Exhibit 10.415
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (this "AMENDMENT") is entered into as of October 20, 2004 by and
between Xxxxxxx Xxxxxxxx Realty Group, L.P., a Delaware limited partnership
("SELLER"), and Inland Real Estate Acquisitions, Inc., an Illinois corporation
("BUYER").
RECITALS:
A. Seller and Buyer entered into that certain Purchase and Sale
Agreement and Joint Escrow Instructions dated as of September 2, 2004 (the
"AGREEMENT"; capitalized terms used but not defined in this Amendment shall have
the meanings given to them in the Agreement) with respect to the property known
as Plaza at River Lakes located in Bakersfield, California.
B. Seller and Buyer now desire to acknowledge certain matters with
respect to the Agreement, and to amend the Agreement, as set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, Buyer and Seller agree as follows with respect to the
Agreement:
1. WAIVER OF CONTINGENCIES; REDUCTION OF PURCHASE PRICE; COLDWELL
BANKER CREDIT. October 20, 2004 is acknowledged to be the Decision Date, and
Buyer's execution and delivery of this Amendment (effective upon receipt of a
faxed counterpart executed by Seller) constitutes Buyer's waiver of all rights
to terminate the Agreement (i) on or before the Decision Date, or (ii) in
accordance with Section 4.7 of the Agreement (Buyer hereby acknowledges it has
received and approved estoppels from the Majors as well as Minors occupying at
least 75% of the remaining leased space at the Property not occupied by the
Major). Seller hereby confirms it shall deliver Seller Estoppels as required by
the last sentence of Section 4.7 of the Agreement. The Purchase Price is hereby
reduced by the sum of $400,000.00 and accordingly is the sum of Seventeen
Million Dollars ($17,000,000.00). Seller agrees that, at Closing, Seller shall
provide Buyer with a credit against the Purchase Price in the amount of
$92,338.00 (less any amount thereof allocable to the period prior to Closing),
by reason of prepaid rent paid to Seller by Coldwell Banker, plus a credit
against the Purchase Price in the amount of the Monthly Smoothie Rent allocable
to the period from the Closing Date through October 30, 2004, plus a credit
against the Purchase Price in the amount of the Monthly Quick One Rent allocable
to the period from the Closing Date through November 30, 2004.
2. ESCROW FOR PLANET SMOOTHIE. Seller has entered into a lease (the
"SMOOTHIE LEASE") dated July 14, 2004 with Addis Enterprises, Inc. ("SMOOTHIE")
covering a portion of the Property as more particularly described therein (the
"SMOOTHIE PREMISES"). Smoothie has not yet finished its tenant improvements as
required by the Smoothie Lease nor has Smoothie obtained the certificate of
occupancy to be issued by the City of Bakersfield (the "SMOOTHIE CERTIFICATE")
upon Smoothie's
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completion of such tenant improvements. Pursuant to the Smoothie Lease, Seller
is obligated to pay $19,500 to Smoothie for tenant Improvements (the "SMOOTHIE
TIs"), and $5,215 to the broker owed the same (the "BROKER") for leasing
commissions (the "SMOOTHIE COMMISSIONS"). Pursuant to the Smoothie Lease,
commencing November 1, 2004 Smoothie is obligated to pay to the landlord
thereunder the sum of $2,459 per month for base rent and $653.12 per month for
estimated operating expenses (the sum of the foregoing amounts, being $3,112.12,
is herein called the "MONTHLY SMOOTHIE RENT"). At Closing, Seller shall deposit
into escrow, with Escrow Holder, the sum of $56,018.16 ("SMOOTHIE ESCROWED
FUNDS") with respect to the Smoothie Lease (said sum equals the product of the
Monthly Smoothie Rent times eighteen (18), plus the Smoothie TIs and plus the
Smoothie Commission). The Smoothie TI's (or the applicable portion thereof)
shall be released to Buyer (for immediate release to Smoothie) upon Buyer's
delivery of Buyer's written certification ("BUYER'S SMOOTHIE CERTIFICATION") to
Seller and Escrow Holder that Smoothie is entitled to the Smoothie TIs (or the
specified portion thereof) pursuant to Article VII of Exhibit B to the Smoothies
Lease. The Smoothie Commission shall be disbursed by Escrow Holder to Broker
upon receipt of Buyer's Smoothie Certification. If Smoothie shall not have paid
the Monthly Smoothie Rent due for November 2004 prior to November 8, 2004,
commencing November 8, 2004, and on the same day of each month thereafter until
the earlier of (i) the date Smoothie shall have commenced paying the Monthly
Smoothie Rent, or (ii) the date of the issuance of the Smoothie Certificate and
the date Smoothie shall have taken possession of the Smoothie Space (whichever
is later), the Smoothie Monthly Rent shall be promptly disbursed to Buyer from
the Escrowed Funds upon Buyer's delivery of written certification to Escrow
Holder and Seller that Smoothie has not yet paid the Smoothie Monthly Rent then
due. In the event that, after Buyer shall have been paid the Smoothie Monthly
Rent (or any portion thereof) out of the Smoothie Escrowed Funds for any
particular month, Buyer should receive payment of all or any portion of the
Smoothie Monthly Rent from Smoothie for such month, Buyer shall immediately
remit the same to Seller. Upon the later to occur of (i) issuance of the
Smoothie Certificate, and (ii) the date Smoothie commences paying the Monthly
Smoothie Rent (Buyer agrees to enforce the Smoothie Lease with respect thereto),
the Smoothie Escrowed Funds still being held by Escrow Holder and not previously
disbursed by Escrow Holder pursuant to this Section 3 shall be promptly
disbursed to Seller. Buyer agrees to notify Seller in writing promptly upon
Buyer acquiring knowledge of the issuance of the Smoothie Certificate and
promptly upon Smoothie taking possession of the Smoothie Space and payment of
the Smoothie Monthly Rent.
3. ESCROW FOR QUICK ONE. Seller has entered into a lease (the "QUICK
ONE LEASE") dated May 21, 2004 with Anher Corporation ("QUICK ONE") covering a
portion of the Property as more particularly described therein (the "QUICK ONE
PREMISES"). Quick One has not yet finished its tenant improvements as required
by the Quick One Lease nor has Quick One obtained the certificate of occupancy
to be issued by the City of Bakersfield (the "QUICK ONE CERTIFICATE") upon Quick
One's completion of such tenant improvements. Pursuant to the Quick One Lease,
Seller is obligated to pay $21,000 to Quick One for tenant improvements (the
"QUICK ONE TIs"), and $3,750 to the broker owed such amount for leasing
commissions (the "QUICK ONE COMMISSIONS"). Pursuant to the Quick One Lease,
commencing November 1, 2004 Quick One is obligated to pay to the landlord
thereunder the sum of $2,505 per month for base rent and $720.00 per month for
estimated operating expenses (the sum of the foregoing amounts, being $3,225.00,
is herein called
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the "MONTHLY QUICK ONE RENT"). At Closing, Seller shall deposit into escrow,
with Escrow Holder, the sum of $58,050.00 (the "QUICK ONE ESCROWED FUNDS") with
respect to the Quick One Lease (said sum equals the product of the Monthly Quick
One Rent times eighteen (18), plus the Quick One TIs and plus the Quick One
Commission). The Quick One TI's (or the applicable portion thereof) shall be
released to Buyer (for immediate release to Quick One) upon Buyer's delivery of
Buyer's written certification ("BUYER'S QUICK ONE CERTIFICATION") to Seller and
Escrow Holder that Quick One is entitled to the Quick One TIs (or the specified
portion thereof) pursuant to Article VII of Exhibit B to the Quick Ones Lease.
The Quick One Commission shall be disbursed by Escrow Holder to Broker upon
receipt of Buyer's Quick One Certification. If Quick One shall not have paid
the Monthly Quick One Rent due for December 2004 prior to December 8, 2004,
commencing December 8, 2004, and on the same day of each month thereafter until
the earlier of (i) the date Quick One shall have commenced paying the Monthly
Quick One Rent, or (ii) the date of the issuance of the Quick One Certificate
and the date Quick One shall have taken possession of the Quick One Space
(whichever is later), the Quick One Monthly Rent shall be promptly disbursed to
Buyer from the Escrowed Funds upon Buyer's delivery of written certification to
Escrow Holder and Seller that Quick One has not yet paid the Quick One Monthly
Rent then due. In the event that, after Buyer shall have been paid the Quick One
Monthly Rent (or any portion thereof) out of the Quick One Escrowed Funds for
any particular month, Buyer should receive payment of all or any portion of the
Quick One Monthly Rent from Quick One for such month, Buyer shall immediately
remit the same to Seller. Upon the later to occur of (i) issuance of the Quick
One Certificate, and (ii) the date Quick One commences paying the Monthly Quick
One Rent (Buyer agrees to enforce the Quick One Lease with respect thereto), the
Quick One Escrowed Funds still being held by Escrow Holder and not previously
disbursed by Escrow Holder pursuant to this Section 4 shall be promptly
disbursed to Seller. Buyer agrees to notify Seller in writing promptly upon
Buyer acquiring knowledge of the issuance of the Quick One Certificate and
promptly upon Quick One taking possession of the Quick One Space and payment of
the Quick One Monthly Rent.
5. HOLDBACK FOR CINGULAR WIRELESS. Seller has entered into a Site
Access Telecommunications License Agreement Ground Space Site (the "CINGULAR
LEASE") dated October 8, 2004 with Pacific Xxxx Wireless, LLC ("CINGULAR") with
respect to the Property. Pursuant to the Cingular Lease, commencing the
"Commencement Date" (as defined in the Cingular Lease), Cingular is obligated to
pay to the landlord thereunder the sum of $1,750 per month (the "MONTHLY
CINGULAR RENT"). Seller and Buyer acknowledge that Cingular may not have
obtained the governmental permits (the "PERMITS") required to operate its
business pursuant to the Cingular Lease prior to the Closing. At Closing, Seller
shall deposit into escrow, with Escrow Holder, the sum of $284,037.11 (the
"CINGULAR ESCROWED FUNDS") with respect to the Cingular Lease (the Purchase
Price payable by Buyer shall be the source of the Cingular Escrowed Funds). Upon
written confirmation from Cingular that it has obtained the Permits (if Cingular
refuses to confirm in writing that Cingular has obtained the Permits, Cingular's
commencement of its business operations on the Property pursuant to the Cingular
Lease shall be deemed Cingular's written confirmation that it has obtained the
Permits), the Cingular Escrowed Funds shall be released to Seller. Buyer and
Seller agree to exert diligent good faith efforts to obtain such written
confirmation. If Cingular terminates the Cingular Lease pursuant to Section
16.10 thereof prior to the release of the Cingular Funds to
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Seller, upon such termination the Cingular Escrowed Funds shall be delivered to
Buyer. Prior to release of the Cingular Escrowed Funds to Seller, all Monthly
Cingular Rent paid to Buyer shall be promptly remitted to Seller.
6. AGREEMENT IN EFFECT. The terms and provisions of this Amendment
shall control over any inconsistent terms and provisions of the Agreement.
Except as amended hereby, the parties acknowledge and agree that the Agreement
is in full force and effect in accordance with its terms. If required by Escrow
Holder, Buyer and Seller shall enter into a separate escrow agreement with
Escrow Holder to implement the post-Closing elements of this Amendment, provided
such escrow agreement is not in conflict with this Amendment. This Amendment may
be executed in counterparts, each of which shall be an original and both of
which, together, shall constitute one and the same instrument.
SIGNATURES ON NEXT PAGE
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IN WITNESS WHEREOF, the parties have duly executed this Amendment as of
the day and year first above written.
SELLER: Xxxxxxx Xxxxxxxx Realty Group, L.P., a Delaware limited
partnership
By: Xxxxxxx Xxxxxxxx Realty Group, Inc., a Maryland
corporation, its general partner
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: XXXXXXX X. XXXXXXX
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Title: PRESIDENT
---------------------------------
By: /s/ Dirk Van Wyk
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Name: Dirk Van Wyk
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Title: Vice President
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BUYER: Inland Real Estate Acquisitions, Inc., an Illinois Corporation
By: /s/ Xxxxx X Xxxxx
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Name: Xxxxx X Xxxxx
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Title: Vice President
---------------------------------
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PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this
"AGREEMENT") is entered into as of September 2, 2004 by and between Xxxxxxx
Xxxxxxxx Realty Group, L.P., a Delaware limited partnership ("SELLER"), and
Inland Real Estate Acquisitions, Inc., an Illinois corporation ("BUYER").
RECITALS:
A. Seller is the owner of certain real property improved as a retail
center known as Plaza at River Lakes located in Bakersfield, California.
B. Buyer desires to purchase that property, and Seller desires to
sell that property, on the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, Buyer and Seller agree as follows:
1. PURCHASE AND SALE
1.1 AGREEMENT TO BUY AND SELL. Subject to all of the terms and conditions
of this Agreement, Seller hereby agrees to sell and convey to Buyer and Buyer
hereby agrees to acquire and purchase from Seller the following (collectively,
the "PROPERTY"):
1.1.1 All of Seller's right, title and interest in and to that
certain parcel of real property described on EXHIBIT "A" attached hereto,
together with all of Seller's rights, privileges and easements appurtenant
thereto (collectively, the "LAND");
1.1.1 All of Seller's right, title and interest in and to all
improvements, structures, equipment and fixtures located on or under the Land
(collectively, the "IMPROVEMENTS") (the Land and Improvements are herein
collectively called the "PROJECT");
1.1.2 All of Seller's right, title and interest in and to all
tangible personal property, if any, located on or affixed to the Project and
used in connection with the ownership, operation, use or maintenance of the
Project, and all intangible property, if any, owned or held by Seller that
pertains to the ownership, maintenance, use or operation of the Project,
including but not limited to the Project's name (collectively, the "PERSONAL
PROPERTY");
1.1.3 All of Seller's interest in any leases or other agreements
demising space in or providing for the use or occupancy of any portion of the
Project (collectively, the "LEASES"); and
1.1.4 All of Seller's right, title and interest in and to any and
all service contracts, maintenance agreements, warranties, guaranties, permits
and licenses and other contracts and agreements relating to the Property, if
any, which continue in full force and effect beyond the
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"Closing" (as defined below) (collectively, the "CONTRACTS"), to the extent the
Contracts are assignable. The Property does not include cash, any insurance
claims (except to the extent Section 4.5 is applicable), or any other claims
against third parties.
1.2 PURCHASE PRICE. The purchase price to be paid by Buyer to Seller for
the Property shall be the sum of Seventeen Million Four Hundred Dollars
($17,400,000) (the "PURCHASE PRICE").
1.3 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be payable as
follows:
1.3.1 Within two (2) business days after the "Effective Date" (as
defined below), Buyer shall deliver to Xxxxxxx Title Insurance Company ("ESCROW
HOLDER" or the "TITLE COMPANY"), in immediately available funds, the sum of Four
Hundred Thousand Dollars ($400,000) (said sum, together with any interest earned
thereon while held by Escrow Holder, is herein called the "DEPOSIT"). Escrow
Holder shall deposit the Deposit into an interest-bearing account satisfactory
to Buyer pending disbursement in accordance with the terms of this Agreement.
Unless Buyer terminates this Agreement by delivery of written notice of
termination (the "TERMINATION NOTICE") to Seller and Escrow Holder on or before
the date (the "DECISION DATE") that is thirty (30) days after the Effective
Date, the Deposit shall be non-refundable after the Decision Date, except in the
event of Seller's material default and except as otherwise expressly herein
provided, and shall be applied to the Purchase Price at Closing.
1.3.2 Not later than 10:00 am Pacific time on the "Closing Date"
(as defined below), Buyer shall deposit into Escrow, by wire transfer of federal
funds, the balance of the Purchase Price, subject to adjustment by reason of any
applicable prorations and the allocation of closing costs described below.
2. OPENING OF ESCROW
2.1 ESCROW; ESCROW HOLDER. Within two (2) business days after Seller shall
have executed this Agreement, Seller shall open an escrow (the "ESCROW") with
Escrow Holder at 000 X. Xxxxx Xxxx., Xxx. 000, Xxxxxxxx, XX 00000, Attn: Xxxxxxx
Xxxxxx, by delivering an executed copy of this Agreement to Escrow Holder. The
date the Escrow is opened pursuant to the preceding sentence is herein called
the "EFFECTIVE DATE". Escrow Holder shall promptly advise Buyer and Seller of
the Effective Date.
2.2 ESCROW INSTRUCTIONS. The terms and conditions set forth in this
Agreement shall constitute both an agreement between Seller and Buyer and escrow
instructions for Escrow Holder. Seller and Buyer shall promptly execute and
deliver to Escrow Holder any separate or additional escrow instructions
requested by Escrow Holder that are consistent with the terms of this Agreement.
Any separate or additional instructions shall not modify or amend the provisions
of this Agreement unless otherwise expressly set forth by mutual consent of
Buyer and Seller. As used in this Agreement, "CLOSING" shall mean the
recordation (or the commitment of the Title Company to do so to the satisfaction
of Buyer) of the "Deed" (as defined below) in the Official Records of Xxxx
County, California and the payment of the Purchase Price to Seller.
2.3 CLOSING DATE. Escrow shall close on or before the date (the "CLOSING
DATE") that is thirty-five (35) days after the Effective Date.
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3. ACTIONS PENDING CLOSING
3.1 BUYER'S REVIEW OF TITLE.
3.1.1 Seller shall cause the Title Company, promptly after the
Effective Date, to deliver to Buyer a copy of a current preliminary title report
or commitment for title insurance (as well as a copy of each exception
referenced therein) showing the condition of title to the Property (the "TITLE
REPORT"). Upon receipt from Buyer of funds sufficient to pay for a survey of the
Property, Seller shall engage a surveyor to prepare a survey of the Property
(the "SURVEY") that meets the requirements set forth on Schedule 3.1.1 hereof.
Seller is ordering the Survey as an accommodation to Buyer, and in no event
shall Seller be in breach or default by reason of the contents, or timing of
delivery, of the Survey.
3.1.2 Buyer shall have until the later of five (5) days after
receipt of the Title Report and Survey or twenty five (25) days after the
Effective Date ((the "TITLE DATE") within which to deliver to Seller written
notice of Buyer's disapproval of title as shown on the Title Report and Survey
(those title matters identified on the Title Report and Survey and timely
disapproved in writing by Buyer are hereafter called the "DISAPPROVED
EXCEPTIONS"). Buyer's failure to deliver such notice to Seller on or before the
Title Date shall constitute Buyer's approval of the condition of title as shown
on the Title Report and Survey.
3.1.3 Seller shall notify Buyer in writing within three (3)
business days after Seller's receipt of Buyer's notice of Disapproved Exceptions
that: (a) Seller will remove such Disapproved Exceptions from title as of or
before Closing; or (b) Seller will not remove any or certain specified
Disapproved Exceptions from title. Seller's failure to address any Disapproved
Exceptions in any notice, or failure to give a notice as to any Disapproved
Exceptions, shall constitute Seller's statement that it will not remove such
Disapproved Exceptions from title.
3.1.4 If Seller does not provide Buyer with written notice that it
shall remove all Disapproved Exceptions from title, Buyer shall have the right
to terminate this Agreement by delivery of written notice of termination in
accordance with Section 3.3 on or before the Decision Date, as Buyer's sole and
exclusive remedy. Buyer's failure to provide such notice of termination on or
before the Decision Date shall constitute Buyer's waiver of its disapproval of
the Disapproved Exceptions. In the case of Buyer's waiver (or deemed waiver) of
Disapproved Exceptions, Seller shall have no obligation to remove or otherwise
address such Disapproved Exceptions from title, and such waived Disapproved
Exceptions shall be deemed approved. If Buyer elects to terminate this Agreement
pursuant to this Section 3.1.4, the provisions of Section 3.3 shall apply.
Except for the Disapproved Exceptions Seller removes or covenants to remove, the
exceptions to title shown by the Title Report and Survey and any encumbrance
arising from the acts of Buyer are called the "PERMITTED EXCEPTIONS" in this
Agreement. In no event shall any mortgage or judgment liens be Permitted
Exceptions, and Seller shall cause the same to be removed at or before Closing.
Should a supplemental Title Report be issued by the Title Company after the date
of the original Title Report disclosing additional title exceptions that
adversely affect the condition of title to the Property, then the Title Date
shall, if applicable, be extended to the date that is three (3) business days
after Buyer's receipt of the supplemental Title Report, and if necessary, the
Closing Date shall be automatically
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extended to the extent necessary to accommodate the approval procedures of
Section 3.1.3 and this Section 3.1.4.
3.2 BUYER'S REVIEW OF THE PROPERTY; AGREEMENTS. Promptly after the
Effective Date, Seller shall provide Buyer with copies of (or make available to
Buyer for review at the Project) the items reflected on Schedule 3.1 attached
hereto (collectively, the "DUE DILIGENCE DOCUMENTS"). Notwithstanding the
foregoing or any other provision hereof to the contrary, (i) Seller's
responsibility to provide Due Diligence Documents shall be limited to those Due
Diligence Documents in Seller's (or its property manager's) possession (without
limiting the foregoing, those items that are marked "not in our possession" on
Schedule 3.1 shall not be provided), (ii) Seller shall not be required to
generate reports or analyses not typically prepared (or reflecting information
not typically reflected) in Seller's ordinary course of business, and (iii) the
Due Diligence Documents are provided as an accommodation to Buyer and Seller
expressly disclaims any and all representations and warranties regarding the
same. On or before the Decision Date, Buyer shall have reviewed the foregoing
and prepared, obtained, reviewed (or shall have chosen not to have prepared,
obtained or reviewed) and approved, among other things, all other reports of
investigations of the Property, including, such soil, environmental, geological
and engineering tests and reports, and other inspections of the Property as
Buyer shall deem necessary in order to determine whether the Property is
suitable for Buyer's intended use, as well as investigated (or chosen not to
have investigated) all zoning requirements, federal, state and local laws,
ordinances, rules, regulations, permits, licenses, approvals and orders
applicable to the Property. Pursuant to and subject to the requirements of
Section 3.5 of this Agreement, Buyer may enter onto the Property for the purpose
of conducting its inspection (the "INSPECTION") of the Property; provided,
however, without first obtaining Seller's prior written consent, which consent
will not be unreasonably withheld, Buyer shall only conduct a visual inspection,
with no right to conduct any physical testing, boring, sampling or removal
(collectively "PHYSICAL TESTING") of any portion of the Property. If Buyer
wishes to conduct any Physical Testing of the Property, Buyer shall submit a
work plan to Seller prior to the Decision Date for Seller's prior written
approval, which work plan Seller may modify, limit or disapprove in its
reasonable discretion. If, on the basis of the review and the Inspection
described in this Section 3.2, or if for any other reason or no reason, Buyer
determines that the Property is not suitable for Buyer's intended use, then
Buyer may terminate this Agreement by delivering the Termination Notice to
Seller and Escrow Holder on or before the Decision Date. Buyer's failure to
deliver the Termination Notice to Seller and Escrow Holder on or before the
Decision Date shall constitute Buyer's approval of the aforementioned items and
of the condition of the Property.
3.3 BUYER'S TERMINATION. If Buyer elects to terminate this Agreement in
accordance with Sections 3.1.4 or 3.2, Buyer shall deliver the Termination
Notice to Seller and Escrow Holder on or before the Decision Date. If Buyer
elects to terminate this Agreement in accordance with Sections 4.4 or 4.5, then
on or before the dates specified therein, Buyer shall deliver a Termination
Notice to Seller and Escrow Holder that Buyer elects to terminate this Agreement
pursuant to said Sections. Buyer's failure to timely deliver such termination
notice pursuant to said Sections of this Agreement shall constitute Buyer's
waiver of Buyer's right to terminate this Agreement pursuant to said Sections.
If Buyer timely elects to terminate this Agreement pursuant to Sections 3.1.4,
3.2, 4.4 or 4.5, Escrow Holder shall deliver the Deposit to Buyer, less fifty
percent (50%) of any Escrow termination fee, and Escrow Holder shall return to
the depositor thereof any other materials
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previously placed in Escrow and remaining in Escrow; and neither party shall
thereafter have any further rights or obligations under this Agreement unless
expressly provided otherwise herein.
3.4 NO PROCESSING. Without Seller's prior written consent, until the
Closing, Buyer shall not make any application to any governmental agency for any
permit, approval, license or other entitlement for the Property or the use or
development thereof.
3.5 ACCESS TO PROPERTY.
3.5.1 Subject to the rights of existing tenants of the Property
("TENANTS"), whom Buyer hereby agrees not to interview or question without
having provided Seller and Seller's Broker (as defined below) with at least 24
hours prior written notice of its intention to do so during such interview,
Seller hereby grants to Buyer and Buyer's representatives, agents, employees and
contractors (collectively, "BUYER'S AGENTS") a nonexclusive license to enter
onto the Property solely for the purpose of conducting Buyer's Inspection. Any
Inspection work shall be at the sole cost and expense of Buyer. The license
created under this Section 3.5.1 shall expire on termination of this Agreement.
At least forty-eight (48) hours prior to any entry and Inspection, Buyer shall
provide Seller with sufficient evidence to show that Buyer and Buyer's Agents,
who are to enter upon the Property, are adequately covered by policies of
insurance issued by a carrier reasonably acceptable to Seller insuring Buyer and
Seller against any and all liability arising out of Buyer's or Buyer's Agents'
entry upon and Inspection of the Property, including without limitation any loss
or damage to the Property, with coverage in the amount of not less than
$1,000,000 per occurrence.
3.5.2 Buyer agrees to keep the Property free from any liens arising
out of any work performed, materials furnished or obligations incurred by or on
behalf of Buyer or Buyer's Agents with respect to any Inspection or Physical
Testing of the Property. If any such lien shall at any time be filed, Buyer
shall cause the same to be discharged of record within twenty (20) days
thereafter by satisfying the same or, if Buyer in its discretion and in good
faith determines that such lien should be contested, by recording a bond.
Failure by Buyer to discharge such lien shall be a material breach of this
Agreement and Seller may terminate this Agreement by written notice thereof to
Buyer.
3.5.3 Buyer shall, at its sole cost and expense, comply with all
applicable federal, state and local laws, statutes, rules, regulations,
ordinances, or policies in conducting the Inspection and the Physical Testing.
3.5.4 Buyer hereby agrees to hold harmless, protect, defend and
indemnify, and hereby releases, Seller and its trustees, officers, directors,
employees, contractors, agents, subsidiaries and affiliates, and its and their
respective successors and assigns (collectively, the "INDEMNITEES") and the
Property from and against any and all claims, demands, causes of action, losses,
liabilities, liens, encumbrances, costs or expenses (including without
limitation reasonable attorneys' fees and litigation costs) arising out of,
connected with or incidental to: (a) any injuries to persons (including death)
or property (real or personal), or (b) any mechanics', workers' or other liens
on the Property, by reason of or relating to the work or activities conducted on
the Property by Buyer or Buyer's Agents. The provisions of this Section 3.5.4
shall survive any termination of this Agreement and shall not be limited in any
way by any other terms of this Agreement.
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3.5.5 In no event shall Buyer or Buyer's Agents have the right to
place any materials or equipment on the Property (including, without limitation,
signs or other advertising material) until after the Closing has occurred.
3.5.6 Buyer shall, at its sole cost and expense, clean up and
repair the Property, in whatever manner necessary, after Buyer's or Buyer's
Agents' entry thereon so that the Property shall be returned to the same
conditions that existed prior to Buyer's or Buyer's Agents' entry thereon.
4. ADDITIONAL AGREEMENTS OF THE PARTIES
4.1 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller hereby represents,
warrants and covenants to and agrees with Buyer as follows:
4.1.1 Seller has the legal right, power and authority to own the
Property and to enter into and consummate the transactions contemplated by this
Agreement, and this Agreement and all instruments, documents and agreements to
be executed by Seller in connection herewith are, or when delivered shall be,
duly authorized, executed and delivered by Seller and are, or when delivered
shall be, valid, binding and enforceable obligations of Seller.
4.1.2 There are no pending or, to Seller's knowledge, threatened
legal proceedings, administrative actions, or pending governmental investigation
of any kind or character adversely affecting the Project or Seller's interest
therein.
4.1.3 To Seller's knowledge and except as may be disclosed in the
Due Diligence Documents, Seller has received no written notice from any
government authority of any violation of any statute, ordinance, code or
regulation with respect to the Project, which violation has not been corrected.
4.1.4 To Seller's knowledge and except as may be disclosed in the
Due Diligence Documents, Seller has received no written notice that the Project
is in violation of any federal, state and local laws, ordinances and regulations
applicable to the Project with respect to "Hazardous Materials" (as defined
below), nor to Seller's knowledge have any Hazardous Materials been or are
currently being produced, disposed of, used or stored on or under the Property
in violation of applicable law.
4.1.5 Seller is not required to obtain any consents or approvals to
consummate the transactions contemplated in this Agreement.
4.1.6 To Seller's knowledge, the copies of the Leases and Contracts
delivered to Buyer (or made available to Buyer) for its review are true and
correct copies of the Leases and Contracts and are all of the Leases and
Contracts affecting the Property.
4.1.7 As used herein, "TO SELLER'S KNOWLEDGE" and phrases of
similar import means the actual (not constructive and without attribution)
conscious knowledge, without undertaking, and without any duty to undertake, any
investigation or inquiry, of Xxxxxxx Xxxxxxxxx and Xxxx Van Wyk, which
individuals are the employees of Seller (or its affiliates) with the
operational/asset
6
disposition responsibility for the Project. It is expressly agreed and
understood that in no event shall Buyer be entitled to bring any action(s) for
damages or otherwise against such individuals. In the event Seller or Buyer
should become aware of any facts or circumstances prior to the Closing Date that
should render any of Seller's representations and warranties that are limited to
Seller's knowledge no longer accurate, the party first becoming so aware shall
promptly notify the other party Buyer in writing, and Buyer shall have the
right, as its sole and exclusive remedy, to terminate this Agreement by written
notice to Seller and Escrow Holder delivered within seven (7) days after receipt
of Seller's notice or first becoming aware of such facts, in which case this
Agreement shall terminate in accordance with Section 3.3. This Section 4.1.7
shall supersede any inconsistent provision of this Agreement.
4.2 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer hereby represents,
warrants and covenants to and agrees with Seller as follows:
4.2.1 BUYER'S INVESTIGATION AND RELEASE. (a) Buyer acknowledges
that, except as explicitly set forth herein, there are no representations or
warranties of any kind whatsoever, express or implied, made by Seller in
connection with this Agreement, the purchase of the Property by Buyer, the
Contracts, the Leases, the physical condition of the Property or whether the
Property complies with applicable laws or is appropriate for Buyer's intended
use; (b) prior to the Decision Date Buyer shall have (or shall have chosen not
to have) fully investigated the Property (including the Leases and Contracts)
and all matters pertaining thereto; (c) Buyer is not relying on any statement or
representation of Seller, its agents or its representatives nor on any
information supplied by Seller, its agents or its representatives; (d) Buyer, in
entering into this Agreement and in completing its purchase of the Property, is
relying, and shall rely, entirely on its own investigation of the Property based
on its extensive experience in and knowledge of real property in the areas where
the Property is located; (e) Buyer is aware (or has chosen not to be aware) of
all zoning regulations, other governmental requirements, legal, site and
physical conditions, and other matters affecting the use and condition of the
Property; (f) Buyer's decision to purchase the Property on the terms and
conditions hereof has been, and at all times shall be, made solely and
exclusively in reliance on Buyer's own review, inspection and investigation of
the Property (including the Leases and Contracts) and of materials, documents,
information and studies relating to the Property; (g) BUYER SHALL PURCHASE THE
PROPERTY IN ITS "AS IS" CONDITION AS OF THE DATE OF CLOSING. Without limiting
the foregoing, Buyer acknowledges that Buyer has accepted full responsibility
for assuring the Property complies at Closing with all applicable laws, rules,
regulations, orders and ordinances, and in the event any such laws, rules,
regulations, orders or ordinances impose any pre-Closing obligations upon
Seller, Seller shall have the right to (i) perform the same at Buyer's expense
and the cost thereof shall be added to the Purchase Price at Closing, if Seller
is obligated by law to perform the same prior to Closing, and/or (ii) require
Buyer to execute and deliver at Closing any documentation requested by Seller or
required by governmental authorities confirming Buyer has accepted such
responsibility and indemnifying Seller against the same.
4.2.2 AUTHORITY. Buyer has the power and authority to own the
Property and to consummate the transactions contemplated by this Agreement. This
Agreement and all instruments, documents and agreements to be executed by Buyer
in connection herewith are or when delivered shall be duly authorized, executed
and delivered by Buyer and are valid, binding and enforceable
7
obligations of Buyer. Each individual executing this Agreement on behalf of
Buyer represents and warrants to Seller that he or she is duly authorized to do
so.
4.2.3 CONSENTS. Buyer is not required to obtain any consents or
approvals to consummate the transactions contemplated in this Agreement.
4.3 REAFFIRMATION. The representations and warranties of Seller and Buyer
set forth in Sections 4.1 and 4.2 are true and correct as of the xxxx of this
Agreement and shall be true and correct as of the Closing. The Closing shall
constitute each party's reaffirmation of those representations and warranties as
of the Closing, and each party shall execute and deliver at Closing a document
(a "REAFFIRMATION CERTIFICATE") reaffirming such representations and warranties.
4.4 CONDEMNATION. If, prior to Closing, any portion of the Property shall
be condemned or become the subject of any pending or threatened condemnation
action, Seller shall promptly notify Buyer thereof. This Agreement shall remain
in full force and effect, regardless of such condemnation or threatened or
pending action, and if any condemnation award is received by Seller prior to
Closing, the amount of such award shall be applied as a credit against the
Purchase Price. Any condemnation awards received by Seller on or after Closing
shall be promptly delivered by Seller to Buyer. Notwithstanding the foregoing,
in the event such condemnation involves 5% or more of the Land or the
Improvements or affects any of the existing access points to the Property, Buyer
shall be entitled to terminate this Agreement by written notice thereof to
Seller given within five (5) business days after Buyer shall have been notified
of such condemnation, whereupon the Deposit (to the extent previously delivered
to Escrow Holder) shall be returned to Buyer. Buyer's failure to timely deliver
such notice to Seller within such five (5) business day period shall constitute
Buyer's election to proceed to Closing.
4.5 DAMAGE OR DESTRUCTION. In the event of any damage to or destruction of
the Property prior to the Closing, Seller shall promptly notify Buyer thereof
and the Closing shall nevertheless occur as otherwise provided for in this
Agreement, except Seller shall assign to Buyer upon the Closing all insurance
proceeds paid or payable to Seller in connection with such occurrences. Seller
shall have no obligation to repair such damage or destruction. Notwithstanding
the foregoing, if such damage or destruction to the Property shall cost more
than $100,000 to repair, then Seller shall promptly so notify Buyer and within
five (5) business days after receipt of such notice, Buyer shall deliver written
notice to Seller and Escrow Holder, electing either: (a) to proceed with this
transaction and Closing in accordance with this Agreement notwithstanding such
damage or destruction; or (b) to terminate this Agreement in accordance with the
terms of Section 3.3. Buyer's failure to deliver either of such notices to
Seller and Escrow Holder within such Five (5) business day period shall
constitute Buyer's election to proceed to Closing under clause (a).
4.6 TENANT LEASE AMENDMENTS; MANAGEMENT OF PROPERTY. Seller agrees to promptly
provide Buyer with a copy of all proposed amendments to existing Leases, and all
proposed new Leases, of any portion of the Property proposed to be executed
after the Effective Date and before the date (the "STOP DATE") that is seven (7)
days prior to the Decision Date for Buyer's review, but in no event shall Buyer
have any right to approve the same, and Buyer's failure to terminate this
Agreement on or before the Decision Date shall constitute Buyer's deemed
approval of all such Lease amendments and new Leases. From and after the Stop
Date, Buyer shall not execute any amendments to any
8
existing Leases, or any new Leases, without Buyer's prior written consent. Upon
the Closing, Buyer shall reimburse Seller for, or assume Seller's obligations
with respect to, all leasing commissions paid or payable by Seller and/or tenant
improvement obligations of Seller with respect to all Lease amendments and new
Leases approved (or deemed approved) by Buyer pursuant to this Section 4.6
(except Seller shall be responsible for all such expenses related to any such
lease with Cingular Wireless, and Seller shall be responsible for any leasing
commissions payable with respect to any Leases that are renewed or extended
before the Closing Date). Subject to damage or destruction, or other matters
outside of Seller's control, Seller agrees to continue to manage the Property
until Closing in the same manner it is currently managing the Property (in no
event shall Seller have any obligation to make capital repairs, replacements or
improvements, nor to cause the Property to comply with applicable laws). Prior
to Closing, and for a reasonable period of time thereafter, Seller agrees to
reasonably cooperate with Buyer and Buyer's accountants to facilitate Buyer's
evaluations and required reports, including at least a one-year audit of the
books and records of the Property, which audit shall conclude with the execution
by Seller of a letter in the form attached hereto as Schedule 4.6 (Seller
confirms that the representations in such letter are, to Seller's knowledge,
correct as of the date of execution of this Agreement, but Seller reserves the
right to revise such letter to reflect the state of Seller's knowledge at the
xxxx Xxxxxx is requested to execute such letter).
4.7 ESTOPPEL CERTIFICATES. Seller agrees to promptly exert good faith
efforts to obtain estoppel certificates ("ESTOPPELS") and subordination,
non-disturbance and attornment agreements ("SNDAs"), on Seller's form or on such
other reasonable forms as Buyer shall deliver to Seller within five (5) days
after the Effective Date, from the Tenants. Seller shall not be in default
hereunder by reason of the unavailability, or contents, of any Estoppel or SNDA.
Subject to the further terms of this Section 4.7, Buyer shall have the right to
terminate this Agreement pursuant to Section 3.3 if prior to Closing Seller
shall be unable to obtain Estoppels approved by Buyer executed by (i) Ralph's
(the "MAJOR"), plus (ii) other tenants (the "MINORS") which, in the aggregate,
occupy at least seventy five percent (75%) of the remaining leased space at the
Property not counting the space leased by the Major. Buyer shall be deemed to
have approved each Estoppel delivered to it by Seller unless Buyer shall have
delivered written notice to Seller objecting to such Estoppel within four (4)
days after Seller's delivery of such Estoppel to Buyer. Buyer shall have no
right to object to, and shall be deemed to have approved, any Estoppel executed
on a form set forth in, or stipulated by, the applicable lease that does not
reflect a default by landlord or tenant and that docs not contain any
information materially inconsistent with the information set forth in the
applicable lease to which it pertains. Buyer shall have no right to terminate
this Agreement by reason of the unavailability, or contents, of any SNDAs.
Seller agrees to execute and deliver to Buyer at Closing a "Seller Estoppel"
with respect to those Minors as to which Seller has been unable to obtain an
executed Estoppel, but each Seller Estoppel shall be limited "to Seller's
knowledge" (as defined in Section 4.1.7).
4.8 HAZARDOUS MATERIAL WAIVER. Buyer, on behalf of itself, its successors
and assigns, hereby releases Indemnitees from and against any and all
liabilities, claims, demands, suits, judgments, causes of action (including, but
not limited to, causes of action arising under the Comprehensive Environmental
Response Compensation and Liability Act of 1980, 42 U.S.C, Sections 9601 ET.
SEQ.), losses, costs, damages, injuries, penalties, enforcement actions, fines,
taxes, remedial actions, removal and disposal costs, investigation and
remediation costs and expenses (including, without limit, attorneys' fees,
litigation, arbitration and administrative proceeding costs,
9
expert and consultant fees and laboratory costs), sums paid in settlement of
claims, whether direct or indirect, known or unknown, arising out of, related in
any way to, or resulting from or in connection with, in whole or in part, the
presence or suspected presence of Hazardous Materials (defined below) in, on,
under, or about the Property.
"HAZARDOUS MATERIAL(S)" means any chemical, substance, material, controlled
substance, object, condition, waste living organisms or combination thereof
which is or may be hazardous to human health or safety or to the environment due
to his radioactivity, ignitability, corrosivity, reactivity, explosivity,
toxicity, carcinogenicity, mutagenicity, phytoloxicity, infectiousness or other
harmful or potentially harmful properties or effects, including, without
limitation, petroleum hydrocarbons and petroleum products, lead, asbestos,
radon, polychlorinated biphenyls (PCBs) and all of those chemicals, substances,
materials, controlled substances, objects, conditions, wastes, living organisms
or combinations thereof which are now or become in the future listed, defined or
regulated in any manner by any federal, state or local law based upon, directly
or indirectly, such properties or effects.
5. CLOSING
5.1 DEPOSITS INTO ESCROW.
5.1.1 At least one (1) business day prior to the Closing Date,
Seller shall deposit into Escrow:
(a) A grant deed conveying the Project to Buyer (the
"DEED"), subject to the Permitted Exceptions;
(b) An affidavit or qualifying statement which satisfies
the requirements of Section 1445 of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder (the "NON-FOREIGN AFFIDAVIT"), and a
"Withholding Exemption Certificate, Form 593", pursuant to the California
Revenue and Taxation Code stating either the amount of withholding required from
Seller's proceeds or that Seller is exempt from such withholding requirement
(the "CERTIFICATE").
(c) An original xxxx of sale and assignment (the "XXXX OF
SALE"), duly executed by Seller, assigning and conveying to Bayer all of
Seller's right, title and interest in and to the Personal Property. The Xxxx of
Sale shall be in the form of EXHIBIT "B" attached hereto;
(d) An original assignment and assumption agreement (the
"ASSIGNMENT AND ASSUMPTION AGREEMENT") duly executed by Seller assigning all of
Seller's right, title and interest in and to the Leases and the Contracts. The
Assignment and Assumption Agreement shall be in the form of EXHIBIT "C" attached
hereto; and
(e) A letter to each Tenant (the "TENANT LETTERS") advising
the Tenant of the sale of the Property, the transfer of the Tenant's security
deposit to Buyer and of the name and address of Buyer (or its property manager).
10
5.1.2 On or before 10:00 a.m. Pacific time or the Closing Date,
Buyer shall deposit into Escrow:
(a) Funds in accordance with the provisions of Section
1.3.2;
(b) Buyer's Reaffirmation Certificate;
(c) An original counterpart of the Assignment and
Assumption Agreement duly executed by Buyer; and
(d) the Tenant Letters.
5.1.3 Seller and Buyer shall each deposit such other instruments
and funds as are reasonably required by Escrow Holder or otherwise required to
close Escrow and consummate the sale of the Property in accordance with the
terms of this Agreement, including but not limited to documents required under
Section 5.4.1.
5.2 PRORATIONS.
5.2.1 Rentals from Leases (including fixed monthly rentals and
other periodic rentals, additional rentals, percentage rentals, operating cost
pass-throughs and other sums and charges payable by the tenants), prepaid
rentals and prepaid payments (collectively, "RENT") shall, subject to the
further provisions hereof, be prorated on the basis that Buyer shall receive a
credit for all security deposits actually held by Seller and for all Rent which
Seller has actually received before the Closing which is allocable to the period
after the Closing. Seller shall not receive a credit for any Rent Seller has not
received as of the Closing that is allocable to the period prior to the Closing.
If Buyer shall collect any such Rent (including without limitation percentage
rent) after the Closing, Buyer shall promptly pay the same to Seller, after
application of the same to any rent due from the applicable Tenant after the
Closing.
5.2.2 Real estate taxes shall be prorated as of the Closing on the
basis of the most recent assessed valuation of and rates and multiplier
applicable to the Property. If prorations are not made on the basis of the
current tax year or if supplemental taxes are assessed after the Closing for the
period prior to the Closing, the parties shall make any necessary adjustment
after Closing by cash payment upon demand to the party entitled thereto so that
Seller shall have borne all taxes allocable to the period prior to the Closing
(including all supplemental taxes which are allocable to the period prior to
Closing) and Buyer shall bear all taxes allocable to the period after the
Closing (including all supplemental taxes which are allocable to the period
after the Closing).
5.2.3 Seller shall endeavor to have all of its utility accounts
with respect to the Property closed out effective as of the Closing Xxxx; if
such close-out is not possible, utilities shall be prorated as of the Closing
(with the assumption that utility charges were uniformly incurred during the
billing period in which the Closing occurs).
5.2.4 Common area and maintenance charges, property taxes,
insurance and other operating cost pass-throughs payable by Tenants which accrue
as of the Closing Date, but which are
11
not then due and payable (collectively, the "OPERATING EXPENSES"), shall not be
prorated, except as herein provided. Buyer shall receive and retain any
Operating Expenses paid by Tenants on or after the Closing Date and Seller
shall receive and retain any Operating Expenses paid by Tenants prior to the
Closing Date; provided, however, that any monthly or periodic deposits or
payments of estimated Operating Expenses with respect to the month in which the
Closing occurs received by Seller prior to the Closing Date or by Buyer on or
after the Closing Date shall be prorated as of the Closing Date. Buyer and
Seller shall prorate at Closing, actual Operating Expenses collected by Seller
from Tenants prior to Closing with actual Operating Expenses paid by Seller with
respect to such period, so that if there are any rebates owing to Tenants for
the period of Seller's ownership, Seller shall pay Buyer the amount of such
rebates at Closing, and if the Tenants owe the landlord any additional amounts
for Operating Expenses with respect to the period of Seller's ownership, Buyer
shall promptly pay Seller the amount so owed to the landlord upon Buyer's
receipt of the same (and Buyer shall exert diligent good faith efforts to
collect the same). Any prorations under this Agreement based upon monthly
amounts shall be based upon a thirty (30) day month; any prorations under this
Agreement based upon annual amounts shall be based upon a 366 day year.
5.3 PAYMENT OF CLOSING COSTS.
5.3.1 CLOSING COSTS BORNE BY SELLER. Seller shall bear and Escrow
Holder shall discharge on Seller's behalf out of the sums payable to Seller
hereunder (a) one-half of Escrow Holder's fee, (b) the Xxxx County documentary
transfer taxes, (c) all costs and expenses of the Owner's Policy (except Buyer
shall pay all costs attributable to any endorsements, any extended coverage and
any deletion of the survey exception from the policy), and (d) any additional
charges payable in accordance with common escrow practices in Xxxx County,
California.
5.3.2 CLOSING COSTS BORNE BY BUYER. Buyer shall deposit with
Escrow Holder for disbursement by Escrow Holder (a) one-half of Escrow Holder's
fee, (b) all costs and expenses of the Owner's Policy not borne by Seller, (c)
the recording fees and documentary transfer fees not borne by Seller required in
connection with the transfer of the Property to Buyer, and (d) any additional,
charges payable in accordance with common escrow practices in Xxxx County,
California.
5.4 CLOSING OF ESCROW.
5.4.1 Pursuant to Section 6045 of the Internal Revenue and Taxation
Code, Escrow Holder shall be designated the "closing agent" hereunder and shall
be solely responsible for complying with the tax reform act of 1986 with regard
to reporting all settlement information to the Internal Revenue Service.
5.4.2 Escrow Holder shall hold the Closing on the Closing Date if:
(i) it has received in a timely manner all the funds and materials required to
be delivered into Escrow by Buyer and Seller; and (ii) it has received
assurances satisfactory to it that, effective as of the Closing, the Title
Company will issue to Buyer, its standard coverage CLTA title insurance policy
in the amount of the Purchase Price, insuring Buyer as the owner of the
Property, subject only to the Permitted Exceptions (the "OWNER'S POLICY").
5.4.3 To Close the Escrow, Escrow Holder shall:
12
(a) Cause the Deed to be recorded and thereafter mailed to
Buyer, and deliver the Owner's Policy, Xxxx of Sale, Assignment and Assumption
Agreement (executed by Seller) and Non-Foreign Affidavit and Certificate to
Buyer; and
(b) Deliver to Seller the Buyer's Reaffirmation
Certificate, the Assignment and Assumption Agreement (executed by Buyer), and by
wire transfer of federal funds, funds in the amount of the Purchase Price, plus
or less any net debit or credit to Seller by reason of the prorations and
allocations of closing costs provided for in this Agreement.
5.5 FAILURE TO CLOSE; CANCELLATION. If Escrow Holder is not in a position
to Close the Escrow on the Closing Date, then this Agreement shall terminate
(and if Buyer is in default the Deposit shall be paid to Seller), except that no
such termination shall relieve either party of liability for any failure to
comply with the terms of this Agreement.
5.6 LIQUIDATED DAMAGES. BUYER AND SELLER AGREE THAT IN THE EVENT OF A
MATERIAL DEFAULT OR BREACH HEREUNDER BY BUYER (INCLUDING, WITHOUT LIMITATION,
ANY DEFAULT OR BREACH BY BUYER WHICH RESULTS IN THE FAILURE OF ESCROW TO CLOSE),
THE DAMAGES TO SELLER WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE TO
ASCERTAIN, AND THAT THEREFORE THE DEPOSIT IS A REASONABLE ESTIMATE OF THE
DAMAGES TO SELLER, SUCH DAMAGES INCLUDING COSTS OF NEGOTIATING AND DRAFTING OF
THIS AGREEMENT, COSTS OF COOPERATING IN SATISFYING CONDITIONS TO CLOSING, COSTS
OF SEEKING ANOTHER BUYER UPON BUYER'S DEFAULT, OPPORTUNITY COSTS IN, AND
CARRYING COST ASSOCIATED WITH, KEEPING THE PROPERTY OUT OF THE MARKETPLACE, AND
OTHER COSTS INCURRED IN CONNECTION HEREWITH. ACCORDINGLY, BUYER AND SELLER AGREE
THAT, EXCEPT FOR ANY DAMAGES, COSTS AND EXPENSES INCURRED IN CONNECTION WITH OR
RESULTING FROM BUYER'S DEFAULT, OR BREACH OF ITS INDEMNITY OBLIGATIONS UNDER
SECTIONS 3.5 AND 6.16 (WHICH DAMAGES, COSTS AND EXPENSES SHALL SURVIVE ANY
CLOSING OR TERMINATION OF THIS AGREEMENT AND ARE NOT LIMITED BY THIS SECTION
5.6), RECEIPT AND RETENTION OF THE DEPOSIT SHALL BE THE SOLE DAMAGES OF SELLER
IN THE EVENT OF ANY BREACH OR DEFAULT BY BUYER HEREUNDER.
/s/ PSD. / [ILLEGIBLE] /s/ [ILLEGIBLE]
------------------------ ----------------
Seller's Initials Buyer's Initials
5.7 SELLER'S BREACH. In the event of a material breach by Seller
hereunder, Buyer's remedies shall be limited to (i) termination of this
Agreement and the return to it of the Deposit, or (ii) specific performance of
this Agreement. Buyer expressly waives and releases any right to xxx Seller for
damages.
5.8 POSSESSION. Subject to the Permitted Exceptions and the rights of the
Tenants, possession of the Property shall be delivered to Buyer upon Closing.
13
6. GENERAL PROVISIONS
6.1 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which, taken together, shall
constitute one and the same instrument.
6.2 ENTIRE AGREEMENT. This Agreement contains the entire integrated
agreement between the parties respecting the subject matter of this Agreement
and supersedes all prior and contemporaneous understandings and agreements,
whether oral or in writing, between the parties respecting the subject matter of
this Agreement.
6.3 LEGAL ADVICE; NEUTRAL INTERPRETATION; HEADINGS. Each party has
received independent legal advice from its attorneys with respect to the
advisability of executing this Agreement and the meaning of the provisions
hereof. The provisions of this Agreement shall be construed as to their fair
meaning, and not for or against any party based upon any attribution to such
party as the source of the language in question. Headings used in this Agreement
are for convenience of reference only and shall not be used in construing this
Agreement.
6.4 CHOICE OF LAW. This Agreement shall be governed by the laws of the
State of California.
6.5 SEVERABILITY. If any term, covenant, condition or provision of this
Agreement, or the application thereof to any person or circumstance, shall to
any extent be held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, covenants, conditions or provisions
of this Agreement, or the application thereof to any person or circumstance,
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby.
6.6 WAIVER OF COVENANTS, CONDITIONS OR REMEDIES. The waiver by one party
of the performance of any covenant, condition or promise under this Agreement
shall not invalidate this Agreement nor shall it be considered a waiver by it of
any other covenant, condition or promise under this Agreement. The waiver by
either or both parties of the time for performing any act under this Agreement
shall not constitute a waiver of the time for performing any other act or an
identical act required to be performed at a later time. The exercise of any
remedy provided in this Agreement shall not be a waiver of any consistent remedy
provided by law, and the provision in this Agreement for any remedy shall not
exclude other consistent remedies unless they are expressly excluded.
6.7 EXHIBITS. All exhibits to which reference is made in this Agreement
are deemed incorporated in this Agreement.
6.8 AMENDMENT. This Agreement may be amended at any time by the written
agreement of Buyer and Seller. All amendments, changes, revisions and discharges
of this Agreement, in whole or in part, and from time to time, shall be binding
upon the parties despite any lack of legal consideration, so long as the same
shall be in writing and executed by the parties hereto.
6.9 RELATIONSHIP OF PARTIES. The parties agree that their relationship is
that of seller and buyer, and that nothing contained herein shall constitute
either party the agent or legal representative of the other for any purpose
whatsoever, nor shall this Agreement be deemed to create any form of business
organisation between the parties hereto, nor is either party granted any right
or authority to
14
assume or create any obligation or responsibility on behalf of the other party,
nor shall either party be in any way liable for any debt of the other.
6.10 NO THIRD PARTY BENEFIT. This Agreement is intended to benefit only
the parties hereto and no other person or entity has or shall acquire any rights
hereunder.
6.11 TIME OF THE ESSENCE. Time shall be of the essence as to all dates and
times of performance, whether contained herein or contained in any escrow
instructions to be executed pursuant to this Agreement, and all escrow
instructions shall contain a provision to this effect.
6.12 FURTHER ACTS. Each party agrees to perform any further acts and to
execute, acknowledge and deliver any documents, which may be reasonably
necessary to carry out the provisions of this Agreement.
6.13 RECORDATION. Buyer shall not record this Agreement, any memorandum of
this Agreement, any assignment of this Agreement or any other document that
would cause a cloud on the title to the Property.
6.14 ASSIGNMENT. Upon written notice to Seller, Buyer shall be entitled to
assign Buyer's rights and delegate its obligations hereunder to a third party
controlled by Buyer, but no such assignment shall release Buyer of any liability
hereunder. Each party agrees to cooperate with the other party in competing an
exchange qualifying for nonrecognition of gain under Internal Revenue Code
Section 1031 and the applicable provisions of the California Revenue and
Taxation Code ("EXCHANGE"), and each party reserves the right to convert this
transaction to an Exchange at any time before the Closing Date. If either party
does elect to complete an Exchange, the other party shall execute all escrow
instructions, documents, agreements or instruments reasonably requested by the
first party to complete the Exchange; provided, however, that the other party
shall incur no additional liabilities, expenses or costs (other than its
attorneys fees in reviewing customary Exchange documentation) as a result of or
connected with such Exchange, and shall not be required to take title to any
other property. Notwithstanding that the transaction contemplated hereby should
be effected as an Exchange through a third party as a qualified IRC Section 1031
intermediary, all obligations, representation, warranties and indemnities made
by Buyer shall run to Seller, and all obligations, representations, warranties
and indemnities made by Seller shall run to Buyer, despite the fact that an
intermediary or other third party facilitating a party's tax-deferred exchange
was substituted hereunder for that party. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the successors
and assigns of the parties to this Agreement.
6.15 ATTORNEYS' FEES. In the event of any litigation involving the parties
to this Agreement to enforce any provision of this Agreement, to enforce any
remedy available upon default under this Agreement, or seeking a declaration of
the rights of either party under this Agreement, the prevailing party shall be
entitled to recover from the other such attorneys' fees and costs as may be
reasonably incurred, including the costs of reasonable investigation,
preparation and professional or expert consultation incurred by reason of such
litigation. All other attorneys' fees and costs relating to this Agreement and
the transactions contemplated hereby shall be borne by the party incurring the
same.
15
6.16 BROKERS. Pursuant to separate agreement, Seller shall pay CB Xxxxxxx
Xxxxx ("SELLER'S BROKER"), a brokerage commission for its services as broker in
this transaction if, as and when the Closing occurs (and Seller understands that
Seller's Broker has an agreement with Buyer's broker, CB Xxxxxxx Xxxxx, to pay
CB Xxxxxxx Xxxxx a portion of such commission at Closing). Buyer and Seller each
represent and warrant to the other that, except as stated in the preceding
sentence (a) they have not dealt with any brokers or finders in connection with
the purchase and sale of the Property, and (b) insofar as such party knows, no
broker or other person is entitled to any commission or finder's fee in
connection with the purchase and sale of the Property. Seller and Buyer each
agree to indemnify and hold harmless the other against any loss, liability,
damage, cost, claim or expense incurred by reason of any brokerage fee,
commission or finder's fee which is payable or alleged to be payable to any
broker or finder because of any agreement, act, omission or statement of the
indemnifying party. The provisions of this Section 6.16 shall not be limited in
any way by any terms of this Agreement.
6.17 MANNER OF GIVING NOTICE. All notices and demands which either party
is required or desires to give to the other shall be given in writing by
personal delivery, express courier service or by telecopy followed by next day
delivery of a hard copy to the address or telecopy number set forth below for
the respective party, provided that if any party gives notice of a change of
name, address or telecopy number, notices to that party shall thereafter be
given as demanded in that notice. All notices and demands so given shall be
effective upon receipt by the party to whom notice or a demand is being given.
TO BUYER: TO SELLER:
Inland Real Estate Acquisitions, Inc. Xxxxxxx Xxxxxxxx Realty Group, L.P.
0000 Xxxxxxxxxxx Xxxx 000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000 Xxxxx Xxxx, XX 00000
Attn.: Xxxx Xxxxxxxx Attn.: Dirk Van Wyk
Telephone: 000-000-0000 Telephone: (000) 000-0000
Fax: 000-000-0000 Fax: (000) 000-0000
WITH A COPY TO: WITH A COPY TO:
Xxxxx Xxxxxxxx
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
6.18 SURVIVAL. The terms and provisions of this Agreement shall survive
the Closing and the consummation of the transactions contemplated by this
Agreement or the termination of this Agreement for any reason without the
conveyance of the Property to Buyer.
SIGNATURES ON NEXT PAGE
16
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
SELLER: Xxxxxxx Xxxxxxxx Realty Group, L.P., a Delaware limited
partnership
By: Xxxxxxx Xxxxxxxx Realty Group, Inc., a Maryland
corporation its general partner
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
XXXXXXX X. XXXXXXX, PRESIDENT
By: /s/ Dirk Van Wyk
------------------------------------
Dirk Van Wyk
Vice President
BUYER: Inland Real Estate Acquisitions, Inc., an Illinois Corporation
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: XXXX XXXXXXXX
----------------------------------
Title: VICE PRESIDENT
---------------------------------
JOINDER OF ESCROW HOLDER
Escrow Holder executes this Agreement for the purpose of agreeing to serve
as escrow agent with respect to the Deposit and closing in accordance with this
Agreement.
XXXXXXX TITLE GUARANTY COMPANY
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: XXXXXXX XXXXXX
---------------------------
Title: Commercial Escrow Officer
--------------------------
17
EXHIBIT "A"
LEGAL DESCRIPTION OF THE LAND
18
EXHIBIT "B"
XXXX OF SALE AND ASSIGNMENT
THIS XXXX OF SALE AND ASSIGNMENT (this "XXXX OF SALE") is made this ___
day of _______________, 200_, by __________________________________ ("SELLER"),
in favor of ___ ("BUYER"), to be delivered and effective on the "Effective Date"
(as defined below).
WITNESSETH
Seller and Buyer entered into that certain Purchase and Sale Agreement
and Joint Escrow Instructions dated as of __________, 200_ (the "AGREEMENT")
respecting the sale of certain real "Property" (as defined in the Agreement).
Under the Agreement, Seller is obligated to transfer to Buyer any and
all of Seller's right, title and interest in and to all tangible personal
property owned by Seller and located on or affixed to the "Land" or
"Improvements" (as such terms are defined in the Agreement) and used in
connection with the maintenance of the Land or Improvements, and all intangible
property owned or held by Seller that pertains to the ownership, maintenance,
use or operation of the Land or Improvements (collectively, "PERSONAL
PROPERTY").
NOW, THEREFORE, as of the "Closing" (as defined in the Agreement) (the
"EFFECTIVE DATE") for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller does hereby absolutely and
unconditionally give, grant, bargain, sell, transfer, set over, assign, convey,
release, confirm and deliver to Buyer all of Seller's right, title and interest,
if any, in and to the Personal Property.
Buyer acknowledges that Seller makes no representation or warranty,
either express or implied, with respect to Seller's interest in the Personal
Property, the Personal Property's present condition or its fitness or
suitability for any particular purpose; and accordingly, Seller's interest in
the Personal Property is being purchased by Buyer from Seller in its "as is"
"where is" condition, with all faults associated therewith. In this respect,
Buyer confirms that Buyer is relying solely upon its investigation of the
present condition of the Personal Property.
This Xxxx of Sale shall be binding upon and inure to the benefit of the
successors, assigns, personal representatives, heirs and legatees of Buyer and
Seller.
The Xxxx of Sale shall be governed by, interpreted under, and construed
and enforceable in accordance with, the laws of the State of California.
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale as of the
date first hereinabove written.
SELLER:
-------------------------------------------------,
a
-----------------------------------------------
By:
----------------------------------------------
Its:
---------------------------------------------
19
EXHIBIT "C"
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "ASSIGNMENT") is made
this ___________________ day of ___________________________, 200_, by and
between ____________________________________________________________"ASSIGNOR"),
and ___________________ a ________ ("ASSIGNEE"), delivered and effective on the
"Effective Date" (as defined below).
W I T N E S S E T H
Assignor and Assignee entered into that certain Purchase and Sale
Agreement and Joint Escrow Instructions dated as of ______, 200_ (the
"AGREEMENT") respecting the sale of certain real "Property" (as defined in the
Agreement).
Under the Agreement, Assignor is obligated to assign to Assignee any
and all of its right, title and interest in and to all "Leases" and "Contracts"
(as those terms are defined in the Agreement) which are set forth on SCHEDULE
"1" attached hereto and incorporated herein (collectively, the "CONTRACTS").
NOW, THEREFORE, as of the "Closing" (as defined in the Agreement) (the
"EFFECTIVE DATE") for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor hereby assigns, sells,
transfers, sets over and delivers unto Assignee as of the Effective Date all of
Assignor's right, title and interest in and to the Contracts.
Assignee hereby accepts such Assignment and agrees to be bound by all
of the terms and provisions of the Contracts, and assumes any and all
liabilities and agrees to perform, pay and discharge in full when due all of
Assignor's liabilities and obligations associated with, or related to the
performance by Assignor of any of the terms, covenants and conditions imposed
upon Assignor under the Contracts, first accruing from and after the date
hereof. Assignee hereby agrees to protect, hold harmless, indemnify, defend and
release Assignor from and against any claims, expenses (including, without
limitation, reasonable attorneys' fees and litigation costs), liabilities or
obligations of Assignor which arise, under any of the Contracts from and after
the Closing. Assignor hereby agrees to protect, bold harmless, indemnify, defend
and release Assignee from and against any claims, expenses (including, without,
limitation, reasonable attorneys' fees and litigation costs), liabilities or
obligations of Assignor which accrue under any of the Contracts prior to the
Closing.
In the event of the bringing of any action or suit by a party hereto
against another party hereunder by reason of any breach of any of the covenants,
conditions, agreements or provisions on the part of the other party arising out
of this Assignment, then in that event the prevailing party shall be entitled to
have and recover of and from the other party all costs and expenses of the
action or suit, including reasonable attorneys' fees.
This Assignment shall be binding upon and inure to the benefit of the
successors, assignees, personal representatives, heirs and legatees of all the
respective parties hereto.
20
This Assignment shall be governed by, interpreted under, and construed
and enforceable in accordance with, the laws of the State of California.
This Assignment may be executed in any number of counterparts, each of
which shall be deemed an original, and all of which, together, shall constitute
one and the same instrument.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
as of the day and year first above written.
ASSIGNOR:
-------------------------------------------------,
a
-----------------------------------------------
By:
----------------------------------------------
Its:
---------------------------------------------
ASSIGNEE:
-------------------------------------------------,
a
-----------------------------------------------
By:
----------------------------------------------,
Its:
---------------------------------------------
21
SCHEDULE "1"
LEASES AND CONTRACTS
22
SCHEDULE 3.1.1
The as built survey of the Property shall be prepared by a licensed land
surveyor acceptable to Buyer and containing a certification in form and
substance acceptable to the Buyer, and prepared in compliance with the most
recently adopted ALTA/ACSM Land Title Survey Standards including all Table A
Responsibilities and Requirements items 1, 2, 3, 4, 6, 7(a), 7(b) 8, 9, 10, 11
(except topography), dated after the Effective Date, setting forth: (i) the
metes and bounds and, if applicable, lot and block legal description of the
Property; (ii) the location, height and square footage of all improvements
located on the Property to which it relates, including parking areas and number
of spaces, curb cuts and the means of ingress and egress from public roads and
highways; (iii) the location of all utilities servicing the Property, including
sewer, water, gas, electric telephone and any other utilities serving the
Property to the point of connection with the public system; (iv) the location
and recording information of all easements affecting the Property or benefitting
the Property, and any building and/or set back lines; and (v) any encroachments
of the improvements on the Property onto adjacent property or easements within
the Property, and any encroachments of improvements on adjacent property onto
the Property (vi) gross acreage of the Property, (vii) a vicinity map and (viii)
certifying the survey as having been prepared to "Urban" standards. The survey
shall indicate whether or not the Property or any part thereof is located within
a flood plain area. The survey shall be certified to the Title Company, the
Buyer, Buyer's lender, and Buyer's grantee, if applicable.
23
DUE DILIGENCE CHECKLIST
XXXXXXX XXXXXXXX COMMENTS ARE RED (DLH 9/3/04)
The following information is to be provided for management review
NAME OF PROPERTY: XXXXX XX XXXXXXXXXX - XXXXXXXXXXX, XX COMMENTS
A. FINANCIAL INFORMATION
1. Leases
a. Copies of all leases, amendments and any guarantees YES
WE NEED WITHIN THREE (3) DAYS AFTER ACCEPTANCE OF AGREEMENT.
b. Copies of any REA, OEA, easements and encumbrances NOT IN OUR POSSESSION
WE NEED WITHIN THREE (3) DAYS AFTER ACCEPTANCE OF AGREEMENT. CCR ENCLOSED
c. Standard Lease Form NOT IN OUR POSSESSION
ENCLOSED
2. Rent Roll
a. Current Rent Roll HAVE 6/2/04, NEED
WE NEED WITHIN THREE (3) DAYS AFTER ACCEPTANCE OF AGREEMENT. CURRENT ENCLOSED
b. Rent Roll as of December 31 of previous year NOT IN OUR POSSESSION
ENCLOSED
c. Rent Information for any tenant who occupied a space during previous NOT IN OUR POSSESSION
year, including vacated tenants as of December 31 of previous year ENCLOSED
d. Future rent information for any tenant to occupy a space in the current NOT IN OUR POSSESSION
year whose lease was signed and finalized as of December 31 of the
previous year ENCLOSED
e. Schedule of rents for free rent and stopped rent periods NOT IN OUR POSSESSION
N/A
3. Copies of Commencement Letters to Tenants NOT IN OUR POSSESSION
ENCLOSED
4. Latest leasing status report NOT IN OUR POSSESSION
100% LEASED. SPACE
1B QUICK ONE
CHINESE AND 6B
PLANET SMOOTHIE
COMPLETING TI'S.
5. Summary of recent lease transactions including rate and tenant improvement NOT IN OUR POSSESSION
allowances YOU PICKED UP THE
LEASE FOR XXXXX FARGO
FINANCIAL, COLDWELL
BANKER AND PLANET
SMOOTHIE LAST WEEK.
ENCLOSED IS THE QUICK
ONE CHINESE LEASE
6. Percentage Rent
a. List of current tenants on percentage rent only or percentage rent in lieu N/A
basis N/A
b. Summary of percentage rents for the year ended December 31 of N/A
previous year and related support N/A
7. List of specialty license agreements N/A
N/A
8. Operating Statements
a. Prior five full years income/operating statements ending December 31 WE ONLY HAVE 2003.
THE CENTER WAS BUILT
IN 2001. ENCLOSED
ARE THE 2001 & 2002
FINANCIAL STATEMENTS
Due Diligence Checklist for Management Review
Page 2
NAME OF PROPERTY: XXXXX XX XXXXXXXXXX - XXXXXXXXXXX, XX COMMENTS
b. Year-to-date income/operating statement HAVE 6/04, NEED
MOST RECENT.
ENCLOSED IS 7/04
c. Balance sheet as of December 31 of previous year NOT IN OUR POSSESSION
ENCLOSED
d. Current year/full year operating budgets WE HAVE NEED PRIOR
ENCLOSED
e. Following year budget NOT IN OUR POSSESSION
2005 BUDGET HAS NOT
BEEN COMPLETED.
9. General Ledger
a. General ledger detail for income statement accounts for the previous year NOT IN OUR POSSESSION
ending December 31 ENCLOSED
b. Year-to-date general ledger statement NOT IN OUR POSSESSION
ENCLOSED
10. Copies of bills for: HAVE 2003, NEED
a. Real estate taxes (last three years) 2002 AND 2001
ENCLOSED
b. Insurance
1) Liability NOT IN OUR POSSESSION
ENCLOSED
2) Property NOT IN OUR POSSESSION
ENCLOSED
c. Copies of reconciliations for CAM/taxes/insurance for year ended
December 31 of previous year for all tenants including vacated Tenants ENCLOSED
d. Statement of current monthly amounts paid by tenants for NOT IN OUR POSSESSION
CAM/tax/insurance plus a year-to-date balance of amounts paid by each ENCLOSED
tenant (Tenant Ledger)
Due Diligence Checklist for Management Review
Page 3
A. FINANCIAL INFORMATION (CONTINUED)
11. Information related to any recent CAM or TAX Audits, including copies of NOT IN OUR POSSESSION
reports N/A
12. Leakage report of reimbursable expenses by tenant NOT IN OUR POSSESSION
N/A
13. Base rent collected in previous five calendar year period by tenant (see pg.3) NOT IN OUR POSSESSION
ENCLOSED
14. Physical occupancy for the last five calendar years prior to purchase NOT IN OUR POSSESSION
ENCLOSED
15. Receivables status/aging report WE HAVE JUNE 4,
2004
16. Tenant sales reports for last three years (absolutely REQUIRED for tenants HAVE 2003, NEED
who have kick-outs for sales or who paid percentage rent) PRIOR 2002 ENCLOSED
17. Tenant financial statements NOT IN OUR POSSESSION
N/A
18. Lease expirations - next three years NOT IN OUR POSSESSION
a. Status of expirations, with kick-outs, with respect to renewal possibilities ENCLOSED
19. Description and breakdown of Promotional Income and Marketing Fund NOT IN OUR POSSESSION
NOT ACTIVE
20. Leasing Plan NOT IN OUR POSSESSION
ENCLOSED
B. EXPENSE INFORMATION
1. Twelve months of consecutive utility bills NOT IN OUR POSSESSION
ENCLOSED
a. Water NOT IN OUR POSSESSION
ENCLOSED
b. Gas NOT IN OUR POSSESSION
ENCLOSED
c. Electric NOT IN OUR POSSESSION
ENCLOSED
d. Telephone and dedicated lines NOT IN OUR POSSESSION
ENCLOSED
2. Copies of all service agreements, contracts or any leases that encumber the ENCLOSED FOR a., c.,
property d., & e.
a. Fire/sprinkler/burglar alarms NOT IN OUR POSSESSION
b. Antenna cable/satellite dish NOT IN OUR POSSESSION
c. Cleaning NOT IN OUR POSSESSION
d. Exterminating NOT IN OUR POSSESSION
e. Landscaping NOT IN OUR POSSESSION
f. Scavenger NOT IN OUR POSSESSION
g. Security service NOT IN OUR POSSESSION
h. Snow removal NOT IN OUR POSSESSION
i. Towing NOT IN OUR POSSESSION
j. Union contracts NOT IN OUR POSSESSION
k. Elevator NOT IN OUR POSSESSION
I. Uniform rental NOT IN OUR POSSESSION
m. Water softeners NOT IN OUR POSSESSION
n. Leasing NOT IN OUR POSSESSION
o. Management Agreement NOT IN OUR POSSESSION
p. Advertising NOT IN OUR POSSESSION
q. Tax reduction legal fees NOT IN OUR POSSESSION
Due Diligence Checklist for Management Review
Page 4
r. Any other service contracts or leases not cancelable in 90 days NOT IN OUR POSSESSION
ENCLOSED
3. Copies of one month's invoices for recurring contractual operating expenses NOT IN OUR POSSESSION
(contractual, landscaping, sweeping, etc.) ENCLOSED
4. Copies of invoices for various significant expense items (repairs, NOT IN OUR POSSESSION
maintenance, contractual) ENCLOSED
5. Details of legal fees + any legal matters related to the property and/or NOT IN OUR POSSESSION
tenants LITIGATION FORMER
DESIRED IMAGE
OWNERS AND RTS BIKE
SHOP. DOCS
ENCLOSED
6. Capital Improvements
a. Capital improvements over the last 36 months NOT IN OUR POSSESSION
NONE
b. Five-year capital expenditure forecast NOT IN OUR POSSESSION
NONE
c. Assignable warranties NOT IN OUR POSSESSION
NONE
Due Diligence Checklist for Management Review
Page 5
C. ENVIRONMENTAL REPORTS
1. Phase I (existing) WE THIS DATED JULY
1995
2. Phase I (new) WE HAVE THIS MAY
DATED 2000
3. Other PHASE II SITE
ASSESSMENT DATED
SEPTEMBER 1995
D. STAFFING
1. Itemized by position and salary NOT IN OUR POSSESSION
N/A NO ON-SITE STAFF
E. SITE INSPECTIONS
1. Inspection report NOT IN OUR POSSESSION
NONE
2. Photos NOT IN OUR POSSESSION
NONE
F. MISCELLANEOUS
1. Code violations
a. Current and outstanding NOT IN OUR POSSESSION
NONE
b. Last 24 months, with compliance NOT IN OUR POSSESSION
NONE
c. Contact municipalities as to other problems NOT IN OUR POSSESSION
NONE
2. Easement/encumbrances; restrictive easement agreements/operating NOT IN OUR POSSESSION
easement agreements ENCLOSED
3. Copies of all Warranties
a. Roof NOT IN OUR POSSESSION
NONE
b. Construction NOT IN OUR POSSESSION
NONE
4. Current tenant contact list NOT IN OUR POSSESSION
ENCLOSED
5. Certificates of insurance for each tenant NOT IN OUR POSSESSION
ENCLOSED
6. Current insurance policies (building and common area)
a. Property N/A FOR #6 UMBRELLA POLICY FOR ALL DS PROPERTIES & NOT IN OUR POSSESSION
b. Liability CONTAINS PRIVATE FINANCIAL INFO. NOT IN OUR POSSESSION
c. Umbrella NOT IN OUR POSSESSION
d. Elevation Certificates for Flood Insurance NOT IN OUR POSSESSION
7. Appraisal
a. Existing Third Party Appraisal NOT IN OUR POSSESSION
N/A
b. New Appraisal NOT IN OUR POSSESSION
8. Marketing/leasing brochures NOT IN OUR POSSESSION
N/A
9. Survey FEBRUARY 2, 2002
10. Site plan YES
11. Building photographs and aerials YES
12. Certificates of Occupancy NOT IN OUR POSSESSION
N/A
Due Diligence Checklist for Management Review
Page 6
13. Zoning Letter NOT IN OUR POSSESSION
N/A
14. Building Plans and Specifications NOT IN OUR POSSESSION
AS BUILT'S ENCLOSED
15. Estoppels NOT IN OUR POSSESSION
BUYER TO PROVIDE
* A. 13
-------
Occupancy Rate Effective
Year Ending as of Annual Rental PSF
December 31 December 31 as of December 31
----------- ----------- -----------------
2003 ENCLOSED ENCLOSED
2002 ENCLOSED ENCLOSED
2001 ENCLOSED ENCLOSED
0000 X/X X/X
0000 X/X X/X
Schedule 4.6
Current Date, 2004
KPMG LLP
KPMG Plaza
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
We, as the owner and Seller (herein so called) of __________________________
(the "Property") are confirming our understanding that your audit of the
Historical Summary of Gross Income and Direct Operating Expenses ("Historical
Summary") of Seller for the calendar year ended December, 2003. during our
period of ownership will be made for the purpose of expressing an opinion to
your client, (insert Inland acquiring entity), as to whether the Historical
Summary presents fairly, in all material respects, the gross income and direct
operating expenses in conformity with the accrual basis of accounting. In
connection with your audit, we confirm, to our actual knowledge without
additional investigation or inquiry, the following representation are made as to
the audit:
1. We will make available to you:
(a) All financial records and related data for the Property reasonable
requested by you in our possession.
2. There have been no:
(a) Instances of fraud involving any member of management or employees who
have significant roles in internal control, not are we aware of
instances of fraud by others.
(b) Communications from regulatory agencies concerning non-compliance
with, or deficiencies in, financial reporting practices received by
the undersigned that could reasonably be expected to have a material
effect on the Historical Summary.
(c) Violations or possible violations of laws or regulations, the effects
of which should be considered for disclosure in the Historical Summary
or as a basis for recording the loss contingency, nor are we aware of
any violations of laws or regulations that to our actual knowledge
would have an adverse impact upon the materials delivered to you.
(d) Nor are we aware of any entries in the minutes of any applicable board
or summary of recant meeting for which minutes have not yet been
prepared which conflict with the financial records provided or the
statements made herein.
28
3. There are no:
(a) Material transactions that have not been properly recorded in the
accounting records underlying the Historical Summary.
(b) Events that have occurred subsequent to the balance sheet data and
through the date of this letter that would require adjustment to or
disclosure in the Historical Summary.
(c) Uninsured claims, asserted claims, material liabilities or loss
contingencies that we believe should have been recorded in the
financial statements that have not been recorded.
4. The Property has failed to comply with all aspects of the contractual
agreements that would have a material effect on the Historical Summary in
the event of noncompliance.
5. All income from operating leases is included as gross income in the
Historical Summary. No other forms of revenue are included in the
Historical Summary.
6. Terms such as "to our knowledge", "to the best of our knowledge", "to our
actual knowledge" or like phrases mean the actual present and conscious
awareness or knowledge of ___________________ (collectively, "Seller's
Representative"), without any duty of inquiry or investigation; provided
that so qualifying Seller's knowledge shall in no event give rise to any
personal liability on the part of Seller's Representative, or any of them,
or any other officer or employee of Seller, on account of any breach of any
representation or warranty made by Seller herein.
Further, we confirm that to our knowledge the financial records do not fail to
disclose any material factors for the Historical Summary.
29
