the applicable Closing
Date.
In the event that the amount
of any item to be prorated is not determinable at
the time of the Closing, such
proration shall be made on the basis of the best
available information, and
the parties shall re-prorate such item promptly upon
receipt of the bills therefor
and shall make between themselves any equitable
adjustment required by reason
of any difference between the estimated amount
used as a basis for the
proration at Closing and the actual amount subject to
proration. In the event any
prorated item is due and payable at the time of
Closing, the same shall be
paid at Closing. If any prorated item is not paid at
Closing, Seller shall deliver
to Buyer the bills therefor promptly upon receipt
thereof and Buyer shall be
responsible for the payment in full thereof within
the time fixed for payment
thereof and before the same shall become delinquent.
In making the prorations
required by this SECTION 6, the economic burdens and
benefits of ownership of the
Land and the Improvements for the Closing Date
shall be allocated to
Buyer.
7.
TITLE.
(A) For the purposes of this Agreement, "GOOD AND MARKETABLE FEE
SIMPLE
TITLE" shall mean such title
as is insurable by Escrow Agent, in its capacity as
a title insurance company, or
by another title insurance company licensed to do
business in West Virginia,
under its standard form of ALTA owner's policy of
title insurance, 1992 Form B,
at its standard rates, subject only to the
following (collectively, the
"PERMITTED EXCEPTIONS"): (I) the standard or
printed exclusions in the
form of owner's policy of title insurance referenced
above; (II) such matters as
would be disclosed by a current and accurate survey
and inspection of the
Property; (III) the lien for Taxes not due and payable
on
or before the Closing Date;
(IV) zoning ordinances affecting the Property; (V)
all easements, covenants,
restrictions, reservations, rights-of-way and other
similar matters of record as
of the date of Seller's execution of this Agreement
(including, without
limitation, that certain Parking Easement and Declaration
of
Covenants dated September 12,
2003, and recorded in Deed Book 1057, Page 859,
real estate records of Wood
County, West Virginia (the "PARKING EASEMENT
AGREEMENT")); (VI) the state
of compliance or non-compliance of the Property, as
of the date of Seller's
execution of this Agreement, with any laws, codes,
ordinances, rules,
regulations or private restrictive covenants applicable to
or
affecting the
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Property; (VII) the BPD Lease
and the rights of the BPD Tenant thereunder;
(VIII) any land use covenant
or other restriction that may be required under the
VRA (as hereinafter defined);
(IX) that certain Memorandum of Understanding
dated June 26, 2002 by and
between the Urban Renewal Authority of the City of
Parkersburg (the "URA") and
the United States of America with respect to the
construction of a municipal
parking facility and any easements, agreements, or
instruments entered into in
connection therewith (the "MOU"); (X) the Phase 2
Purchase Agreement and Ground
Lease, as such terms are hereinafter defined; and
(XI) all matters set forth in
EXHIBIT "D" hereto; and (XII) all matters, if any,
waived by Buyer pursuant to
this SECTION 7.
(B) Buyer shall have until DECEMBER 31, 2003 in which to examine
title
to the Property and in which
to give Seller written notice of any objections
(including survey matters)
which render Seller's title less than good and
marketable fee simple title.
Buyer may reexamine title to the Property up to and
including the Closing Date
and give Seller written notice of any additional
objections appearing of
record, together with any additional survey matters
appearing, subsequent to the
date of Buyer's initial examination, but Buyer's
failure to specify in its
initial notice of title objections any objection
appearing of record, or any
survey matter existing, as of the date of such
initial notice shall be
deemed to be, and shall constitute, a waiver of any such
objection (including such
survey matters), and such objection (including such
survey matters) shall
thereafter constitute a Permitted Exception under this
Agreement; and, if Buyer
shall fail so to examine title to the Property
(including obtaining a
survey) or to give Seller such initial notice of title
and survey objections, Buyer
shall be deemed to have waived all objections
appearing of record or, with
respect to survey matters, existing, as of THE DUE
DILIGENCE DATE, and all such
objections shall thereafter constitute Permitted
Exceptions under this
Agreement.
(C) Seller shall have until THAT DATE ONE (1) DAY PRIOR TO THE
DUE
DILIGENCE DATE (I.E., JANUARY
4, 2004) in which to review Buyer's initial notice
of title objections and, if
Seller elects, in which to give Buyer written notice
of any valid objections
specified therein which Seller does not intend to
attempt to satisfy. If Seller
gives Buyer such written notice with respect to
any objection specified in
Buyer's initial notice of title objections, and if
Buyer thereafter does not
elect to terminate this Agreement pursuant to SECTION
4 hereof, Buyer shall be
deemed to have waived any objection specified in
Buyer's initial notice of
title objections as to which Seller has given Buyer
such notice, and any such
objection shall thereafter constitute a Permitted
Exception under this
Agreement.
(D) Seller shall have until the date THREE (3) MONTHS prior to
the
Final Closing Date to satisfy
all valid objections other than those waived by
Buyer pursuant to
SUBPARAGRAPHS (B) AND (C) of this SECTION 7, and, if
Seller
fails to so satisfy any such
valid objections which have a material adverse
affect on the BPD Tenant's
use and occupancy of the Property and would
constitute a breach under the
BPD Lease, then, at the option of Buyer, and as
its sole and exclusive
alternatives and remedies, Buyer may either: (I)
terminate this Agreement in
which event all rights and obligations of the
parties under this Agreement
shall expire, and this Agreement shall become null
and void; or (II) waive such
satisfaction and performance and elect to
consummate the purchase and
sale of the Property, in which event all unsatisfied
objections shall constitute
Permitted Exceptions under this Agreement. The
remedies of Buyer as set
forth in clauses (I) and (II) of this SUBPARAGRAPH (D)
shall be Buyer's sole and
exclusive remedies in
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the event Seller fails to
satisfy any valid objections, notwithstanding anything
to the contrary contained
herein.
8. SURVEY.
In the event Seller has not done so prior to the
Effective
Date, Seller shall cause a
surveyor properly licensed under the laws of the
State of West Virginia to
prepare a survey of the Property (the "SURVEY") and to
deliver same to Buyer. The
Survey shall be certified to both Buyer and Seller.
At Buyer's option, the Survey
will be utilized as the basis for the preparation
of a legal description of the
Property to be included in the quitclaim deed to
be delivered by Seller to
Buyer at the Closing. Not later than ninety (90) days
prior to the Final Closing
Date, Seller shall cause the surveyor to update and
re-certify the Survey and to
deliver same to Buyer.
9.
PROCEEDINGS AT CLOSING. On the Closing Date, the Closing shall
take
place as follows:
(A) Seller shall deliver to Buyer the following documents
and
instruments, duly executed by
or on behalf of Seller:
(I) a limited or special warranty deed, in recordable
form,
conveying the Property,
subject to the Permitted Exceptions;
(II) an Assignment of Tenant Leases, whereby Seller transfers
and
assigns to Buyer all of
Seller's right, title and interest as "landlord" or
"lessor" in, to and under the
BPD Lease and Buyer assumes and agrees to perform
the duties and obligations of
the "landlord" or "lessor" under the BPD Lease
arising from and after the
Closing Date;
(III) a letter notifying the BPD Tenant under the BPD Lease of
the
sale of the Property, and the
assignment of the BPD Lease, to Buyer;
(IV) an Assignment of all of Seller's right, title and interest
in,
to and under the following
(collectively, the "ASSIGNED CONTRACTS"): (i) any
Service Agreements; (ii) all
contracts, warranties and guaranties relating to
the construction of the
Improvements; (iii) the contracts or agreements with (a)
Seller's construction
manager, but only with respect to rights and remedies of
enforcement with respect to
the construction and installation of the
Improvements, and (b)
Seller's Architect and Seller's general contractor
relating to the Improvements;
each assignment of any contract to be assumed by
Buyer shall provide that (A)
Seller shall assume and be, and shall remain,
responsible for all
obligations of the owner of the Property required to be
performed thereunder prior to
the Closing Date not theretofore performed, (B)
Buyer shall assume and be
responsible for all other obligations of the owner of
the Property, and (C) each of
Buyer and Seller shall indemnify, defend and
forever hold the other
harmless from, against and in respect of any and all
liabilities, damages, losses,
costs and expenses (including reasonable
attorneys' fees and
disbursements) suffered, incurred or sustained by the
indemnified party as a result
of or by reason of the nonperformance or
nonsatisfaction of any
obligation that has been assumed by and is the
responsibility of the
indemnifying party in accordance with clauses (A) or (B)
of this sentence; and (iv)
the Parking
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Easement Agreement, subject
to the rights of Seller with respect thereto to be
set forth in the Ground Lease
(as hereinafter defined);
(V) a Certificate and Affidavit of Non-Foreign Status;
(VI) a completed 1099-S request for taxpayer identification
number
and certification, and
acknowledgment;
(VII) if requested by Buyer, a quitclaim deed conveying all
of
Seller's right, title and
interest in and to the Land in accordance with the
legal description prepared
from the Survey;
(VIII) if not previously executed, a Purchase and Sale
Agreement
(Phase 2) (the "PHASE 2
PURCHASE AGREEMENT") with respect to the improvements to
be constructed as "Phase 2"
under the BPD Lease in the event the BPD Tenant
exercises its "Phase 2"
expansion option under the BPD Lease, which Purchase
Agreement shall be
substantially in the form of, and on the terms and
conditions
set forth in, this Agreement,
except that the purchase price thereunder will be
equal to the net operating
income with respect to such "Phase 2" improvements
during the first full twelve
(12) months after commencement of the payment of
annual rent for such "Phase
2" improvements divided by a capitalization rate
equal to 8.75%. As used
herein, "net operating income" means the annual rent
payable with respect to such
"Phase 2" improvements (as set forth in page 7 of
the Rider to the BPD Lease)
less the amounts described in lines 27 and 33 of the
"Phase 2" Form 1217 with
respect to the BPD Lease (i.e., Lessor's Annual Cost
Statement). By way of
illustration only, if such annual rent were in the
amount
of $1,202,205.95 and the
amounts so described in said lines 27 and 33 were
$87,433.00 and $189,611.00,
respectively, then the purchase price under the
Phase 2 Purchase Agreement
would be $10,573,279.00. The Phase 2 Purchase
Agreement shall also provide,
among other things, that it shall be conditioned
on the BPD Tenant exercising
such expansion option on or before the final date
on which such option may be
exercised under the BPD Lease, as the same may be
hereafter modified or
amended;
(IX) a Ground Lease (the "GROUND LEASE") whereunder Buyer,
as
landlord, will lease to
Seller, as tenant, those portions of the Land and
related Improvements
reasonably necessary for Seller to construct the "Phase
2"
Improvements in the event the
BPD Tenant exercises its "Phase 2" expansion
option under the BPD Lease,
which Ground Lease shall, among other things,
provide for a nominal rent
(e.g., $100 annually) to be paid by Seller, as tenant
thereunder, shall provide for
construction easements and similar rights as may
be reasonably necessary for
Seller to construct the "Phase 2" Improvements, and
shall be conditioned on the
BPD Tenant exercising such expansion option on or
before the final date on
which such option may be exercised under the BPD Lease,
as the same may be hereafter
modified or amended; and
(X) an Agreement Regarding Development (Phase 3) (the "PHASE
3
AGREEMENT") with respect to
the improvements to be constructed as "Phase 3"
under the BPD Lease in the
event the BPD Tenant exercises its "Phase 3"
expansion option under
the
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<PAGE>
BPD Lease, which agreement
shall provide, among other things, that, in such
event, Buyer shall negotiate
in good faith with Seller as a fee developer to
develop the Phase 3
improvements on the following terms and conditions,
among
other terms and conditions:
(I) a fee structure as follows: (A) Buyer's payment
to Seller of a development
management fee equal to three percent (3%) of total
Phase 3 project costs, a
construction management fee equal to one percent (1%)
of such total costs, and a
general and administrative cost reimbursement of
$10,000 for each calendar
month (prorated for partial months) during the Phase 3
project; and (B) Buyer's
payment to The Albermarle Group, LLC of a leasing fee
equal to three percent (3%)
of the aggregate rental payable under the BPD Lease
with respect to the Phase 3
improvements; (II) a developer incentive arrangement
whereby Seller and Buyer will
equally share, on a 50% / 50% basis, any "profit"
from the development of the
Phase 3 improvements, with such "profit" meaning the
difference between the fair
market value of the completed Phase 3 improvements
at the time of completion of
the Phase 3 improvements (which fair market value,
if not then agreed upon by
Seller and Buyer, shall be determined by appraisal
pursuant to terms and
provisions to be set forth in the Phase 3 Agreement) and
the total Phase 3 project
costs.
The form of each of the
foregoing closing documents shall be agreed upon by
Seller and Buyer, in writing,
prior to the Due Diligence Date; in the event
Seller and Buyer have not so
agreed, in writing, on the form of such closing
documents on or before the
Due Diligence Date, the then most recent forms of
such documents given to
Seller by Buyer or Buyer's counsel at least three (3)
business days prior to the
Due Diligence Date shall be deemed approved and
agreed upon by
Seller.
(B) Seller shall also deliver to Buyer, if the same has not
been
theretofore delivered by
Seller to Buyer, (A) evidence in form and substance
reasonably satisfactory to
Buyer's title insurer that Seller has the power and
authority to execute and
enter into this Agreement and to consummate the
purchase and sale of the
Property, and that any and all actions required to
authorize and approve the
execution of and entry into this Agreement by Seller,
the performance by Seller of
all of Seller's duties and obligations under this
Agreement, and the execution
and delivery by Seller of all documents and other
items to be executed and
delivered to Buyer at the Closing, have been
accomplished, and (B) if and
to the extent in Seller's possession, the executed
originals of the BPD Lease
and any Service Agreements.
(C) Seller shall deliver to Buyer's title insurer a title
affidavit
regarding the Property in
form and substance reasonably acceptable to Seller and
Buyer's
title insurer.
(D) Buyer shall deliver to Seller the Assignment described in
clause
(a)(iv) of this Section, the
Phase 2 Purchase Agreement, the Ground Lease, and
the Phase 3 Agreement, each
duly executed by or on behalf of Buyer:
(E) Buyer shall pay the Purchase Price to Seller in accordance
with
the provisions of this
Agreement.
10. COSTS
OF CLOSING. Seller will bear its specific costs associated
with
the transaction, including
the Survey, its own legal costs, transfer taxes
payable in connection
with
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the deed to be executed and
delivered by Seller at Closing, one-half of any
escrow fee payable to Escrow
Agent in connection with the transaction that is
the subject of this
Agreement, and recording costs on corrective title
instruments obtained by
Seller and releases of the Deed of Trust executed by
Seller in favor of Seller's
Construction Lender (as hereinafter defined). Buyer
will bear its specific costs
associated with the transaction, including due
diligence, its own legal
costs, one-half of any escrow fee payable to Escrow
Agent, as described above,
transfer, intangibles, and similar taxes payable in
connection with Buyer's
mortgages and notes, recording and filing costs on
Buyer's mortgages
