PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (hereinafter the "Agreement") is
entered into as of the Effective Date (as set forth below) between 695 Rt. 46
Realty LLC (hereinafter "695 LLC"), a limited liability company duly
organized and existing under the laws of the State of New Jersey, maintaining
offices at 950 Third Avenue, 31st Floor, New York, NY 10022, 710 Rt. 46
Realty LLC (hereinafter "710 LLC"), a limited liability company duly
organized and existing under the laws of the State of New Jersey maintaining
offices at 950 Third Avenue, 31st Floor, New York, NY 10022 (hereinafter
collectively the "Seller"), and COPT Acquisitions, Inc., a corporation duly
organized under the laws of the State of Delaware, maintaining offices at One
Logan Square, Suite 1105, Philadelphia, Pennsylvania 19103 (hereinafter, the
"Purchaser");
W I T N E S S E T H:
In consideration of the mutual covenants set forth herein and in
consideration of the earnest money deposit herein called for, the parties
agree as follows:
Section 1. Sale and Purchase. Seller shall sell, convey, and assign
to Purchaser, and Purchaser shall purchase, assume, and accept from Seller,
for the Purchase Price (hereinafter defined) and on and subject to the terms
and conditions herein set forth:
All of that certain land consisting of the tract or parcel (or, if
more than one, those certain tracts or parcels), of land being described more
fully on Exhibits "A-1" and "A-2" (hereinafter the "Land"); together with all
improvements, buildings and structures, which may be located on the Land (the
"Improvements") (all of which is hereinafter collectively referred to as the
"Property"), which Property is commonly known by the street addresses 695
Route 46, Fairfield, New Jersey (hereinafter "695") and 710 Route 46,
Fairfield, New Jersey (hereinafter "710"). Notwithstanding the foregoing, the
term Property shall mean "695," where applicable, in connection with the sale
of 695 Route 46 Fairfield, New Jersey and shall mean 710," where applicable,
in connection with the sale of 710 Route 46, Fairfield, New Jersey. The
parties hereto each acknowledge and agree that 695 is owned by 695 LLC and
710 is owned by 710 LLC and that all agreements and representations herein
made by 695 LLC pertain only to 695 and that all agreements and
representations herein made by 710 LLC pertain only to 710. As used herein,
the term "Seller" shall mean (a) 695 LLC with respect to 695; and (b) 710 LLC
with respect to 710. An essential term of this contract of sale is that
Purchaser shall purchase both 695 and 710 for the Purchase Price. In no event
shall this contract of sale be divisible, it being the agreement of the
parties that if for any reason whatsoever either 695 or 710 are not
transferred pursuant to this agreement, neither party
shall have the right to require the other party to consummate a sale of the
other parcel.
This sale includes all of the right, title and interest of the
Seller in and to
(a) easements, rights of way, privileges, appurtenances and rights
to the same belonging to and inuring to the benefit of the Property, if any;
(b) All of the fixtures and articles of personal property,
including, but not limited to, machinery and equipment, attached to or
appurtenant to the Property or used in connection with the operation of the
Property as set forth on Exhibits M-1 and M-2 (hereinafter, the
"Personalty"), however, specifically excluding therefrom any such personal
property which belongs to the tenants;
(c) all of the right, title and interest of the Seller, if any, in
and to any land lying in the bed of any street, road or avenue, opened or
proposed, in front of or adjoining the Property, to the center line thereof,
and all right, title and interest of Seller in and to any award made or to be
made in lieu thereof and in and to any unpaid award for damage to the
Property by reason of change of grade of any street;
(d) All right, title and interest of Seller in the Leases (as such
term is hereinafter defined) in effect on the Closing Date in the form
annexed as Exhibit "H" hereto, excluding however any rights against tenants
for the collection of rent or other amounts past due pursuant to such Leases;
together with the Security Deposits held by Seller thereunder and any
guaranties thereof;
(e) All right, title and interest of the Seller, if any, (the
transfer thereof to be without warranty or covenant of any nature) in and to
the use of the name by which the Property is commonly known, if any, although
no portion of the Purchase Price will be allocated thereto; and
(f) all right, title and interest of the Seller, if any, (the
transfer thereof to be without warranty or covenant of any nature) in and to
any and all approvals, licenses and permits owned by Seller, if any, to the
extent that same may be assignable and in any way related to or arising out
of or used in connection with the Property.
Section 2. Purchase Price.
(a) The price for which Seller shall sell and convey the Property
to Purchaser, and which Purchaser shall pay to Seller, at Closing is
Twenty-Eight Million Eight Hundred Thousand ($28,800,000) Dollars (the
"Purchase Price"), payable as follows:
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(i) Six Hundred Thousand ($600,000) Dollars (the "Earnest
Money") payable upon the signing of this agreement pursuant to the provisions
of Section 3 of this agreement, the receipt of which is hereby acknowledged
by the escrow agent, Commonwealth Land Title Insurance Company;
(ii) Intentionally Omitted.
(iii) Approximately Six Million Five Hundred Thousand Four
Dollars and Fourteen Cents ($6,500,004.14) by the Purchaser acquiring title
to "710" subject to and assuming that certain existing mortgage (hereinafter
the "Existing Mortgage") dated April 29, 1997 made by 710 Rt. 46 Realty LLC
to Life Investors Insurance Company of America (hereinafter the "Existing
Mortgagee") in the original principal amount of $6,600,000, a copy of which
has been delivered to Purchaser;
(iv) Approximately Twenty-One Million Six Hundred Ninety-Nine
Thousand Nine Hundred Ninety Five Dollars and Eighty-Six Cents
($21,699,995.86) at the Closing by wire transfers) of federal funds as
directed by Seller in writing;
(b) The parties hereto specifically acknowledge that the transfer
of 710 subject to the Existing Mortgage will constitute a default pursuant to
the Existing Mortgage absent the procurement of consent from the Existing
Mortgagee pursuant to the provisions thereof.
Accordingly, the parties hereby agree to jointly cooperate for
the purpose of obtaining the written consent of the Existing Mortgagee to
this transaction. Without limiting the generality of the foregoing,
(i) Purchaser agrees to timely complete any application
materials requested by the Existing Mortgagee and to otherwise comply on a
timely basis with the requirements of the application process utilized by the
Existing Mortgagee in making its determination as to whether to consent to
the instant transaction;
(ii) Purchaser agrees to make available to the Existing
Mortgagee financial statements, tax returns, organizational documents and any
other documents as reasonably required by the Existing Mortgagee;
(iii) Purchaser shall comply with the provisions of paragraphs
14A(d) and (e) of the Existing Mortgage;
(iv) Purchaser shall be responsible for complying with the
provisions of paragraphs 14A(f) and (g) of the Existing Mortgage. Without
limiting the generality of the foregoing, Purchaser shall pay the Assumption
Fee and the existing mortgagee's out-of-pocket expenses, as required to be
paid pursuant to paragraph 14A(g).
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In the event that the Existing Mortgagee shall fail to either
consent in writing to the transfer of 710 to Purchaser on or before the date
thirty (30) days after the Effective Date, or deliver to 710 LLC, Richard
Wagman and Jean Putzer a release as provided in paragraph 14D of the
Mortgage, then Seller shall have the option to either (a) terminate this
agreement by delivering written notice of termination (together with
reasonable proof of rejection by the Existing Mortgagee, which proof shall be
deemed to include a copy of the written notice of rejection if such notice
was issued in writing) to Purchaser within ten (10) business days of receipt
of the applicable rejection or refusal from the Existing Mortgagee, in which
event, the Earnest Money shall be returned to the Purchaser and neither party
shall have any further rights or obligations as against the other; or (b)
convert this transaction to an "all cash deal" by written notice thereof to
Purchaser, within the same ten (10) business day period, in which event
subparagraph 2a(iii) shall be deleted and extinguished from this agreement
and the sums set forth in subparagraph 2(a)(iv) shall be increased by the
amount previously set forth in subparagraph 2(a)(iii), so that the balance of
the Purchase Price due Seller at Closing shall be $28,200,000 (subject to the
closing adjustments) in the form set forth in subparagraph 2(a)(iv) and in
such event there shall be no Existing Mortgage and Seller shall satisfy such
Existing Mortgage at or prior to Closing.
(c) In the event that 710 shall be sold subject to the Existing
Mortgage, the following provisions shall be operative:
(i) In the event that Seller shall make any regularly
scheduled monthly payments in reduction of the principal amount due and owing
upon the Existing Mortgage (i.e., principal payments which are not a
prepayment of principal) between the date hereof and Closing which reduces
the Existing Mortgage to an amount less than Six Million Five Hundred
Thousand Four Dollars and Fourteen Cents ($6,500,004.14), Purchaser shall pay
to Seller at closing a cash payment reflecting the amount of such principal
payments so that the Purchase Price shall remain unchanged;
(ii) Seller agrees to deliver to Purchaser at Closing, a
certificate or letter executed by the Existing Mortgagee or its agent, Aegon
USA Realty Advisors Inc., certifying the amount of the unpaid principal, the
date to which interest has been paid and the balance of any escrow accounts
held by the Existing Mortgagee;
(iii) The amount of any escrow deposits made by Seller with
the Existing Mortgagee, including but not limited to those for taxes, water,
sewer, insurance or any assessments shall be paid by the Purchaser to the
Seller at the Closing of title hereunder by wire transfer and such deposits
shall be assigned by the Seller to the Purchaser;
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(iv) The existence of a UCC security interest, assignment of
rents or any other encumbrance to title in favor of the Existing Mortgagee
shall constitute a Permitted Exception;
(d) Seller covenants as follows with respect to the Existing
Mortgage;
(i) Seller will not modify or amend the Existing Mortgage;
(ii) Seller will not make any prepayments of principal in
connection with the Existing Mortgage;
(iii) Seller will make all payments upon the Existing Mortgage
which will become due between the date hereof and Closing.
(e) It shall be a condition precedent to Purchaser's obligation to
close title that:
(i) Seller shall not have received a written notice of default
from the Existing Mortgagee which remains uncured as of the Closing Date; and
(ii) The following documents (all of which other than the
Borrower's Certificate, have been previously delivered to the Purchaser)
constitute all material agreements executed by Seller in connection with the
closing of the Existing Mortgage; Promissory Note, Mortgage and Security
Agreement, Assignment of Leases and Rents, Agreement Concerning Leasing,
Indemnity Agreement, Indemnification Against Environmental Matters, UCC-1
Financial Statements, Borrower's Certificate, and Post-Closing Agreement.
Section 3. Earnest Money. Concurrently with the execution hereof,
Purchaser has delivered to Commonwealth Land Title Insurance Company whose
address is 1700 Market Street, Philadelphia, Pennsylvania 19103, Attention:
M. Gordon Daniels, Esq. (hereinafter the "Title Company") the amount of Six
Hundred Thousand ($600,000) Dollars (the "Earnest Money"). The Title Company
shall immediately deposit the Earnest Money (which shall include all interest
earned thereon) in an interest bearing account and the interest earned
thereon shall be payable to the party to whom the Earnest Money is ultimately
paid or credited pursuant to this Agreement.
Section 4. Standard of Title. Seller shall give and Purchaser shall
accept a marketable title such as either the Title Company or Chicago Title
Insurance Company will' approve and insure, subject only to the Permitted
Exceptions and such other matters approved by Purchaser pursuant to the
further provisions hereof. The Property is being sold and shall be conveyed
and
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transferred subject to (1) those title encumbrances and other matters set
forth in Exhibits "B-1" and "B-2" annexed hereto and made a part hereof and
(2) those state of facts shown on that survey dated July 11, 1985 revised
October 23, 1987, prepared by The Calvin Gibson Group L.S., and that survey
dated November 28, 1995, prepared by Schoor Depalma (hereinafter
collectively, the "Permitted Exceptions").
Section 5. Title Objections. Purchaser agrees to forthwith order
two (2) title reports and surveys for the Property (hereinafter collectively,
the "Title Commitment"). Purchaser shall have until 5:00 p.m. on the
twenty-first (21st) day after the Effective Date (defined below), to advise
Seller in writing as to the existence of any objections to title (other than
Permitted Exceptions) which are reflected in the Title Commitment and are
required to be cured in order for Seller to deliver such state of title as
required pursuant to the provisions of paragraph 4. All matters to which
Purchaser so objects (other than Permitted Exceptions) are hereinafter
referred to as the "Non-Permitted Encumbrances"; if no such notice of
objection is given, then it shall be deemed that all matters reflected by the
Title Commitment are "Permitted Exceptions" and Purchaser shall accept title
subject to same. The Non-Permitted Encumbrances, subject to which Purchaser
elects to purchase the Property, shall thereafter be Permitted Exceptions.
In the event that Purchaser shall timely advise Seller as to the
existence of Non-Permitted Encumbrances, and Seller is willing to cure such
Non-Permitted Encumbrances (or if Seller is otherwise required to cure such
Non-Permitted Encumbrances pursuant to the further provisions of this
paragraph), then Seller shall be entitled to reasonable adjournments of the
Closing Date, but not to exceed thirty (30) days, within which to clear such
Non-Permitted Encumbrances.
If for any reason the Seller shall fail to convey at closing a
title, subject to and in accordance with paragraph 4 of this Agreement, or
fail to comply with the commitments, representations or conditions on the
part of the Seller to be performed as set forth herein, the sole obligation
of the Seller shall be to direct the Title Company to refund the Earnest
Money to Purchaser, unless Purchaser shall elect to close title pursuant to
the provisions of the following paragraph, in which event Purchaser shall
have the remedy of specific performance without abatement in the Purchase
Price, as provided in paragraph 10(c) of this Agreement.
Upon the return of the Earnest Money, the Purchaser shall have no
further claim against the Seller nor any lien against the Property, and the
Purchaser shall at that time surrender this contract for cancellation.
Without limiting the generality of the foregoing, it is specifically agreed
that the Seller shall not be required to bring any action or proceeding or
otherwise to incur any expenses in excess of Five Hundred Thousand
($500,000)) Dollars plus the
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amount necessary to pay any real estate taxes, water charges and mortgages
(excluding the Existing Mortgage) encumbering the Property, in order to
render the title to the Property insurable. Notwithstanding the foregoing,
Purchaser may nevertheless close title hereunder by accepting such title or
other state of facts as the Seller may be able to convey, without reduction
of the purchase price, and without any other liability on the part of the
Seller. The acceptance of a deed by the Purchaser shall be deemed to be a
full performance and discharge of every agreement and obligation on the part
of the Seller to be performed pursuant to the provisions of this agreement
except those, if any, which are herein specifically stated to survive the
delivery of the deed.
Section 6. Right of Inspection: Contingency Period.
(a) After the Effective Date, Seller shall afford Purchaser and its
representatives a right to inspect, at reasonable hours, and so long as such
inspection does not interfere with the rights of Tenants under the Leases;
the Property, Leases, Property Agreements (as such terms are hereinafter
defined), Seller's federal income tax returns for the period of its ownership
of the Property (including all schedules annexed thereto), and such other
documents or data pertaining to the ownership, or maintenance of the Property
which are located at the Property or are in Seller's possession and to
satisfy itself as to the condition the Property. In addition, prior to the
expiration of the Contingency Period, Seller shall deliver to Purchaser a
"Certification," with such "Certification" being defined as set forth in
paragraph 8(b)x hereof, provided, however, that such Certification shall be
made as of the date thereof rather than as of the Closing Date. Purchaser and
its representatives shall not damage the Property during the course of its
inspections and Purchaser shall promptly repair and restore in a workmanlike
manner satisfactory to Seller any damage to the Property to its prior
condition. Purchaser shall indemnify and hold Seller harmless from any
damage, loss, liability or expense (including court costs and attorney fees)
arising out of the conduct of Purchaser's inspections, which indemnity shall
survive the expiration, closing or termination of this Agreement. Seller
represents that all documents or other materials delivered by Seller to
Purchaser incident to Purchaser's inspection of the Property shall be true
and correct. Seller further agrees to make available to Purchaser for a
period of one (1) year subsequent to the closing of title, Seller's federal
income tax returns, including all schedules thereto and bank statements in
its possession for the period of its ownership of the Property.
(b) If for any reasons Purchaser, in its sole and absolute
discretion, is not satisfied with the Property, then Purchaser shall have the
right to terminate this Agreement in accordance with Section 10(b) hereof, by
delivering to Seller a notice of termination at any time during the period
from the Effective Date until 5:00 p.m. on the twenty-first (21st) day
following the Effective Date (the "Contingency Period"). In the event
Purchaser terminates this Agreement during the Contingency Period as herein
provided, the Title Company shall return the Earnest Money to Purchaser. In
the event that
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Purchaser fails to terminate this Agreement before the expiration of the
Contingency Period, Purchaser shall have waived its right to terminate this
Agreement under this Section 6(b), and in such event this Agreement shall
remain in full force and effect without further right of termination pursuant
to this paragraph 6(b).
Section 7. Representations and Warranties.
(a) Purchaser agrees that, except as expressly provided in this
Agreement, Seller makes no representations or warranties of any kind or type
with respect to the Property, including without limitation, the environmental
condition of the Land and Improvements, the absence of hazardous substances
or other contaminants, the availability of utilities to the improvements, the
status of the Leases, the condition of the Improvements, the enforceability
of the Property Agreements, or the profitability, habitability,
marketability, or the suitability of the Property for any particular purpose.
Purchaser assumes full responsibility for inspecting the Property, and for
ascertaining whether it wishes to proceed with the transaction herein
contemplated. Seller makes no representations whatsoever except as expressly
set forth herein. Seller is not liable or bound in any manner by any verbal
or written statements, representations, or information pertaining to the
Property furnished by any real estate broker, agent, employee, or other
person. Purchaser agrees that the Property is to be sold to and accepted by
Purchaser at closing in its then present condition "as is, with all faults,
and subject to all notes or notices of violation of law or municipal
ordinances or requirements issued by any municipal, state or federal
department, bureau or agency; if any, and without any warranty whatsoever,
express or implied except to the extent, if at all, expressly provided in
this Agreement". Notwithstanding anything to the contrary contained herein,
it is a condition of the Closing that the Property be in materially the same
physical condition it was at the expiration of the Contingency Period, normal
wear and tear excepted.
(b) Notwithstanding the foregoing, Seller represents and warrants
to Purchaser, as follows:
(i) Annexed hereto and made a part hereof as Exhibits "C-l"
and C-2" is a rent roll containing a list of all leases and occupancy
agreements (individually, a "Lease" and collectively, the "Leases," and the
tenants thereunder who are herein referred to individually as a "Tenant" and
collectively as the "Tenants"), true, complete and correct copies of which
Leases, including all amendments thereof, if any, have been or shall
simultaneously herewith be delivered to Purchaser. Other than the Leases and
applicable law, there are no agreements which confer upon a Tenant or upon
any other person or entity any possessory rights with respect to the Property.
Seller does not undertake or guarantee that the Leases
referred to in this agreement shall be in force or effect at the closing of
title and
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Purchaser agrees that the removal of tenants, whether by summary proceedings
or otherwise prior to the delivery of the deed shall not give rise to any
claim on the part of Purchaser, or affect this agreement in any manner
whatsoever and Seller shall be entitled, but not obligated, to enforce the
rights of any Lease or any tenancy by summary proceedings. Seller agrees that
it will not terminate any lease agreement for which the tenant thereunder is
not in default. No representation has been made as to the responsibilities
assumed by Seller with respect to the continued occupancy of said premises or
any part or parts thereof, by any tenant or tenants now in possession except
as herein otherwise specifically provided. Seller represents that it is not
in receipt of any written notice from any Tenant (which has not been cured
and is presently outstanding) alleging a default by Seller in the performance
of its lease obligations except as follows:
None
Seller represents that it has not delivered any written notice of
default to any tenant (which has not been cured and is presently outstanding)
except as follows:
None
(ii) No rent under any Lease has been paid more than
thirty-one (31) days in advance of its due date.
(iii) Annexed hereto and made a part hereof as Exhibits "D-1"
and "D-2" is a list of all service and maintenance contracts affecting the
Property (the "Property Agreements"). Seller has furnished to Purchaser and
Purchaser's representatives true, accurate and complete copies of the
Property Agreements, and Purchaser or its representatives have initialed the
same.
(iv) Annexed hereto and made a part hereof as Exhibits "E-1"
and "E-2" is a list of liability and casualty insurance policies of Seller
covering the Property as of the date hereof. All such insurance policies (or
replacements or renewals thereof) shall be maintained in full force and
effect to the date of the Closing;
(v) Annexed hereto and made a part hereof as Exhibits "F-1"
and "F-2" is a list of all employees employed by Seller in connection with
the operation or maintenance of the Property and the wages and salaries paid
to them. Seller represents that it is not a party to either a union contract
or any other written contract of employment with any employee of the Property.
(vi) Seller has not been served with any pleadings involving
any litigation with respect of the Property except for an action commenced by
South Pacific Holdings captioned 695 Route 46 Realty LLC vs. S.
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Pacific Holdings Corp. and S. Pacific Holding Corp. vs. Principal Investment
Group Inc. and Richard F. Wagman, Docket No. C320-97 in the Superior Court of
New Jersey, Essex County.
(vii) The information set forth upon Exhibits K-1 and K-2
annexed hereto is true and complete.
(viii) Seller is a duly formed limited liability company
pursuant to the laws of the State of New Jersey. Seller is duly authorized to
execute and perform this agreement pursuant to the vote of its members. This
agreement is a legal and binding obligation of Seller. The execution of this
agreement (or performance of its terms) will not constitute a violation of
any agreement to which the Seller is a party other than the Existing Mortgage.
(ix) Seller has not received any written notice from any
governmental agency relating to the failure of the Property to comply with
any applicable law governing the subject premises, except as set forth upon
Exhibits "N-1" and "N-2".
(x) None of the representations or warranties contained herein
shall survive the closing except for a period of sixty (60) days from the
Closing Date, during which sixty (60) day period, any action thereon must be
commenced or shall otherwise be deemed waived and extinguished.
(c) Seller covenants and agrees that between the Effective Date and
the Closing Date hereunder:
(i) Seller will not modify, amend or terminate any Lease.
Notwithstanding the foregoing, Seller shall be permitted to terminate the
lease of any tenant who is in default pursuant to the terms of its lease
agreement.
(ii) With respect to any portion of the Property which is
presently vacant, Seller shall not enter any new lease agreements except in
accordance with the following provisions hereof.
Prior to the expiration of the Contingency Period, Seller
shall be authorized and entitled to enter new lease agreements for any vacant
portion of the Improvements provided that any such lease agreement satisfies
all of the following criteria:
1. base rents of not less than $18.00 per square foot
2. electricity charge of $1.25 per square foot
3. tenant improvement cost shall not be greater
than $20.00 per square foot for a five (5)
year lease nor greater than $25.00 per foot
for a ten (10) year lease
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4. lease term of not greater than 11 years
(excluding options).
5. tenant to pay its proportionate share of real estate
taxes and operating cost escalations over a base year
6. rent concession not to exceed one (1) month's rent
7. Brokerage commission shall not exceed 7% gross rents
(including overage)
8. The lease form to be utilized shall be the same lease
form previously used by Seller in connection
with its prior leasing of the Property, provided however
that the foregoing requirement shall not apply with
respect to a certain lease agreement presently under
negotiation with the State of Michigan.
Subsequent to the expiration of the Contingency Period, and
provided that Purchaser has not terminated this agreement pursuant to the
provisions of paragraph 6(b) hereof, Seller shall not enter any new lease
agreements without the prior written approval of Purchaser.
In the event that Seller shall enter any new lease agreements
pursuant to this paragraph (c)(ii), Purchaser shall at Closing assume the
obligations and performance of the agreements of the Landlord thereunder and
otherwise agree to be bound by the terms of any such lease agreement,
including, without limiting the generality of the foregoing, the performance
of any Tenant improvements required to be made by the Landlord pursuant to
the terms thereof. In addition, Purchaser shall assume the obligation to pay
any brokerage commission required to be paid incident to such lease
agreement. In the event that Seller shall prior to closing be required to pay
any sums of money on account of either said Tenant improvements or brokerage
commissions, Purchaser shall at closing credit Seller with a cash payment
equal to the sums so expended by Seller prior to closing.
(iii) Seller shall not enter any agreement, the effect of
which is to encumber the Property with any consensual liens, security
interests, easements, restrictions or other title objections.
(iv) Seller will (1) continue to operate the Property in
accordance with its present operating and leasing policy; (2) keep and
maintain the Property in at least as good condition and repair as existed on
the Effective Date, subject to normal wear and tear and to casualty losses;
and (3) maintain in force and effect property and liability insurance with
respect to damage or injury to person or property occurring on the Property
in at least such amounts as are maintained on the Effective Date. It is the
intention of the parties that the general operation of the Property shall not
be materially changed between the Effective Date and the Closing Date, except
as herein provided.
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(v) Seller shall not enter into any other agreement relating
to the ownership or operation of the Property which will be binding upon the
Purchaser.
(vi) Seller shall deliver to Purchaser a copy of any written
notice of violation received by Seller from any applicable municipal
authority relating to any portion of the Property.
(vii) Seller shall deliver to Purchaser a copy of any written
notice of default received by Seller from any Tenant at the Property between
the date hereof and the Closing Date.
(d) Purchaser represents and warrants to Seller that Purchaser has
the full right, power, and authority to execute this Agreement and that this
Agreement is a legal and binding obligation of Purchaser.
Section 8. Closing. Closing ("Closing") of the sale of the Property
Seller to Purchaser shall occur on or before May 1, 1998 (the "Closing
Date"). If the Closing Date falls on a weekend or holiday, Closing shall
occur on the immediately following business day. Time is of the essence with
regard to the Closing Date. Notwithstanding the foregoing, Purchaser shall
have the right to adjourn the Closing Date for a period of up to thirty (30)
additional days by delivering to the Title Company (on or before the
expiration of the Closing Date) an additional deposit on account of the
Purchase Price in the amount of Six Hundred Thousand ($600,000) Dollars. Any
such additional deposit made pursuant to the provisions hereof shall be
deemed Earnest Money for all purposes of this Agreement. Time shall be as of
the essence with respect to such adjourned closing date. Closing shall occur
in the offices of Seller's counsel (or at such other place as is mutually
agreeable to the parties) commencing at 10:00 a.m. on the Closing Date. At
Closing the following, which are mutually concurrent conditions, shall occur
(with all legal documents to be in form and content reasonably acceptable to
the parties and their respective counsel):
(a) Purchaser, at its sole cost and expense, shall deliver or cause
to be delivered to Seller the following:
(i) a wire transfer or transfers in the aggregate amount of
the balance of the Purchase Price as specified in Section 2 hereof, payable
as directed in writing by Seller, adjusted in accordance with Sections 8(c)
hereof and any other sums required to be paid pursuant to the terms of this
Agreement.
(ii) the Assignment of Tenant Leases and Assumption Agreement
described in Section 8(b)(iii) hereof executed by Purchaser;
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(iii) a letter to each Tenant of the Property advising such
Tenant of Purchaser's acquisition of the Property and assumption of Seller's
liability and obligations under the Leases (which letter shall be
countersigned by Seller); and
(iv) evidence satisfactory to the Title Company that the
person executing the Closing documents has full right, power, and authority
to do so.
(v) those assumption and indemnity agreements required to be
delivered pursuant to this agreement.
(vi) such other documents and items as may be required by or
pursuant to this Agreement in order to effect the provisions hereof.
(b) Seller, at its sole cost and expense, shall deliver or cause to
be delivered to Purchaser the following:
(i) Bargain and Sale Deed with Covenants against Grantor's
Acts duly executed and acknowledged by Seller, conveying the Property to
Purchaser subject only to the Permitted Exceptions and any other exceptions,
if any, which Purchaser may approve;
(ii) a Bill of Sale (herein so called) substantially in the
form attached hereto as Exhibit "G," duly executed by Seller, transferring,
assigning and conveying to Purchaser, Seller's interest in and to all
Personalty without warranty and on an "AS IS", "WHERE IS", "WITH ALL FAULTS"
basis as set forth in said Exhibit "G";
(iii) an Assignment of Tenant Leases and Assumption Agreement
substantially in the form attached hereto as Exhibit "H", duly executed and
acknowledged by Seller, assigning all of Seller's interest, in, to and under
all Leases in force on the Closing Date together with all rentals and other
payments arising therefrom on or after the Closing Date, subject only to the
Permitted Exceptions and any other exceptions, if any, which Purchaser may
approve.
(iv) to the extent that the same are in Seller's possession
and have not previously been delivered to Purchaser, the originals or copies
of all Property Agreements, which shall be assigned by Seller and assumed by
Purchaser substantially in the form of the Assignment of Property Agreements
attached hereto as Exhibit "I" and made a part hereof for all purposes;
(v) to the extent the same are in Seller's possession and have
not previously been delivered to Purchaser, originals or copies of all
Leases, keys, and other items being transferred by Seller under this Contract;
13
provided, however, Seller may elect to arrange for delivery of all or some of
such items at the office of the manager of the Property on the Closing Date;
(vi) an affidavit duly executed by Seller in compliance with
Section 1445 of the United States Internal Revenue Code, as amended, and
applicable regulations, stating that Seller is not a "foreign person" as that
term is defined in said Section 1445;
(vii) estoppel certificates in the form attached as Exhibit J,
dated subsequent to the Effective Date, from the following five Tenants:
Dean Witter Reynolds Inc.
United Health Care Services, Inc.
The Museum Company
Midsco, Inc.
Pearson, Inc.
In addition to estoppel certificates from the aforenamed five Tenants, Seller
shall also deliver to Purchaser, estoppel certificates from Tenants occupying
70% of the remaining rentable square footage (i.e., 70% of the rentable
square footage of the Property, excluding the rentable square footage
occupied by the aforenamed five Tenants) in each of the buildings, 695 and
710.
The aforesaid estoppel certificates required to be delivered by Seller
hereunder are collectively referred to as the "Required Estoppels"). If
despite Seller's reasonable efforts to obtain the Required Estoppels, it
determines that it will not be able to comply with the terms of this
paragraph, it shall notify Purchaser in writing and specify those tenants
from whom Seller has been unable to obtain estoppel certificates. In such
event, Purchaser shall as its sole and exclusive remedy have the right to
terminate this agreement in accordance with the following provisions.
Purchaser must notify Seller within ten (10) days of such notice if it elects
to terminate the contract based on Seller's failure to obtain all of the
Required Estoppels. In the event that Purchaser elects to terminate this
agreement as aforesaid, Purchaser shall receive the return of the Earnest
Money deposited hereunder. If Purchaser does not provide such notice of
termination within the said ten (10) day period, Purchaser shall be deemed to
have waived its right to terminate this contract under this Section 8(b)vii,
and in such event Purchaser shall be required to close title hereunder absent
the estoppel certificates) of any tenant(s) named in the above notice from
Seller to Purchaser.
Notwithstanding the provisions of this subparagraph (vii) relating
to Seller's delivery obligations at closing, Seller agrees to use reasonable
efforts to obtain estoppel certificates in the form attached as Exhibit "J"
from all Tenants of the Property. The provisions of the foregoing sentence
shall not
14
expand or otherwise modify Seller's delivery obligations pursuant to this
subparagraph.
(viii) Affidavit of Title in Customary Form.
(ix) Such other documents and items as may be required by or
pursuant to this Agreement in order to effect the provisions hereof..
(x) Certification of Seller, certifying that either (a) the
representations set forth in paragraphs 7b(i)-b(ix) remain true and correct
as of the date of Closing; or (b) so indicating the change in facts which
render such representations no longer true as of the date of Closing
(hereinafter the "Certification"). The failure of said representations to be
true and correct as of the date of Closing shall not constitute a defense to
Purchaser to the passages of title and Purchaser shall accept title subject
to such state of facts without abatement in price and without any claim for
damages as the result therefrom.
(c) All normal and customarily proratable items (except to the
extent paid directly by Tenants to the charging governmental body or other
applicable entity), including without limitation interest on the Existing
Mortgage, real estate taxes, water and sewer charges, fuel, service
contracts, salaries (including benefits) of employees, rents, additional
rents, escalations, and building utility charges, will be prorated as of the
Closing Date, Seller being charged and credited for all of same up to the
Closing Date and Purchaser being charged and credited for all of same on and
after the Closing Date. In addition the Seller shall receive a credit for any
sums which may be due Seller pursuant to the provisions of paragraph 13
hereof. All utility deposits shall be transferred to Purchaser, and Purchaser
shall reimburse Seller for the amounts thereof. If the actual amounts to be
prorated are not known as of the Closing Date, the prorations shall be made
on the basis of the best evidence then available, and thereafter, when actual
figures are received, a cash settlement will be made between Seller and
Purchaser. All rentals, if any, actually received by Seller for the month in
which the Closing occurs shall be prorated as of the Closing Date. To the
extent actually received by Seller prior to the Closing, Seller shall deliver
to Purchaser at the Closing all advance payments or rental, other than for
the month in which the Closing occurs. All Security Deposits held by Seller
shall be retained by Seller and Purchaser shall receive a credit therefor
against the Purchase Price (a list of those security deposits held by Seller
which will be retained by Seller but credited to Purchaser is attached hereto
as Exhibits "K-1" and "K-2"), less any deposits returned to Tenant in
accordance with their leases and less any deposits made by a Tenant who has
vacated the Property. Any rents, additional rents, escalations and other sums
which are owing to Seller by Tenants of the Property for periods prior to the
Closing Date ("Delinquent Rents") shall be owned and retained by Seller and
Seller shall be entitled to collect all of same, (and in connection therewith
Seller shall have the right to commence legal action for the collection of
same) but Purchaser agrees to pay
15
any Delinquent Rents (or Seller's pro rata share thereof to the extent such
Delinquent Rents are applicable to the month during which the Closing
occurred) to Seller from the rentals collected by Purchaser from each such
delinquent Tenant in accordance with the following provisions:
(i) the first rents collected by Purchaser from a delinquent
Tenant shall be applied to the month in which the closing occurs (subject to
apportionment as herein provided);
(ii) the next rents collected by Purchaser shall be applied to
current rentals due from such Tenant for the one (1) calendar month after the
month of Closing;
(iii) the next rents collected shall be applied on account of
Delinquent Rents due and owing Seller for the one (1) calendar month
preceding the month of Closing;
(iv) the next rents collected shall be applied to the Tenant's
then outstanding rents due for the period subsequent to the closing of title
until such Tenant is current in the payment of its rent to Purchaser; and
(v) the next rentals collected by Purchaser in excess of the
amounts necessary for the Tenant to be current in its rent obligations to the
Purchaser, shall be paid to the Seller on account of the Delinquent Rents.
Purchaser agrees to use reasonable efforts (i.e., bill and demand
payment) to collect Delinquent Rents from Tenants, but nothing contained
herein shall operate to require Purchaser to institute a lawsuit to recover
any such Delinquent Rents. To the extent rentals are collected by Purchaser
after Closing from Tenants owing Delinquent Rents which are due Seller
hereunder, Purchaser shall remit such rents collected by Purchaser to Seller
in payment of the Delinquent Rents due and owing Seller. Any such payment
shall be made to Seller within ten (10) days of receipt thereof by Purchaser.
Purchaser agrees to account to Seller on a regular basis subsequent to the
closing with respect to the collection by Purchaser of Delinquent Rents. In
the event that after the closing of title, Seller shall receive any rentals
which correspond to a period subsequent to the closing of title, Seller shall
pay to Purchaser such portion of any collection. The provisions of this
paragraph (c) shall survive closing of title.
(d) The Title Company shall deliver the Earnest Money to Seller.
(e) Seller shall pay the transfer tax required by law to be paid to
the State of New Jersey, together with the fee charged by the County Clerk's
Office for the recording of the deed.
16
(f) Seller shall deliver to Purchaser a Letter of Non-Applicability
under the New Jersey Industrial Site Recovery Act with respect to the
Property. Purchaser agrees to cooperate with Seller by providing any
information or executing any documents that may be necessary in order to
procure such letter. If for any reason Seller is unable to provide the Letter
of Non-Applicability at the time of closing, it shall so notify Purchaser. In
such event, Purchaser shall as its sole and exclusive remedy have the right
to either (a) terminate this agreement and receive the return of all Earnest
Money; or (b) close title hereunder, without any abatement in purchase price
or claim for damages. Purchaser shall make such election within five (5) days
of receipt of Seller's notification of its failure to obtain the Letter of
Non-Applicability. Purchaser's failure to respond in writing within said
period shall be deemed an election to close title hereunder, absent the
delivery of the letter, without any abatement in purchase price or claim for
damages.
Section 9. Taking Before Closing: Casualty.
(a) Seller shall promptly notify Purchaser of any condemnation or
eminent domain proceeding affecting the Property which is commenced prior to
Closing. If, before Closing, all or any "substantial portion" (as such term
is defined in Section 9(c) below) of the Property becomes subject to
condemnation or eminent domain proceedings. Purchaser shall have the right to
elect to proceed with Closing (subject to the other provisions of this
Agreement including, but not limited to the payment of the entire Purchase
Price required to be paid hereunder) by delivering notice thereof to Seller
within ten (10) business days of receipt of Seller's notice respecting the
taking, but Purchaser shall be entitled to all condemnation awards payable as
a result of such taking, and, Seller shall assign to Purchaser at Closing
Seller's rights to such awards. If, within ten (10) business days of receipt
of Seller's notice respecting the taking, Purchaser notifies Seller of its
intent to terminate this Agreement, the same shall terminate pursuant to
Section 10(b) hereof; if Purchaser does not timely notify Seller of its
intent to so terminate this Agreement, it shall remain in full force and
effect.
(b) In the event that all or any "substantial portion" of the
Property shall be damaged or destroyed by fire or other casualty after the
Effective Date and before the Closing Date, Purchaser may, at its option,
terminate this Contract by written notice thereof to Seller within ten (10)
business days after Seller notifies Purchaser of the casualty, in which event
Purchaser shall receive an immediate refund of the Earnest Money together
with ail accrued interest thereon and thereafter neither party shall have any
further rights hereunder. If Purchaser fails to provide such notice to
Seller, this Agreement shall remain in full force and effect. In the event
Purchaser does not terminate this Contract as described above, it shall be
deemed to have elected to proceed to close the transaction contemplated
herein pursuant to the terms hereof, (including but not limited to the
payment of the entire Purchase Price required to be paid hereunder) in which
event Seller shall deliver to Purchaser
17
at the Closing any insurance proceeds actually received by Seller
attributable to the Property from such casualty, and assign to Purchaser all
of Seller's right, title and interest in any claim under any applicable
insurance policies in respect of such casualty, together with an amount equal
to the deductibles, if any, applicable to such loss under the insurance
policy(ies), and there shall be no reduction in the Purchase Price. If the
casualty loss does not involve a "substantial portion" of the Property, as
defined herein, then Purchaser shall be obligated to close the transaction
contemplated herein according to the terms hereof, notwithstanding such
casualty loss, and Seller shall, at Seller's election, either (i) repair the
damages caused by such casualty loss prior to Closing, at Seller's expense or
(H) deliver to Purchaser at the Closing any insurance proceeds actually
received by Seller attributable to the Property from such casualty, and/or
assign to Purchaser all of Seller's right, title, and interest in any claim
under any applicable insurance policies in respect of such casualty, together
with an amount equal to the deductibles, if any, applicable to such loss
under the insurance policy(ies), and there shall be no reduction in the
Purchase Price.
(c) For the purposes of this Section 9, a taking of or casualty
loss to a "substantial portion" of the Property shall be deemed to include
any taking or casualty loss which would cost greater than $500,000 to repair
and restore or, as to a taking, shall involve the taking of a portion of the
Property valued in excess of $500,000 and shall not include any taking or
casualty loss of less than such amount. The amount of damage resulting from a
taking or casualty loss of a portion of the Property shall be determined by a
contractor mutually agreeable to the Seller and Purchaser.
(d) Subject to the foregoing provisions of this Section 9, risk of
loss until Closing shall otherwise be borne by Seller.
(e) The provisions of this Section 9 shall supersede and prevail in
the event of any conflict with the provisions of the Uniform Vendor and
Purchasing Act of New Jersey.
Section 10. Termination and Remedies.
(a) If Purchaser defaults in its obligation to purchase the
Property pursuant to this Agreement, then Seller, as its sole and exclusive
remedy therefor, shall have the right to terminate this Agreement by
notifying Purchaser thereof, in which event the Title Company shall deliver
the Earnest Money to Seller as liquidated damages, whereupon neither
Purchaser nor Seller shall have any further rights or obligations hereunder.
This provision shall not limit Purchaser's liability in respect of the
indemnity contained in Section 6 (a) hereof.
(b) If Purchaser terminates this Agreement pursuant to Sections 5,
6 or 9 hereof or pursuant to any other provision hereof expressly permitting
18
Purchaser to terminate, then the Title Company shall return the Earnest Money
to Purchaser, whereupon neither party hereto shall have any further rights or
obligations hereunder.
(c) If Seller defaults under any provision of this Agreement, then
Purchaser as its sole and exclusive remedy shall have the right to terminate
this Agreement by notifying Seller thereof, in which case Title Company shall
return the Earnest Money to Purchaser and neither party hereto shall have any
further rights or obligations hereunder. Notwithstanding the foregoing, if
Seller fails to convey at Closing a title, subject to and in accordance with
the provisions of paragraph 4 of this Agreement, or if Seller shall fail to
comply with the commitments, warranties, representations or conditions on the
part of Seller to be performed as set forth herein, the Purchaser may elect
to accept title to the Property subject to any such title defect,
misrepresentation, failure of condition, breach of warranty or other
deficiency as Seller may be able to convey, without reduction of the Purchase
Price and without any other liability on the part of the Seller. In the event
that Purchaser shall elect to close title pursuant to such terms and Seller
shall fail to deliver title to the Property in accordance with the provisions
of this paragraph, Purchaser shall be entitled to maintain an action for
specific performance (without any right to abatement in purchase price or
damages). In no event shall Seller be liable to Purchaser for damages of any
kind, whether actual, consequential or punitive.
(d) Seller and Purchaser hereby acknowledge and agree that they
have included the provision for payment of liquidated damages in Section
10(a) because, in the event of a breach by Purchaser, the actual damages to
be incurred by Seller can reasonably be expected to approximate the amount of
liquidated damages called for herein and because the actual amount of such
damages would be difficult if not impossible accurately to measure.
Section 11. Notices. All notices provided or permitted to be given
under this Agreement must be in writing and may be served by depositing same
in the United States mail, addressed to the party to be notified, postage
prepaid and registered or certified with return receipt requested or by
nationally recognized overnight courier; by delivering the same in person to
such party; by prepaid telegram or telex; or, by facsimile copy transmission
together with registered or certified mail or nationally recognized overnight
courier. Notice given in accordance herewith shall be effective upon receipt
at the address of the addressee. The addresses of the parties shall be as
follows:
If to Seller: 710 Rt. 46 Realty LLC
695 Rt. 46 Realty LLC
c/o Principal Investment Group Inc.
950 Third Avenue-31st Floor
New York, NY 10022
Fax Number: (212) 838-8180
19
With a copy to: Gary A. Barash, Esq.
Ellenoff Grossman & Schole
200 Madison Avenue-Suite 1900
New York, NY 10016
Fax Number: (212) 481-5376
If to Purchaser: c/o Corporate Office Properties Trust, Inc.
One Logan Square, Suite 1105
Philadelphia, PA 19103
Attention: Mr. Clay W. Hamlin III, President
Fax Number: (215) 567-1907
With a copy to: F. Michael Wysocki, Esq.
Saul Ewing Remick & Saul LLP
Centre Square West
1500 Market Street, 38th Floor
Philadelphia, PA 19102-2186
Fax Number: (215) 972-1932
If to the Title Company/Escrowee:
M. Gordon Daniels, Esq.
Commonwealth Land Title Insurance Company
1700 Market Street
Philadelphia, PA 19103-3990
Fax Number: (215) 241-1641
Either party hereto may change its address for notice by giving three (3)
days prior written notice to the other party.
Section 12. Brokerage Commissions. The parties hereto warrant and
represent that neither party nor their agents or representatives have had any
dealings with any broker other than Grubb & Ellis (hereinafter the "Broker")
in connection with the purchase of the Property. Each party does hereby
indemnify and hold the other harmless from any and all claims of any other
broker, finder or any other party claiming a fee or commission arising our of
any act or negotiation on the part of such party or anyone acting on such
party's behalf. The foregoing indemnity and hold harmless shall cover and
include any and all liability, loss, cost or expense (including reasonable
attorneys' fees actually incurred) in connection with any breach of the
foregoing warranty and representation. Purchaser agrees to be responsible at
the time of closing for the payment of the entire compensation which is
required to be paid to the Broker in connection with this transaction.
20
Purchaser further agrees to cooperate in defense of any brokerage
lawsuit, to give testimony and to reimburse seller for sellers' reasonable
attorneys' fees incurred in connection with defending any brokerage claims.
The provisions of this paragraph shall survive the delivery of the
deed.
Section 13. Leasing Brokerage Commissions.
(a) Definition. For purposes of this Section 13:
(i) The term "Leasing Commissions" shall be defined to mean
any compensation or other consideration required to be paid pursuant to the
terms of the brokerage commission agreements which are described on the
annexed Exhibit "L" hereto (hereinafter collectively the "Brokerage
Commission Agreements").
(b) All Leasing Commissions which are due and owing on or prior to
the time of closing pursuant to Brokerage Commission Agreements shall be paid
by Seller prior to the closing of title hereunder. Seller shall have no
obligation to pay any Leasing Commission which is not due and payable at the
time of closing. Without limiting the generality of the foregoing, it is
specifically agreed that Seller shall have no obligation or responsibility
with respect to the payment of any Leasing Commissions which shall become due
upon the exercise of any option, extension or expansion rights granted
pursuant to the terms of any lease agreement. Purchaser shall at closing
assume the obligations to pay all Leasing Commissions which shall become due
and owing pursuant to the Brokerage Commission Agreements subsequent to the
closing of title hereunder. Without limiting the generality of the foregoing,
it is specifically agreed that Purchaser shall assume all obligations and
responsibilities for payment of any Leasing Commissions which shall become
due upon the exercise of any option, extension or expansion rights pursuant
to any Lease. At closing, Purchaser shall execute an indemnification and
assumption agreement pursuant to which Purchaser shall assume the aforesaid
obligations and indemnify and hold Seller harmless from any causes of action,
liabilities or damages arising from such obligations, including court costs
and reasonable attorneys fees incurred by Seller in enforcing the
indemnification agreement. At Closing, Seller shall execute an
indemnification agreement, pursuant to which Seller shall indemnify and hold
Purchaser harmless from any cause of action, liabilities or damages arising
from the Seller's failure to pay any Leasing Commission which is due and
owing at the time of the Closing of this transaction pursuant to the
Brokerage Commission Agreements, including court costs and reasonable
attorneys fees incurred by Seller in enforcing the indemnification agreement.
21
Section 14. Assessments and Certiorari Proceedings.
(a) If, on the date hereof, the Property or any part thereof are
affected by an assessment or assessments payable in installments
(collectively the "Assessments"), Seller shall pay any such installment due
prior to the Closing and Purchaser shall be responsible for the payment of
any installments subsequent to the Closing.
(b) As to any Assessments levied or imposed after the date hereof,
Seller reserves the right to convert the same into installments payable over
the maximum allowable period and, in such case, Seller shall be responsible
for those installments due prior to the Closing of title, Purchaser shall be
responsible for the payment of all other installments, and adjustments
thereof shall be effected accordingly at the Closing.
(c) Seller represents that to the best of its knowledge the
Property is not presently the subject of any assessment.
(d) Any lien of any Assessment (or installments thereof) levied or
due or imposed before or after the date hereof shall not be an objection to
title.
(e) With regard to any proceeding with respect to the real estate
taxes assessed against the Property, if such proceeding shall result in any
reduction of assessment for the tax year in which the Closing occurs, it is
agreed that the amount of tax saving refund for such tax year, less the fees
and disbursements of Seller's attorney and any expert witnesses in connection
with such proceedings, shall be apportioned between the parties as of the
date real estate taxes are apportioned under this Agreement.
Section 15. Payment of Liens from Purchase Price. The existence of
any lien upon the Property to which the Purchaser is not obliged under the
terms hereof to take subject, shall not be an objection to the passage of
title provided that appropriate instruments in recordable form for the
discharge of the same are delivered at the Closing and either the Title
Company or Chicago Title Company is willing to omit the exception from
Purchaser's title report. The Purchaser agrees upon request of Seller to
issue and deliver upon the Closing separate checks or wire transfers, not in
excess of the unpaid portion of the cash consideration, in such amounts and
to such payees as may be directed by the Seller.
Section 16. Tax Proceedings. If a proceeding is pending to correct
or reduce the assessed valuation of the Property described in this contract
for a period extending after the Purchaser's acquisition of title, such
proceeding shall be continued by the Seller and the Purchaser agrees to pay
his proportionate -share of the fees and disbursements in the event that such
a reduction is obtained. Any reduction in taxes actually obtained for the tax
year during which
22
this closing shall occur shall be appropriately prorated. This provision
shall survive the delivery of the deed.
Section 17. No Recordation of Contract. The Purchaser hereby agrees
that it shall not record this Contract or any memorandum hereof unless Seller
is in default. In the event Purchaser shall record this Contract, except as
provided for herein, it shall be a default under this Contract and Seller may
terminate this Contract and retain any payment made on account of the price
as liquidated damages. Nothing herein shall preclude the filing of a notice
of settlement.
Section 18. Failure of Contract Deposit. If the payment made on
account of the purchase price at the time of the execution of this agreement
is by check, and if said check fails due collection, the Seller at its option
may declare the contract null, void and of no force and effect, and may
pursue his remedies against the Purchaser upon the said check or in any
manner permitted by law, such remedies being cumulative.
Section 19. Variation in Schedule. In the event that the
information set forth in any rent schedule hereto annexed should vary by less
than 2% from the facts as recited in the actual leases which have been
exhibited to and initiated by the Purchaser, then the information set forth
on such schedule shall be deemed amended to conform to the facts set forth in
the leases.
Section 20. Submission of Contract. Submission of the within
Contract shall, not be deemed an offer and shall not be binding upon the
Seller or Purchaser until such time as the Contract has been signed by the
Purchaser and Seller and the payment of the Initial Earnest Money has been
made by the Purchaser and received and accepted by the Title Company.
Section 21. Assigns; Beneficiaries. Purchaser shall not have the
right to assign this Agreement without the prior written consent of Seller.
Any assignment by Purchaser without Seller's prior written consent shall
constitute a material breach of this Agreement, and thereupon Seller shall
have the right to terminate this Agreement and retain the Earnest Money.
Subject to the foregoing provisions of this Section, this Agreement shall
inure to the benefit of and be binding on the parties hereto and their
respective heirs, legal representatives, successors, and assigns. This
Agreement is for the sole benefit of Seller and Purchaser, and no third party
is intended to be a beneficiary of this Agreement. Notwithstanding the
foregoing, Purchaser shall be permitted to assign this Contract to Corporate
Office Properties, L.P. provided that such assignment is effected and a copy
of such assignment is delivered to Seller's counsel prior to the submission
of any application materials to the Existing Mortgagee in connection with the
procurement of the Existing Mortgagee's consent to the transfer of the 710
Property subject to the Existing Mortgage. No assignment of this Contract to
Corporate Office Properties L.P. shall be valid or
23
effective unless and until Corporate Office Properties, L.P. shall execute an
assumption agreement in form reasonably acceptable to Seller's counsel,
pursuant to which Corporate Office Properties, L.P. assumes all of the
obligations of Purchaser pursuant to this agreement, specifically including,
but not limited to the provisions of paragraph 2(b) hereof. In no event shall
this Contract be assignable or assigned to Corporate Office Properties, L.P.
or to any other party, after the submission to the Existing Mortgagee of any
application for said mortgagee's consent to the occurrence of this
transaction subject to the Existing Mortgage.
Section 22. Governing Law. This Agreement shall be governed and
construed in accordance with the substantive federal laws of the United
States and the laws of the State of New Jersey.
Section 23. Confidentiality. Seller and Purchaser agree that at all
times after the Effective Date until the closing of this transaction, no
press release or any other dissemination of information concerning this
transaction shall be made unless consented to in writing by both parties,
except as reasonably necessary to complete this transaction. Without limiting
the generality of the foregoing, it is hereby specifically agreed that
neither Purchaser nor its agents or employees shall create any publicity nor
advise any Tenant or potential tenant of the Property or any member of the
real estate brokerage community as to the existence of this transaction.
Failure of Purchaser to comply with the foregoing shall constitute a default
hereunder entitling Seller to all remedies available pursuant to this
agreement or at law.
Section 24. Multiple Counterparts. This Agreement may be executed
in a number of identical counterparts. If so executed, each of such
counterparts is to be deemed an original for all purposes, and all such
counterparts shall, collectively, constitute one agreement, but, in making
proof of this agreement, it shall not be necessary to produce or account for
more than one such counterpart.
Section 25. Severability. Each section of this Agreement
constitutes a separate agreement between the parties. In the event that any
provision of this Agreement which would not deprive the parties of the
benefit of the bargain, is deemed to be invalid or unenforceable on its face
or as applied, then -such provision shall be deemed severed herefrom to the
extent invalid and unenforceable. Notwithstanding the foregoing, the parties
hereby agree that the Property may only be sold in its entirety and that no
individual parcel of real estate may be sold absent a sale of the entire
Property upon the terms set forth within this agreement.
Section 26. Entire Agreement. This Agreement is the entire
agreement between Seller and Purchaser concerning the sale of the Property,
all previous agreements (oral or otherwise) are merged herein, and no
24
modification hereof or subsequent agreement relative to the subject matter
hereof shall be binding on either party unless reduced to writing and signed
by the party to be bound. Without limiting the generality of the foregoing,
the parties hereby agree that the "letter of intent" dated December __, 1997
is merged herein and no party hereto shall retain any benefits or rights, or
suffer any obligations or liabilities pursuant to said letter agreement.
Exhibits A-L, attached hereto, are incorporated herein by this reference for
all purposes.
Section 27. Escrow Provisions.
(a) Commonwealth Land Title Insurance Company (hereinafter the
"Escrowee") shall hold the Earnest Money in escrow in a special bank account
(or as otherwise agreed in writing by Seller, Purchaser and Escrowee) until
the Closing or sooner termination of this contract and shall pay over or
apply such proceeds in accordance with the terms of this section. Escrowee
shall hold such Earnest Money in an interest-bearing account, and any
interest earned thereon, shall be paid to the same party entitled to the
Earnest Money, and the party receiving such interest shall pay any income
taxes thereon. The tax identification numbers of the parties shall be
furnished to Escrowee upon request. If the Purchaser terminates this
Agreement during the Contingency Period, in accordance with the provisions of
Section 6(b), and provides the Escrowee with a copy of the termination
notice, the Escrowee shall, without the necessity of giving notice to the
Seller, promptly return the Earnest Money to the Purchaser. At the Closing,
such proceeds and the interest thereon, shall be paid by Escrowee to Seller.
If for any reason the Closing does not occur and either party makes a written
demand upon Escrowee after the Expiration of the Contingency Period for
payment of such amount, Escrowee shall give written notice to the other party
of such demand. If Escrowee does not receive a written objection from the
other party to the proposed payment within fifteen (15) days after the giving
of notice, Escrowee is hereby authorized to make such payment. If Escrowee
does receive such written objection within such fifteen (15) day period,
Escrowee shall continue to hold such amount until otherwise directed by
written instructions from the parties to this contract or a final judgment of
a court. However, Escrowee shall have the right at any time to deposit the
escrowed proceeds and interest thereon, if any, with the clerk of the
appropriate court of the county in which the Land is located. Escrowee shall
give written notice of such deposit to Seller and Purchaser. Upon such
deposit Escrowee shall be relieved and discharged of all further obligations
and further responsibilities hereunder.
(b) The parties acknowledge that Escrowee is acting solely as a
stakeholder at their request and for their convenience. Escrowee shall not be
liable to either of the parties for any act or omission on its part unless
taken or suffered in bad faith, in willful disregard of this contract or
involving gross negligence. Seller and Purchaser shall jointly and severally
indemnify and hold Escrowee harmless from and against all costs, claims and
expenses, including reasonable attorneys' fees, incurred in connection with
the performance of
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Escrowee's duties hereunder, except with respect to actions or omissions taken
or suffered by Escrowee in bad faith, in willful disregard of this contract or
involving gross negligence on the part of Escrowee.
(c) Escrowee has acknowledged agreement to these provisions by
signing in the place indicated on the signature page of this contract.
IN WITNESS WHEREOF, Purchaser and Seller have executed this
Agreement as of the dates set forth below their signatures. The "Effective
Date" of this Agreement is the date a fully executed copy of this Agreement
is received by each of the parties hereto and the Earnest Money Deposit is
receipted by the Title Company as set forth below.
710 Rt. 46 Realty LLC, as 695 Rt. 46 Realty LLC, as
to "710", Seller to "695", Seller
By: /s/ Richard Wagman By: /s/ Richard Wagman
- ------------------------- --------------------------
Name: Richard Wagman Name: Richard Wagman
Title: Member Title: Member
Date: 3/2/98 Date: 3/2/98
COPT Acquisitions, Inc., Purchaser
By: /s/ Clay W. Hamlin III
--------------------------
Name: Clay W. Hamlin III
Title: President
Date: 2/26/98
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The undersigned hereby acknowledges receipt of the Earnest Money and further
agrees to comply with the provisions hereof relating to the retention and
disbursement of the Earnest Money and any additional Earnest Money if
actually deposited hereunder.
Commonwealth Land Title Insurance Company
By: /s/ M. Gordon Daniels
---------------------
M. Gordon Daniels
Date: 3/4/98
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SCHEDULE OF EXHIBITS
Exhibit A-1 Legal Description "710"
Exhibit A-2 Legal Description "695"
Exhibit B-1 Permitted Exceptions "710"
Exhibit B-2 Permitted Exceptions "695"
Exhibit C-1 Rent Roll "710"
Exhibit C-2 Rent Roll "695"
Exhibit D-1 Property Agreements "710"
Exhibit D-1 Property Agreements "695"
Exhibit E-1 Insurance Policies "710"
Exhibit E-2 Insurance Policies "695"
Exhibit F-1 Employees "710"
Exhibit F-2 Employees "695"
Exhibit G Bill of Sale
Exhibit H Assignment of Tenant Leases and Assumption Agreement
Exhibit I Assignment of Property Contracts
Exhibit J Form of Estoppel Certificate
Exhibit K Schedule of Security Deposits
Exhibit L Brokerage Commission Agreements
Exhibit M-1 Personalty "710"
Exhibit M-2 Personalty "695"
Exhibit N-1 Notices of Violation "710"
Exhibit N-2 Notices of Violation "695"
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