EXHIBIT 10.01
AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY AND ESCROW INSTRUCTIONS
THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of this 5th day of March, 2004, by and
between XXXXX - Gateway Mall ND Fee, LLC, a Delaware limited liability company
(the "Seller"), and VP Investments, L.L.C., a Utah limited liability company
("Buyer"), with reference to the following facts:
A. Seller is owner of fee simple title in the real property
located in Burleigh County, North Dakota commonly known as
Gateway Mall and more specifically described in Exhibit A
attached hereto (the "Real Property") and such other assets,
as the same are herein described.
B. Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the Land and the associated assets.
NOW, THEREFORE, in consideration of the mutual covenants, premises and
agreements herein contained, the parties hereto do hereby agree as follows:
1. Purchase and Sale.
1.1. The purchase and sale includes, and at Close of Escrow
(hereinafter defined) Seller shall sell, transfer, grant and
assign to Buyer, Seller's entire right and interest in and to
all of the following (hereinafter sometimes collectively, the
"Property"):
1.1.1. The Land, all easements, development rights, rights
of way, and other rights appurtenant to the Land;
1.1.2 To the extent owned by Seller, all structures,
buildings, improvements, machinery, fixtures, and
equipment affixed or attached to the Land and, (all
items listed in sections 1.1.1 ands 1.1.2 are
collectively referred to herein as the "Real
Property");
1.1.3. All of the Seller's rights, title and interest as
"lessor" of the leasehold estate and interest created
by those ground leases dated October 1, 1990, more
fully described in Exhibit "B" attached hereto and
made a part hereof by reference (the "Ground Lease")
with XXXXX - Gateway Mall ND, LLC, a Delaware limited
liability company ("Ground Lessee")
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1.1.4 All tangible and intangible personal property owned
by Seller located on or used in connection with the
Real Property, including, specifically, without
limitation, equipment, furniture, tools and supplies,
any website maintained by the Seller and all related
intangibles including Seller's interest in the name
"Gateway Mall" (the "Personal Property");
1.1.5 All service contracts, agreements, warranties and
guaranties relating to the operation, use or
maintenance of the Property (the "Contracts"); and
1.1.6. To the extent transferable, all building permits,
certificates of occupancy and other certificates,
permits, licenses and approvals relating to the
Property (the "Permits").
2. Purchase Price.
The total Purchase Price of the Property shall be ELEVEN MILLION SIX
HUNDRED THOUSAND Dollars ($11,600,000.00) ("Purchase Price") payable as
follows:
2.1. Deposit/Further Payments/Down Payment.
2.1.1. Within one (1) business days following a fully
executed original of this Agreement is delivered to
the Escrow Holder (such delivery date hereafter the
"EFFECTIVE DATE"), Buyer shall deposit into Escrow
(hereinafter defined) the amount of Fifty Thousand
And No/100 Dollars ($50,000) (the "Deposit") in the
form of a wire transfer payable to Chicago Title
Company, 000 X. Xxxxxxxxxxx Xxxx, Xxx Xxxxxxxxxx,
Xxxxxxxxxx 00000, Attn: Xxxxx Xxxxxx (000) 000-0000
(Telephone), (000) 000-0000 (Fax) ("Escrow Holder").
Escrow Holder shall place the Deposit into an
interest bearing money market account at a bank or
other financial institution reasonably satisfactory
to Buyer, and interest thereon shall be credited to
Buyer's account. In the event this Agreement is
terminated by Buyer in accordance with its terms, the
Deposit (hereinafter defined) shall be immediately
and automatically paid over to Buyer without the need
for any further action by either party hereto.
2.1.1. Buyer's principal, Xxxxx X. Xxxxxx ("Moffat") shall
execute a Promissory Note in the form attached hereto
as Exhibit B secured by a Pledge Agreement in the
form attached hereto as Exhibit C, in favor of the
Seller for the principal sum of Eight
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Million Six Hundred Thousand Dollars ($8,700,000).
Said Note shall bear the interest at the rate of six
percent (6%) per annum, payable with monthly
interest-only payments commencing on the 1st day of
each calendar month and continuing monthly thereafter
until the earlier of (a) the tenth anniversary of the
execution of the Note or (b) the date the Ground
Lessee's existing financing with American Express is
paid off, at which time the entire unpaid principal
and any accrued interest shall be come due and
payable in full.
2.1.3. At the Close of Escrow, Moffat shall instruct the
Escrow Holder to xxxx that certain promissory note,
dated February 17, 2004 executed by Seller's
affiliate, Triple Net Properties, LLC, a Virginia
limited liability company for the benefit of Moffat,
in the original principal amount of Three Million
Dollars ($3,000,000) (the "Triple Net Note") as "PAID
IN FULL" and to deliver the Triple Net Note to
Seller.
2.1.4. At the Close of Escrow, Buyer shall receive from
Escrow a return of any monies paid pursuant to this
Section 2 in excess of the Purchase Price, after
adjustments for closing costs and prorations, as
provided in this Agreement. In the event there is any
deficiency, Buyer will deposit the balance of the
Purchase Price, by wire transfer payable to Escrow
Holder.
2. Title to Property.
2.2. Title Insurance.
Seller will, at Seller's sole expense, cause Escrow Holder to
issue a commitment for an Extended Coverage ALTA owner's
Policy of Title Insurance (the "Title Policy") for and on
behalf of Buyer in the total amount of the Purchase Price and
obtainable at standard rates insuring good, marketable and
insurable title in and to the Real Property. The Title Policy
is to be free and clear of encumbrances except as follows:
2.2.1. Real property taxes and assessments, which are a lien
not yet due;
2.2.2. The permitted exceptions included in such policy and
approved by Buyer as herein described.
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2.3. Procedure for Approval of Title.
Seller has provided to Buyer a current title insurance
commitment and/or preliminary title report for the Real
Property, including good and legible copies of all related
items certified as exceptions thereto (the "Title Documents").
During the Inspection Period (hereafter defined) Buyer shall
review and approve the Title Documents (hereinafter defined)
and the Survey (hereinafter defined). If the Title Documents
reflect or disclose any defect, exception or other matter
affecting the Property ("Title Defects") that is unacceptable
to Buyer, then prior to the expiration of the Inspection
Period, then Buyer shall be entitled, as Buyer's sole and
exclusive remedies, either to (i) terminate this Agreement and
obtain a refund of the Deposit by providing written notice of
termination to Seller or (ii) waive the objections and close
this transaction as otherwise contemplated herein. Any
exceptions to title or other conditions or matters which have
been approved or waived by Buyer and which are shown on the
Survey or described in the Title Report shall be deemed
"Permitted Exceptions."
3. Due Diligence Items.
3.1. Seller and Buyer acknowledge that Seller has delivered to
Buyer each of the following (collectively, the "Due Diligence
Items"):
3.1.1. The existing survey of the Real Property that Seller
has in its possession ("Survey"). In the event Buyer
desires to update the Survey, Buyer may do so at its
own cost and expense;
3.1.2. Copies of the Ground Leases and Subleases presently
in effect with respect to the Real Property, together
with any amendments or modifications thereof;
3.1.3. A "rent roll" with respect to the Real Property for
the calendar month immediately preceding the
Effective Date, showing with respect to each Tenant
of the Real Property: (1) the name of the Tenant, (2)
the number of rentable square feet in Tenant's
premises as set forth in Tenant's Lease, (3) the
current monthly base rental payable by such Tenant,
(4) the term of the Lease, (5) any available options
for the Tenant under the Lease; and (6) the amount of
any security deposit;
3.1.4. A "rent roll" current as of December 2001, 2002, 2003
and year to date;
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3.1.5. An aging report showing, with respect to each Tenant
of the Real Property, the date through which such
Tenant has paid Rent and a Tenant by Tenant monthly
aging report for the proceeding 24 months;
3.1.6. A list of all contracts, including service contracts,
warranties, management, maintenance, leasing
commission or other agreements affecting the Real
Property, if any, together with copies of the same;
3.1.7. All site plans, leasing plans, as-built plans,
drawings, environmental, mechanical, electrical,
structural, soils and similar reports and/or audits
and plans and specifications relative to the Property
in the possession of Seller, if any, shall be made
available for inspection at Seller's offices;
3.1.8. True and correct copies of the real estate and
personal property tax statements covering the
Property or any part thereof for each of the two (2)
years prior to the current year and, if available,
for the current year;
3.1.9. A schedule of all current or pending litigation with
respect to the property or any part thereof, if any;
3.1.10. Operating statements for the Real Property for
calendar years 2001, 2002, 2003 and 2004 year to
date, or if shorter, for any periods during which
Seller was owner of the Real Property;
3.1.11. Copies of Tenant files and records relating to the
ownership and operation of the Real Property
(provided, however, with Buyer's consent such files
and records may be made available for inspection by
Buyer during ordinary business hours at Seller's
management office);
3.1.12. An inventory of all personal property located on the
Property, used in the maintenance of the Property or stored
for future use at the Property and an inventory of all
furniture and appliances used in the units, if any.
3.1.13. Copies of utility bills for the Real Property for the
calendar years 2001, 2002, 2003 and 2004 year to
date;
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4. Inspections.
Buyer, at its sole expense, shall have the right to conduct
feasibility, environmental, engineering and physical studies or other
tests (the "Inspections") of the Property at any time during the
Inspection Period (hereinafter defined). Buyer, and its duly authorized
agents or representatives, shall be permitted to enter upon the
Property at all reasonable times during the Inspection Period in order
to conduct engineering studies, soil tests and any other Inspections
and/or tests that Buyer may deem necessary or advisable. Buyer must
arrange all Inspections of the Property with Seller at least one (1)
business day in advance of any Inspections. In the event that the
review and/or Inspection conducted pursuant to this paragraph shows any
fact, matter or condition to exist with respect to the Property that is
unacceptable to Buyer, in Buyer's sole subjective discretion, then
Buyer shall be entitled, as its sole and exclusive remedy, to (1)
terminate this Agreement and obtain a refund of the Deposit, or (2)
waive the objection, and close the transaction as otherwise
contemplated herein. Buyer agrees to promptly discharge any liens that
may be imposed against the Property as a result of the Inspections and
to defend, indemnify and hold Seller harmless from all, claims, suits,
losses, costs, expenses (including without limitation court costs and
attorneys' fees), liabilities, judgments and damages incurred by Seller
as a result of any Inspections.
4.1. Approval.
4.1.3. Buyer shall have until Monday March 8, 2004
("Inspection Period") to approve or disapprove the
Inspections. If Buyer shall fail to notify Seller and
Escrow Holder of its approval of the Inspections in
writing within the Inspection Period, the condition
of the Property shall be deemed disapproved. If Buyer
shall disapprove or be deemed to disapprove the
Inspections within the Inspection Period, this
Agreement and the Escrow shall thereupon be
terminated. Buyer shall not be entitled to purchase
the Property, Seller shall not be obligated to sell
the Property to Buyer and the parties shall be
relieved of any further obligation to each other with
respect to the Property, except as provided in
Paragraph 5.
4.1.4. Notwithstanding anything to the contrary contained
herein, Buyer hereby agrees that, in the event this
Agreement is terminated for any reason, then Buyer
shall promptly and at its sole expense return to
Seller all Due Diligence Items which have been
delivered by Seller to Buyer in connection with the
Inspections, along with copies of all reports,
drawings, plans,
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studies, summaries, surveys, maps and other data
prepared by or for Buyer's right to make any such
materials available to Seller that are imposed in any
agreement with a third party consultant preparing any
such reports or materials ("Buyer's Reports"). Buyer
shall cooperate with Seller at no expense to Buyer in
order to obtain a waiver of any such limitations.
4.1.5. Notwithstanding any contrary provision of this
Agreement, Buyer acknowledges that Seller is not
representing or warranting that any of the Due
Diligence Items prepared by third parties are
accurate or complete, such as the Survey, engineering
reports and the like. Seller advises Buyer to
independently verify the facts and conclusions set
forth therein, provided however, Seller warrants that
it has no knowledge of any material errors or
misstatements in such information regarding the
Property.
5. Escrow.
5.1. Opening.
Purchase and sale of the Property shall be consummated through
an escrow ("Escrow") to be opened with Escrow Holder within
one (1) business day after the execution of this Agreement by
Seller and Buyer. Escrow shall be deemed to be opened as of
the date fully executed copies (or counterparts) of this
Agreement are delivered to Escrow Holder by Buyer and Seller
("Opening of Escrow"). This Agreement shall be considered as
the Escrow instructions between the parties, with such further
instructions as Escrow Holder shall require in order to
clarify its duties and responsibilities. If Escrow Holder
shall require further Escrow instructions, Escrow Holder may
prepare such instructions on its usual form. Such further
instructions shall be promptly signed by Buyer and Seller and
returned to Escrow Holder promptly. In the event of any
conflict between the terms and conditions of this Agreement
and such further instructions, the terms and conditions of
this Agreement shall control.
5.2. Close of Escrow.
Escrow shall close ("Close of Escrow") on or before March 9,
2004.
5.3. Buyer Required to Deliver.
Buyer shall deliver to Escrow the following:
5.3.1. Concurrently with the Opening of Escrow, the Deposit;
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5.3.2. On or before Close of Escrow, the payment required by
Paragraph 2.1.2; provided, however that Buyer shall
not be required to deposit the amount specified in
Paragraph 2.1.2 until Buyer has been notified by
Escrow Holder that (i) Seller has delivered to Escrow
each of the documents and instruments to be delivered
by Seller in connection with Buyer's purchase of the
Property, (ii) Title Company has committed to issue
and deliver the Title Policy to Buyer and Seller and
(iii) the only impediment to Close of Escrow is
delivery of such amount by or on behalf of Buyer;
5.3.3. On or before Close of Escrow, such other documents as
Title Company may require from Buyer in order to
issue the Title Policy;
5.3.4. An original assignment and assumption agreement (the
"Assignment and Assumption Agreement") duly executed
by Seller assigning and conveying to Buyer all of
Seller's right, title and interest in and to the
Ground Lease and the Contracts. All other Contracts
shall be terminated by Seller effective as of the
Close of Escrow at Seller's sole cost and expense,
and proof thereof shall be delivered by Seller at the
Close of Escrow;
5.3.5. The executed Note;
5.3.6. The Triple Net Note, together with escrow
instructions from Moffat, authorizing the Escrow
Holder to xxxx the Triple Net Note as "PAID IN FULL"
upon satisfaction of the conditions to Closing and
delivery of the Deed to the Buyer.
5.3.7. The Pledge Agreement, executed by Moffat;
5.3.8. A counterpart original of the REA; and
5.3.9. A counterpart original of the Assignment of
Membership Interests (hereafter defined), executed by
Buyer.
5.4. Seller Required to Deliver.
On or before Close of Escrow, Seller shall deliver to Escrow
the following:
5.4.1. A duly executed and acknowledged grant deed, conveying
fee title to the Property in favor of Buyer (the "Deed");
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5.4.2. An executed Certificate of Non-Foreign Status;
5.4.3. A xxxx of sale or other assignment of the Personal
Property, if any, in favor of Buyer and duly executed
by Seller;
5.4.4. Such other documents as Title Company may require
from Seller in order to issue the Title Policy;
5.4.5. To Buyer, the original Ground Lease ;
5.4.6. Seller shall deliver to Buyer all keys to all
buildings and other improvements located on the
Property, combinations to any safes thereon, and
security devices therein in Seller's possession;
5.4.7. Seller shall deliver all records and files relating
to the management or operation of the Property,
including, without limitation, all insurance
policies, all security contracts, all tenant files
(including correspondence), property tax bills, and
all calculations used to prepare statements of rental
increases under the Leases and statements of common
area charges, insurance, property taxes and other
charges which are paid by tenants of the Project; and
5.4.8. A counterpart original of the Assignment and
Assumption Agreement. 5.4.9. A counterpart original
of the REA.
5.4.10. A counterpart original of the Assignment of
Membership Interests (hereafter defined), executed by
XXXXX, XX.
5.5. Buyer's Costs.
Buyer shall pay the following:
5.5.1 One-half (1/2) of Escrow Holder's fees, costs and
expenses
5.5.2 All other costs customarily borne by purchasers of real
property in Burleigh County, North Dakota, including payment
for real property taxes for calendar year 2003;
5.5.3. If Buyer elects to obtain extended coverage title
insurance, the amount by which the premium for an
extended coverage policy of
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title insurance in the amount of the Purchase Price
exceeds the premium for the Title Policy.
5.6. Seller's Costs.
Seller shall pay the following:
5.6.3. One-half (1/2) of Escrow Holder's fees, costs and
expenses;
5.6.4. All other costs customarily borne by sellers of real
property in Burleigh County, North Dakota; and.
5.6.5. Title Company's premium for the Title Policy.
5.7. Prorations.
5.7.1 Real property taxes, assessments, and CAM expenses shall
be prorated through Escrow between Buyer and Seller as of Close of
Escrow, as if the ground leasehold as well as the fee were being
transferred to the Buyer.
5.7.2 Deleted.
5.7.3 Any delinquent CAM collected by Buyer shall be paid
to Seller. Seller shall have the right to pursue any
Tenant for delinquent CAM, but shall not cause a
Tenant to be delinquent for their current CAM or
become financially unstable. Tax and assessment
prorations shall be based on the latest available tax
xxxx. If, after Close of Escrow, Buyer receives any
further or supplemental tax xxxx relating to any
period prior to Close of Escrow, or Seller receives
any further or supplemental tax xxxx relating to any
period after Close of Escrow, the recipient shall
promptly deliver a copy of such tax xxxx to the other
party, and not later than ten (10) days prior to the
delinquency date shown on such tax xxxx Buyer and
Seller shall deliver to the taxing authority their
respective shares of such tax xxxx, prorated as of
Close of Escrow.
Percentage Rents. Any percentage rents due or paid
under any of the Subleases ("Percentage Rents") shall
be prorated between Buyer and Seller outside of
Escrow as of the date of Close of Escrow on a
Sublease-by-Sublease basis, as follows: (a) Seller
shall be entitled to receive the portion of the
Percentage Rent under each Sublease for the Lease
Year in which Close of Escrow occurs, which portion
shall be the ratio of the number of days of
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said Lease Year in which Seller was Landlord under a
Sublease to the total of number of days in said Lease
Year, and (b) Buyer shall receive the balance of
Percentage Rent paid under each Sublease for the
Lease Year. As used herein, the term "Lease Year"
means the twelve (12) month period as to which annual
Percentage Rent is owed under each Lease. Upon
receipt by either Buyer or Seller of any gross sales
reports ("Gross Sales Reports") and /or any full or
partial payment of Percentage Rent from any subleases
of the Property, the party receiving the same shall
promptly provide to the other party a copy of the
Gross Sales Report and/or a check for the other
party's prorate share of the Percentage Rent within
five (5) days of the receipt thereof. Nothing
contained herein shall be deemed or construed to
require either Buyer or Seller to pay to the other
party its Percentage Rent from the Tenant, and the
acceptance or negotiation of any check for Percentage
Rent by either party shall not be deemed a waiver of
that party's right to contest the accuracy or amount
of the Percentage Rent paid by the Tenant.
5.7.4. All leasing commissions owing and tenant improvements
with respect to the Property transactions entered
into prior to execution of this Agreement shall be
paid by Seller, and Seller shall indemnify and hold
Buyer harmless for Lease commission claims brought
against the Property arising therefrom. All leasing
commissions for new Leases and for Lease renewals and
expansion options executed after the date of this
Agreement shall be prorated between Buyer and Seller
as their respective periods of ownership bear to the
primary term of the new Lease.
5.7.5. Seller agrees to indemnify and hold Buyer harmless of
and from any and all liabilities, claims, demands,
suits, and judgments, of any kind or nature,
including court costs and reasonable attorneys' fees
(except those items which under the terms of this
Agreement specifically become the obligation of
Buyer), brought by third parties and based on events
occurring on or before the date of closing and which
are in any way related to the Property, and all
expenses related thereto, including but not limited
to court costs and attorneys' fees.
5.7.6. Buyer agrees to indemnify and hold Seller harmless of
and from any and all liabilities, claims, demands,
suits and judgments, of any kind or nature, including
court costs and reasonable attorneys' fees, brought
by third parties and based on events occurring
subsequent to the date of closing and which are in
any
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way related to the Property, and all expenses related
thereto, including, but not limited to, court costs
and attorneys' fees.
6. Representations, Warranties, and Covenants.
Seller hereby represents and warrants as of the date hereof to Buyer as
follows, to the best knowledge of Seller, defined as the actual
knowledge, without investigation, of Xxxxxxx X. Xxxxxxxx:
6.1. Seller is a limited liability company duly formed and validly
existing under the laws of the State of Delaware. Seller has
full power and authority to enter into this Agreement, to
perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance
of this Agreement and all documents contemplated hereby by
Seller have been duly and validly authorized by all necessary
action on the part of Seller and all required consents and
approvals have been duly obtained. This Agreement is a legal,
valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting the
rights of creditors generally.
6.2 There are no outstanding rights of first refusal, rights of
reverter or option relating to the Property or any interest
therein, except that a subtenant of the Ground Lessee,
Paradiso, has a right of refusal as to the Burger King outlot
in the event the Ground Lease is to be conveyed. To Seller's
knowledge, there are no unrecorded or undisclosed documents or
other matters which affect title to the Property.
6.3. Seller is not a "foreign person" within the meaning of Section
1445(f) of the Internal Revenue Code of 1986, as amended (the
"Code").
6.4. To Seller's knowledge, defined as the actual knowledge of
Xxxxxxx X. Xxxxxxxx, without investigation, (a) Seller has no
knowledge of nor received any written notice of violation
issued pursuant to any environmental law with respect to the
Real Property or any use or condition thereof; (b) Seller has
not released and, to the best of Seller's knowledge, there has
been no release of, any pollutant or hazardous substance of
any kind onto or under the Real Property that affects the Real
Property or that would result in the prosecution of any claim,
demand, suit, action or administrative proceeding against
Buyer as owner of the Real Property based on any environmental
requirements of state, local or federal law including, but not
limited to, the
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Comprehensive Environmental Response Compensation and
Liability Act of 1980, U.S.C. 9601 et seq.
6.5. Covenants of Seller. Seller hereby covenants as follows:
6.5.3. At all times from the date hereof through the date of
the Closing of Escrow in which Seller owns the
Property, Seller shall cause to be in force fire and
extended coverage insurance upon the Property, and
public liability insurance with respect to damage or
injury to persons or property occurring on the
Property in commercially reasonable amounts, and
seller shall not consent to the Ground Lessee
reducing its insurance from that currently
maintained;
6.5.4. From the date of execution of this Agreement through
the date of closing, Seller shall not sell, assign,
or convey any right, title or interest whatsoever in
or to the Property, or create or permit to attach any
lien, security interest, easement, encumbrance,
charge, or condition affecting the Property (other
than the Permitted Exceptions) without promptly
discharging the same prior to closing;
6.5.5. Seller shall not, without Buyer's written approval,
(a) amend or waive any right under any Service
Contract, or (b) enter into any agreement of any type
affecting the Property that would survive the Closing
Date.
7.5 Approval of Property. The consummation of the purchase and
sale of the Property pursuant to this Agreement shall be
deemed Buyer's acknowledgement that it has had an adequate
opportunity to make such legal, factual and other inspections,
inquiries and investigations as it deems necessary, desirable
or appropriate with respect to the Property. Such inspections,
inquiries and investigations of Buyer shall be deemed to
include, but shall not be limited to, any leases and contracts
pertaining to the Property, the physical components of all
portions of the Property, the physical condition of the
Property, such state of facts as an accurate survey,
environmental report and inspection would show, the present
and future zoning ordinance, ordinances, resolutions. Buyer
shall not be entitled to and shall not rely upon, Seller or
Seller's agents with regard to, and Seller will not make any
representation or warranty with respect to: (i) the quality,
nature, adequacy or physical condition of the Property
including, but not limited to, the structural elements,
foundation, roof, appurtenances, access, landscaping, parking
facilities, or the electrical,
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mechanical, HVAC, plumbing, sewage or utility systems,
facilities, or appliances at the Property, if any; (ii) the
quality, nature, adequacy or physical condition of soils or
the existence of ground water at the Property; (iii) the
existence, quality, nature, adequacy or physical condition of
any utilities serving the Property; (iv) the development
potential of the Property, its habitability, merchantability,
or the fitness, suitability, or adequacy of the Property for
any particular purpose; (v) the zoning or other legal status
of the Property; (vi) the Property or its operations'
compliance with any applicable codes, laws, regulations,
statutes, ordinances, covenants, conditions or restrictions of
any governmental or quasi-governmental entity or of any other
person or entity; (vii) the quality of any labor or materials
relating in any way to the Property; or (viii) the condition
of title to the Property or the nature, status and extent of
any right-of-way, lease, right of redemption, possession,
lien, encumbrance, license, reservation, covenant, condition,
restriction, or any other matter affecting the Property except
as expressly set forth in this Agreement. EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT AND THE GRANT DEED, SELLER HAS NOT,
DOES NOT, AND WILL NOT MAKE ANY WARRANTIES OR REPRESENTATIONS
WITH RESPECT TO THE PROPERTY AND SELLER SPECIFICALLY DISCLAIMS
ANY OTHER IMPLIED WARRANTIES OR WARRANTIES ARISING BY
OPERATION OF LAW, INCLUDING, BUT IN NO WAY LIMITED TO, ANY
WARRANTY OF CONDITION, MERCHANTABILITY, HABITABILITY, OR
FITNESS FOR A PARTICULAR PURPOSE OR USE. FURTHERMORE, SELLER
HAS NOT, DOES NOT, AND WILL NOT MAKE ANY REPRESENTATION OR
WARRANTY WITH REGARD TO COMPLIANCE WITH ANY ENVIRONMENTAL
PROTECTION, POLLUTION, OR LAND USE LAWS, RULES, REGULATIONS,
ORDERS, OR REQUIREMENTS INCLUDING, BUT NOT LIMITED TO, THOSE
PERTAINING TO THE HANDLING, GENERATING, TREATING, STORING OR
DISPOSING OF ANY HAZARDOUS WASTE OR SUBSTANCE INCLUDING,
WITHOUT LIMITATION, ASBESTOS, PCB AND RADON. BUYER
ACKNOWLEDGES THAT BUYER IS A SOPHISTICATED BUYER FAMILIAR WITH
THIS TYPE OF PROPERTY AND THAT, SUBJECT ONLY TO THE EXPRESS
WARRANTIES SET FORTH IN THIS AGREEMENT AND CLOSING DOCUMENTS,
BUYER WILL BE ACQUIRING THE PROPERTY "AS IS AND WHERE IS, WITH
ALL FAULTS," IN ITS PRESENT STATE AND CONDITION, SUBJECT ONLY
TO NORMAL WEAR AND TEAR AND BUYER SHALL ASSUME THE RISK THAT
ADVERSE MATTERS AND CONDITIONS
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MAY NOT HAVE BEEN REVEALED BY BUYER'S INSPECTIONS AND
INVESTIGATIONS. BUYER SHALL ALSO ACKNOWLEDGE AND AGREE THAT
THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS,
COLLATERAL TO OR AFFECTING THE PROPERTY BY SELLER, ANY AGENT
OF SELLER OR ANY THIRD PARTY. THE TERMS AND CONDITIONS OF THIS
PARAGRAPH SHALL SURVIVE THE CLOSING, AND NOT MERGE WITH THE
PROVISIONS OF ANY CLOSING DOCUMENTS. SELLER SHALL NOT BE
LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN
STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE,
SERVANT OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET
FORTH OR REFERRED TO IN THIS AGREEMENT.
7. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows:
7.1 Buyer has full power and authority to enter into this
Agreement, to perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and
performance of this Agreement and all documents contemplated
hereby by Buyer have been duly and validly authorized by all
necessary action on the part of Buyer and all required
consents and approvals have been duly obtained and will not
result in a breach of any of the terms or provisions of, or
constitute a default under any indenture, agreement or
instrument to which Buyer is a party. This Agreement is a
legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, subject to the
effect of applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting the
rights of creditors generally.
8. Conditions Precedent to Closing.
The obligations of Buyer pursuant to this Agreement shall, at the
option of Buyer, be subject to the following conditions precedent:
8.1. All of the representations, warranties and agreements of
Seller set forth in this Agreement shall be true and correct
in all material respects as of the date hereof, and Seller
shall not have on or prior to closing, failed to meet, comply
with or perform in any material respect
15
any conditions or agreements on Seller's part as required by
the terms of this Agreement.
8.2. There shall be no change in the matters reflected in the Title
Report, and there shall not exist any encumbrance or title
defect affecting the Property not described in the Title
Report except for the Permitted Exceptions or matters to be
satisfied at closing.
8.3. Seller shall have operated the Property from and after the
date hereof in substantially the same manner as prior thereto.
8.4. If any such condition is not fully satisfied by closing, Buyer
shall so notify Seller and may terminate this Agreement by
written notice to Seller whereupon this Agreement may be
canceled, upon return of the Due Diligence Items the Deposit
shall be paid to Buyer and, thereafter, neither Seller nor
Buyer shall have any continuing obligations hereunder.
8.5. If Buyer notifies Seller of a failure to satisfy the
conditions precedent set forth in this paragraph, Seller may,
within five (5) days of receipt of Buyer's Notices agree to
satisfy the condition by written notice to Buyer, and Buyer
shall thereupon be obligated to close the transaction provided
Seller so satisfies such condition. If Seller fails to agree
to cure or fails to cure such condition by the Closing Date,
this Agreement shall be canceled and the Deposit shall be
returned to Buyer and neither party shall have any further
liability hereunder.
8.6. If Buyer's acquisition of the Property is part of a
tax-deferred exchange pursuant to Section 1031 of the Code, it
is a condition precedent to the closing of this Escrow that
Buyer is able to complete an exchange for all or a portion of
its relinquished property pursuant to an Exchange Agreement
between Buyer and Accommodator. Seller agrees to execute such
documents or instruments as may be necessary or appropriate to
evidence such exchange, provided that Seller's cooperation in
such regard shall be at no additional cost, expense, or
liability whatsoever to Seller, and that no additional delays
in the scheduled Close of Escrow are incurred unless mutually
agreed upon by all parties to this Agreement.
9. Damage or Destruction Prior to Close of Escrow.
In the event that the Property should be damaged by any casualty prior
to the Close of Escrow, then if the cost of repairing such damage, as
estimated
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by an architect or contractor retained pursuant to the mutual agreement
of the parties, is:
9.1. Less than Two Hundred Fifty Thousand Dollars ($250,000), the
Close of Escrow shall proceed as scheduled and any insurance
proceeds shall be distributed to Buyer to the extent not
expended by Seller for restoration;
or if said cost is:
9.2. Greater than Two Hundred Fifty Thousand Dollars ($250,000),
then either Seller or Buyer may elect to terminate this
Agreement, in which case upon return of the Due Diligence
Items the Deposit shall be returned to Buyer and neither party
shall have any further obligation to the other except for
Buyer's indemnification obligations under Paragraph 5.
10. Eminent Domain.
10.1. If, before the Close of Escrow, proceedings are commenced for
the taking by exercise of the power of eminent domain of all
or a material part of the Property which, as reasonably
determined by Buyer, would render the Property unacceptable to
Buyer or unsuitable for Buyer's intended use, Buyer shall have
the right, by giving notice to Seller within thirty (30) days
after Seller gives notice of the commencement of such
proceedings to Buyer, to terminate this Agreement, in which
event this Agreement shall terminate, the Deposit shall be
returned to Buyer and neither party shall have any further
obligation to the other except for Buyer's indemnification
under Paragraph 5. If, before the Close of Escrow, proceedings
are commenced for the taking by exercise of the power of
eminent domain of less than such a material part of the
Property, or if Buyer has the right to terminate this
Agreement pursuant to the preceding sentence but Buyer does
not exercise such right, then this Agreement shall remain in
full force and effect and, at the Close of Escrow, the
condemnation award (or, if not therefore received, the right
to receive such portion of the award) payable on account of
the taking shall be transferred in the same manner as title to
the Property is conveyed. Seller shall give notice to Buyer
within three (3) business days after Seller's receiving notice
of the commencement of any proceedings for the taking by
exercise of the power of eminent domain of all or any part of
the Property.
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11. Notices.
11.1. All notices, demands, or other communications of any type
given by any party hereunder, whether required by this
Agreement or in any way related to the transaction contracted
for herein, shall be void and of no effect unless given in
accordance with the provisions of this Paragraph. All notices
shall be in writing and delivered to the person to whom the
notice is directed, either in person, by United States Mail,
as a registered or certified item, return receipt requested by
telecopy or by Federal Express. Notices delivered by mail
shall be deemed given when received. Notices by telecopy or
Federal Express shall be deemed received on the business day
following transmission. Notices shall be given to the
following addresses:
Seller: Xxxxx - Gateway Mall ND Fee, LLC
Attn: Xxxx Xxxxxxxx and Xxxxxxx Xxxxxx
Triple Net Properties, LLC
0000 X. Xxxxxx Xxx. # 000
Xxxxx Xxx, XX 00000
(000) 000-0000
(000)000-0000 fax
With Required Copy to: Xxxxx X. Xxxxxx, Esq.
Xxxxxxxxx Xxxxxxxxx
The Federal Reserve Bank Building,
15(th) Floor
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 fax
Buyer: Xxxxx X. Xxxxxx
VP Investments, L.L.C.
0000 Xxxxxxxx Xxxx.
Xxxx Xxxx Xxxx, XX 00000
With Required Copy to: Xxxxxxx Xxxxxxxx
Holland & Xxxx
00 X. Xxxxx Xxxxxx, #0000
Xxxx Xxxx Xxxx, XX 00000
000-000-0000
000-000-0000 fax
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12. Remedies.
12.1. Defaults by Seller. If there is any default by Seller under
this Agreement, following notice to Seller and seven (7) days,
during which period Seller may cure the default, Buyer may, at
its option, (a) declare this Agreement terminated in which
case the Deposit shall be returned to Buyer or (b) treat this
Agreement as being in full force and effect and bring an
action against Seller for specific performance.
12.2. Defaults by Buyer. If there is any default by Buyer under this
Agreement, following notice to Buyer and seven (7) days,
during which period Buyer may cure the default, then Seller
may, as its sole remedy, declare this Agreement terminated, in
which case the Deposit shall be paid to Seller as liquidated
damages and each party shall thereupon be relieved of all
further obligations and liabilities, except any which survive
termination. In the event this Agreement is terminated due to
the default of Buyer hereunder, Buyer shall deliver to Seller,
at no cost to Seller, the Due Diligence Items and all of
Buyer's Reports.
12.3. ARBITRATION OF DISPUTES. ANY CLAIM, CONTROVERSY OR DISPUTE,
WHETHER SOUNDING IN CONTRACT, STATUTE, TORT, FRAUD,
MISREPRESENTATION OR OTHER LEGAL THEORY, RELATED DIRECTLY OR
INDIRECTLY TO THIS AGREEMENT, WHENEVER BROUGHT AND WHETHER
BETWEEN THE PARTIES TO THIS AGREEMENT OR BETWEEN ONE OF THE
PARTIES TO THIS AGREEMENT AND THE EMPLOYEES, AGENTS OR
AFFILIATED BUSINESSES OF THE OTHER PARTY, SHALL BE RESOLVED BY
ARBITRATION AS PRESCRIBED IN THIS SECTION. THE FEDERAL
ARBITRATION ACT, 9 U.S.C. Sections 1-15, NOT STATE LAW, SHALL
GOVERN THE ARBITRABILITY OF ALL CLAIMS, AND THE DECISION OF
THE ARBITRATOR AS TO ARBITRABILITY SHALL BE FINAL.
A SINGLE ARBITRATOR WHO IS A RETIRED FEDERAL OR CALIFORNIA
JUDGE SHALL CONDUCT THE ARBITRATION UNDER THE THEN CURRENT
RULES OF THE AMERICAN ARBITRATION ASSOCIATION (THE "AAA"). THE
ARBITRATOR SHALL BE SELECTED BY MUTUAL AGREEMENT ON THE
ARBITRATOR WITHIN THIRTY (30) DAYS OF WRITTEN NOTICE BY ONE
PARTY TO THE OTHER INVOKING THIS ARBITRATION PROVISION, IN
ACCORDANCE WITH AAA PROCEDURES FROM A LIST OF QUALIFIED PEOPLE
MAINTAINED BY THE AAA. THE ARBITRATION SHALL BE CONDUCTED IN
SANTA ANA, CALIFORNIA AND ALL EXPEDITED PROCEDURES PRESCRIBED
BY THE AAA RULES SHALL APPLY.
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THERE SHALL BE NO DISCOVERY OTHER THAN THE EXCHANGE OF
INFORMATION WHICH IS PROVIDED TO THE ARBITRATOR BY THE
PARTIES. THE ARBITRATOR SHALL HAVE AUTHORITY ONLY TO GRANT
SPECIFIC PERFORMANCE AND TO ORDER OTHER EQUITABLE RELIEF AND
TO AWARD COMPENSATORY DAMAGES, BUT SHALL NOT HAVE THE
AUTHORITY TO AWARD PUNITIVE DAMAGES OR OTHER NONCOMPENSATORY
DAMAGES OR ANY OTHER FORM OF RELIEF. THE ARBITRATOR SHALL
AWARD TO THE PREVAILING PARTY ITS REASONABLE ATTORNEYS' FEES
AND COSTS AND OTHER EXPENSES INCURRED IN THE ARBITRATION,
EXCEPT THE PARTIES SHALL SHARE EQUALLY THE FEES AND EXPENSES
OF THE ARBITRATOR. THE ARBITRATOR'S DECISION AND AWARD SHALL
BE FINAL AND BINDING, AND JUDGMENT ON THE AWARD RENDERED BY
THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION
THEREOF.
13. Assignment.
Buyer may assign its rights under this Agreement to an entity in which
Buyer has a significant interest.
14. Interpretation and Applicable Law.
This Agreement shall be construed and interpreted in accordance with
the laws of the state in which the Property is located (the "State").
Where required for proper interpretation, words in the singular shall
include the plural; the masculine gender shall include the neuter and
the feminine, and vice versa. The terms "successors and assigns" shall
include the heirs, administrators, executors, successors, and assigns,
as applicable, of any party hereto.
15. Amendment.
This Agreement may not be modified or amended, except by an agreement
in writing signed by the parties. The parties may waive any of the
conditions contained herein or any of the obligations of the other
party hereunder, but any such waiver shall be effective only if in
writing and signed by the party waiving such conditions and
obligations.
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16. Attorney's Fees.
In the event it becomes necessary for either party to file a suit or
arbitration to enforce this Agreement or any provisions contained
herein, the prevailing party shall be entitled to recover, in addition
to all other remedies or damages, reasonable attorneys' fees and costs
of court incurred in such suit or arbitration.
17. Entire Agreement; Survival.
This Agreement (and the items to be furnished in accordance herewith)
constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings of the parties in connection therewith.
No representation, warranty, covenant, agreement, or condition not
expressed in this Agreement shall be binding upon the parties hereto
nor affect or be effective to interpret, change, or restrict the
provisions of this Agreement. The obligations of the parties hereunder
and all other provisions of this Agreement shall survive the closing or
earlier termination of this Agreement, except as expressly limited
herein.
18. Multiple Originals only; Counterparts.
Numerous agreements may be executed by the parties hereto. Each such
executed copy shall have the full force and effect of an original
executed instrument. This Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute the
entire agreement of the parties.
19. Acceptance.
Time is of the essence of this Agreement. The date of execution of this
Agreement by Seller shall be the date of execution of this Agreement.
If the final date of any period falls upon a Saturday, Sunday, or legal
holiday under Federal law, the laws of the State or the laws of the
State of California if it is not the State, then in such event the
expiration date of such period shall be extended to the next day which
is not a Saturday, Sunday, or legal holiday under Federal law, the laws
of the State or the State of California if it is not the State.
20. Real Estate Commission.
Seller and Buyer each represent and warrant to the other that neither
Seller nor Buyer has contracted or entered into any agreement with any
real estate broker, agent, finder or any other party in connection with
this transaction, and that neither party has taken any action which
would result in any real
21
estate broker's, finder's or other fees or commissions being due and
payable to any party with respect to the transaction contemplated
hereby, except that Seller has contracted with Triple Net Properties
Realty, Inc. as its broker and will pay any commission due to said
broker. Each party hereby indemnifies and agrees to hold the other
party harmless from any loss, liability, damage, cost, or expense
(including reasonable attorneys' fees) resulting to the other party by
reason of a breach of the representation and warranty made by such
party in this paragraph.
21. Exchange.
Seller reserves the right to structure the sale of the Property as a
like kind exchange pursuant to Section 1031 of the Code. In such event
Seller shall have the right to assign its interest in this Agreement to
a qualified exchange intermediary of its choosing to effect such
exchange. Buyer shall sign a customary assignment and/or notice of
assignment, however, such assignment shall at no cost or expense to
Buyer and shall not otherwise affect the term of this Agreement.
22. Approval.
The consummation of this transaction shall be subject to the final
approval from the Board of Directors for T REIT, Inc..
23. Confidentiality.
Buyer agrees that, prior to the closing, all Property information
received by Buyer shall be kept confidential as provided in this
paragraph. Without the prior written consent of Seller, prior to the
closing, the Property information shall not be disclosed by Buyer or
its representatives, in any manner whatsoever, in whole or in part,
except (1) to Buyer's representatives who need to know the Property
information for the purpose of evaluating the Property and who are
informed by the Buyer of the confidential nature of the Property
information; (2) as may be necessary for Buyer or Buyer's
representatives to comply with applicable laws, including, without
limitation, governmental, regulatory, disclosure, tax and reporting
requirements; to comply with other requirements and requests of
regulatory and supervisory authorities and self-regulatory
organizations having jurisdiction over Buyer or Buyer's
representatives; to comply with regulatory or judicial processes; or to
satisfy reporting procedures and inquiries of credit rating agencies in
accordance with customary practices of Buyer or its affiliates; and (3)
to prospective tenants of the Property.
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25. Acquisition of Membership Interests in Ground Lessee.
The Seller and Buyer agree that the parties intend that the Buyer's
acquisition of the Property is intended to occur simultaneously with the
acquisition by the Buyer of one hundred percent (100%) of the membership
interest in the Ground Lessee. XXXXX, XX ("XXXXX"), sole member of the Buyer
executes this Agreement below to confirm TREIT's agreement to convey 100% of the
membership interest in the Ground Lessee at the time of the Close of Escrow
pursuant to this Agreement and in consideration for the buyer's performance of
its obligations herein. The acquisition of membership interests shall occur
pursuant to an Assignment of Membership Interests Agreement in the form attached
hereto as Exhibit D.
26. Retained Parcel, Partial Release from Ground Lease, and REA.
The Seller and Buyer acknowledge and agree that, at the time of the
Close of Escrow, the Seller and Ground Lessee will enter into an amendment to
Ground Lease, whereby the Ground Lessee will consent and agree to the release of
approximately seven acres of unimproved property described in Exhibit E attached
(the "Retained Parcel") from the Ground Lease. The intent of the parties is
that, after the Close of Escrow, the Buyer will possess fee title to the
Property, and the Seller will retain the Retained Parcel. The Seller will
possess 100% of the ownership interests in Ground Lessee, which will hold a
ground leasehold for the entire Property, but not of the Retained Parcel. The
parties further agree to execute at the Close of Escrow a reciprocal easement
agreement ("REA") between the Retained Parcel and the Property in a form
mutually acceptable to the parties.
27. Subdivision.
The Seller and Buyer acknowledge that the process of subdivision of the
Property from the Retained Parcel will not be completed at the Close of Escrow.
Accordingly, Buyer covenants not to record the Deed until final subdivision
approval is obtained from the proper government authorities. Buyer agrees to
cooperate with Seller's efforts to finalize subdivision, and consents to
documents executed by Seller in the furtherance of the same. Upon final
subdivision approval, Buyer agrees to accept a replacement deed (the
"Replacement Deed") from Seller, which is dated after final subdivision approval
and which contains a legal description referencing the approved subdivision
plat, provided that the property conveyed in the Replacement Deed is not
different from the Property conveyed in the Deed, to an extent which is
economically material. Upon receipt of the Replacement Deed, the Buyer agrees to
destroy the original Deed, and the Buyer shall be authorized to record the
Replacement Deed.
THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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SIGNATURE PAGE FOR
Gateway Mall , Interstate 94 and Highway 84, Bismarck, North Dakota
EXECUTED as of the 5th day of March, 2004.
SELLER:
XXXXX - Gateway Mall ND Fee, LLC,
a Delaware limited liability company
By: Triple Net Properties, LLC
a Virginia limited liability company,
its Manager
By:_________________________________________
Xxxxxxx X. Xxxxxxxx, President
BUYER:
VP Investments, L.L.C., a Utah limited liability company
By:________________________________________________
Xxxxx X. Xxxxxx
Its:__________________________________________
CONSENTED AND AGREED:
XXXXX, XX _____________________________
a Virginia limited partnership Xxxxx X. Xxxxxx, individually
By: XXXXX Inc.
Its: General Partner
By:___________________________
Xxxxxxx X. Xxxxxxxx, President
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