EXHIBIT 2.1
AGREEMENT OF PURCHASE AND SALE
AND
JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT AND JOINT ESCROW INSTRUCTIONS are made as of the
Effective Date (defined herein), by and between LAFP PHOENIX, INC., a California
corporation ("Seller"), and AMERIVEST PROPERTIES INC., a Maryland corporation
("Buyer").
Article 1 of this Agreement consists of definitions used throughout
this Agreement.
Article 2 of this Agreement constitutes instructions to Escrow Agent
(defined below), as well as agreements between Buyer and Seller.
Article 3 of this Agreement consists of further agreements between
Buyer and Seller, with which Escrow Agent need not be concerned (except as
otherwise directed in Article 2). Escrow Agent may rely entirely on the
instructions contained in Article 2; however, as between Buyer and Seller, the
provisions of Article 3 shall control if there is any inconsistency between
those provisions and the instructions in Article 2.
NOW, in consideration of the mutual covenants and conditions contained
herein, Seller and Buyer hereby agree as follows:
Article 1 DEFINITIONS
The following terms, wherever used in this Agreement, shall have the respective
meanings set forth below:
1.1 APPROVAL DATE. "Approval Date" means the 45th day after Effective Date.
1.2 ASSOCIATION RIGHTS. "Association Rights" means all of Seller's rights,
interests and obligations as a member of The Grove at Black Canyon Association,
formed under the Declaration of Covenants, Conditions and Restrictions recorded
on April 16, 1986, as Instrument No. 86-185402, in the Official Records of
Maricopa County, Arizona, as thereafter supplemented and amended.
1.3 XXXX OF SALE. "Xxxx of Sale" means a xxxx of sale substantively in the
form attached hereto as Exhibit C, conveying the Personal Property to Buyer
without warranty or representation, except a warranty of title against anyone
claiming an interest in the Personal Property by, through or under Seller.
1.4 BROKER. "Broker" means Xxxxx & Xxxxx.
1.5 BUYER'S CLOSING DOCUMENTS. "Buyer's Closing Documents" has the meaning
specified in Section 2.2.2.
1.6 CLOSING DATE. "Closing Date" means the date upon which Closing occurs.
1.7 CLOSING. "Closing" means the recordation of the Deed in the official
land records of the county in which the Real Property is located, concurrently
with the delivery of the Purchase Price and other documents as required herein.
1.8 DAYS AND BUSINESS DAYS. The term "day" means a calendar day, and the
term "Business Day" means any day on which commercial banks are generally open
for business in the state in which the Real Property is located. Any period of
time specified in this Agreement which would otherwise end upon a non-Business
Day shall be extended to, and shall end upon, the next following Business Day.
1.9 DEED. "Deed" means a special warranty deed in the form attached hereto
as Exhibit B, conveying the Real Property to Buyer.
1.10 DEPOSIT. "Deposit" has the meaning specified in Section 2.1.1.
1.11 EFFECTIVE DATE. "Effective Date" means the date on which this
Agreement is executed by the later to sign of Buyer or Seller, as indicated on
the signature page of this Agreement.
1.12 ENVIRONMENTAL REPORT. "Environmental Report" means the report(s)
identified in the Schedule of Environmental Reports attached hereto as Exhibit
N.
1.13 ESCROW AGENT. "Escrow Agent" means the Republic Title of Texas, Inc.,
acting through its offices at 0000 Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000
(attention Xx. Xxxxxx Xxxxxx).
1.14 ESCROW. "Escrow" means the escrow established with Escrow Agent by and
pursuant to this Agreement, for purposes of consummating the sale and purchase
of the Property in accordance with this Agreement.
1.15 GENERAL ASSIGNMENT. "General Assignment" has the meaning specified in
Section 2.2.1.
1.16 GENERAL INTANGIBLES. "General Intangibles" means all of (A) the
Association Rights, (B) Seller's rights under the Service Contracts and (C) the
Permits and the Repair Warranties.
1.17 HAZARDOUS SUBSTANCE. "Hazardous Substance" means any petroleum or
petroleum-related product, any materials containing friable asbestos or any
other pollutant or hazardous or toxic waste, material or substance (as such
terms are used in applicable Laws regulating the generation, storage,
transportation, discharge, disposal, release or removal of environmentally
hazardous substances).
1.18 IMPROVEMENTS. "Improvements" means all of the improvements and
fixtures on the Land, including two commercial office buildings.
1.19 LAND. "Land" means (1) those certain parcels described in Exhibit A
hereto, together with (2) all appurtenant rights (including, without limitation,
rights in and to adjoining streets, rights-of-way and strips and gores, water
and riparian rights, rights to light and air and easements.
1.20 LAST CLOSING DATE. "Last Closing Date" means the 30th day after the
Approval Date, subject to extension as expressly provided in this Agreement.
1.21 LAWS. "Laws" means any and all constitutions, statutes, ordinances,
rules, regulations, orders, rulings or decrees of the United States, or of the
state, county or any municipality in which the Property is located, or any
authority, agency, division, district, court or other authority thereof.
1.22 LEASE. "Lease" means (i) any of the leases of space within the
Improvements identified in the Schedule of Leases attached hereto as Exhibit D
(including amendments, commencement agreements, letter agreements and other
modifications thereto) and (ii) any lease of such space hereafter made in
accordance with Section 3.2.1 (including amendments, commencement agreements,
letter agreements and other modifications thereto).
1.23 LEASE ASSIGNMENT. "Lease Assignment" has the meaning specified in
Section 2.2.1.
1.24 LIEN. "Lien" means any mortgage, deed or trust or other consensual
lien recorded against the Real Property, and any delinquent tax liens, mechanics
liens, and judgment liens, but does not include other statutory or involuntary
liens.
1.25 OPUS ENCUMBRANCES. "Opus Encumbrances" mean the signage easement,
declaration of cross-easement and the declaration of restrictive covenant,
recorded November 14, 2002, as, respectively, instruments numbered 20021208432,
20021208430 and 20021208433, in the Official Records of Maricopa County,
Arizona.
1.26 ORIGINALS. "Originals" has the meaning specified in Section
2.2.1(vii).
1.27 PARTIES AND PARTY. "Parties" means Buyer and Seller together and
"Party" may mean either Buyer or Seller, as the case may be.
1.28 PERMIT. "Permit" means any permit, certificate, license or other form
of authorization or approval issued by a government agency or authority and
legally required for the occupancy and use of the Property (including, without
limitation, any certificates of occupancy with respect to the Improvements,
elevator permits, conditional use permits, zoning variances and business
licenses) to the extent held and assignable by Seller or Seller's property
manager or otherwise transferable with the Property.
1.29 PERMITTED EXCEPTIONS. "Permitted Exceptions" means (i) liens for all
real property taxes and general and special assessments for the current year,
not yet delinquent, (ii) liens or encumbrances arising out of any activity of
Buyer with respect to the Property, (iii) the Leases, (iv) standard "printed
form" exceptions and exclusions from coverage customarily included within the
form of the Title Policy, other than those that can be removed upon delivery of
an owner's affidavit in Title Company's customary form, (v) the Revised CCRs,
(vi) the Opus Encumbrances, and (vii) any other matter deemed to be a Permitted
Exception pursuant to Section 2.3.
1.30 PERSONAL PROPERTY. "Personal Property" means all of the non-affixed
equipment, trade fixtures, furnishings, building stock and supplies, and other
tangible personal property owned by Seller and used or held for use in operation
of the Real Property.
1.31 PLANS. "Plans" means the plans and specifications for the original
construction of the Improvements, together with any subsequent material
modifications thereof.
1.32 PROPERTY. "Property" means all of the Real Property, the Personal
Property and the General Intangibles.
1.33 PURCHASE PRICE. "Purchase Price" means the gross purchase price being
paid by Buyer to Seller for the Property, as specified in Section 2.1,
1.34 REAL PROPERTY. "Real Property" means the Land and the Improvements
together, commonly known as "Southwest Gas Building," located at 00000 Xxxxx
Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Arizona.
1.35 REPAIR WARRANTIES. "Repair Warranties" means all written guaranties,
warranties and other obligations for repair or maintenance on the part of any
architect, engineer, contractor, manufacturer or vendor, with respect to any of
the Improvements or Personal Property, to the extent held and assignable by
Seller.
1.36 REVISED CCRS. "Revised CCRs" means an amendment and restatement,
substantively in the form attached hereto as Exhibit O (subject to immaterial
changes), of the Declaration of Covenants, Conditions and Restrictions recorded
on April 16, 1986, as Instrument No. 86-185402, in the Official Records of
Maricopa County, Arizona, as previously supplemented and amended.
1.37 SANDA. "SANDA" means a subordination, non-disturbance and attornment
agreement with Buyer's lender, substantially in the form attached hereto as
Exhibit P.
1.38 SELLER'S CLOSING DOCUMENTS. "Seller's Closing Documents" has the
meaning specified in Section 2.2.1.
1.39 SELLER'S KNOWLEDGE. "Seller's Knowledge" means the actual (and not the
constructive) current knowledge of Xxxx Xxxxxxxx, the executive of Xxxx
Enterprises Commercial Group, Inc., responsible for management of the Property,
and does not imply any inspection, examination or other inquiry undertaken by
Seller or said individual to determine the accuracy of any representation,
warranty or other statement made "to Seller's Knowledge" in this Agreement or in
any of Seller's Closing Documents.
1.40 SERVICE CONTRACT. "Service Contract" means any contract or other
arrangement, written or oral, for the continuing provision of services relating
to the construction, maintenance, repair, protection or operation of the
Property; excluding, however, (i) any property management contract or
arrangement and (ii) any contract for services with Seller, or any affiliate of
Seller.
1.41 SURVEY. "Survey" means (i) the ALTA/ACMS survey of the Real Property
prepared by CMX Group, Inc., as Job No. 6164.01 and certified as of July 26,
2002, and (ii) the ALTA/ACMS survey of the Opus Parcel prepared by the CMX
Group, Inc., as Job No. 6350.01A and certified as of August 20, 2002.
1.42 TENANT. "Tenant" means any tenant or lessee under a Lease.
1.43 TENANT ESTOPPEL CERTIFICATE. "Tenant Estoppel Certificate" means a
certificate, dated no earlier than ten days prior to the Approval Date,
substantively in the form attached hereto as Exhibit L.
1.44 TITLE REPORT. "Title Report" means (A) the commitment or commitments
for title insurance with respect to the Real Property to be issued by the Title
Company.
1.45 TITLE COMPANY. "Title Company" means Chicago Title Insurance Company.
1.46 TITLE POLICY. "Title Policy" means an ALTA (Form 10-17-92) owner's
policy of title insurance, insuring fee title to the Real Property in Buyer
subject only to Permitted Exceptions.
1.47 VALUE AFFIDAVIT. "Value Affidavit" means an "Affidavit of Real
Property Value," in the form required under applicable Law to be submitted in
connection with the recordation of the Deed, specifying the Purchase Price as
the "Total Sales Price."
1.48 OTHER DEFINITIONS. Terms defined in any other part of this Agreement
shall have the defined meanings wherever capitalized herein. As used in this
Agreement, the terms "herein," "hereof" and "hereunder" refer to this Agreement
in its entirety and are not limited to any specific sections; and the term
"person" means any natural person, other legal entity, or combination of natural
persons and/or other legal entities acting as a unit. Wherever appropriate in
this Agreement, the singular shall be deemed to refer to the plural and the
plural to the singular, and pronouns of certain genders shall be deemed to
comprehend either or both of the other genders.
[ARTICLE 2 BEGINS ON FOLLOWING PAGE]
ARTICAL 2 COVENANT OF PURCHASE AND SALE AND INSTRUCTIONS TO ESCROW AGENT
In accordance with and subject to the terms and conditions of this Agreement,
Seller shall sell and convey the Property to Buyer, and Buyer shall purchase and
accept the Property from Seller, for the Purchase Price, subject to the
prorations and credits contained herein. No later than two Business Days after
the Effective Date, Buyer shall open Escrow by delivery of a copy of this
Agreement to Escrow Agent together with the Deposit, and Escrow Agent shall
promptly notify Seller of such delivery and shall evidence its agreement to act
as Escrow Agent hereunder by countersigning and delivering to each Party a copy
of this Agreement. In connection with the administration of Escrow and Closing,
Buyer and Seller hereby agree, and advise and instruct Escrow Agent, as follows:
2.1 PURCHASE PRICE. The Purchase Price for the Property shall be SEVENTEEN
MILLION DOLLARS ($17,000,000), payable as provided below.
2.1.1 DEPOSIT.
2.1.1.1 INITIAL DEPOSIT. Concurrently with the opening of Escrow,
Buyer shall deliver into Escrow the sum of ONE HUNDRED SEVENTY
THOUSAND DOLLARS ($170,000) (the "Deposit," including the additional
amount deposited under Section 2.1.1.2 and all interested earned on
the Deposit while in Escrow).
2.1.1.2 Additional Deposit. Within two Business Days after the
Approval Date (unless Buyer has elected to terminate this Agreement
under Section 2.4), Buyer shall deliver into Escrow an additional
THREE HUNDRED THIRTY THOUSAND DOLLARS ($330,000) (the "Additional
Deposit"), increasing the funds deposited by Buyer to $500,000. If
Buyer fails to make the Additional Deposit in a timely manner, Seller
shall have the right immediately to terminate this Agreement.
2.1.1.3 INVESTMENT OF DEPOSIT. The Deposit, while held in Escrow,
shall be held by the Escrow Agent in a federally-insured,
interest-bearing account with a national banking association. All
interest earned on the Deposit while in Escrow shall be added to, and
become part of, the Deposit.
2.1.1.4 APPLICATION OF DEPOSIT. If Buyer, in breach of its
obligations under this Agreement, fails to purchase the Property,
Seller upon termination of this Agreement shall be entitled to retain
the Deposit as liquidated damages, as provided in Section 3.24.1 (with
which Escrow Agent need not otherwise be concerned). In all other
circumstances, the Deposit shall remain the property of Buyer. At
Closing, the Deposit shall be applied against the Purchase Price.
2.1.1.5 EINS. For Escrow Agent's information, Buyer's Employer
Identification Number is 00-0000000 and Seller's Employer
Identification Number is 00-0000000.
2.1.2 BALANCE OF THE PURCHASE PRICE (AND OTHER FUNDS REQUIRED FOR
CLOSING). On or before the Last Closing Date, Buyer shall deposit in Escrow
current funds in an amount equal to the Purchase Price, plus Buyer's share
of Closing costs under Section 2.6, minus the amount of the Deposit, and
plus or minus (as the case may be) the net amount of prorations and other
credits under Section 2.5.
2.2 ESCROW DEPOSITS.
2.2.1 BY SELLER. At least one Business Day prior to the Last Closing
Date, Seller shall deposit or cause to be deposited in Escrow:
(i) The Deed.
(ii) The Xxxx of Sale.
(iii) Two counterparts of an assignment and assumption
agreement (the "Lease Assignment"), substantively in the form
attached hereto as Exhibit E, assigning to Buyer all of the
Lease.
(iv) Two counterparts of an assignment and assumption
agreement (the "General Assignment), substantively in the form
attached hereto as Exhibit F, assigning to Buyer to the extent
(if any) of Seller's rights, title and interest therein, the
General Intangibles.
(v) A Certificate of Non-Foreign Ownership with respect
to the Real Property (a "FIRPTA Certificate"), substantively in
the form attached hereto as Exhibit H.
(vi) A certificate, dated as of Closing, substantively in
the form attached hereto as Exhibit I, that all of the warranties
and representations of Seller contained in Section 3.2.1 are true
and correct in all material respects as of the Closing date,
except for matters specified in such certificate ("Seller's
Closing Certificate").
(vii) The original (or, where an original is not available,
the best copy available to Seller) of each Lease and Service
Contract, all maintenance records and warranties, plans and
specifications, licenses, permits and certificates of occupancy;
copies or originals of all books and records of account,
contracts, and copies of correspondence with tenants and
suppliers; receipts for deposits, unpaid bills and other papers
or documents which pertain to the Property; all advertising
materials; booklets; keys; and other items, if any, used in the
operation of the Property (the "Originals"); provided, however,
that Seller may deliver any or all of the Originals to Buyer by
leaving them, in place, in the office of the property manager at
the Property.
(viii) A notice to each Tenant, substantively in the form
attached hereto as Exhibit J, advising such Tenant that the
Property has been sold to Buyer and such Tenant's security
deposit (if any)
transferred to Buyer, and containing instructions as to the
future payment of rents and other amounts under such Tenant's
Lease (the "Tenant Notices").
(ix) The Value Affidavit (but if Seller fails to deliver the
Value Affidavit in a timely way, Seller hereby authorizes and
directs Escrow Agent to complete and execute such affidavit in
Seller's name).
(x) Such other documents as the Title Company or Buyer may
reasonably require to effect Closing (but without materially
increasing Seller's obligations, liabilities or expenses
hereunder).
Each of the documents specified in this Section 2.2.1 ("Seller's Closing
Documents"), except for the Originals, shall have been duly executed and,
if appropriate, acknowledged, by Seller.
2.2.2 BY BUYER. In addition to the deposit of funds under Section
2.1.2, Buyer shall deposit in Escrow, at least one Business Day prior to
the Last Closing Date:
(i) Two counterparts of the Lease Assignment.
(ii) Two counterparts of the General Assignment.
(iii) The Value Affidavit (but if Buyer fails to deliver the
Value Affidavit in a timely way, Buyer hereby authorizes and directs
Escrow Agent to complete and execute such affidavit in Buyer's name).
(iv) Such other documents as the Title Company or Seller may
reasonably require to effect Closing (but without materially
increasing Buyer's obligations, liabilities or expenses hereunder).
Each of the documents specified in this Section 2.2.2 ("Buyer's Closing
Documents") shall have been duly executed and, if appropriate, acknowledged
by Buyer.
2.3 TITLE.
2.3.1 TITLE REPORT AND SURVEY. Prior to or within five Business Days
after the Effective Date, Seller shall have delivered to Buyer a copy of
the Title Report, together with copies of all recorded documents referenced
in the Title Report, and a copy of the Survey.. No later than the fifth
Business Day preceding the Approval Date, Seller, at its expense, shall
have the Survey re-certified to Seller, Buyer, Buyer's Lender and the Title
Company and revised, as necessary, to comply with the 1999 edition of the
"Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys,"
including Items 2, 3, 4, 6, 7(a), 8, 9, 10 and 11 of Table A thereof.
2.3.2 OBJECTIONABLE TITLE MATTERS AND PERMITTED EXCEPTIONS. Except for
any exceptions to or defects in Seller's title with respect to which Buyer
gives Seller and Escrow Agent written notice of objection on or before the
Approval Date ("Objectionable Title Matters"), Buyer shall be deemed to
have approved all
exceptions to and defects in Seller's title to the Real Property which are
disclosed by the Title Report and the Survey, or which would be disclosed
by an inspection of the Property on the Effective Date. All such exceptions
and defects to which Buyer does not make objection in accordance with the
provisions of this Section 2.3, and all such exceptions and defects to
which Buyer does so object but later waives such objection as provided in
this Section 2.3, shall be deemed Permitted Exceptions.
2.3.3 CURE OF OBJECTIONABLE TITLE MATTERS. With respect to any
Objectionable Title Matter that does not appear to be a valid exception to
Seller's title ("Inapplicable Exceptions," including, without limitation,
references to leases or tenancies which no longer exist, to instruments or
documents which on their face or by law are no longer effective and to
matters which have no apparent applicability to the Real Property), Seller
shall use commercially reasonable efforts (e.g., furnishing the Title
Company with an affidavit which may be required to establish that a lease
or other instrument is no longer in effect or applicable to the Real
Property) to have all such matters omitted as exceptions in the Title
Policy, but Seller shall not be obligated to incur in the aggregate more
than $500 in expense or liability in removing Inapplicable Exceptions.
Except as expressly provided in this Section 2.3.3 with respect to removal
of Inapplicable Exceptions and in Section 0 with respect to removal of
Liens, Seller shall have no obligation to cure any Objectionable Title
Matter.
2.3.4 TERMINATION FOR OBJECTIONABLE TITLE MATTER. If, after giving
Seller timely written notice under this Section 2.3 of any Objectionable
Title Matter (other than Inapplicable Exceptions), Buyer has not received
by the Last Closing Date either:
(i) Where such Objectionable Title Matter would otherwise
be within the scope of coverage of the Title Policy, written
confirmation from the Title Company that such Objectionable Title
Matter will not be scheduled as an exception in the Title Policy,
or
(ii) Confirmation from the Title Company that it will
affirmatively insure Buyer against loss resulting from such
Objectionable Title Matter, by an endorsement to the Title Policy
reasonably satisfactory to Buyer,
Buyer shall have the right to terminate Escrow and this Agreement by
written notice of termination given to Seller and Escrow Agent no later
than the Last Closing Date and if Buyer does not so elect to terminate this
Agreement, Buyer shall be deemed to have waived its objection to the
Objectionable Title Matter(s) in question. If, after receiving from Buyer
timely written notice of an Objectionable Title Matter, Seller at any time
gives Buyer written notice that such Objectionable Title Matter will not be
remedied by one of the means specified above and Buyer does not within five
Business Days after receiving such notice from Seller give Seller written
notice waiving Buyer's objection to such Objectionable Title Matter, Seller
shall have the right to terminate this Agreement by written notice of
termination given to Seller and Escrow Agent. Any Objectionable Title
Matter to which Buyer waives, or is deemed to waive, its objection, as
provided above, shall be deemed to be a Permitted Exception.
2.3.5 REMOVAL OF LIENS. Notwithstanding any other provision hereof,
Seller shall obtain the full reconveyance, release or other discharge, of
record, at or prior to Closing, of all Liens, and shall convey the Real
Property to Buyer free of Liens.
2.4 TERMINATION FOR FAILURE OF DUE DILIGENCE CONDITION. Buyer shall have
the right to terminate this Agreement on or before the Approval Date by giving
Seller written notice that any of the conditions specified in Section 3.3.1
(collectively, the "Due Diligence Condition") have not been satisfied or waived
in Buyer's sole and absolute discretion; but unless such termination notice is
given before 5:00 p.m., Pacific Time, on the Approval Date, Buyer shall be
deemed to have waived the Due Diligence Condition and shall have no further
right to terminate this Agreement by reason of dissatisfaction with any of the
matters specified in Section 3.3.1 or, subject only to Section 3.6, by reason of
any changes with respect to such matters occurring after the Approval Date.
2.5 PRORATIONS AND CREDITS.
2.5.1 PRORATED ITEMS. The following items (on an accrual basis) shall
be prorated between Seller and Buyer as of 12:00:01 a.m., local time, on
the Closing Date:
2.5.1.1 RENTS. Rents and other fixed periodic payments (including
periodic payments on account of property tax and operating expense
pass-throughs) under each Lease, except that any rent or other such
payment that is more than 30 days overdue as of the Closing Date shall
not be included in the Closing prorations. and Seller shall retain all
rights to collect, receive and retain any such delinquent rents and
payments (but Seller shall not have the right after Closing to
terminate any Lease).
2.5.1.2 TAXES. All real estate taxes and assessments (including,
without limitation, the current year's installment of any bond
assessments) and all personal property taxes with respect to the
Property.
2.5.1.3 OTHER REVENUE AND EXPENSES. All other periodic revenues
and periodic charges attributable to the Property, including (without
limitation) periodic charges under each Service Contract and with
respect to each Permit, but excluding insurance premiums. (Seller's
insurance with respect to the Property shall terminate as of Closing
and shall not be assigned to Buyer.)
2.5.2 CREDIT TO BUYER. Buyer shall receive a credit for all
outstanding security deposits and advance rent payments under each Lease,
if any.
2.5.3 LEASING COSTS. Leasing commissions, tenant space improvement
costs and other tenant inducement costs incurred by Seller for any Lease
hereafter made by Seller in accordance with Section 3.2.1(xiii) ("New Lease
Costs") shall, upon Closing, be the responsibility of Buyer. Buyer shall
assume, upon Closing, the obligation to pay all accrued and unpaid New
Lease Costs and, to the extent that Seller has paid any New Lease Costs
prior to Closing, Seller shall receive a credit for such payments.
2.5.4 DETERMINATION OF PRORATIONS AND CREDITS. The prorations and
credits provided for in this Section 2.5 shall be effected through Escrow,
based upon:
(i) In the case of real estate taxes and assessments, the
most recent available tax xxxx for the Real Property.
(ii) In the case of New Lease Costs, based on Seller's
written certification to Buyer of the amount of New Lease Costs
paid by Seller.
(iii) In the case of all other prorations and credits, a
proration statement that Seller, subject to Buyer's reasonable
approval, shall prepare and deliver to Escrow Agent at least one
full Business Day prior to the Last Closing Date.
After taking all such prorations and credits into account, the net amount
owing to Seller or Buyer (as the case may be) shall be added to or deducted
from the proceeds of the Purchase Price payable to Seller at Closing.
2.5.5 UTILITY CHARGES. Notwithstanding any other provision hereof, use
charges for any utility serving the Property shall be prorated only if
Seller and Buyer are unable to arrange for a final billing to Seller
through the day preceding Closing, without interruption of such utility
service. The Parties shall cooperate, each using reasonable efforts, to
make such arrangements for each utility serving the Property.
2.6 CLOSING COSTS.
2.6.1 ALLOCATION OF CLOSING COSTS. Closing costs shall be allocated
between Buyer and Seller as follows:
(i) Seller shall pay:
(A) All charges for the Title Report and the Title
Policy, excluding any charge (the "Extended Coverage
Premium") for deleting survey and other general exceptions
and excluding charges for any title insurance endorsements
requested by Buyer in addition to the endorsements covered
by the Extended Coverage Premium;
(B) Recording charges for instruments required to
remove Liens and other encumbrances that are not Permitted
Exceptions and that Seller has elected to cure,
(C) One-half of Escrow Agent's fees and expenses for
administering Escrow, and
(D) The commission due to Broker on the sale of the
Property hereunder, in accordance with Seller's separate
written agreement with Broker.
(ii) Buyer shall pay:
(A) Recording charges for the Deed;
(B) The Extended Coverage Premium, the charges for any
title insurance endorsements requested by Buyer in addition
to the endorsements covered by the Extended Coverage
Premium, and the cost of obtaining the Survey;
(C) One-half of Escrow Agent's fees and expenses for
administering Escrow; and
(D) All fees, charges and expenses related to Buyer's
financing for the purchase of the Property (including,
without limitation, any additional premium for a lender's
policy of title insurance).
Each Party shall pay the fees and expenses of its attorneys and other
consultants. Any other charges and expenses incurred by Escrow Agent in
effecting Closing shall be allocated between the Parties in accordance with
the custom of the county in which the Real Property is located.
2.6.2 PRELIMINARY CLOSING STATEMENT. At least one Business Day prior
to the Last Closing Date, Escrow Agent shall prepare and submit to each of
Buyer and Seller preliminary Closing statements, showing the Parties'
respective amounts of Closing costs, the Deposit balance (including
interest earned to such date), the net credit due to Seller or Buyer under
Section 2.5 and the net amount of funds required to be deposited by Buyer
in order to effect Closing hereunder.
2.7 CLOSING.
2.7.1 TIME AND PLACE. Closing shall take place at the Escrow Agent's
offices, as soon as all of the conditions specified in Section 2.7.2 are
satisfied. If Escrow Agent is unable to close Escrow by the Last Closing
Date in compliance with Section 2.7.2, Escrow Agent shall hold Escrow open
and effect Closing as soon as it is able to do so in compliance with such
provision, unless Escrow Agent receives written demand from either Buyer or
Seller for cancellation of Escrow (in which event, Escrow Agent shall
proceed in accordance with Section 2.8).
2.7.2 CLOSING INSTRUCTIONS. As soon as:
(i) Seller has delivered into Escrow Seller's Closing
Documents and Buyer has approved each of the same as satisfying
the requirements of this Agreement;
(ii) Buyer has delivered into Escrow the funds required to
effect Closing hereunder and Buyer's Closing Documents, and
Seller has approved Buyer's Closing Documents as satisfying the
requirements of this Agreement; and
(iii) Upon recording the Deed, the Title Company is prepared
to issue the Title Policy to Buyer, insuring Buyer's title to the
Real Property subject only to Permitted Exceptions;
Escrow Agent shall cause the Title Company to record the Deed and issue
the Title Policy and shall then close Escrow by:
(iv) Disbursing the funds in Escrow as follows:
(A) To Seller, the amount of the Purchase Price, plus
the net credit, if any, to Seller under Section 2.5 and
minus (1) the net credit, if any, to Buyer under Section 2.5
and (2) Seller's share of Closing costs; and
(B) To Buyer, any funds remaining in Escrow after the
foregoing disbursement to Seller and payment of all of the
Closing costs;
(v) Delivering to Buyer the Originals (if and to the extent
deposited with Escrow Agent), a copy of the Deed as recorded,
showing the recording data thereon, and the rest of Seller's
Closing Documents; and
(vi) Delivering to Seller Buyer's Closing Documents,
together with a copy of the Deed as recorded, showing the
recording data thereon.
2.7.3 POSSESSION. Seller shall delivery possession of the Property to
Buyer at the Closing subject only to the Permitted Exceptions.
2.8 CANCELLATION OF ESCROW WITHOUT CLOSING. After the Last Closing Date,
upon receiving a written demand from either Party for cancellation of Escrow,
Escrow Agent shall promptly deliver a copy of such demand to the other Party and
shall then proceed as follows:
(i) If, by close of business on the tenth Business Day after
Escrow Agent gives the other Party a copy of such demand for
cancellation, Escrow Agent has not received from such other Party
written instructions which conflict in any way with such demand,
Escrow Agent shall cancel Escrow, disburse the Deposit as
directed in such demand (or, if no directions are given in such
demand regarding the Deposit, disburse the Deposit to Buyer) and
return every other item deposited in Escrow to the Party which
deposited the same; or
(ii) If, by close of business on the tenth Business Day
after Escrow Agent gives the other Party a copy of such demand
for cancellation, Escrow Agent has received conflicting written
instructions from such other Party, Escrow Agent shall take no
further actions with respect to Escrow (other than to continue to
invest and reinvest the Deposit as provided in Section 2.1.1)
except (A) in accordance with joint written instructions of
Seller and Buyer or (B), upon advice of Escrow Agent's legal
counsel, in accordance with a certified copy of the order or
judgment of any court; provided, however, that if Seller and
Buyer have not provided Escrow Agent with joint written
instructions as to the disposition of Escrow (and all items
deposited therein) within 60 days after Escrow Agent's receipt of
such demand for cancellation, Escrow Agent shall have the right
(at any time thereafter) to commence an action in interpleader
against Seller and Buyer and, in connection therewith, to deposit
all funds and other items held in Escrow with the court hearing
such action, whereupon Escrow Agent shall be relieved of all
further obligations and duties with respect to Escrow.
Buyer and Seller, jointly and severally, shall hold harmless and indemnify
Escrow Agent from and against any costs and expenses incurred by it in
connection with any interpleader action commenced pursuant to clause (ii) above.
Upon cancellation of Escrow, either pursuant to this Section or other joint
written instructions of the Parties, Buyer and Seller shall each pay one-half of
Escrow Agent's reasonable and customary cancellation fees. All notices and other
communications by Escrow Agent under this Section 2.8 shall be given and
delivered in accordance with Section 3.14.
2.9 EXTENDED TITLE COVERAGE. Buyer may elect, at its expense, to have the
Title Policy issued with extended coverage (i.e., with general exceptions for
certain non-record matters excepted), but Buyer shall have the responsibility of
obtaining and delivering a Survey to the Title Company in sufficient time to
permit issuance of an extended coverage policy and Buyer's obligation to close
shall not be conditioned upon the availability or timely issuance of an extended
coverage policy. Seller shall, upon request, provide the Title Company with an
owner's declaration or affidavit, on the type customarily required for issuance
of an extended coverage title policy and in a form or forms reasonably
acceptable to Seller, but Seller shall not otherwise have any obligation with
respect to Buyer's obtaining extended coverage on the Title :Policy.
2.10 SUPPLEMENTAL ESCROW AGREEMENT. Buyer and Seller shall execute such
supplemental escrow instructions or supplemental escrow agreement as Escrow
Agent may reasonably request, provided the provisions of such supplemental
instructions or agreement do not materially conflict with the provisions of this
Agreement. In the event of any conflict between this Agreement and such
supplemental instructions, this Agreement shall control.
2.11 TERMINATION OF SERVICE CONTRACTS. Notwithstanding any other provision
of this Agreement, Seller shall, at or before Closing, give notice of
termination under each Service Contract that (A) Buyer has requested be
terminated, in a written notice given to Seller at least five Business Days
prior to the Closing Date, and (B) may under its terms be terminated without
payment or penalty.
[ARTICLE 3 BEGINS ON FOLLOWING PAGE]
ARTICLE 3 FURTHER AGREEMENTS BETWEEN BUYER AND SELLER (OF NO CONCERN TO ESCROW
AGENT EXCEPT AS EXPRESSLY REFERENCED IN ARTICLES 1 OR 2)
3.1 ITEMS TO BE DELIVERED OUTSIDE OF ESCROW.
3.1.1 PROPERTY RECORDS AND DOCUMENTS. Prior to or within five Business
Days following the Effective Date, Seller shall have delivered to Buyer
copies of each of the items specified in the Schedule of Property Records
attached hereto as Exhibit M, to the extent such item exists and is within
Seller's possession or control.
3.1.2 TENANT ESTOPPEL CERTIFICATES. Seller shall use commercially
reasonable efforts to obtain from each Tenant (A) a Tenant Estoppel
Certificate and (B) a subordination, attornment and non-disturbance
agreement in the form requested by the lender providing financing for
Buyer's purchase of the Property (a "SANDA") and to deliver such
Certificates and SANDAs to Buyer at least ten Business Days prior to the
Last Closing Date. Seller shall not be obligated to pay any Tenant, or
otherwise incur any significant expense or liability, in order to obtain
any Tenant Estoppel Certificate or SANDA and, except as expressly provided
in Section 3.3, the obtaining and delivery of the Tenant Estoppel
Certificates and SANDAs shall not be a condition to Buyer's obligation to
purchase the Property (nor shall the obtaining of such financing).
3.1.3 RETURN OF DOCUMENTS; DELIVERY OF REPORTS; Copies of Buyer
Reports. If this Agreement terminates without Closing, Buyer shall promptly
(A) return to Seller each item provided pursuant to this Section 3.1 and
diligently undertake either to have delivered to Seller or destroyed every
copy, digest or summary made of any such item and (B) deliver to Seller
each third-party report, study or analysis that Buyer obtained with respect
to the Property other than economic analyses (collectively, the "Reports"
and, individually, a "Report"). The Reports shall be delivered to Seller
without any representation or warranty as to the completeness or accuracy
of the Reports or any other matter relating thereto, and Seller shall have
no right to rely on any Report without the written consent of the party
preparing same.
3.2 WARRANTIES, REPRESENTATIONS AND COVENANTS.
3.2.1 BY SELLER. Seller hereby warrants, represents and/or covenants
to Buyer that, except as disclosed in any Exhibit to or elsewhere in this
Agreement, or in any Property Record delivered to Buyer, or in the
Environmental Report, the Title Report or the Survey:
(i) Seller has full authority, right and power to convey
the Real Property in accordance with this Agreement and to
perform all of its other obligations under this Agreement.
(ii) Seller is the owner of the Real Property.
(iii) To Seller's Knowledge, Seller has not received written
notice from any government authority, agency or officer that the
current condition, occupancy or use of the Property violates any
applicable Law (including, without limitation, the Americans with
Disabilities Act and regulations promulgated pursuant thereto).
(iv) To Seller's Knowledge, Seller has not received
written notice from any government authority, agency or officer,
or from the carrier of any hazard or liability insurance covering
the Real Property, requiring any work, investigation,
remediation, repair, maintenance or improvement be performed on
the Real Property where such work, etc., has not been performed.
(v) Exhibit D is a true, correct and complete list of all
tenants of the Property, and the Property Records include true
and correct copies of the Leases. Each of the Leases is in full
force and effect and, to Seller's knowledge, there are no events
which, with the giving of notice or the passage of time, or both,
would cause a default or Event of Default under the Leases.
(vi) Exhibit G is a true, correct and complete list of the
Service Contracts, and the Property Records include true and
correct copies of the Service Contracts. Each of the Service
Contracts is in full force and effect, and there are no events
which, with the giving of notice or the passage of time, or both,
would cause a default or Event of Default under the Service
Contracts.
(vii) To Seller's Knowledge, there is no condition at the
Real Property requiring reporting or remediation under any
applicable Law governing the use, storage, release or disposal of
Hazardous Substances. To Seller's Knowledge, Seller has not
deposited or released any Hazardous Substances on the Real
Property in violation of any applicable laws, rule or regulations
in existence as of the Effective Date.
(viii) There are no lawsuits pending and served against
Seller or, to Seller's Knowledge, otherwise pending or
threatened, whose outcome could adversely affect title to or the
use, occupancy or operation of the Property or Seller's ability
to convey any of the Property to Buyer under this Agreement
(including, without limitation, actions for condemnation).
(ix) Seller is a corporation duly organized, validly
existing and in good standing under the laws of the state of its
incorporation; is in good standing and qualified to do business
in the jurisdiction where the Real Property is located; has full
power to enter into this Agreement and to fulfill its obligations
hereunder; and has caused this Agreement to be duly executed and
delivered to Buyer.
(x) No government or third-party approvals or consents
are required for Seller's execution and delivery of, or
performance of its obligations under, this Agreement. Seller's
execution and performance of this Agreement do not and will not
violate, and are not restricted by, any other contractual
obligation or any Law to which Seller is a party or by which
Seller or any of the Property is bound.
(xi) Except for Broker, Seller has not engaged or dealt
with any broker, finder or similar agent in connection with the
transaction contemplated by this Agreement.
(xii) During the period from the Effective Date to Closing,
Seller shall:
(A) Maintain the Property in its present condition and
state of repair and maintenance (subject to casualty damage
and to normal wear and tear) and in a manner consistent with
Seller's maintenance of the Property during Seller's period
of ownership. Seller will not remove any Tangible Personal
Property except as may be required for necessary repair or
replacement, and replacement shall be of substantially
similar quality and quantity as the removed item of Personal
Property; and
(B) Take reasonable measures to preserve and enforce
all of its rights and remedies with respect to the Property
and each Lease, Service Contract and Permit.
(xiii) During the period from the Effective Date to Closing,
Seller shall not:
(A) Enter into, modify or terminate the Lease, or
consent to any assignment or sublease by Tenant, without
Buyer's prior written consent, which (until after the
Approval Date) Buyer shall not unreasonably withhold or
delay. Buyer shall give Seller written notice of objection,
specifying Buyer's reasons, within five Business Days after
Seller has notified Buyer of such proposed action and, if
applicable, provided Buyer with a copy of any lease
agreement, amendment or other document therefor);
(B) Enter into, modify or terminate any Service
Contract with respect to the Property without Buyer's prior
written consent, which (until after the Approval Date) Buyer
shall not unreasonably withhold or delay (but Buyer shall be
deemed to have approved any such action unless Buyer has
given Seller written notice of objection, specifying Buyer's
reasons, within five Business Days after Seller has notified
Buyer of such proposed action and, if applicable, provided
Buyer with a copy of any agreement, amendment or other
document therefor); provided, however, that the foregoing
shall not preclude Seller from entering into any Service
Contract (or supplement to an existing Service Contract)
that will be fully performed, or otherwise terminated, by
Closing.
(xiv) During the period from the Effective Date to
Closing, Seller shall provide Buyer, its agents,
consultants, accountants and counsel upon two Business Days'
prior notice, (A) access at all reasonable times to all of
Seller's contracts, books and records and other documents
relating to the occupancy, operation, leasing, maintenance
and repair of the Property (including, without limitation,
such records maintained by or otherwise in the possession of
Seller's property manager, but excluding any appraisals,
internal valuations or attorney-client privileged
materials), with the right to make photocopies thereof and
(B), subject to the rights of Tenants to the quiet enjoyment
and exclusive possession of their leased premises, access to
the Property at all reasonable times for purposes of
conducting (at Buyer's expense and liability) any
examinations, surveys and tests as Buyer may reasonably
require; provided, however, that Buyer shall not have any
right to conduct any drilling, boring or other intrusive or
destructive testing of the Property without the prior
written consent of Seller, which shall not be unreasonably
withheld, conditioned or delayed.
(xv) During the period from the Effective Date until
Closing, Seller shall not knowingly and voluntarily (A)
create any Lien or any other new exceptions to Seller's
title to the Real Property (except the Revised CCRs) or (B)
commit any other act, except acts required or permitted
hereunder, that would result in any of the warranties or
representations contained in this Section not being
materially true or correct as of Closing.
3.2.2 BY BUYER. Buyer hereby warrants, represents and covenants to
Seller that:
(i) Buyer is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of
Maryland; is in good standing and qualified to do business
in every other jurisdiction where such qualification is
legally required; has full power to enter into this
Agreement and to fulfill its obligations hereunder; and has
caused this Agreement to be duly executed and delivered to
Seller.
(ii) No government or other third-party approvals or
consents are required for Buyer's execution and delivery of,
or performance of its obligations under, this Agreement.
Buyer's execution and performance of this Agreement do not
and will not violate, and are not restricted by, any other
contractual obligation or applicable Law to which Buyer is a
party or by which Buyer is otherwise bound.
(iii) There are no lawsuits pending and served against
Buyer or, to Buyer's knowledge, otherwise pending or
threatened, whose outcome could adversely affect Buyer's
ability to purchase the Property under this Agreement.
(iv) Except for Broker, Buyer has not engaged or dealt
with any broker, finder or similar agent in connection with
the transaction contemplated by this Agreement.
(v) Buyer and its management have extensive experience
and sophistication in the acquisition and operation of
commercial properties similar to the Property.
(vi) BUYER'S PURCHASE OF THE PROPERTY HEREUNDER WILL BE
"AS-IS, WHERE-IS, WITH ALL FAULTS" AND, EXCEPT FOR THE
WARRANTIES, REPRESENTATIONS AND COVENANTS OF SELLER
EXPRESSLY SET FORTH IN SECTION 3.2.1 AND IN THE SELLER'S
CLOSING DOCUMENTS (INCLUDING WITHOUT LIMITATION THE DEED)
BUYER WILL BE CONCLUDING THE PURCHASE OF THE PROPERTY BASED
SOLELY ON ITS AND ITS AGENTS' AND CONSULTANTS' INSPECTION
AND INVESTIGATION OF THE PROPERTY AND ON DOCUMENTS AND OTHER
MATERIALS RELATED TO THE PROPERTY. WITHOUT LIMITING THE
FOREGOING, BUYER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET
FORTH IN SECTION 3.2.1, SELLER HAS NOT MADE ANY
REPRESENTATIONS AND WARRANTIES ON WHICH BUYER IS RELYING AS
TO ANY MATTERS CONCERNING THE PROPERTY (INCLUDING, WITHOUT
LIMITATION, THE CONDITION OF THE LAND AND IMPROVEMENTS,
TITLE, ZONING, DEVELOPMENT RIGHTS OR PERMISSIBLE USES,
ACCESS TO OR SUFFICIENCY OF UTILITIES AND TRANSPORTATION,
TAXES AND ASSESSMENTS, WATER OR WATER RIGHTS, TOPOGRAPHY OR
SOIL AND SUBSOIL CONDITIONS, DRAINAGE, ENVIRONMENTAL
CONDITIONS, AND APPLICABLE LAWS, RULES OR REGULATIONS).
(vii) AS A MATERIAL INDUCEMENT TO SELLER TO ENTER INTO
THIS AGREEMENT AND A MATERIAL PART OF THE CONSIDERATION TO
SELLER FOR THE SALE OF THE PROPERTY, EXCEPTING THE EXPRESS
WARRANTIES AND REPRESENTATIONS OF SELLER SET FORTH IN THIS
AGREEMENT AND SELLER'S CLOSING DOCUMENTS, BUYER HEREBY
WAIVES, AND RELEASES SELLER (AND SELLER'S SHAREHOLDER,
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS,
INCLUDING (WITHOUT LIMITATION) BROKER, XXXX ENTERPRISES
COMMERCIAL GROUP, INC., XXXX ENTERPRISES INVESTMENT
MANAGEMENT, INC., AND THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES AND AFFILIATES) FROM, ANY AND ALL CLAIMS THAT ARE
BASED DIRECTLY OR INDIRECTLY ON, ARISE FROM OR IN CONNECTION
WITH, OR ARE RELATED TO: (A) ANY PAST, PRESENT OR FUTURE
CONDITION OF OR ACTIONS ON OR ABOUT THE PROPERTY, INCLUDING,
WITHOUT LIMITATION, THE PRESENCE OF HAZARDOUS SUBSTANCES AT
THE PROPERTY, WHETHER OR NOT CAUSED BY SELLER, (B) ANY AND
ALL STATEMENTS, REPRESENTATIONS, WARRANTIES, DETERMINATIONS,
CONCLUSIONS, ASSESSMENTS, ASSERTIONS OR ANY OTHER
INFORMATION CONTAINED IN ANY OF THE PROPERTY INFORMATION, OR
ANY MISREPRESENTATION OR FAILURE TO DISCLOSE INFORMATION
RELATING TO THE PROPERTY, OR (C) ANY DEFECT, INACCURACY OR
INADEQUACY IN TITLE TO THE PROPERTY, LEGAL DESCRIPTION OF
THE PROPERTY, COVENANTS, RESTRICTIONS, ENCUMBRANCES OR
ENCROACHMENTS WHICH AFFECT THE PROPERTY.
BUYER HEREBY ACKNOWLEDGES AND AGREES THAT (i) BUYER MAY
HEREAFTER DISCOVER FACTS DIFFERENT FROM OR IN ADDITION TO
THOSE NOW (OR AS OF THE CLOSING) KNOWN OR BELIEVED TO BE
TRUE REGARDING THE PROPERTY AND/OR PROPERTY INFORMATION,
(ii) BUYER'S AGREEMENT TO RELEASE, ACQUIT AND DISCHARGE
SELLER AND SELLER PARTIES AS SET FORTH HEREIN SHALL REMAIN
IN FULL FORCE AND EFFECT, NOTWITHSTANDING THE EXISTENCE OR
DISCOVERY OF ANY SUCH DIFFERENT OR ADDITIONAL FACTS, AND
(iii) BUYER KNOWINGLY AND VOLUNTARILY WAIVES ANY AND ALL
RIGHTS, BENEFITS AND PRIVILEGES TO THE FULLEST EXTENT
PERMISSIBLE UNDER ANY FEDERAL, STATE, LOCAL, OR OTHER LAWS
WHICH DO OR WOULD NEGATIVELY AFFECT VALIDITY OR
ENFORCEABILITY OF ALL OR PART OF THE RELEASES SET FORTH IN
THIS AGREEMENT.
BUYER ACKNOWLEDGES THAT IT HAS CONSULTED WITH BUYER'S LEGAL
COUNSEL AS TO THE IMPLICATIONS AND RISKS OF THE FOREGOING
RELEASE AND WAIVER AND HAS TAKEN SUCH RISKS INTO ACCOUNT IN
SETTING THE PURCHASE PRICE.
NOTHING IN THIS SECTION 3.2.2 IS INTENDED TO RELEASE SELLER
FROM CLAIMS FOR BREACH OF ITS WARRANTIES, REPRESENTATIONS
AND COVENANTS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN
THE SELLER'S CLOSING DOCUMENTS (INCLUDING WITHOUT LIMITATION
THE DEED).
(viii) Prior to the Approval Date, Buyer shall have
performed all of the inspections, investigations and other
due diligence reasonably required to apprise Buyer of the
suitability of the Property and its suitability for Buyer's
purposes, taking into account the disclaimers and waivers
set forth in this Section 3.2.2.
3.2.3 SURVIVAL. Except as provided below, the foregoing warranties,
representations and covenants (and the Parties' respective liability for
any breach thereof) shall survive Closing and shall not be deemed to merge
in the Deed or any other instrument. Notwithstanding any other provision of
this Agreement or Seller's Closing Documents, any claim based on a breach
of Seller's representations and warranties in Section 3.2.1 or in Seller's
Closing Certificate shall be forever barred, and Buyer shall bring no
action thereon, unless:
3.2.3.1 The facts constituting such breach have not been
disclosed to, discovered by or otherwise become known to Buyer prior
to Closing;
3.2.3.2 Buyer's actual out-of-pocket loss from such breach
exceeds $25,000; in no event, however, shall Seller's liability from
all breaches of Seller's representations herein exceed $300,000; and
3.2.3.3 Buyer commences action on such claim within one year
after the Closing Date.
3.3 CONDITIONS TO BUYER'S OBLIGATION. Buyer's obligation to close Escrow
shall be subject to timely satisfaction of each of the following conditions:
3.3.1 DUE DILIGENCE CONDITIONS. Buyer's approval (in its sole and
absolute discretion) of each of:
(i) The structural and environmental integrity of the
Real Property (including, without limitation, conformity of
the Improvements to the requirements of building health and
safety codes, handicap codes, Title III of the Americans
with Disabilities Act, OSHA requirements and other
applicable Laws, and the state of contamination or potential
contamination of the Real Property by Hazardous Substances);
(ii) All other aspects of the physical condition of
the Property, including (without limitation) the water-tight
integrity of the Improvements, the condition of all power
and mechanical systems in the Improvements and the general
state of repair of the Property);
(iii) The status and adequacy of the Permits;
(iv) All zoning, land use and similar regulations and
restrictions affecting the Property;
(v) The access to and sufficiency of utility,
transportation and other public services with respect to the
Property;
(vi) The dependence of the Property on the use of any
off-site facilities (including, without limitation, parking
facilities);
(vii) The Leases and the Tenants;
(viii) Any Service Contracts;
(ix) The operating history of the Property; and
(x) The suitability of the Property for Buyer's
purposes.
3.3.2 PERFORMANCE OF SELLER'S OBLIGATIONS. Performance by Seller in
all material respects of Seller's obligations under this Agreement to be
performed at or before Closing.
3.3.3 ACCURACY OF WARRANTIES AND REPRESENTATIONS. The accuracy in all
material respects, as of Closing, of each of the warranties and
representations of Seller set forth in Section 3.2.1, subject to only
changes which are required or permitted hereunder.
3.3.4 SATISFACTORY TITLE. The Title Company's commitment as of Closing
to issue the Title Policy in accordance with Section 2.7.2.
3.3.5 SUFFICIENT TENANT ESTOPPEL CERTIFICATES. Buyer shall have
received, at least ten Business Days prior to the Last Closing Date, signed
Tenant Estoppel Certificates from the Tenants under Leases aggregating at
least 90% of by rentable area of all the Leases, addressed to Buyer,
Buyer's lender and their successors, and assigns, dated no earlier than ten
days prior to the Approval Date and containing no statement that, in the
reasonable judgment of Buyer or Buyer's lender, is materially and adversely
inconsistent with the Lease documents and other written Lease and Tenant
information that Seller has provided to Buyer prior to the Approval Date
pursuant to Section 3.1.1. Buyer shall be deemed to have approved, as
counting toward satisfying the condition of this Section 3.3.5, each Tenant
Estoppel Certificate delivered to it unless Buyer, within five Business
Days after receiving such Certificate (or a true and complete copy,
including a fax copy, thereof), objects to the same in a written notice to
Seller, specifying the basis for Buyer's objection.
3.3.6 SUFFICIENT SANDAs. Buyer shall have received, at least ten
Business Days prior to the Last Closing Date, signed SANDAs from the
Tenants under Leases aggregating at least 90% of by rentable area of all
the Leases, without material alteration from the form attached hereto as
Exhibit P. Buyer shall be deemed to have approved, as counting toward
satisfying the condition of this Section 3.3.6, each SANDA delivered to it
unless Buyer, within five Business Days after receiving such Certificate
(or a true and complete copy, including a fax copy, thereof), objects to
the same in a written notice to Seller, specifying the basis for Buyer's
objection.
3.3.7 MATERIAL LITIGATION. There shall exist no pending or threatened
actions, suits, arbitrations, claims, attachments, assignments for the
benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings against Seller that would materially and adversely affect the
operation or value of the Property or Seller's ability to perform its
obligations under this Agreement.
The condition specified in Section 3.3.1 shall be deemed waived unless Buyer has
given Seller written notice terminating this Agreement, by reason of the failure
of such condition, by 5:00 p.m., Pacific Time, on the Approval Date. If any
other of the foregoing conditions is not timely satisfied (or waived by Buyer in
writing), Buyer shall have the right to terminate this Agreement before Closing
by written notice of such termination to Seller and Escrow Agent given at any
time prior to the satisfaction of such condition; but once Closing has occurred
all of the foregoing conditions, to the extent not satisfied at Closing, shall
be deemed to have been waived. If Seller gives Buyer written notice that either
of the conditions specified in Sections 3.3.3 and 3.3.7 will not be satisfied by
Closing, then (so long as such failure of condition is not the result of a
willful breach on the part of Seller of any of its covenants or warranties under
this Agreement) Seller shall have the right to terminate this Agreement unless
Buyer, within five Business Days after receiving such notice from Seller, waives
in a written notice to Seller the condition in question (provided, however, that
such termination shall not excuse Seller from liability to Buyer for monetary
damages if such failure of condition results from a breach on the part of
Seller, whether or not willful). If either of the conditions specified in
Sections 3.3.5 and 3.3.6 are not satisfied by the tenth Business Day prior to
the Last Closing Date (the "Estoppel Deadline"), Buyer shall have the right to
terminate this Agreement by giving Seller written notice of such termination by
5:00 p.m. Pacific Time on the Estoppel Deadline; but Buyer shall be deemed to
have waived both such conditions if it has not so terminated this Agreement by
such time on the Estoppel Deadline.
3.4 CONDITIONS TO SELLER'S OBLIGATION. Seller's obligation to close Escrow
shall be subject to the timely satisfaction of each of the following conditions:
3.4.1 PERFORMANCE OF BUYER'S OBLIGATIONS. Performance by Buyer in all
material respects of Buyer's obligations under this Agreement to be
performed at or before Closing.
3.4.2 ACCURACY OF WARRANTIES AND REPRESENTATIONS. The accuracy in all
material respects, as of Closing, of each of the warranties and
representations of Buyer set forth in Section 3.2.2.
If any of the foregoing conditions is not timely satisfied (or waived by Seller
in writing), Seller shall have the right to terminate this Agreement before
Closing by written notice of such termination to Buyer and Escrow Agent given at
any time prior to the satisfaction of such condition; but once Closing has
occurred all of the foregoing conditions, to the extent not satisfied at
Closing, shall be deemed to have been waived.
3.5 INDEMNITIES.
3.5.1 BUYER'S ACTIVITIES ON THE REAL PROPERTY. Buyer shall hold
harmless, indemnify and defend Seller from and against any and all claims,
liability and losses, and expenses related thereto (including reasonable
attorneys' fees), which Seller incurs by reason of any damage to the
Property caused by, or any third-person claim against Seller arising or
asserted to arise out of, any activity of Buyer, or any of Buyer's agents,
conducted on the Real Property prior to Closing provided, however, that the
foregoing indemnity shall not extend to protect Seller from any (i)
pre-existing liabilities for matters merely discovered by Buyer (e.g.,
latent environmental contamination), (ii) any liabilities arising as a
result of Seller's willful misconduct or gross negligence and (iii) any
claims, liabilities or losses arising or asserted to arise out of any
disclosures required by applicable law, rule or regulation promulgated by
any governmental agency with jurisdiction over Buyer or the Property. Buyer
shall, with reasonable promptness, repair any damage caused to the Property
by any such activity.
3.5.2 LEASES, SERVICE CONTRACTS . Seller shall hold harmless,
indemnify and defend Buyer from and against any and all claims and
liability, and expenses related thereto (including reasonable attorneys'
fees), which Buyer incurs by reason of any alleged default on the part of
the landlord under the Lease, as vendee under a Service Contract based upon
an event or condition occurring (or alleged to have occurred) prior to
Closing. Buyer shall hold harmless, indemnify and defend Seller from and
against any and all claims and liability, and expenses related thereto
(including reasonable attorneys' fees), which Seller incurs by reason of
any alleged default on the part of the landlord under a Lease, as vendee
under a Service Contract, based upon an event or condition occurring (or
alleged to have occurred) after Closing.
3.5.3 LEASING COMMISSIONS. Seller shall pay, and shall hold harmless,
indemnify and defend Buyer from and against any claims or liability for,
leasing commissions which are or before Closing become due and payable
under any leasing commission or leasing agency agreement which Seller has
entered into, with respect to any Lease made (i) prior to the Effective
Date or (ii) after the Effective Date other than in accordance with Section
3.2.1(xiii)(A). Buyer shall pay, and shall hold harmless, indemnify and
defend Seller from and against any claims or liability for, leasing
commissions which become due and payable after Closing (including, without
limitation, any commissions which become due under any such agreement by
reason of the extension, renewal or expansion after Closing of any Lease
existing as of Closing).
3.5.4 SURVIVAL. The provisions of, and the Parties' respective
obligations under, this Section 3.5 shall survive Closing or termination of
this Agreement. The indemnifications contained in this Section 3.5 shall
run to the benefit of the named indemnified Party and such Party's
shareholder(s), constituent partners, directors, officers, employees,
agents, successors and assigns.
3.6 DAMAGE, DESTRUCTION OR CONDEMNATION.
3.6.1 TERMINATION RIGHTS. If, prior to Closing, the Property suffers
any material damage, destruction or taking by eminent domain (a "Material
Casualty"), either Party shall have the right, at its election, to
terminate this Agreement, by written notice given to the other Party within
ten Business Days after receiving notice of such Material Casualty (or, if
sooner, by the Last Closing Date). If a Material Casualty occurs fewer than
ten Business Days before the Last Closing Date, either Party shall have the
right to extend the Last Closing Date until the tenth Business Day after
the occurrence of such Material Casualty in order to make the election
permitted by this Section.
3.6.2 IF NO TERMINATION. In the event that a Material Casualty or any
other damage, destruction or taking of the Property by eminent domain
occurs and neither Party has or elects to exercise a permitted right to
terminate this Agreement, this Agreement shall continue in force and, upon
Closing, Buyer shall be entitled to all insurance proceeds (other than
proceeds of rent loss or business interruption insurance which are
allocable to periods before Closing), condemnation awards or other amounts
which have been paid or may thereafter be payable to Seller by any person
in connection with such Casualty ("Proceeds"), and at Closing Seller shall
pay over to Buyer the amount of any Proceeds already received by Seller
(except to the extent expended by Seller to repair or restore the
Property), assign Buyer all of Seller's rights to Proceeds which may then
be or thereafter become payable and credit Buyer with an amount equal to
the least of (A) the "deductible" under the applicable property hazard
insurance policy or (B) the reasonably estimated cost of repairing or
restoring the Property.
3.6.3 MATERIALITY. For purposes of this Section 3.6, a material
Casualty is one in which the extent of the damage, destruction or taking
(measured by the cost of repairing or replacing the damaged, destroyed or
taken portion of the Property) exceeds ten percent of the Purchase Price.
3.7 ASSIGNMENT BY BUYER. Prior to Closing, Buyer shall have the right to
assign this Agreement to a corporation or other entity controlling, controlled
by or under common control with Buyer, by delivering to Seller a written
assignment and assumption agreement under which the assignee assumes all of
Buyer's obligations under this Agreement. For purposes hereof, "control" means
the direct or indirect (A) ownership of more than 50% of the capital and profits
interest, coupled with (B) the right to elect a majority of the board of directs
or similarly direct such entity. Except as provided in the foregoing sentence,
Buyer shall have no right to assign or transfer its rights under this Agreement
except with Seller's prior written consent, which Seller may withhold in its
sole and absolute discretion. Seller shall have no obligation to respect any
assignment in violation of this Section and such an assignment shall constitute
a material breach of this Agreement on the part of Buyer. No assignment shall
relieve or excuse Buyer of its obligations and liability hereunder. Seller's
consent to any one assignment shall not be deemed consent to any other
assignment or a waiver of the requirement for its consent to any other
assignment.
3.8 TERMINATION.
3.8.1 BY BUYER. If Buyer has and timely exercises any right hereunder
to terminate this Agreement, Buyer shall be immediately entitled to the
return of the Deposit and, promptly upon receiving notice of such
termination, Seller shall join with Buyer in a written notice to Escrow
Agent acknowledging the termination of this Agreement and instructing
Escrow Agent to return the Deposit to Buyer and to return all other funds
and every other item deposited in Escrow to the Party which deposited the
same.
3.8.2 BY SELLER. If Seller has, and timely exercises, the right to
terminate this Agreement for a breach by Buyer of its obligation hereunder
to close the purchase of the Property, promptly upon receiving notice of
such termination Buyer shall join with Seller in a written notice to Escrow
Agent acknowledging the termination of this Agreement and instructing the
Title Company to deliver the Deposit to Seller and to return all other
funds and every other item deposited in Escrow to the Party which deposited
the same. If Seller terminates this Agreement for any other reason, Seller
shall promptly, upon Buyer's written request, join with Buyer in a written
notice to Escrow Agent acknowledging the termination of this Agreement and
instructing Escrow Agent to return the Deposit to Buyer and to return all
other funds and every other item deposited in Escrow to the Party which
deposited the same.
3.8.3 EFFECT OF TERMINATION. Upon any termination of this Agreement,
neither Party shall have any further obligation or liability to the other
hereunder except (i) any remaining obligation or liability of Buyer under
Section 3.1.3 (for return, destruction and/or delivery of documents to
Seller) or under Section 3.5.1 (with respect to activities of Buyer or its
agents upon the Real Property), (ii) any liability which either Party may
have hereunder by reason of the fact that such termination either (A) was
wrongfully made by it or (B) resulted from a breach of its warranties,
covenants or other obligations hereunder, and (iii) any obligation under
Section 3.11.
3.9 BROKERAGE COMMISSION. Upon Closing, Seller shall pay any commission due
to Broker on the sale of the Property under a separate, written agreement
between Seller and Broker. Nothing contained herein shall be deemed to make
Broker a third-party beneficiary of this Agreement or to create any obligation
on the part of either Party to close the sale and purchase of the Property for
Broker's benefit. Each Party shall hold harmless, indemnify and defend the other
from and against any claim or liability for a commission, fee or other
compensation to any broker, salesman, finder or similar intermediary, and for
any expenses (including, without limitation, reasonable attorneys' fees and
expenses) related to the defense of any such claim, where such claim constitutes
a breach of such Party's applicable representation in Section 3.2.1 or Section
3.2.2.
3.10 POST-CLOSING PRORATIONS AND ADJUSTMENTS. For a period of one year
after Closing, the Parties shall make the following additional prorations and
settlements:
3.10.1 LEASE PAYMENTS.
3.10.1.1 PRIOR PERIOD RENTS. If collected or received by Buyer
after Closing, Buyer shall pay over to Seller, within ten Business
Days after receipt, any monthly rent or other payment which was due
for a period beginning prior to Closing (including, without
limitation, Seller's prorated share of any monthly rent due for the
month in which Closing occurs) or which was due and payable prior to
Closing, but Buyer shall have no obligation to commence legal action,
or incur any material liability, loss or expense to collect any such
reimbursements or other payments and Buyer shall be entitled to apply
amounts which it receives or collects from the Tenant first to rents
and other amounts due at the time of such collection under the Lease
for periods beginning after Closing, next to such rents or other
amounts for the period during which Closing occurred and, last, to
such rents and other amounts owing for periods ending before Closing.
3.10.1.2 EXPENSE PASS-THROUGHS. Following the end of this
calendar year, Buyer shall timely and diligently prepare and deliver
to the Tenants (with copies to Seller) the operating expense and
property tax reconciliation statements for 2002 and shall use
commercially reasonable efforts to collect any additional amounts for
such expenses and taxes that are owned by Tenants for 2002. With
respect to each Lease in effect as of Closing, any amount owing,
whether to or by the Tenant, on account of such reconciliation shall
be prorated between Seller and Buyer as of Closing. If owed by the
Tenant, Buyer shall pay Seller its prorated share of such amount
within ten Business Days after collecting the same; if owed to the
Tenant, Seller shall pay Buyer its prorated share of such amount
within 30 days after receiving Seller's written statement therefor. If
Buyer after Closing increases the monthly amounts payable by Tenants
on account of 2002 operating expenses and property taxes, such
increases shall be disregarded for purposes of this provision and
Seller shall receive (or pay) the prorated amount that would have been
due to or from Seller had no such increase been made. Buyer shall give
Seller prompt written notice of any such increase.
3.10.1.3 OTHER EXPENSE REIMBURSEMENT. Any direct expense
reimbursement or charge (such as for after-hours of HVAC) due Seller
under a Lease as of Closing shall remain the property of Seller and
Buyer, upon receiving any payment of such a reimbursement or charge
shall promptly remit the same to Seller.
3.10.2 REAL ESTATE TAXES AND ASSESSMENTS. If Closing prorations of
real estate taxes and assessments are based on other than the current
year's tax xxxx, within 30 days after such xxxx is issued to Buyer, Buyer
shall recompute such proration. If such recomputation results in a larger
proration credit to Seller, Buyer shall pay Seller the additional amount
due Seller within such 30 days. If such recomputation results in a larger
proration credit to Buyer, Seller shall pay Buyer the additional amount due
Buyer within 30 days after receiving Buyer's written recomputation of such
proration, accompanied by a copy of such tax xxxx.
3.10.3 OTHER EXPENSES. If any other expense proration at Closing is
based on other than a final xxxx, such expense proration shall be
recomputed by Seller or Buyer (as the case may be) promptly after the final
xxxx is received and the final adjustment of such proration shall be
settled between the Parties within 30 days thereafter.
3.10.4 REMITTAL OF POST-CLOSING RECEIPTS TO BUYER. Seller shall
immediately remit to Buyer each check or other payment which Seller (or
Seller's property manager) receives after Closing on account of rent or
other amounts due under any Lease for any period ending after Closing.
Seller shall endorse (or cause its property manager to endorse, if
appropriate) any such checks, but without recourse. Seller hereby
designates and appoints Buyer and Buyer's property manager its
attorney-in-fact after Closing to endorse any checks payable to Seller
received by Buyer on account of rent or other amounts due under any Lease.
3.10.5 DETERMINATIONS OF POST-CLOSING PRORATIONS AND ADJUSTMENTS.
Except where expressly provided otherwise, Buyer shall make the required
determinations and computations of all post-Closing prorations and other
adjustments under this Section 3.10 (the "Post-Closing Prorations") and
shall provide Seller with a reasonably detailed written summary of each
Post-Closing Proration, concurrently with or prior to making any payment to
or requesting any payment from Seller under this Section 3.10 with respect
thereto. Neither Party shall be obligated to make any adjustment payment
with respect to any item unless it has received written notice from the
other Party of such adjustment, with all supporting documentation, prior to
the first anniversary of Closing.
3.11 CONFIDENTIALITY. The following provisions shall apply to all
documents, data, materials and other information regarding the Property (other
than information available from public records or otherwise generally available
to the public) that Seller furnishes, or causes to be furnished to Buyer (the
"Private Information"), regardless whether furnished prior to, concurrently with
or after the execution and delivery of this Agreement, except to the extent such
information is obtained from other sources.
3.11.1 DISCLOSURE PURPOSE. The Private Information is furnished to
Buyer solely to assist Buyer in its due diligence with respect to the
Property (the "Disclosure Purpose") and without warranty or representation
of any kind, except as expressly set forth in this Agreement. Buyer shall
use the Private Information only for the Disclosure Purpose.
3.11.2 CONFIDENTIALITY OBLIGATIONS. Buyer shall treat the Private
Information as confidential and shall not disclose Private Information to
any person, other than any employees, attorneys, accountants and other
consultants whom Buyer engages to assist in evaluating the Property and to
prospective lenders and such lender's employees, attorneys and consultants
(altogether, "Buyer Parties") and as may be required under applicable laws,
rules or regulations promulgated by any governmental agency with
jurisdiction over Buyer or the Property. Buyer shall advise each Buyer
Party to whom Buyer discloses any of the Private Information of the
confidentiality requirements of this Section 3.11 and obtain from such
person an undertaking to respect the confidentiality of the Private
Information and make no further disclosures of any such information, except
in accordance herewith. Without limiting the generality of the foregoing,
Buyer shall not disclose, and shall use reasonable efforts to prevent any
of the other Buyer Parties from disclosing, any of the Private Information
concerning present or prospective tenants of the Property, the rent or
other terms of any existing or proposed Lease, or the operating expenses of
the Property to any person who is regularly engaged in soliciting tenants,
or representing tenants or landlords in leasing transactions, within the
greater Phoenix, Arizona metropolitan area. The foregoing shall not be
deemed to prevent Buyer from making any disclosure that Buyer is required
by law to make; but prior to making any such disclosure Buyer shall give
Seller such prior written notice, specifying the information required to be
disclosed, the basis of the legal obligation to disclose and the party(ies)
to whom disclosure will be made, as applicable law and circumstances
reasonably permit and Seller shall have whatever opportunity applicable law
provides to contest the requirement for such disclosure or to limit the
same.
3.11.3 NO COMMUNICATIONS WITH TENANTS. Buyer shall not, and shall not
permit any Buyer Party to, directly or indirectly contact any current or
prospective tenant of the Property, without Seller's prior written approval
which shall not be unreasonably withheld, conditioned or delayed. Seller
may condition any such contact on Seller's having a representative present
and on such contact it being made at a time and place, and in a manner,
reasonably convenient to such representative.
3.11.4 REMEDIES. Buyer acknowledges that a breach of its covenants in
this Section 3.11 could result in substantial injury to Seller, that
monetary damages will not adequately compensate Seller and Seller for any
material such breach and that Seller shall be entitled to prompt injunctive
relief in the event of such a breach. The foregoing, however, shall not be
construed to preclude Seller from recovering monetary damages from Buyer as
well.
3.11.5 DURATION OF THESE CONFIDENTIALITY PROVISIONS. Buyer's
obligations under this Section 3.11 shall cease upon Closing but if Closing
does not occur, Buyers obligations under this Section 3.11 shall survive
for a period of one year.
3.12 No Disclosure of Sale Terms. Except to persons to whom Buyer may
disclose Private Information under Section 3.11.2 and except for any required
filing with the Securities and Exchange Commission ("SEC") under the Securities
and Exchange Act of 1934 and regulations pursuant thereto, Buyer shall not, and
shall not permit any Buyer Party to, communicate to anyone the terms of this
Agreement prior to Closing. Buyer shall give Seller at least five Business Days'
prior written notice of any such proposed filing with the SEC, including a copy
of the portion(s) of such proposed filing relating to this Agreement, but Seller
shall have no obligation or liability with respect to such filing. Except for
its parent shareholder (and such shareholder's board, staff and consultants),
Seller shall not communicate to anyone the terms of this Agreement prior to
Closing or the termination of this Agreement without Closing.
3.13 ENFORCEMENT COSTS. Should either Party institute any action or
proceeding to enforce any provision of this Agreement or for damages by reason
of an alleged breach of any provision hereof, the prevailing Party shall be
entitled to receive all reasonable costs and expenses (including reasonable
attorneys' fees) incurred by such prevailing Party in connection with such
action or proceeding. A Party entitled to recover costs and expenses under this
Section shall also be entitled to recover all costs and expenses (including
reasonable attorneys' fees) incurred in the enforcement of any judgement or
settlement obtained in such action or proceeding and provision (and in any such
judgement provision shall be made for the recovery of such post-judgement costs
and expenses).
3.14 NOTICES. Except in the case (if any) where this Agreement expressly
provides for an alternate form of communication, any notice, consent, demand or
other communication to be delivered to a Party hereunder shall be deemed
delivered and received when made in writing and transmitted to the applicable
Party either by receipted courier service, or by the United States Postal
Service, first class registered or certified mail, postage prepaid, return
receipt requested, or by electronic facsimile transmission ("Fax"), at the
address or addresses indicated for such Party below (and/or to such other
address as such Party may from time to time by written notice designate to the
other):
If to Seller: c/o Lowe Enterprises Investment Management, Inc.
------------ 00000 Xxx Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax No. (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx
with a copy to: Xxxx Enterprises Commercial Group
-------------- 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Fax No. (000) 000-0000
Attention: Xxxx Xxxxxxxx
and a copy to: Xxxxxx, Xxxxx & Xxxxxxx LLP
------------- 000 Xxxxx Xxxxx Xxx., 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax No. (000) 000-0000
Attention: J. Xxxx Xxxxxx
If to Buyer: AmeriVest Properties Inc.
----------- 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Fax No. (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Vice President
with a copy to: Jenkens & Xxxxxxxxx
-------------- 0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax No. (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
and shall be deemed delivered and received: (A) if delivery is made or Fax
transmission completed before 5:00pm recipient's local time on a Business Day,
or if tendered for delivery between 9:00am and 5:00pm recipient's local time on
a Business Day and refused, then on the date of such actual or attempted
delivery or completed transmission, as evidenced by postal or courier receipt or
by the transmission log sheet generated by the sending Fax machine; and
otherwise (B) on the Business Day next following the date of actual delivery or
completed transmission; provided, however, that any communication by Fax to be
effective must be confirmed within three Business Days after transmission by
duplicate notice delivered as otherwise provided herein.
3.15 BINDING EFFECT. Except as otherwise expressly provided herein, this
Agreement shall bind and inure to the benefit of the Parties and their
respective successors and assigns.
3.16 ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the entire
agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings and representations of the
Parties with respect to the subject matter hereof (including, without
limitation, any letter of intent or other such written proposal). This Agreement
may not be modified, amended, supplemented or otherwise changed, except by a
writing executed by both Parties.
3.17 CAPTIONS. Article and section headings used herein are for convenience
of reference only and shall not affect the construction of any provision of this
Agreement.
3.18 INTERPRETATION. Each Party acknowledges that it and its legal counsel
have participated substantially in the drafting of this Agreement and agree
that, accordingly, in the interpretation and construction of this Agreement, no
ambiguity, real or apparent, in any provision hereof shall be construed against
either Party by reason of the role of such Party or its counsel in the drafting
of such provision.
3.19 MUTUAL COOPERATION; FURTHER ASSURANCES. The Parties shall cooperate
with each other as reasonably necessary to effect the provisions of this
Agreement, shall use reasonable and good faith efforts to satisfy conditions to
Closing and, at and after Closing, shall each execute and deliver such
additional instruments or other documents and the other may reasonably request
to accomplish the purposes and intent of this Agreement; provided, however, that
nothing in this Section shall be deemed to enlarge the obligations of the
Parties hereunder or to require either Party to incur any material expense or
liability not otherwise required of it hereunder.
3.20 EXHIBITS. Each of the following Exhibits hereto:
Exhibit Title
------- -----
A Description of Land
B Form of Deed
C Form of Xxxx of Sale
D Schedule of Leases
E Form of Lease Assignment
F Form of General Assignment
G Schedule of Service Contracts
H Form of FIRPTA Certificate
I Form of Seller's Closing Certificate
J Form of Tenant Notice
K Exceptions to Seller's Warranties and Representations
L Form of Tenant Estoppel Certificate
M Schedule of Property Records
N Schedule of Environmental Reports
O Form of Revised CCRs
P Form of SANDA
is hereby incorporated herein. Seller may amend Exhibits D and G at any time
prior to the Approval Date and Exhibit O at any time prior to the 30th day after
the Effective Date.
3.21 COUNTERPARTS. This Agreement, and any amendment hereto, may be
executed in any number of counterparts and by each Party on separate
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which taken together shall constitute but one and the same
instrument. To facilitate execution of this Agreement, the parties may execute
and exchange by telephone facsimile counterparts of the signature pages,
provided that executed originals thereof are delivered to the other Party within
three Business Days after such facsimile delivery by any of the delivery methods
set forth herein other than facsimile.
3.22 GOVERNING LAW. This Agreement shall be deemed to be an agreement made
under the laws of the state in which the Real Property is located and for all
purposes shall be governed by and construed in accordance with such laws.
3.23 SIGNERS' WARRANTY. Each individual executing and delivering this
Agreement on behalf of a Party hereby warrants and represents to the other Party
or Parties that he or she is duly authorized and empowered to do so.
3.24 LIMITATION ON REMEDIES FOR SELLER'S BREACH.
3.24.1 PROHIBITION ON SPECIFIC PERFORMANCE, LIS PENDENS . Except as
permitted by Section 3.24.2, if Seller in breach of this Agreement fails to
close, Buyer shall be limited to an action for monetary damages only and
shall have no right to seek specific performance or to record a lis pendens
against the Property. This provision shall be an absolute bar to any action
by Buyer for specific performance of this Agreement, and Seller shall be
entitled to an immediate expungement of any lis pendens recorded by Buyer.
If Buyer brings an action for specific performance of this Agreement, or
records a lis pendens against the Property, Buyer shall hold harmless and
indemnify Seller from and against all costs, expenses (including attorneys'
fees) and losses that Seller consequently incurs.
3.24.2 EXCEPTION FOR WILLFUL BREACH. Notwithstanding Section 3.24.1,
in the event Seller in breach of this Agreement fails to close the sale of
the Property, Buyer may in lieu of an action for monetary damages bring an
action for specific performance of Seller's obligation to close, subject to
strict compliance with each of the following conditions:
(i) Buyer gives Seller at least ten Business Days'
prior written notice of its intention to commence such an
action;
(ii) Buyer commences such action, and serves Seller
with a complaint therein, within 60 days after the Last
Closing Date;
(iii) Such action, to the extent seeking specific
performance (or other equitable relief) is limited to an
action to compel Seller to deliver into Escrow the Deed and
other Seller's Closing Documents actually required to convey
the Property free of Liens and to perform Seller's other
delivery obligations to be performed at Closing and does not
seek specific performance of any other covenant or warranty
of Seller hereunder (including, without limitation, any
covenant or warranty contained in Section 3.2.1) or the
correction of any condition respecting the Property.
(iv) During the pendency of such action, the Deposit
remains in Escrow (or is deposited with the court hearing
such action);
provided, however, that if Seller, at any time during the pendency of such
action, delivers the Deed and other required Seller's Closing Documents
into Escrow (or into the court before which such action is pending) and
authorizes Closing in accordance with Section 2.7.2 (including instructions
to Escrow Agent to apply the proceeds of the Purchase Price to the payment
of any Lien that would otherwise appear as an exception on the Title
Policy), Buyer shall either proceed immediately to close the purchase of
the Property or immediately to dismiss such action to the extent it seeks
specific performance or other equitable relief and expunge from the record
any lis pendens Buyer has filed. By electing to seek specific performance
under this Section 3.24.2, Buyer shall be deemed to have waived any claim
or right to monetary damages for Seller's failure to close, other than such
damages for delay as are customarily awarded in conjunction with specific
performance of an obligation to sell real property (but, if such action
results in Buyer's purchasing the Property, such waiver shall not apply to
any claim for damages for Seller's subsequent breach of any of its
post-Closing obligations under this Agreement). If Buyer brings or
maintains an action for specific performance other than as expressly
permitted under this Section 3.24.2, or fails to close the purchase of the
Property within 30 days after Seller has delivered the Deed and other
required Seller's Closing Documents and instructions into Escrow (or into
such court) and authorized Closing, Seller shall have the right to
terminate this Agreement and recover the Deposit as liquidated damages
under Section 3.25.
3.25 LIQUIDATED DAMAGES AND LIMITATION ON REMEDIES FOR BUYER'S BREACH. IF
BUYER IN BREACH OF THIS AGREEMENT FAILS TO CLOSE, SELLER SHALL BE ENTITLED TO
TERMINATE THIS AGREEMENT AND, AS ITS SOLE AND EXCLUSIVE REMEDY ON ACCOUNT OF
SUCH FAILURE (SELLER HEREBY WAIVING ALL OTHER RIGHTS AND REMEDIES, WHETHER
ARISING AT LAW OR IN EQUITY) AND IN CONSIDERATION OF ITS WITHDRAWAL OF THE
PROPERTY FROM THE MARKET DURING THE TERM OF THIS AGREEMENT, TO RECEIVE AND
RETAIN, AS LIQUIDATED DAMAGES, THE DEPOSIT; AND SELLER SPECIFICALLY WAIVES ANY
RIGHT SPECIFICALLY TO ENFORCE BUYER'S OBLIGATION HEREUNDER TO PURCHASE THE
PROPERTY. BY INITIALING BELOW, THE PARTIES ACKNOWLEDGE AND AGREE THAT:
3.25.1 BUYER'S WRONGFUL FAILURE TO CLOSE WILL CAUSE SELLER TO INCUR
LOSSES AND OTHER DAMAGES IN AN AMOUNT THAT WOULD BE EXTREMELY DIFFICULT TO
ASCERTAIN.
3.25.2 THE DEPOSIT (INCLUDING INTEREST EARNED THEREON) BEARS A
REASONABLE RELATIONSHIP TO THE DAMAGES WHICH THE PARTIES ESTIMATE SELLER
WILL SUFFER BY REASON OF BUYER'S WRONGFUL FAILURE TO CLOSE AND IS NOT AN
UNREASONABLE AMOUNT OF LIQUIDATED DAMAGES UNDER THE CIRCUMSTANCES EXISTING
AT THE TIME THIS AGREEMENT IS MADE.
3.25.3 SUCH LIQUIDATED DAMAGES ARE ALSO REASONABLE CONSIDERATION FOR
SELLER'S AGREEMENT TO LIMIT ITS REMEDIES AGAINST BUYER FOR SUCH A FAILURE
TO CLOSE.
3.25.4 BUYER HAS FULLY CONSIDERED THE PROVISIONS OF THIS SECTION 3.25
AND HAS CONSULTED WITH ITS LEGAL COUNSEL WITH RESPECT THERETO.
THE FOREGOING SHALL NOT, HOWEVER, LIMIT SELLER'S RIGHTS AND REMEDIES TO ENFORCE
OBLIGATIONS OF BUYER UNDER SECTIONS 3.1.3, 3.5.1 AND 3.11 (INCLUDING COSTS OF
ENFORCING THIS LIQUIDATED DAMAGES PROVISION) OR, IF CLOSING OCCURS, TO ENFORCE
ANY OTHER OBLIGATIONS OF BUYER HEREUNDER.
THE PARTIES HEREBY ACKNOWLEDGE THEIR SPECIFIC AGREEMENT TO THE FOREGOING
LIQUIDATED DAMAGES PROVISION BY INITIALING BELOW.
SELLER TL BUYER JBG
-- ---
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered by their respective representatives, thereunto duly authorized, as
of the date first above written.
[SIGN BELOW AND INITIAL PAGE 32 (BUYER AND SELLER)]
SELLER: BUYER:
LAFP PHOENIX, INC., a California AMERIVEST PROPERTIES INC.,
corporation a Maryland corporation
By: /s/ Xxx Xxxxx By: /s/ Xxxx X. Xxxxxxxx
-------------------------- -------------------------------
Xxx Xxxxx Xxxx X. Xxxxxxxx
Its: Vice President Its: Vice President
------------------------- ------------------------------
Date: November 18, 2002 Date: November 18, 2002
------------------------ -----------------------------
The undersigned agrees to
serve as Escrow Agent under
the foregoing Agreement:
REPUBLIC TITLE OF TEXAS, INC.
By: /s/ Xxxxxx Xxxxxx ,
----------------------------
Xxxxxx Xxxxxx
Escrow Officer
