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EXHIBIT 2.2
SALE AND PURCHASE AGREEMENT
THIS AGREEMENT OF PURCHASE AND SALE ("Agreement") is made between
MADISON PROPERTY I, L.P. ("Seller") and PRICE/BAYBROOK, LTD. ("Buyer"), a
Texas limited partnership. CHICAGO TITLE INSURANCE COMPANY ("Escrow Agent")
joins in this Agreement for the purposes set forth below. The effective date
of this Agreement (the "Effective Date") shall be the date on which the last of
the Seller or Buyer sign this Agreement below.
WHEREAS, Seller is the owner of certain real property known as the
Broadmoor Village Shopping Center, consisting of land totaling approximately
6.34 acres in size, which land is more particularly described in Exhibit A
attached hereto, improved with two buildings having approximately 62,000
rentable square feet of space, located at the northeast corner of Centerville
Road and Broadmoor Drive in Dallas, Texas (collectively the "Property").
AND, WHEREAS, Seller has agreed to sell the Property to Buyer, and
Buyer has agreed to purchase the Property from Seller, under all of the terms
set forth herein.
NOW, THEREFORE, for good and valuable consideration, Seller hereby
agrees to sell to Buyer, and Buyer hereby agrees to purchase from Seller, the
Property, together with (i) all minerals, oil, gas and other hydrocarbon
substances on and under the Property, (ii) all development rights, air rights,
water, water rights and water stock relating to the Property, (iii) any other
easements, rights-of-way or appurtenances owned by Seller and used in
connection with the beneficial operation, use and enjoyment of the Property,
(iv) all rights of Seller in and to public and xxxxxxx xxxxxxx, xxxxx, xxxxxxx,
alleys and passageways, sidewalks, driveways, parking areas and areas adjacent
thereto or used in connection therewith (open or proposed, in front of or
abutting the Property), (v) all rights of Seller in any land lying in the bed
of any existing or proposed street adjacent to the Property, (vi) all strips or
gores of land adjoining the Property, (vii) any awards made or to be made and
any unpaid award for damage to the Property by reason of any change of grade of
any such street, road, avenue, alley or passageway, (viii) all improvements and
fixtures located or to be located on the Property, including, without
limitation, all buildings and structures presently located on the Property or
to be located thereon, (ix) all apparatus, equipment and appliances presently
located on the Property and used in connection with the operation or occupancy
thereof, such as heating and air conditioning systems and facilities used to
provide any utility services, parking services, refrigeration, ventilation,
garbage disposal, recreation or other services thereto, (x) all landscaping and
leasehold improvements of tenants, if any, which become the property of the
owner of the Property, (xi) all leases, occupancy agreements and other similar
agreements to which Seller is a party or by which it is bound, including all
modifications, extensions and renewals thereof, and any guarantees of any of
the foregoing, with respect to or demising any part of the Property or the
improvements thereon, (xii) all income, receipts, funds and revenues of any
kind whatsoever payable under the leases or otherwise with respect to all or
any portion of the Property or the improvements thereon, (xiii) all of the
interest of Seller in any intangible personal property which relates to and is
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required for the operation and functioning of the Property or the improvements
thereon generally, as well as any and all warranties, guarantees, permits,
contracts and other rights owned by Seller relating to the ownership, operation
or functioning of all or any part of the Property (including without limitation
all third party guarantees and warranties, express or implied, in connection
with the construction of the improvements thereon), and (xiv) all personal
property owned by Seller and located at such Property, under all of the
following terms and conditions:
1. Price and Deposit.
1.01 Purchase Price. The purchase price for the Property
(the "Purchase Price") shall be $4,750,000.00.
1.02 Payment. The Purchase Price shall be paid as
follows:
(a) On the Effective Date of this Agreement,
Buyer shall pay an amount of $100,000.00 (the "Deposit") to the Escrow Agent,
which Deposit shall be held by the Escrow Agent in accounts investing solely in
government securities or government insured, as approved by Seller and Buyer.
Any interest earned on the Deposit shall be deemed part of the Deposit and paid
together with the principal portion of the Deposit according to the terms
hereof. The Deposit shall be credited against the Purchase Price, returned to
Buyer or forfeited to Seller in accordance with the terms of this Agreement.
(b) Upon closing under this Agreement, the
Deposit and the remainder of the Purchase Price, subject to closing adjustments
provided herein, shall be paid by wire transfer of funds to Seller's account.
2. Review of Property.
2.01 Property Information. Within 5 business days after
the Effective Date, Seller shall deliver to Buyer, or make available for review
by Buyer, copies of the following documents to the extent in the Seller's
possession or in the possession of the Seller's property manager:
(a) Monthly operating statements in the form
periodically maintained by Seller for the calendar year to date and for the
immediately preceding two calendar years.
(b) The most recent rent roll statement in the
form and with the information maintained by Seller from time to time.
(c) All leases (with any amendments thereto) of
any portions of the Property which are in effect on the Effective Date,
together with all correspondence with tenants and Seller's files related
thereto.
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(d) A survey of the Property prepared for Seller
and dated July, 1996, and any (if any) plans and specifications relating to the
Property.
(e) The xxxx(s) for real estate taxes and
assessments for the preceding two tax/fiscal years and, if available, for the
current tax/fiscal year.
(f) A copy of an environmental audit prepared for
Seller and dated May, 1994, as well as copies of any other (if any)
environmental audits in Seller's possession.
(g) A copy of an engineering report prepared for
Seller and dated May, 1994, as well as copies of any other (if any) engineering
reports in Seller's possession.
(h) A list of all capital expenditures on the
Property in the preceding two year period.
(i) A redacted copy of the Seller's current
property insurance policy for the Property.
(j) All contracts or agreements for property
management, maintenance, janitorial services, trash removal, landscaping, snow
removal, HVAC maintenance and other ongoing services provided to Seller in
connection with the Property.
(k) A list of any personal property owned by
Seller and located at the Property.
(l) Any certificates of occupancy (if any)
relating to the Property.
Buyer acknowledges and agrees that Buyer shall be
responsible for verifying through Buyer's own due diligence the accuracy and
completeness of all documents and information, including the foregoing,
provided by Seller to Buyer, and any reliance by Buyer on such documents and
information shall be at Buyer's own risk. In addition, Buyer expressly
acknowledges and agrees that Seller shall not be obligated to furnish, nor
shall Buyer be entitled to review or have access to, internal memoranda or
internal work product which are in the possession or control of Seller.
However, the foregoing shall not limit the effectiveness of any representations
or warranties expressly set forth herein.
2.02 Study Period. Buyer shall have a period, commencing
upon the Effective Date and extending for 35 calendar days thereafter (the
"Study Period"), in which to determine in its discretion if Buyer wishes to
purchase the Property. If Buyer shall conclude that it elects to not purchase
the Property, then Buyer shall so notify Seller on or prior to the date on
which the Study Period expires, in which event the Deposit shall be returned to
Buyer and the parties shall have no further liability hereunder (except as may
be expressly provided herein upon termination). In the event Buyer does not so
notify Seller prior to expiration of the Study Period, Buyer shall be
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deemed to have automatically waived its right to terminate this Agreement, and
the parties shall proceed to closing in accordance with the terms of this
Agreement.
2.03 Right of Entry. During the Study Period, Buyer and
its agents shall have the right to enter the Property for the purpose of
examining the environmental, structural and other physical conditions of the
Property. In addition, Buyer shall have the right to interview tenants at the
Property during the Study Period, provided that Buyer notifies Seller in
advance and affords Seller an opportunity to attend such interviews. In
exercising such right of entry, the Buyer agrees to not unreasonably or
materially interfere with the operation of the Property or the rights of
tenants therein. Furthermore, Buyer shall not take any core samples, install
any monitoring xxxxx or undertake any other invasive tests or studies without
the Seller's prior written consent, which consent shall not be unreasonably
withheld or delayed. In all events, Buyer shall fully repair and restore the
Property if any physical damage is caused by the exercise of such rights.
Likewise, Buyer acknowledges and agrees that Seller makes no representations or
warranties of any kind regarding the physical (including environmental and
structural) condition of the Property, except as may be expressly stated herein
(if at all), and Buyer shall rely entirely on Buyer's own examinations and
inspections of the Property in determining whether to purchase the Property.
Buyer hereby indemnifies and holds harmless Seller from and against any and all
liability, losses and damages (whether actual, direct, indirect, incidental or
consequential), suits, claims, actions or other proceedings (including
attorneys' fees), and costs and expenses (including the costs of restoration,
remediation and other similar activities) arising from any damage to property
or injury to person caused during any entry onto the Property by Buyer or any
of its employees, agents, contractors or consultants. The foregoing indemnity
shall survive any termination of this Agreement for a period of 1 year.
2.04 Legal Review Period. After the Effective Date, Buyer
shall have the right to obtain a current survey according to the Buyer's
requirements ("Survey") and a title insurance commitment with legible copies of
all exceptions stated therein ("Title Commitment") with respect to the
Property. On or before a date which is the earlier of (i) 15 calendar days
after the later of Buyer's receipt of the Survey or Buyer's receipt of the
Title Commitment, or (ii) the date on which the Study Period expires, Buyer
shall notify Seller in writing of any defect in title to the Property or of any
other matter which is indicated on the Survey or Title Commitment to which
Buyer objects. If Buyer does so notify Seller of a defect in title or other
matter objectionable to Buyer within the prescribed time, Seller shall have 15
calendar days in which to determine whether to cure the defect or other matter
so objected to by Buyer and to notify Buyer of Seller's decision in this
regard; however, Seller shall not be required or obligated to expend any amount
of money or take any other action to cure such defect or other matter. If
Seller is unable to cure the defect or other matter so objected to by Buyer to
the reasonable satisfaction of Buyer, Buyer shall have the right (i) to waive
such defect or other matter and take title to the Property without any
adjustment in the Purchase Price, or (ii) to terminate this Agreement and
receive a return of the Deposit. In all events, Seller will cause to be paid
off and released any mortgage or deed of trust encumbering title to the
Property at closing, provided that if Seller is unable to obtain a release of
any mortgage or deed of trust through payment of Seller's net proceeds of sale
(and Seller is unable or unwilling to pay any additional amounts necessary to
obtain such release), then Seller shall have the option
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of terminating this Agreement, whereupon the Deposit shall be returned to Buyer
and Seller shall reimburse to Buyer the verifiable out-of-pocket costs
incurred by Buyer in connection with this Agreement up to an amount of
$75,000.00. In the event that Buyer fails to initially notify Seller in
writing of a defect or other objectionable matter within the prescribed time as
described above, or Buyer fails to terminate the Agreement within the
prescribed time upon Seller's failure to cure the defect or other matter to
Buyer's reasonable satisfaction, Buyer shall be deemed to have automatically
waived any objection to the state of title to the Property or to any matter
shown on the Survey and to have agreed to proceed to closing in accordance with
the terms of this Agreement.
3. Covenants, Representations and Warranties.
3.01 Seller's Covenants, Representations and Warranties.
Seller hereby covenants, represents and warrants that to Seller's knowledge:
(a) The documents delivered to Buyer pursuant to
Section 2.01 hereof are true, correct and complete in all material respects
without intentional alteration or omission.
(b) There are not pending any special assessments
or condemnation actions with respect to the Property.
(c) This Agreement has been, and all the
documents to be delivered by Seller to Buyer at closing will be, duly
authorized.
(d) This Agreement, and the transfer of the
Property by Seller, shall not violate any contract, agreement or instrument to
which Seller is a party or by which the Seller or the Property is bound.
(e) Any and all improvements to the Property, and
any services the nonpayment of which could result in the imposition of
mechanics' liens, have been or at closing will have been paid in full.
(f) The Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986.
(g) There are no existing or proposed eminent
domain proceedings with respect to the Property.
(h) There are no actions or proceedings,
including actions or proceedings related to environmental matters, pending
against Seller or with respect to the Property or any tenant at the Property
before any court or administrative agency.
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(i) Seller has received no written notice of, and
has no knowledge of, any violation of any zoning or other land use law or
regulation regarding the physical condition of the Property.
(j) Seller owns the Property in fee simple, free
and clear of all liens and encumbrances except those matters which are of
public record or which are disclosed in writing to Buyer in the Title
Commitment or the Survey, or otherwise disclosed in writing by Seller to Buyer
or independently discovered by Buyer.
(k) Seller has received no written notice of, and
has no knowledge of, any violation of any Environmental Requirements (defined
herein) with respect to the existence, storage, use or other handling of any
Hazardous Materials (defined herein) at the Property. "Environmental
Requirements" shall mean all applicable present statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises and similar items of all governmental agencies,
departments, commissions, boards, bureaus or instrumentalities of the United
States, states and political subdivisions thereof and all applicable judicial
and administrative and regulatory decrees, judgments and orders relating to the
protection of human health or the environment, including, without limitation
all requirements, including but not limited to those pertaining to reporting,
licensing, permitting, investigation and remediation of emissions, discharges,
releases or threatened releases of Hazardous Materials into the air, surface
water, ground water or land. "Hazardous Materials" shall mean (i) any
flammable, explosive or radioactive materials, hazardous wastes, toxic
substances or related materials, including, without limitation, substances
defined as "hazardous substances," "hazardous materials," "toxic substances" or
"solid waste" in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Sec. 9601, et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Toxic
Substances Control Act, 15 U.S.C., Section 2601 et seq., the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., and in
the regulations adopted and publications promulgated pursuant to said laws,
(ii) those substances listed in the United States Department of Transportation
Table (49 C.F.R. 172.101 and amendments thereto) or by the Environmental
Protection Agency (or any successor agency) as hazardous substances (40 C.F.R.
Part 302 and amendments thereto), (iii) those substances defined as "hazardous
wastes," "hazardous substances" or "toxic substances" in any similar federal,
state or local laws or in the regulations adopted and publications promulgated
pursuant to any of the foregoing laws or which otherwise are regulated by any
governmental authority, agency, department, commission, board or
instrumentality of the United States of America, the State of Texas or any
political subdivision thereof, (iv) any pollutant or contaminant or hazardous,
dangerous or toxic chemicals, materials, or substances within the meaning of
any other applicable federal, state, or local law, regulation, ordinance, or
requirement (including consent decrees and administrative orders) relating to
or imposing liability or standards of conduct concerning any hazardous, toxic
or dangerous waste, substance or material, all as amended; (v) petroleum or any
by-products thereof; (vi) any radioactive material, including any source,
special nuclear or by-product material as defined at 42 U.S.C. Sections 2011 et
seq., as amended, and in the regulations adopted and publications promulgated
pursuant to said law; (vii) asbestos in any form or condition; and (viii)
polychlorinated biphenyls.
(l) Seller has no employees.
(m) All trash removal, landscaping, maintenance
and other service contracts and agreements relating to the Property may be
terminated upon advance notice of 30
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days or less, and no such contracts or agreements require the payment of
penalties upon cancellation.
(n) None of the leases with tenants at the
Property require the payment of a security deposit.
(o) No leasing commissions will be payable upon
the exercise by any of the tenants at the Property of an option to renew or
extend the term of its lease.
(p) Seller has received no notice of, and has no
knowledge of, any outstanding violations of any covenants, restrictions or
other agreements affecting title to the Property.
(q) None of the representations or warranties set
forth above is stated in such a manner as to be materially misleading.
Any reference in this Agreement to "knowledge,"
"actual knowledge" or "best of knowledge" of Seller, or the receipt of notices
or other communications by Seller, shall be deemed to mean the actual knowledge
of, or receipt of notice or communication by, Xxxx X. Xxxxxxx, whom Seller
represents is the person in the employ of Seller, its affiliates or advisor
having day-to-daymanagement responsibility with respect to the Property. Buyer
acknowledges and agrees that such party nor any other employee or agent of
Seller shall have any duty or obligation under this Agreement or other law to
make any affirmative investigation of the matters covered by the foregoing
provisions in order to determine the accuracy or truthfulness thereof. In
addition, Buyer hereby acknowledges and agrees that except with respect to the
foregoing representations and warranties set forth in this provision above, or
that which may be expressly set forth elsewhere in this Agreement (if at all),
the Property is to be conveyed by Seller to Buyer in "as-is, where-is"
condition without warranty or representation, express or implied, as to zoning,
physical condition, environmental condition, suitability for a particular
purpose or any other matter whatsoever.
3.02 Conditions to Buyer's Closing. The continued
accuracy in all material respects of the representations and warranties set
forth in Section 3.01 above shall be a condition precedent to the Buyer's
obligation to close hereunder. If any representation or warranty set forth in
Section 3.01 above shall prove to be incorrect in any material respect at or
before closing, Buyer may, as its sole remedy on account thereof, terminate
this Agreement and receive a return of its Deposit, in which event the parties
shall have no further liability hereunder, except as may be expressly provided
herein upon termination, and except that if the reason any such representation
or warranty is incorrect is that Seller failed to disclose known defects or
other information necessary for such representation or warranty to have been
correct at the time made, then Buyer shall be entitled to receive a
reimbursement of all of its verifiable out-of-pocket costs incurred in
connection with this Agreement up to an amount of $75,000.00. Absent any such
termination, upon closing hereunder the covenants, representations and
warranties set forth in Section 3.01 above, as modified by the certificate
delivered from Seller to Buyer at closing as described in Section 5.04, as well
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as the covenants contained in the first two sentences of Section 4.02 and the
covenant contained in the first sentence of Section 4.03, shall be deemed
remade as of the date of closing hereunder and shall survive the closing for a
period of six months, provided that such six month period shall be extended to
a period of one year with respect to (and only to) any claim under a covenant,
representation or warranty as to which Seller is notified by Buyer in writing
within such six month period, and further provided that such one year period
shall be extended to the end of the concomitant litigation with respect to any
claim as to which Seller is notified by Buyer in writing within the six month
period and as to which Buyer files suit within one year from the date of
closing. However, notwithstanding anything to the contrary herein, to the
extent that any documents or information regarding the Seller or the Property
are disclosed to Buyer or brought to Buyer's attention prior to closing, either
orally or in writing, and Buyer nevertheless closes on purchase of the
Property, Buyer shall be deemed to have accepted and to have waived any
objection to or claim based on such documents or information. Furthermore,
except with respect to any covenants, representations or warranties which are
expressly to survive closing hereunder, any and all covenants, representations
and warranties contained in this Agreement shall merge in the deed delivered at
closing and shall not survive closing hereunder.
3.03 Buyer's Covenants, Representations and Warranties.
Buyer hereby covenants, represents and warrants that to Buyer's knowledge:
(a) This Agreement has been, and all the
documents to be delivered by Buyer to Seller at closing will be, duly
authorized.
(b) This Agreement, and the acquisition of the
Property by Buyer, shall not violate any contract, agreement or instrument to
which Buyer is a party or by which the Buyer is bound.
3.04 Conditions to Seller's Closing. The continued
accuracy in all material respects of the representations and warranties set
forth in Section 3.03 above shall be a condition precedent to the Seller's
obligation to close hereunder. If any representation or warranty set forth in
Section 3.03 above shall not be correct in any material respect at or before
closing, Seller may terminate this Agreement and retain the Deposit pursuant to
Section 7.02 hereof.
4. Pre-closing Obligations.
4.01 Operations. Between the Effective Date and closing
hereunder, Seller shall continue to repair, maintain and operate the Property
according to the standards under which the Property has been operated prior to
the Effective Date of this Agreement. In the event that after expiration of
the Study Period but before closing hereunder, Seller has actual knowledge for
the first time of the need for any roof, foundation or other structural repair
at the Property, then Seller shall notify Buyer in writing of such fact.
4.02 Actions Affecting Property. Between the Effective
Date and closing hereunder, Seller shall not execute any new leases or lease
amendments without Buyer's prior
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written approval, which approval shall not be unreasonably withheld,
conditioned or delayed. In addition, during the same period, Seller shall not
without the prior written approval of the Buyer execute any documents,
agreements or instruments affecting title to the Property or otherwise allow or
permit the imposition of any liens or other encumbrances which affect title to
the Property (with the understanding that Seller shall not be required to
expend funds in order to prevent the imposition of a lien or encumbrance,
unless the lien or encumbrance is the result of a voluntary act of Seller).
Upon requesting approval of any lease with a prospective tenant or any renewal
agreement with an existing tenant, Seller shall furnish to Buyer copies of (a)
the form lease providing the basis for negotiations with such tenant, (b) the
financial statements of the tenant supplied to Seller, (c) any credit reports
with respect to the tenant obtained by Seller, and (d) a letter of intent or
other statement of the business terms of the proposed lease or other agreement,
including rent, lease term, tenant improvements, leasing commissions and
allowances or concessions. In the event that Buyer fails to respond within 5
business days after any request for approval of a lease or any other document,
then Buyer's approval shall be deemed granted.
4.03 Service Contracts. Between the Effective Date and
closing hereunder, Seller shall not enter into any new landscaping, trash
removal, maintenance or other service contracts or agreements relating to the
Property without the prior written approval of the Buyer. In the event that
Buyer fails to respond within 5 business days after any written request for
approval of a service contract or agreement, then Buyer's approval shall be
deemed granted. At closing, Seller shall assign, and Buyer shall assume, all
landscaping, trash removal, maintenance and other service contracts or
agreements relating to the Property.
4.04 Estoppel Letters. Within 21 days after the Effective
Date of this Agreement, Seller shall request in writing from each of the
tenants at the Property an estoppel letter based on the form of the estoppel
letter previously provided by each such tenant in connection with Seller's
financing of the Property and attached hereto as Exhibit B. Seller shall
deliver to Buyer at or before closing copies of all estoppel certificates so
obtained by Seller. In the event that by the time of closing hereunder, Seller
has not obtained from any tenant at the Property an estoppel certificate
substantially in the form shown in Exhibit B hereto with respect to such
tenant, as modified to reflect accurate information regarding the lease term,
rent and other terms of the respective tenant's lease, or any estoppel so
obtained by Seller states that the Seller is in default under the applicable
tenant's lease, then Buyer shall have the right, as its sole remedy on account
thereof, to terminate this Agreement and receive a return of the Deposit,
whereupon the parties shall have no further liability hereunder (except as may
be expressly provided herein upon termination).
4.05 Marketing of Property. After the Effective Date, and
until closing or earlier termination of this Agreement, Seller shall not enter
into any other contract for sale of the Property unless such contract is
expressly subject to the prior rights of Buyer hereunder.
5. Closing and Settlement.
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5.01 Closing Date. The purchase and sale contemplated
herein shall either close at the office of the Escrow Agent or occur by mailed
escrow closing within 15 calendar days after the expiration of the Study Period
described in Section 2.02 above.
5.02 Deed and Title. At closing, Seller shall deliver to
Buyer a special warranty deed in form reasonably satisfactory to both Seller
and Buyer upon payment of the Purchase Price (subject to closing adjustments
provided herein) to Seller. Title to the Property as conveyed by such deed
shall be subject to (a) liens securing payment of taxes, assessments and other
public charges imposed in connection with the Property but which are not yet
due as of the date of closing, (b) all matters indicated on the Title
Commitment which are not objected to by Buyer in accordance with Section 2.04
above, (c) any zoning, subdivision or other public laws and regulations, and
(d) leases or other occupancy agreements with tenants at the Property disclosed
to Buyer as required by Section 2.01 hereof or executed by Seller after Buyer's
approval or deemed approval pursuant to Section 4.02 hereof (collectively the
"Permitted Encumbrances"). However, in the event that title insurance related
to the Property (subject to exceptions for the Permitted Encumbrances, standard
exceptions, customary requirements for issuance, payment of premiums, and other
customary conditions) is not available to Buyer at closing due to defects in
title to the Property first arising after issuance of the Title Commitment,
then Buyer shall have the right to terminate this Agreement and receive a
return of its Deposit, whereupon the parties shall have no further liability
hereunder.
5.03 Additional Conveyances. At closing, Seller shall
execute and deliver to Buyer, and where appropriate Buyer shall execute and
deliver to Seller, the following documents in the form attached hereto or,
where no form is attached hereto, as reasonably acceptable to the parties:
(a) A xxxx of sale in the form attached hereto as
Exhibit C.
(b) An assignment by Seller, with an assumption
by Buyer, of (i) all leases disclosed to Buyer affecting the Property, (ii) all
service contracts and agreements disclosed to Buyer relating to the Property,
and (iii) all equipment leases and all warranties and other rights relating to
the Property which are assignable without charge or restriction, in the form
attached hereto as Exhibit D.
(c) Letters to each tenant at the Property
notifying the tenants of the sale of the Property to Buyer.
(d) Evidence, in form satisfactory to the Buyer's
title insurer, of Seller's power and authority to enter into this transaction,
as well as a customary owner's affidavit necessary for the Buyer's title
insurer to issue a title insurance policy to Buyer.
(e) A written certificate stating that all
representations and warranties contained in Section 3.01 above remain, as of
the date of closing, correct in all material respects as when
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first made hereunder or, if not correct, stating the extent to which any such
representations and warranties are not correct, in the form attached hereto as
Exhibit E.
(f) A certificate stating that Seller is not a
"foreign person" for the purposes of Section 1445 of the Internal Revenue Code
of 1986, in the form attached hereto as Exhibit F.
(g) Original copies of all leases (including all
amendments thereto) and, if requested, original copies of all materials
previously delivered or made available to Buyer pursuant to Section 2.01
hereof.
5.04 Possession. Possession of the Property shall be
delivered to the Buyer on the date of closing.
5.05 Prorations. The parties shall adjust and prorate the
following items, as of 11:59 p.m. on the day immediately prior to closing:
(a) All rent, including base rent, minimum rent
and fixed rent (if any), which relates to the months or other applicable
periods up through the month or other applicable period within which the
closing occurs. Seller shall not receive a credit for any rental amounts which
are due and payable prior to closing but not actually paid by the respective
tenant(s). Buyer shall use commercially reasonable efforts to collect such
delinquent amounts after closing and, after application to any amounts due but
unpaid for the period after closing, promptly remit such amounts to Seller.
(b) All amounts payable by tenants at the
Property as periodic estimates of the costs of utilities, insurance,
maintenance, repairs and other operating expenses relating to the months or
other applicable periods up through the month or other applicable period within
which the closing occurs.
(c) All real property taxes, assessments and
other governmental impositions of any kind or nature, including any special
assessments or similar charges, which relate to the tax year or other
applicable period within which the closing occurs. However, notwithstanding
the foregoing, if any taxes or assessments are payable to the applicable
authorities in arrears at the end of the calendar year or other tax period in
which the closing occurs, no proration for such taxes or assessments shall be
made at closing, provided that if any tenants at the Property are required to
pay periodic estimates of such tenants' share of such taxes or assessments,
Seller shall pay to Buyer at closing the periodic payments actually made by
such tenants prior to closing with respect to the calendar year or other tax
period in which the closing occurs.
(d) All fees, costs and expenses under
maintenance, trash removal, janitorial or other service contracts which relate
to the period within which the closing occurs.
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Subject to the requirements of Section 4.02 above,
all leasing commissions and tenant improvement costs arising in connection with
leases, lease amendments or other agreements with tenants which are entered
into by Seller on or after the Effective Date and before closing shall be
assumed and paid by Buyer, with an adjustment of the Purchase Price to be made
at closing in order to credit to Seller any payments of such amounts made by
Seller prior to closing.
The obligations under this section shall survive
closing. In the event that any errors in prorations or adjustments made at
closing are discovered after closing, the parties shall promptly re-adjust the
subject amounts, with such payments to be made between the parties as are
necessary to correct the errors. In all events, the parties shall make such
adjustments, or confirm in writing that no such adjustments are necessary,
within 120 days after the end of the calendar year in which the closing occurs.
5.06 Closing Costs. Upon (but only upon) closing
hereunder, Seller shall reimburse to Buyer (i) the cost to Buyer of obtaining
the Survey, which may be an updated version of the 1996 survey delivered to
Buyer pursuant to Section 2.01 hereof and (ii) the costs to Buyer of the Title
Commitment, including standard rates and premiums, but excluding charges for
coverage as to area and boundaries and any other special premiums or charges
for extraordinary coverages obtained by Buyer. Buyer and Seller shall divide
evenly any recording charges imposed in connection with the delivery and
recordation of a deed for the Property and any escrow charges or other
settlement costs of the transaction. Seller and Buyer shall each pay the costs
of its own counsel.
5.07 Property Exchange. Seller agrees to cooperate at
closing hereunder with Buyer's efforts to complete a tax-free exchange of
property through the Buyer's purchase of the Property. Such cooperation shall
include the signing of documents, as necessary, provided that Seller shall not
be required to take title to any property other than the Property, and further
provided that such cooperation shall be at no cost to Seller. In addition,
Buyer hereby indemnifies Seller from any claims, suits, liabilities and
expenses incurred in any connection with such exchange, which indemnification
shall survive closing hereunder indefinitely.
6. Casualty and Condemnation.
6.01 Substantial Event. Until closing under this
Agreement, Seller will maintain its existing all-risk property damage insurance
on the buildings and improvements on the Property, on a replacement cost basis.
If any improvements on the Property are destroyed or damaged and the cost of
restoration exceeds $250,000, or if restoration after a casualty would take
longer than 120 days, according to bona-fide contractors' estimates, or if any
tenant has the right to terminate its lease as a result of a casualty, or if
condemnation proceedings are commenced against the Property or any part
thereof, between the date hereof and the date of closing, Buyer may terminate
this Agreement and receive a return of its Deposit. However, in the event of
such casualty or condemnation, Buyer shall have the right to elect not to
terminate this
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Agreement, in which case all proceeds of insurance or condemnation awards
payable by reason of such damage or condemnation shall be paid or assigned to
Buyer.
6.02 Insubstantial Event. In the event of damage to the
improvements on the Property with the cost of restoration being $250,000 or
less and the time necessary for restoration being less than 120 days, or if any
improvements on the Property are destroyed or damaged as described in Section
6.01 above but Buyer elects not to terminate the Agreement, then all proceeds
of insurance or condemnation awards payable by reason of such damage or
condemnation shall be paid or assigned to Buyer, and Buyer shall proceed to
closing.
7. Default/Remedies.
7.01 Default by Seller. If Seller breaches or defaults in
any obligation under this Agreement (subject to Section 3.02 hereof), and such
breach or default is not cured within a reasonable time after written notice
from Buyer, then provided Buyer is not in breach or default hereunder, Buyer
shall have, as its sole option and remedy on account thereof, the right to
enforce this Agreement by specific performance. However, in the event of any
such uncured default by Seller, and after making good faith efforts to enforce
this Agreement by specific performance, Buyer is denied the right of specific
performance by order of court or otherwise, then Buyer shall have the right to
terminate this Agreement and receive a return of the Deposit, whereupon Buyer
shall be entitled to receive from Seller a reimbursement of all of its
verifiable out-of-pocket costs incurred in connection with this Agreement up to
an amount of $75,000.00.
7.02 Default by Buyer. If Buyer breaches any covenant,
warranty or representation contained in this Agreement, then provided Seller is
not in breach or default hereunder, Seller shall have the right to retain the
Deposit (in which case the Escrow Agent shall pay the Deposit to Seller), as
Seller's sole remedy and liquidated damages on account of the Buyer's default,
with the parties agreeing that the Seller's actual damages would be difficult
to ascertain and that the Deposit is the parties' best and good faith estimate
of such damages and not a penalty.
8. Provisions Regarding Escrow Agent.
8.01 Administration of Deposit. The Escrow Agent agrees
to hold and apply the Deposit in accordance with the terms and conditions of
this Agreement. The Escrow Agent shall invest the Deposit as directed by the
Buyer.
8.02 Limitation on Liability. The following provisions
shall control with respect to the rights, duties and liabilities of the Escrow
Agent:
(a) The Escrow Agent acts hereunder as a
depository only and is not responsible or liable in any manner whatsoever for
the (i) sufficiency, correctness, genuineness or validity of any written
instrument, notice or evidence of a party's receipt of any instruction or
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notice which is received by the Escrow Agent, or (ii) identity or authority of
any person executing such instruction, notice or evidence.
(b) The Escrow Agent shall have no responsibility
hereunder except for the performance by it in good faith of the acts to be
performed by it hereunder, and the Escrow Agent shall have no liability except
for its own willful misconduct or gross negligence.
(c) The Escrow Agent shall not be responsible for
the solvency or financial stability of any financial institution with which
Escrow Agent is directed to invest funds escrowed hereunder.
(d) The Escrow Agent shall be reimbursed on an
equal basis by Buyer and Seller for any reasonable expenses incurred by the
Escrow Agent arising from a dispute with respect to the amount held in escrow,
including the cost of any legal expenses and court costs incurred by the Escrow
Agent, should the Escrow Agent deem it necessary to retain an attorney with
respect to the disposition of the amount held in escrow.
(e) In the event of a dispute between the parties
hereto with respect to the disposition of the amount held in escrow, the Escrow
Agent shall be entitled, at its own discretion, to deliver such amount to an
appropriate court of law pending resolution of the dispute.
9. Confidentiality. Buyer expressly agrees to protect and hold
in the strictest confidence the transactions contemplated by this Agreement,
the documents and information provided by Seller to Buyer under Section 2.01
hereof or otherwise (except for that which is readily available to the public),
and all negotiations between the parties. Notwithstanding the foregoing, Buyer
shall be permitted to disclose such matters, as appropriate, to its officers,
directors, employees and partners and to its attorney(s), surveyor, title
insurer, broker and accountants, provided that Buyer requires such parties, in
writing, to observe the foregoing covenant regarding confidentiality, and this
section shall not apply to the extent of any information which Buyer determines
in good faith should be disclosed by Buyer pursuant to state or federal
securities laws or the rules of any national securities exchange. Buyer
further agrees that if the transaction contemplated by this Agreement does not
occur for any reason whatsoever, Buyer shall promptly return to Seller all
copies of documents and other written materials related to the transaction
furnished to the Buyer and such other parties under Section 2.01 or otherwise.
The provisions of this section shall survive any termination of this Agreement.
10. Miscellaneous.
10.01 Assignment. Any assignment of this Agreement by
Buyer must meet with Seller's prior written approval. Upon any such assignment
of this Agreement, the original named Buyer herein shall not be released but
shall remain primarily responsible for all duties, obligations and liabilities
of the Buyer hereunder. This Agreement shall inure to the benefit of, and be
binding upon, the successors and assigns of the parties hereto.
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10.02 No Personal Liability. No employee, officer,
director, trustee, partner or affiliate of Seller, or any investment manager or
other agent of Seller, shall be personally liable or responsible for any
duties, obligations or liabilities of the Seller hereunder or in any other
connection with the Property or this transaction. No employee, officer or
director of Buyer shall be personally liable or responsible for any duties,
obligations or liabilities of the Buyer hereunder.
10.03 Applicable Law. This document shall be governed by,
construed and enforced in accordance with the laws of the state in which the
Property is located. The parties agree that the United States District Court
for such state or any court of such state shall have jurisdiction in any
proceeding instituted to enforce this Agreement, and any objections to such
venue are hereby waived.
10.04 Notices. All notices given in connection with this
Agreement shall be effective as of the date personally delivered, the date sent
by confirmed facsimile transmission, one day after the date delivered to
overnight courier, or three days after being mailed by U.S. Mail (postage
prepaid), as the case may be, if sent to the parties at the following
addresses:
Seller's notice address:
c/o ABKB/LaSalle Securities Limited
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
Fax: 410/000-0000
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Buyer's notice address:
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxxx
Fax: 213/000-0000
Escrow Agent's notice address:
0000-00xx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx Xxxxxx
Fax: 202/000-0000
10.05 Entire Agreement. This Agreement contains all
agreements of the parties with respect to the Property and supersedes any prior
discussions, contracts or other agreements with respect thereto. No
modifications to this Agreement or waivers of any rights or benefits provided
herein shall be binding unless signed by the party against whom such
modification or waiver is sought to be enforced.
10.06 Broker. Each of Seller and Buyer represents and
warrants to the other that it has not dealt with any broker or finder in
connection with the transaction contemplated by this Agreement, except for
Marcus & Millichap, to whom Seller shall pay a commission at closing according
to separate agreement. Furthermore, each of Seller and Buyer indemnifies and
holds the other harmless from and against any losses, damages, costs or
expenses (including attorneys' fees) incurred by such other party due to a
breach of the foregoing warranty and representation. The foregoing indemnity
shall survive closing.
10.07 Attorney's Fees. If any action is brought by either
party hereto against the other party, the party in whose favor a final judgment
shall be entered shall be entitled to recover court costs and reasonable
attorneys' fees incurred in connection therewith.
10.08 Perpetuities. If the rule against perpetuities would
invalidate this Agreement or any portion hereof, due to the potential failure
of an interest in property created herein to vest within a particular time,
then notwithstanding anything to the contrary herein, each such interest in
property must vest, if at all, before the passing of 21 years from the date of
this Agreement, or this Agreement shall become null and void upon the
expiration of such 21 year period and the parties shall have no further
liability hereunder.
10.09 Timing. The phrase "business days" as used herein
shall mean the days of Monday through Friday, excepting only federal holidays.
The phrase "calendar days" as used herein shall mean all days of the week,
including all holidays. Time is of the essence of this Agreement.
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10.10 Reporting. Seller agrees to cooperate after closing
hereunder with any reasonable request by Buyer for information which is
necessary or desirable for Buyer to comply with its reporting obligations under
state or federal securities laws or the rules of any national securities
exchange. Such cooperation shall include without limitation the making of any
operating books and records of the Property relating to the three full calendar
years prior to closing, if available, available for review by Buyer's auditors
at Seller's offices upon reasonable advance notice. Such covenant shall
survive closing for a period of one year.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the dates set forth below.
SELLER: MADISON PROPERTY I, L.P.
By: Madison Property Investment Co. L.L.C.,
its sole general partner
Xxxxxx Claylar
____________________________ By: /s/ Xxxx X. Xxxxxxx
__________________________________
Witness Name: Xxxx X. Xxxxxxx
_________________________
Title: Asst. Vice President
__________________________
Date of execution: 2/20/97
______________________
Xxxxxxxxxx Xxxxx
____________________________ By: /s/ illegible
__________________________________
Witness Name: illegible
_________________________
Title: Principal
__________________________
Date of execution:______________________
BUYER: PRICE/BAYBROOK, LTD.
By: Price/Texas, Inc., General Partner
Xxxxx Xxxx
____________________________ By: /s/ Xxxxxx Karnwasser
__________________________________
Witness Name: Xxxxxx Karnwasser
_________________________
Title: Pres./CEO
__________________________
Date of Execution: 2/18/1997
______________________
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ESCROW AGENT: CHICAGO TITLE INSURANCE
COMPANY
____________________________ By: /s/ Xxxxx X. Xxxxxxx
__________________________________
Witness Name: Xxxxx X. Xxxxxxx
_________________________
Title: Resident Vice President
__________________________
Date of Execution: 2-20-97
___________________
Attachments
Exhibit A - Plat/Description of Property
Exhibit B - Copies of tenant estoppel certificates
Exhibit C - Xxxx of Sale
Exhibit D - Assignment Agreement
Exhibit E - Affidavit
Exhibit F - FIRPTA Certificate
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Exhibit A
[PLAT OR DESCRIPTION OF PROPERTY
[Attached]
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Exhibit B
[COPIES OF ESTOPPEL CERTIFICATES]
[Attached]
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Exhibit C
XXXX OF SALE
THIS XXXX OF SALE is made as of the ____ day of ____________, 1997, by
_____________________________ ("Seller") for benefit of
_______________________________________ ("Buyer").
WHEREAS, on the date hereof, Seller has sold and transferred to Buyer
certain real property known as the "______________________" which is comprised
of a _______ building, parking facilities and other improvements situated on a
parcel of land more particularly described on Exhibit A attached hereto
(collectively the "Property"), which Property is located at
_____________________________ in ______________________, ______________.
AND, WHEREAS, in connection with such sale and transfer of the
Property, Seller has agreed to sell to Buyer, and Buyer has agreed to purchase
from Seller, all personal property of Seller located at the Property.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby sells, transfers
and conveys to Buyer and Buyer's successors and assigns, without recourse, all
rights, title and interest of Seller in and to any and all equipment, fixtures
and personal property (collectively the "Personal Property") which is owned by
Seller and located at the Property, which Personal Property is transferred
hereunder "as-is, where-is" with all faults and without any warranty or
representation as to condition, suitability for a particular purpose or any
other matter whatsoever.
IN WITNESS WHEREOF, the Seller has executed this Xxxx of Sale as of
the date set forth in the first paragraph above.
SELLER: _____________________________
By: ________________________
____________________________ By: __________________________________
Witness Name:_________________________
Title:__________________________
Attachments
Exhibit A - Description of Property
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Exhibit D
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT ("Assignment") is made as of the ____ day of
______________, 1997, by and between _____________________________ ("Assignor")
and _____________________________ ("Assignee").
WHEREAS, as of the date hereof, Assignee has purchased from Assignor
certain real property known as the "___________________" which is comprised of
a ______ building, parking facilities and other improvements situated on a
parcel of land more particularly described on Exhibit A attached hereto
(collectively the "Property"), which Property is located at
________________________ in __________________, _____________.
AND, WHEREAS, in connection with such purchase and sale of the
Property, Assignor and Assignee enter into this Agreement in order to provide
for the assignment of leases and other interests in the Property.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Assignor hereby assigns and transfers to Assignee all rights,
title and interest of Assignor in and to the following described rights,
property and interests:
(a) All leases (including ground leases), subleases and
other occupancy agreements relating to or affecting the Property, together with
all guarantees of obligations of tenants and other parties under such leases
and agreements, which leases and other agreements are listed in Exhibit B
attached hereto (collectively the "Leases").
(b) All rights, title and interest in and to, and for use
of, any and all trademarks, logos or other trade names used in connection with
the Property (collectively the "Trade Name").
(c) All utility, janitorial, landscaping, trash removal
and other service or other contracts or agreements affecting or related to the
Property, which contracts and other agreements are listed in Exhibit C attached
hereto (collectively the "Service Contracts").
(d) Any and all warranties for work or construction
performed or to be performed in connection with the Property or for machinery
or equipment attached thereto, and any and all permits, licenses and other
similar rights or approvals issued in any connection with the Property, to the
extent assignable and transferable (collectively the "Permits and Warranties").
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2. Assignee hereby accepts the foregoing assignment of the
Leases, Trade Name, Service Contracts, and Warranties and Permits, and Assignee
hereby assumes all the duties and obligations of Assignor to be performed under
the Tenant Leases and the Service Contracts and relating to the period
commencing on and after the date hereof.
3. This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
as of the date set forth in the first paragraph above.
ASSIGNOR: _______________________________
By: _________________________
____________________________ By: __________________________________
Witness Name:_________________________
Title:__________________________
ASSIGNEE: _______________________________
____________________________ By: __________________________________
Witness Name:_________________________
Title:__________________________
Attachments
Exhibit A - Description of Property
Exhibit B - List of Leases
Exhibit C - List of Service Contracts
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Exhibit E
AFFIDAVIT
THIS AFFIDAVIT is made as of the ____ day of ____________, 1997 by
_______________________ ("Seller") for benefit of _______________________
("Buyer").
WITNESSETH, as required by that Sale and Purchase Agreement having an
effective date of _______________ (the "Agreement") pertaining to the purchase
and sale of property known as the "____________________" located at
_________________ in ___________, ______________ (the "Property"), Seller
hereby confirms for the Buyer that all of the representations and warranties
set forth in Section 3.01 of the Agreement remain, as of the date hereof, true
and correct in all material respects, except as may be otherwise identified on
Exhibit A attached hereto.
IN WITNESS WHEREOF, the Seller has executed this Affidavit as of the
date set forth in the first paragraph above.
SELLER: ______________________________
By: ________________________
____________________________ By: __________________________________
Witness Name:_________________________
Title:__________________________
Attachments
Exhibit A - List of Variations
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Exhibit F
FIRPTA CERTIFICATE
WHEREAS, Section 1445 of the Internal Revenue Code provides that a
transferee of a U.S. real property interest must withhold tax if the transferor
is a foreign person. To inform the ___________________________ (the
"Transferee") that withholding of tax is not required upon the disposition of a
U.S. real property interest by _______________________ ("Transferor"), the
undersigned hereby certifies the following on behalf of the said Transferor:
1. The said Transferor is not a foreign corporation, foreign
partnership, foreign trust or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations);
2. Transferor's U.S. employer identification number is
_____________;
3. Transferor's office address is c/o LaSalle Advisors Limited
Partnership, 000 X. Xxxxx Xx., Xxxxx 0000, Xxxxx., XX 00000.
Transferor understands that this certification may be disclosed to the
Internal Revenue Service by Transferee. This Certificate is given under
penalty of perjury.
IN WITNESS WHEREOF, the Seller has executed this Certificate as of the
date set forth in the first paragraph above.
TRANSFEROR: ______________________________
By: ________________________
____________________________ By: __________________________________
Witness Name:_________________________
Title:__________________________
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