Exhibit 10.70
[INLAND(R) LOGO]
INLAND REAL ESTATE ACQUISITIONS, INC.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Phone: (000) 000-0000 Fax: 4935
xxx.xxxxxxxxxxx.xxx
January 8, 2004
Xxxxx & Company (Seller)
c/o: Venture Commercial (Broker)
Attn: Xxxxxxx Xxxxxxx, Partner
0000 Xxxxxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000
Re: HERITAGE TOWNE CROSSING
EULESS, TX
Dear Xxxxxxx:
This letter represents this corporation's offer to purchase the Heritage
Towne Crossing Shopping Center with 73,480 net rentable square feet, situated on
approximately 7.6 acres of land, located at the Southeast corner of Glade and SH
121, Euless, TX. (See Exhibit A)
The above property shall include all the land and buildings and common
facilities, as well as all personalty within the buildings and common areas,
supplies, landscaping equipment, and any other items presently used on the site
and belonging to owner, and all intangible rights relating to the property.
This corporation or its nominee will consummate this transaction on the
following basis:
1. The total purchase price shall be $16,287,977.00 all cash, plus or
minus prorations, WITH NO MORTGAGE CONTINGENCIES, to be paid at
CLOSING 30 BUSINESS DAYS following acceptance of this agreement (see
Paragraph 10). PURCHASER HAD PAID $250,000.00. NO XXXXXXX MONEY TO THE
TITLE CO. ON EXECUTION HEREOF.
Purchaser shall allocate the land, building and depreciable
improvements prior to closing.
2. Seller represents and warrants (TO THE BEST OF THE SELLER'S
KNOWLEDGE), that the above referenced property is leased to the
tenants described on Exhibit B on triple net leases covering the
building and all of the land, parking areas, reciprocal easements and
REA/OEA agreements (if any), for the entire terms and option periods.
Any concessions given to any tenants that extend beyond the closing
day shall be settled at closing by Seller giving a full cash credit to
Purchaser for any and all of those concessions.
3. Seller warrants and represents (TO THE BEST OF THE SELLER'S
KNOWLEDGE), that the property is free of violations, and the interior
and exterior structures are in a good state of repair, free of leaks,
structural problems, and mold, and the property is in full compliance
with Federal, State, City and County ordinances, environmental laws
and concerns, and no one has a lease that exceeds the lease term
stated in said leases, nor does anyone have an option or right of
first refusal to purchase or extend, nor is there any contemplated
condemnation of any part of the property, nor are there any current or
contemplated assessments.
4. Seller warrants and represents (TO THE BEST OF THE SELLER'S
KNOWLEDGE), that during the term of the leases the tenants and
guarantors are responsible for and pay all operating expenses relating
to the property on a prorata basis, including but not limited to, real
estate taxes, REA/OEA agreements, utilities, insurance, all common
area maintenance, parking lot and the building, etc.
PAGE 2
HERITAGE TOWNE CROSSING - EULESS, TX
JANUARY 8, 2004
Prior to closing, Seller shall not enter into or extend any agreements
without Purchaser's approval and any contract presently in existence
not accepted by Purchaser shall be terminated by Seller. Any work
presently in progress on the property shall be completed by Seller
prior to closing.
5. Ten (10) days prior to closing Seller shall furnish Purchaser with
estoppel letters acceptable to Purchaser from all tenants, guarantors,
and parties to reciprocal and/or operating easement agreements, if
applicable. SELLER SHALL FURNISH PURCHASER WITH SELLER'S ESTOPPEL IF
UNABLE TO OBTAIN LETTER FROM SALON G.
6. Seller is responsible for payment of any LEASING BROKERAGE FEES or
commissions which are due any leasing brokers for the existing leases
stated above or for the renewal of same.
7. This offer is subject to Seller supplying to Purchaser prior to
closing a certificate of Insurance from the tenants and guarantors in
the form and coverage acceptable to Purchaser for the closing.
8. Seller shall supply to Purchaser 10 days prior to closing, and Seller
shall pay for at closing, a certificate which must be acceptable to
Purchaser from a certified hygienist for environmental concerns that
there is no asbestos, PCBs, or hazardous substance in the buildings
and on the property; in other words, a Level 1 environmental audit
(and Level 2 audit, if required).
9. The above sale of the real estate shall be consummated by conveyance
of a full warranty deed from Seller to Purchaser's designee, with the
Seller paying any city, state, or county transfer taxes for the
closing, and Seller agrees to cooperate with Purchaser's lender, if
any, and the money lender's escrow.
10. The closing shall occur through Chicago Title & Trust Company, in
Chicago, Illinois with Xxxxx Xxxxxx as Escrowee, 30 business days
following acceptance of this agreement, at which time title to the
above property shall be marketable; i.e., free and clear of all liens,
encroachments and encumbrances, and a TLTA owner's title policy with
complete extended coverage and required endorsements, waiving off all
construction, including 3.1 zoning including parking and loading
docks, and insuring all improvements as legally conforming uses and
not as non-conforming or conditional uses, paid by Seller, shall be
issued, with all warranties and representations being true now and at
closing and surviving the closing, and each party shall be paid in
cash their respective credits, including, but not limited to, security
deposits, rent and expenses, with a proration of real estate taxes
based (at Purchaser's option) on the greater of 110% of the most
recent bill or latest assessment, or the estimated assessments for
2003 and 2004 using the Assessor's formula for these sales
transactions, with a later reproration of taxes when the actual bills
are received. At closing, no credit will be given to Sellers for any
past due, unpaid or delinquent rents.
11. It is understood that the Seller has in its possession an appraisal of
the property prepared by an MAI or other qualified appraiser,
acceptable to Purchaser or Purchaser's lender, if any, and shall
deliver copies of such appraisal to Purchaser within 10 days of the
acceptance of this offer and shall cause the appraiser to re-certify
an appraised amount not less than the Purchase Price and re-issue said
appraisal to, and in the name of, Purchaser or Purchaser's lender, all
at Seller's cost.
12. Neither Seller (Landlord) or any tenant and guarantor shall be in
default on any lease or agreement at closing, nor is there any
threatened or pending litigation.
13. Seller warrants and represents that he has paid all unemployment taxes
to date
PAGE 3
HERITAGE TOWNE CROSSING - EULESS, TX
JANUARY 8, 2004
14. Prior to closing, Seller shall furnish to Purchaser copies of all
guarantees and warranties which Seller received from any and all
contractors and sub-contractors pertaining to the property. This offer
is subject to Purchaser's satisfaction that all guarantees and
warranties survive the closing and are assignable and transferable to
any titleholder now and in the future.
15. This offer is subject to the property being 100% occupied at the time
of closing (EXCEPT FOR EARNOUTS) with all tenants occupying their
space, open for business, and paying full rent, including CAM, tax and
insurance current, as shown on Exhibit B attached. In the event the
property is less than 100% occupied, than the Purchaser and Seller
agree there shall be an INITIAL CLOSING. The Initial Closing will be
based on the PURCHASE PRICE/EARNOUT FORMULA which shall be EQUAL TO
the actual BASE MINIMUM RENT, LESS the amount, if any, by which the
pass-through amount paid by any tenant is less than 100% of such
tenant's proportionate share; i.e.; SLIPPAGE, DIVIDED BY 8.914815%,
WHICH IS BASED ON BASE RENT ONLY. However, it is anticipated that the
Initial Closing will be a purchase price of $14,583,977.00, which is
derived by using the base minimum rent of $1,298,683.00 divided by
8.90486%.
The Seller shall have 24 MONTHS FOLLOWING THE INITIAL CLOSING to
receive the balance of the potential Earnout at the EARNOUT CLOSING(S)
provided they are successful in the leasing of the vacant space and
each tenant shall xxxx accepted their space "as is" and takes total
possession, has opened for business and commences full rental
payments, including CAM, taxes and insurance on a prorata basis. It
shall be Seller's responsibility and sole cost and expense for leasing
out and paying all costs related to placing the tenants into their
leasable space. Each Earnout Closing shall occur upon 10 business days
prior written notice to Purchaser: it being expressly understood that
the Sellers shall waive their right to the additional Earnout if the
final Seller's notice has not been sent within 24 months after the
Initial Closing date. SELLER SHALL BE PAID $100 PER SQUARE FOOT FOR
ANY REMAINING VACANT SPACE AT THE END OF 24 MONTHS MINUS $15.00 PER
SQUARE FOOT FOR TENANT IMPROVEMENTS AND $3.00 PER SQUARE FOOT FOR
LEASING COMMISSIONS.
It is estimated that the Earnout Closing for the earnout space will be
equal to the base minimum rent of $153,360.00 (less Slippage, if any)
divided by a Base Rent divider of 9.0% which equals the Earnout Price
of $1,704,000.00
Seller shall be responsible on a monthly basis for all CAM, tax and
insurance on a prorata basis for the space that is part of the Earnout
formula until such time as the Seller perfects the Income for said
space, but in no event, following 24 months following the closing.
At the Initial Closing, Seller shall place in Purchaser's escrow, cash
in an amount equal to $15.00 per square foot for tenant improvements
and $3.00 per square foot for leasing commissions, times the remaining
vacant Earnout square feet of the property. This escrow may be used by
the Seller on a prorate basis as they continue to lease. However, with
regards to any vacant space never leased, the balance of the tenant
improvements and leasing commissions shall remain with Purchaser.
Not withstanding anything to the contrary, all Earnout Closings must
comply with all of the terms, requirements and conditions contained in
this entire agreement, BUT PURCHASER SHALL NOT UNREASONABLY DISAPPROVE
ANY LEASE SUBMITTED BY SELLER. PURCHASER AGREES TO ACCEPT PENDING
LEASES FOR THE 1,700 S.F. (i)DA LAVA, INC EXPANSION AND (ii) THE
1,460 S.F. XXXX XXXX CURRENTLY BEING NEGOTIATED BY SELLER.
Not withstanding anything to the contrary, the purchase price of
$16,287,977.00 is the maximum purchase price.
PAGE 4
HERITAGE TOWNE CROSSING - EULESS, TX
JANUARY 8, 2004
16. Seller shall be responsible for payment of a real estate brokerage
commission, as per their agreement to the Venture Commercial, said
commission shall be paid through the closing.
17. Fifteen (15) days prior to closing, Seller must provide the title as
stated above and a current Urban ALTA/ACSM spotted survey in
accordance with the minimum standard detail requirements for ALTA/ACSM
Land Title surveys jointly established and adopted by ALTA and ACSM in
1999 and includes all Table A optional survey responsibilities and
acceptable to Purchaser and the title company.
18. Xxxxxx agrees to immediately make available and disclose all
information that Purchaser needs to evaluate the above property,
including all inducements, abatements, concessions or cash payments
given to tenants, and for CAM, copies of the bills. Seller agrees to
cooperate fully with Purchaser and Purchaser's representatives to
facilitate Purchaser's evaluations and reports, including at least a
one-year audit of the books and records of the property.
This offer is, of course, predicated upon the Purchaser's review and
written approval of the existing leases, new leases, lease modifications (if
any), all tenant correspondence, REA/OEA agreements, tenants' and guarantors'
financial statements, sales figures, representations of income and expenses made
by Seller, site inspection, environmental, appraisal, etc., and at least one
year of audited operating statements on said property is required that qualify,
comply with and can be used in a public offering.
If this offer is acceptable, please have the Seller SIGN the original of
this letter and initial each page, keeping copies for your files and returning
the original to me by JANUARY 12, 2004.
Sincerely,
ACCEPTED: HERITAGE TOWNE CROSSING, L.P. INLAND REAL ESTATE ACQUISITIONS, INC.
BY: MTC DEVELOPMENT, INC. ITS or nominee
GENERAL PARTNER
By: /s/ Xxxx X. Xxxxx
-------------------------------
XXXX X. XXXXX
Date: PRESIDENT
--------------------------------- /s/ Xxxx Xxxx
-----------------------------------
Xxxx Xxxx
/s/ Xxxxxx Xxxxxxx
-----------------------------------
X. Xxxxxx Xxxxxxx
Vice Chairman
"EXHIBIT A"
[SITE PLAN]
Exhibit B
[ILLEGIBLE TABLE]
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