EXHIBIT 2.1
05/19/02 Discount Tire Building
07/02/02
07/10/02
07/16/02
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
OPUS WEST CORPORATION,
a Minnesota corporation,
and
STRATFORD AMERICAN CORPORATION,
an Arizona corporation
TABLE OF CONTENTS
1. Sale of Property..........................................................1
1.1 Office Project.....................................................1
1.2 Real Property......................................................1
1.3 Tenant Lease.......................................................1
1.4 Contracts..........................................................1
1.5 Permits 2
1.6 Warranties.........................................................2
1.7 Marketing Information..............................................2
2. Purchase Price............................................................2
2.1 Purchase Price.....................................................2
2.2 Adjustment to Purchase Price.......................................3
3. Investigation Period......................................................3
3.1 Investigation......................................................3
3.2 Financing Contingency..............................................5
4. Title Requirements, Survey and Permitted Exceptions.......................6
4.1 Title Evidence.....................................................6
4.2 Survey ............................................................6
4.3 Objections; Cure of Title and Survey Objections....................6
4.4 First Amendment to Declaration.....................................7
5. Conditions Precedent to Closing...........................................8
6. Closing; Covenants........................................................9
6.1 Closing Date.......................................................9
6.2 Seller's Obligations at Closing...................................10
(a) Deed ......................................................10
(b) Assignment and Assumption of Lease.........................10
(c) Assignment and Assumption of Contracts and Permits.........10
(d) Notice to Tenant ..........................................10
(e) Security and Prepaid Rents.................................10
(f) Original Documents.........................................10
(g) FIRPTA Affidavit ..........................................11
(h) Tenant Estoppel Certificate................................11
(i) Owner's Title Insurance Policy.............................11
(j) Title Documents ...........................................11
(k) Closing Statement .........................................11
(l) Additional Documents.......................................11
6.3 Purchaser's Obligations at Closing................................11
(a) Purchase Price ............................................11
(b) Assignment and Assumption of Lease.........................11
(c) Blanket Assignment.........................................11
(d) Title Documents ...........................................11
(e) Closing Statement .........................................11
(f) Additional Documents.......................................12
i
6.4 Closing Costs.....................................................12
6.5 Prorations........................................................12
(a) Property Taxes ............................................12
(b) Operating Expense and Utility Charges......................13
(c) Rents .....................................................13
(d) Prepaid Rent and Security Deposits.........................14
(e) Early Closing .............................................15
6.6 Tenant Reimbursements.............................................15
6.7 Work Letter Obligations...........................................15
6.8 License ..........................................................15
6.9 Construction; Construction Warranty...............................16
7. Damage...................................................................17
8. Condemnation.............................................................17
9. Representations and Warranties; "As-Is" Sale.............................18
9.1 Representations and Warranties of Seller..........................18
9.2 As Is" Sale.......................................................20
9.3 Representations and Warranties of Purchaser.......................21
10. Default..................................................................22
10.1 Default by Seller.................................................22
10.2 Default by Purchaser..............................................22
10.3 Attorneys' Fees and Costs.........................................23
11. Brokerage Commission.....................................................23
11.1 Broker ...........................................................23
12. Escrow...................................................................24
12.1 Escrow Agent and Escrow Procedure.................................24
13. Other Contractual Provisions.............................................24
13.1 Assignment........................................................24
13.2 Notices ..........................................................24
13.3 Entire Agreement..................................................25
13.4 Applicable Law; Jurisdiction; Venue; Damage.......................26
13.5 Headings .........................................................26
13.6 Binding Effect....................................................26
13.7 Counterparts......................................................26
13.8 Interpretation....................................................26
13.9 Severability......................................................26
13.10 Time of Essence...................................................26
13.11 Authority of Parties..............................................26
13.12 No Waiver.........................................................27
13.13 IRS Reporting Requirements........................................27
13.14 Agreement Not Recordable..........................................27
13.15 Return of Documents; Confidentiality..............................27
13.16 Continued Marketing of the Property...............................27
13.17 Actions by Seller Relating to the Tenant Lease....................28
ii
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made as of the 17th
day of July, 2002 (the "Execution Date"), by and between STRATFORD AMERICAN
CORPORATION, an Arizona corporation ("Purchaser"), and OPUS WEST CORPORATION, a
Minnesota corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Seller is the owner of that certain Property (as hereinafter
defined) located at 20225 North Scottsdale Road, Scottsdale, Maricopa County,
Arizona; and
WHEREAS, Purchaser desires to purchase the Property from Seller upon the
terms and conditions set forth in this Agreement; and
WHEREAS, Seller desires to sell the Property to Purchaser upon the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, Seller and Purchaser agree as follows:
1. SALE OF PROPERTY. Seller agrees to sell to Purchaser and Purchaser
agrees to buy from Seller the following (collectively, the "Property"):
1.1 OFFICE PROJECT. The office project (the "Project") as more
particularly described and depicted on EXHIBIT A attached hereto, which
shall include the Real Property, Tenant Lease, Contracts, Permits and the
Marketing Information (as each such term is defined herein) with respect to
the Project.
1.2 REAL PROPERTY. That parcel of land more particularly described on
EXHIBIT B attached hereto (the "Land"), together with (i) all building
structures located on the Land and all improvements and fixtures owned by
Seller located on the Land (collectively, the "Improvements"), and (ii) all
rights, privileges, servitudes and appurtenances thereunto belonging or
appertaining (collectively, the "Real Property").
1.3 TENANT LEASE. All right, title and interest of the landlord under
the tenant lease for the Project listed on EXHIBIT C attached hereto,
together with all amendments or modifications thereto and guaranties
thereof and all prepaid rent and all security deposits in connection
therewith, subject to the provisions of Sections 6.6 and 6.7 hereof (the
"Tenant Lease").
1.4 CONTRACTS. All right, title and interest of Seller in and to all
service and maintenance contracts, equipment leases and other contracts, if
any, related to the Project (the "Contracts").
1.5 PERMITS. Seller's interests in the licenses, permits, certificates
of occupancy and franchises for the Project (the "Permits"), to the extent
such Permits are assignable.
1.6 WARRANTIES. A nonexclusive assignment of Seller's interests in all
unexpired warranties and guaranties given by third parties unaffiliated
with Seller to, assigned to or benefiting Seller and relating to the Real
Property regarding the acquisition, construction, design, use, operation,
management or maintenance of the Real Property (the "Warranties"), to the
extent that such Warranties are assignable; provided, however, Seller shall
have the nonexclusive ownership of all such unexpired warranties and
guaranties and shall have the right to enforce same prior to the expiration
thereof; and provided further, however, Buyer understands that Seller may
also make a nonexclusive assignment of all such unexpired warranties and
guaranties to the tenant under the Tenant Lease.
1.7 MARKETING INFORMATION. All leasing brochures, current marketing
information and models for the Project which are in Seller's possession
(the "Marketing Information").
2. PURCHASE PRICE.
2.1 PURCHASE PRICE. Subject to the provisions of Section 2.2,
Purchaser shall pay to Seller, as consideration for the purchase of the
Property, the sum of Twenty-Four Million Nine Hundred Eighty-Eight Thousand
Eighty and No/100ths Dollars ($24,988,080.00) (the "Purchase Price"). The
Purchase Price shall be payable as follows:
(a) Concurrently with full execution of this Agreement, Purchaser
shall deliver by cashier's check or wire transfer the sum of Two
Hundred Fifty Thousand and No/100ths Dollars ($250,000.00) (said sum,
together with the additional xxxxxxx money deposit made pursuant to
Section 2.1(b), and together with and including all accrued interest
thereon, being hereinafter referred to as the "Deposit") to Chicago
Title Insurance Company, 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx, which firm shall serve as
the "Escrow Agent" pursuant to the terms of this Agreement. All fees
or charges imposed by the Escrow Agent shall be shared equally between
Seller and Purchaser. The Escrow Agent is directed to hold the Deposit
in an interest-bearing account with a commercial bank located in
Phoenix, Arizona. Purchaser represents that its federal tax
identification number is as set forth immediately after its signature
hereon. The Deposit shall be applied against the Purchase Price at the
Closing.
(b) If Purchaser does not elect to terminate this Agreement
pursuant to its rights to do so contained in Section 3.2 hereof on or
before the expiration of the Financing Contingency Period (as
hereinafter defined), Purchaser shall deposit an additional sum of Two
Hundred Fifty Thousand and No/100ths Dollars ($250,000.00) as an
additional portion of the Deposit.
2
(c) The balance of the Purchase Price, plus or minus prorations
and other adjustments as provided in this Agreement, if any, shall be
due at Closing and shall be paid by wire transfer of immediately
available funds paid to Escrow Agent by 11:00 a.m. on the Closing Date
(as hereinafter defined).
2.2 ADJUSTMENT TO PURCHASE PRICE. The parties acknowledge and agree
that the Purchase Price was based on the Annual Basic Rent (as defined in
the Tenant Lease) for the first five years of the term of the Tenant Lease
equaling Two Million Ninety-Six Thousand Two Hundred Fifty and No/100ths
Dollars ($2,096,250.00). Seller and Purchaser acknowledge and agree that
Seller and the tenant under the Tenant Lease are to execute, on or before
the Closing Date, an amendment to the Tenant Lease setting forth the actual
amount of the Annual Basic Rent for the first five years of the term of the
Tenant Lease. If such Annual Basic Rent is less than or more than Two
Million Ninety-Six Thousand Two Hundred Fifty and No/100ths Dollars
($2,096,250.00), then the Purchase Price shall be adjusted to equal the
quotient of such Annual Basic Rent divided by .08389.
3. INVESTIGATION PERIOD.
3.1 INVESTIGATION. Seller acknowledges that, to enable Purchaser to
proceed with this transaction, Purchaser must undertake or cause to have
undertaken certain tests and studies, including but not limited to
engineering and soil studies (hereinafter collectively referred to as
"Tests and Studies"), so as to determine whether, in Purchaser's sole
discretion, it would be feasible, economically or otherwise, to go forward
with Purchaser's acquisition of the Property. Purchaser shall have from the
Execution Date of this Agreement until 5:00 p.m., M.S.T., on July 22, 2002
(herein, the "Investigation Period") in which to undertake any Tests and
Studies which Purchaser, in its sole discretion, deems necessary to
determine the feasibility of its acquisition of the Property. If for any
reason whatsoever during the Investigation Period Purchaser determines, in
Purchaser's sole discretion, that the Property is feasible for Purchaser's
purposes, then Purchaser may notify Seller and Escrow Agent in writing
thereof on or before the expiration of the Investigation Period, which
written notice shall be deemed to be notice that Purchaser has satisfied
itself that the Property is feasible for Purchaser's purposes and that the
contingency contained in this Section 3.1 shall be deemed waived as of such
date and time. A failure to so notify Seller and Escrow Agent in writing on
or before the expiration of the Investigation Period shall be deemed as
notice to Seller that Purchaser has determined that the Property is not
feasible for Purchaser's purposes and that Purchaser has elected to
terminate this Agreement pursuant to this Section 3.1, whereupon Escrow
Agent shall return the Deposit to Purchaser immediately thereafter, and
neither party shall thereafter have any further obligations or liabilities
to the other hereunder, except for those matters which specifically survive
the expiration or termination of this Agreement.
3
Purchaser and its agents, contractors or employees shall have the
right to enter upon the Property at all reasonable times for the purpose of
performing its Tests and Studies, provided said activities shall not damage
the Property or interfere with the rights of the tenant under the Tenant
Lease. Purchaser shall give Seller reasonable prior notice before Purchaser
enters upon the Property and, with respect to any invasive Tests and
Studies at the Property, Purchaser shall obtain the prior written approval
of Seller thereto prior to conducting any invasive Tests and Studies, which
approval shall not be unreasonably withheld, conditioned or delayed. In the
event this Agreement fails to close for any reason, Purchaser shall restore
the Property to its condition prior to such surveying, inspecting and
testing; provided, however, that Purchaser's restoration shall be limited
to the damage or other change to the condition of the Property caused by
Purchaser or its agents, contractors, employees or other representatives in
connection with such surveying, inspecting or testing. Purchaser shall not
disrupt the ordinary course of business of Seller at the Property or
Seller's tenant. Purchaser shall keep the Property free of all liens in
connection with its inspection of the Property and shall cause all such
liens to be removed immediately upon its being notified of same. Purchaser
agrees to indemnify, defend, protect and hold harmless Seller against any
liabilities, claims and damages, including without limitation any property
damage or personal injury or claim of lien against the Property, resulting
from Purchaser's Tests and Studies or investigations (including, without
limitation, reasonable attorneys' fees and expenses paid or incurred by
Seller during litigation, if any, and the costs of enforcing this
indemnity), which indemnity shall survive the Closing or the expiration,
cancellation or termination of this Agreement. Purchaser shall cause any
consultants retained by Purchaser to name Seller as an additional insured
on their policies of liability insurance with minimum limits and coverages
as may be reasonably approved by Seller. Purchaser shall promptly deliver
to Seller copies of any Tests and Studies undertaken by Purchaser,
including, without limitation, any environmental assessment prepared with
respect to the Property. In addition to the rights granted to Purchaser
under this Section 3.1, Purchaser may, at Purchaser's option, undertake to
interview the tenant of the Project during the Investigation Period;
provided, however, such interview shall be upon reasonable advance notice
to Seller and a representative of Seller or Seller's management company may
be present during such interview.
Purchaser acknowledges and agrees that Seller has previously delivered
or may hereafter deliver to Purchaser certain agreements, Contracts, Tenant
Lease, tests, studies, valuations, reports and other documents relating to
the Property. Purchaser shall use all such materials solely for Purchaser's
evaluation and investigation of the Property. In the event that Purchaser
should terminate this Agreement or otherwise not close on the purchase of
the Property hereunder for any reason, Purchaser shall immediately return
all such materials, together with all copies hereof, to Seller, and shall
otherwise discontinue any use of such materials.
4
3.2 FINANCING CONTINGENCY. The obligation of Purchaser to consummate
the transaction described in this Agreement is contingent upon and subject
to Purchaser, on or before 5:00 p.m., M.S.T., August 22, 2002 (the
"Financing Contingency Period"), obtaining a commitment letter ("Loan
Commitment") from a third party institutional lender for a new loan to
purchase the Property, on terms and conditions acceptable to Purchaser in
its sole discretion. Purchaser shall use good faith, diligent efforts to
obtain an acceptable Loan Commitment. During the Financing Contingency
Period, Purchaser shall also have the right to submit to Seller proposed
amendments to the Tenant Lease requested by Purchaser's lender, and unless
any such proposed amendments to the Tenant Lease adversely affect Seller in
Seller's reasonable determination, Seller shall promptly submit to the
tenant the proposed amendments to the Tenant Lease for the tenant's review
and approval. If Purchaser does obtain a Loan Commitment, on terms
acceptable to it in its sole discretion, and if the tenant under the Tenant
Lease agrees to such amendments to the Tenant Lease as are satisfactory to
Purchaser and Purchaser's lender, on or before the expiration of the
Financing Contingency Period, then Purchaser may notify Seller and Escrow
Agent in writing thereof on or before the expiration of the Financing
Contingency Period, which written notice shall be deemed to be notice (i)
that Purchaser has satisfied itself that it shall obtain or has obtained a
Loan Commitment acceptable to Purchaser in its sole discretion and (ii)
that Purchaser has approved such amendments to the Tenant Lease as were
acceptable to the tenant, and the contingency contained in this Section 3.2
shall be deemed waived by Purchaser as of such date and time. Purchaser's
failure to so notify Seller and Escrow Agent in writing on or before the
expiration of the Financing Contingency Period shall be deemed as notice to
Seller that Purchaser has terminated this Agreement and the Escrow, in
which event the Deposit shall be returned to Purchaser by Escrow Agent, and
neither party shall thereafter have any further obligations or liabilities
to the other hereunder, except for those matters which specifically survive
the expiration or termination of this Agreement. Upon the expiration of the
Financing Contingency Period, unless Purchaser has terminated or has been
deemed to have terminated this Agreement and the Escrow, Purchaser shall
make the deposit required by Section 2.1(b) hereof, whereupon the Deposit
shall be non-refundable to Purchaser, subject to the fulfillment of
Seller's obligations hereunder and the waiver or satisfaction of each of
the Conditions Precedent. Notwithstanding anything to the contrary in this
Section 3.2, if as a condition to the execution of the tenant estoppel
certificate by the tenant under the Tenant Lease there is a material change
to the terms and conditions of this Agreement which adversely affects the
Loan Commitment previously approved or deemed approved by Purchaser,
regardless of whether such condition imposed by the tenant occurs before or
after the expiration of the Financing Contingency Period, then Purchaser
may terminate this Agreement and the Escrow by delivering written notice to
5
Seller and Escrow Agent within three (3) business days after Purchaser's
receipt of the tenant estoppel certificate or other written notice of such
condition from the tenant under the Tenant Lease, in which event the
Deposit shall be returned to Purchaser by Escrow Agent, and neither party
shall thereafter have any further obligations or liabilities to the other
hereunder, except for those matters which specifically survive the
expiration or termination of this Agreement. If for any reason Purchaser
does not timely terminate this Agreement and the Escrow in accordance with
the previous sentence, then Purchaser shall be deemed to have waived its
right to terminate this Agreement and the Escrow as a result of the
imposition of such condition by the tenant.
4. TITLE REQUIREMENTS, SURVEY AND PERMITTED EXCEPTIONS.
4.1 TITLE EVIDENCE. On or before the Execution Date hereof, Seller has
furnished to Purchaser an extended coverage owner's commitment for title
insurance (the "Title Commitment") covering the Real Property (together
with legible copies of the exception documents referenced therein) issued
by Chicago Title Insurance Company (the "Title Company"), pursuant to which
Title Commitment the Title Company shall agree to issue to Purchaser, upon
the Closing of the purchase of the Property, an extended coverage owner's
title insurance policy (Form B-1970) for the Property in the amount of the
Purchase Price, without exception for any matters except as described in
this Article 4. Seller shall be required to pay in full, on or before the
Closing, any monetary liens created by Seller against the Property;
provided, however, it is understood that, with respect to any mechanic's or
materialmen's liens related to the design or construction of the
Improvements by Seller, Seller will cause the title policy (through an
endorsement to the title policy providing such coverage, which endorsement
will include insurance over the actual knowledge of Purchaser with respect
to the status of any mechanic's or materialmen's liens) to provide coverage
to be issued to Purchaser without exception for any such mechanic's or
materialmen's liens.
4.2 SURVEY. On or before the Execution Date, Seller has furnished to
Purchaser an ALTA/ACSM survey of the Property certified by DEI Professional
Services, L.L.C. (the "Survey"), which Survey has been provided at Seller's
cost. Promptly after the Execution Date hereof, Seller at Seller's sole
cost shall cause the Survey to be certified to Purchaser and Title Company;
in addition, if Purchaser has advised Seller in writing, prior to the date
the Survey has been certified to Purchaser and Title Company. of the name
of Purchaser's lender, Purchaser's lender shall be added as a certified
party to the Survey. The Survey, as certified, shall comply with the survey
requirements set forth in EXHIBIT I attached hereto.
4.3 OBJECTIONS; CURE OF TITLE AND SURVEY OBJECTIONS. On or before
seven (7) days prior to the expiration of the Investigation Period,
Purchaser may make written objections ("Objections") to the form and/or
contents of the Title Commitment or the Survey. Purchaser's failure to make
6
objections within such time period shall constitute Purchaser's waiver of
Objections. Any matter shown on the Title Commitment or on the Survey which
is not objected to by Purchaser shall be a "Permitted Exception" hereunder.
Seller will have until the earlier of five days after receipt of the
Objections or the expiration of the Investigation Period to attempt to cure
the Objections. If Seller is unwilling or unable to cure the Objections
within the period of time specified in the preceding sentence, Purchaser's
sole remedy shall be to elect to do only one of the following by delivering
written notice thereof to Seller and the Escrow Agent on or before the
expiration of the Investigation Period:
(1) Terminate this Agreement and receive a refund of the Deposit,
in which event neither party shall have any further rights or
obligations hereunder except for those matters which specifically
survive the expiration or termination of this Agreement; or
(2) Waive the Objections (whereupon such previously objected to
item shall thereafter be deemed to be an additional Permitted
Exception hereunder) and proceed to close on the Property subject
thereto. If Purchaser does not timely make the required election in
writing, then Purchaser shall be deemed to have made the election
provided in this clause (1).
4.4 FIRST AMENDMENT TO DECLARATION. Seller and Purchaser acknowledge
and agree that Seller shall have the right to execute, acknowledge and
record a first amendment to that certain Declaration of Easements,
Covenants, Conditions and Restrictions dated April 10, 2001, recorded
August 10, 2001 in Instrument No. 2001-0735394, official records of
Maricopa County, Arizona, as re-recorded August 28, 2001 in Instrument No.
2001-0790145, official records of Maricopa County, Arizona, in order to
change the parking ratio described in the second sentence of Section 3.7(a)
thereof and to make other changes then appropriate for the currently
contemplated development and operation of the Property. Seller shall keep
Purchaser advised of the progress toward finalization of such first
amendment, and upon execution thereof, Seller shall promptly furnish a copy
of same to Purchaser and Purchaser shall have seven (7) days to review and
approve or disapprove same in Purchaser's reasonable discretion. If
Purchaser approves same, Purchaser may notify Seller and Escrow Agent in
writing thereof on or before the expiration of the seven-day period, which
written notice shall be deemed to be notice that Purchaser has approved
such first amendment. Purchaser's failure to so notify Seller and Escrow
Agent in writing on or before the expiration of such seven-day period shall
be deemed notice to Seller that Purchaser has terminated this Agreement and
the Escrow, in which event the Deposit shall be returned to Purchaser by
Escrow Agent, and neither party shall thereafter have any further
obligations or liabilities to the other hereunder, except for those matters
which specifically survive the expiration or termination of this Agreement.
7
The right set forth in the preceding sentence is Purchaser's sole and
exclusive right and remedy in the event Purchaser disapproves the executed
first amendment.
5. CONDITIONS PRECEDENT TO CLOSING. Closing of the purchase of the
Property hereunder shall be and hereby is conditioned upon satisfaction of each
of the following conditions (collectively, the "Conditions Precedent"):
5.1 Seller shall have performed, in all material respects, the
obligations required to be performed by Seller prior to Closing under this
Agreement. Prior to Closing, Seller shall use good faith, diligent efforts
to perform its pre-Closing obligations under this Agreement.
5.2 Subject to the last paragraph of Section 9.1, the representations
and warranties of Seller as set forth in Article 9 hereof shall be, in all
material respects, true and complete.
5.3 Purchaser shall have received on or before the Closing Date an
estoppel certificate in substantially the form attached hereto as EXHIBIT D
from the tenant under the Tenant Lease, which certificate shall disclose no
material facts which are contradictory to those facts previously disclosed
to Purchaser with respect to the Tenant Lease. Seller shall use its
reasonable and diligent efforts to obtain the estoppel certificate from the
tenant under the Tenant Lease; provided, however, Seller shall not be
required to expend monies or make concessions or institute litigation in
order to obtain such estoppel certificate. In exercising its reasonable
discretion concerning the acceptability of the estoppel certificate on a
form other than that prescribed by EXHIBIT D, subject to the provisions of
this paragraph, Purchaser will accept an alternate form which complies with
Section 21.7 of the Tenant Lease.
5.4 The tenant under the Tenant Lease and Seller shall have executed a
Second Amendment to Bondable Net Lease Agreement which sets forth the
actual amount of the Annual Basic Rent under the Tenant Lease for the first
five years of the term of the Tenant Lease and sets forth the amount of the
Landlord's Project Costs (as defined in the Tenant Lease) for the shell
building improvements.
5.5 The tenant under the Tenant Lease shall have executed in writing,
either in an amendment to the Tenant Lease, in the estoppel certificate
referred to in Section 5.3 or in some other written certification or
agreement, a statement that the tenant acknowledges that, as provided in
Section 6.7 of this Agreement, the warranties, rights and obligations of
the landlord under the Work Letter attached as Exhibit "B-1" to the Tenant
Lease will remain the warranties, rights and obligations of Seller and that
Purchaser will not assume or be assigned such warranties, rights and
obligations.
If any of the Conditions Precedent have not been satisfied on or before the
Closing Date, this Agreement may be canceled by Purchaser, at Purchaser's
option, by written notice from Purchaser to Seller and to the Escrow Agent given
8
on or before the Closing Date. Upon such cancellation, the Deposit shall be
refunded and returned to Purchaser. Purchaser shall have the right to
unilaterally waive any Conditions Precedent by written notice to Seller, and
Purchaser shall be deemed to have waived any unsatisfied Conditions Precedent if
Purchaser acquires the Property.
6. CLOSING; COVENANTS.
6.1 CLOSING DATE. The consummation of the purchase of the Property
contemplated by this Agreement (the "Closing") shall take place in Phoenix,
Arizona, at the offices of the Escrow Agent on the date which is two (2)
days after the satisfaction of the Delivery Conditions as set forth in
Paragraphs 7.1-7.6 of Exhibit "B-1" to the Tenant Lease and the payment by
the tenant under the Tenant Lease of the first month's installment of
Annual Basic Rent, together with the receipt by Purchaser of the
certificate of substantial completion issued by Seller's architect for the
construction of the Improvements (provided, however, a Delivery Condition
shall be deemed satisfied if Seller has performed all of its
responsibilities with respect to a Delivery Condition, but the remaining
requirements for satisfying such Delivery Condition are the responsibility
of the tenant under the Tenant Lease), or at such other place and time as
Purchaser and Seller may agree to in writing (the "Closing Date").
Notwithstanding the foregoing, Purchaser shall have the right, in its sole
discretion, upon seven (7) business days prior written notice to Seller, to
cause the Closing to occur prior to occupancy of the Project by the tenant
under the Tenant Lease, but in all events such early Closing Date shall not
occur until after the issuance of a certificate of substantial completion
for the shell building by Seller's architect (or the issuance of any
similar or equivalent approval establishing the substantial completion of
the shell building). Notwithstanding anything to the contrary in this
Agreement, and notwithstanding that the Initial Term (as defined in the
Tenant Lease) of the Tenant Lease shall remain two hundred sixty-four (264)
calendar months from the Commencement Date (as defined in the Tenant
Lease), if Purchaser elects the right to close early pursuant to the
preceding sentence, then Seller shall pay to Purchaser at Closing (or
Seller may elect to give to Purchaser a credit at Closing against the
Purchase Price) in an amount equal to the Annual Basic Rent under the
Tenant Lease for the period of time then reasonably estimated by Seller and
Purchaser from the date of Closing until the date that the tenant under the
Tenant Lease is required to pay Annual Basic Rent thereunder; in such
event, after the tenant under the Tenant Lease has commenced payment of
Annual Basic Rent thereunder, Seller and Purchaser shall re-calculate the
amount of the payment which should have been made, or credit which should
have been given, by Seller to Purchaser at Closing pursuant to this
sentence, and if the actual payment made, or credit given, by Seller to
Purchaser at Closing is different than such amount, then within fifteen
(15) days thereafter, the party who owes the other party a payment to
reconcile such amount shall pay such sum to the other party. Possession of
the Property, subject to the Tenant Lease, shall be granted by Seller to
Purchaser on the Closing Date.
9
Notwithstanding anything to the contrary in this Agreement, if for any
reason the Closing has not occurred on or before December 31, 2002, then at
any time thereafter Seller shall have the right to terminate this
Agreement, in which event the Deposit shall be returned to Purchaser by
Escrow Agent, and neither party shall thereafter have any further
obligations or liabilities to the other hereunder, except for those matters
which specifically survive the expiration or termination of this Agreement.
In addition, notwithstanding anything to the contrary in this Agreement, if
for any reason the Closing has not occurred on or before June 30, 2003,
then at any time thereafter Buyer shall also have the right to terminate
this Agreement, in which event the Deposit shall be returned to Purchaser
by Escrow Agent, and neither party shall thereafter have any further
obligations or liabilities to the other hereunder, except for those matters
which specifically survive the expiration or termination of this Agreement.
6.2 SELLER'S OBLIGATIONS AT CLOSING. On the Closing Date, Seller shall
execute and/or deliver to Purchaser, through the Escrow Agent as
applicable, the following:
(a) DEED. A Special Warranty Deed, in the form attached hereto as
EXHIBIT E, conveying the Real Property to Purchaser, together with an
Affidavit of Real Property Value as required by law.
(b) ASSIGNMENT AND ASSUMPTION OF LEASE. An Assignment and
Assumption of Lease, in the form attached hereto as EXHIBIT F (the
"Assignment and Assumption of Lease"), assigning Seller's landlord
interest in the Tenant Lease and any security deposits for the
Property to Purchaser, subject to Sections 6.6 and 6.7 hereof.
(c) ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND PERMITS. A Blanket
Transfer, Assignment and Assumption, in the form attached hereto as
EXHIBIT G (the "Blanket Assignment"), assigning Seller's interest in
the Contracts and Permits for the Property to Purchaser.
(d) NOTICE TO TENANT. A notice to the tenant under the Tenant
Lease, in the form attached hereto as EXHIBIT H, advising the tenant
of the sale of the Project and directing it make future lease payments
to Purchaser at the place designated by Purchaser.
(e) SECURITY AND PREPAID RENTS. All security deposits and prepaid
rents under the Tenant Lease for the Property, including valid
transfers of any noncash securities or documents held for such
purposes.
(f) ORIGINAL DOCUMENTS. Original copies of the Tenant Lease
(including the documents referenced in Sections 3.2, 5.4 and 5.5), the
Contracts and the Permits, to the extent in Seller's possession or
control.
10
(g) FIRPTA AFFIDAVIT. A non-foreign affidavit properly executed
and containing such information as is required by IRC Section
1445(b)(2) and its regulations.
(h) TENANT ESTOPPEL CERTIFICATE. A tenant estoppel certificate as
contemplated by Section 5.3 hereof.
(i) OWNER'S TITLE INSURANCE POLICY. An irrevocable commitment of
Escrow Agent to issue an owner's title insurance policy, or proforma
policy issued by Escrow Agent, for the Real Property insuring fee
simple title to the Real Property to Purchaser in a face amount equal
to the Purchase Price and containing no exceptions other than the
Permitted Exceptions and other exceptions, if any, to which Purchaser
may consent in its sole discretion.
(j) TITLE DOCUMENTS. Such affidavits of Seller or other documents
as may be reasonably required by Title Company in order to record the
closing documents and issue the Title Insurance Policy.
(k) CLOSING STATEMENT. A closing statement setting forth the
Purchase Price, the Deposit, adjustments, prorations and Closing costs
as set forth herein.
(l) ADDITIONAL DOCUMENTS. Such other documents as may be required
by the terms and conditions of this Agreement.
6.3 PURCHASER'S OBLIGATIONS AT CLOSING. On the Closing Date, Purchaser
shall execute and/or deliver to Seller, through the Escrow Agent as
applicable, the following with respect to the Project:
(a) PURCHASE PRICE. The Purchase Price payable at Closing by wire
transfer received no later than 11:00 a.m., M.S.T., on the Closing
Date. (b) ASSIGNMENT AND ASSUMPTION OF LEASE. The Assignment and
Assumption of Lease.
(c) BLANKET ASSIGNMENT. The Blanket Assignment.
(d) TITLE DOCUMENTS. Such affidavits of Purchaser or other
documents as may be reasonably required by Title Company in order to
record the closing documents and issue the Title Insurance Policy.
(e) CLOSING STATEMENT. A closing statement setting forth the
Purchase Price, the Deposit, adjustments, prorations and Closing costs
as set forth herein.
11
(f) ADDITIONAL DOCUMENTS. Such other documents as may be required
by this Agreement, including an Affidavit of Real Property Value as
required by law.
6.4 CLOSING COSTS.
(a) Seller shall pay the following costs and expenses in
connection with the Closing:
(i) All recording fees, transfer taxes, if any, and all
documentary stamps payable upon the recording of the Special
Warranty Deed in connection with the conveyance of the Property;
(ii) The premium payable for the standard coverage portion
of the owner's policy of title insurance, plus one-half of Escrow
Agent's escrow fees;
(iii) The cost of the Survey delivered by Seller to
Purchaser pursuant to Section 4.2; and
(iv) Its costs of document preparation and its attorneys'
fees.
(b) Purchaser shall pay the following costs arising in connection
with the Closing:
(i) All due diligence or inspection costs incurred by
Purchaser;
(ii) The premium payable for the extended coverage portion
of the owner's policy of title insurance and all endorsements
thereto requested by Purchaser, plus one-half of Escrow Agent's
escrow fees; and
(iii) Its cost of document preparation and its attorneys'
fees.
6.5 PRORATIONS. The following items shall be prorated between Seller
and Purchaser as of 12:01 a.m. on the Closing Date (the "Proration Date"):
(a) PROPERTY TAXES. City, state and county ad valorem taxes and
all general and special assessments payable during the calendar year
of Closing based on the ad valorem tax bills for such period. All such
prorations shall account for and reflect contributions to (or the
direct payment of) such taxes or assessments made, or to be made, by
the tenant under the Tenant Lease.
12
(b) OPERATING EXPENSE AND UTILITY CHARGES. Sanitary sewer taxes,
utility charges and any other operating expenses associated with the
operation of the Property, if any. Seller shall endeavor to obtain
final readings for electricity and utility charges for the Project as
of the Closing Date. All such prorations shall account for and reflect
contributions to (or the direct payment of) such taxes, charges and
expenses made, or to be made, by the tenant under the Tenant Lease.
(c) RENTS. Current and advance rentals; operating expenses, real
estate tax and insurance escalations and adjustments and other charges
payable by the tenant under the Tenant Lease (collectively, "Expense
Contributions"); utility charges and deposits made by Seller with
respect to utilities; and all other items of accrued or prepaid income
and expenses (except delinquent rents) shall be prorated on an accrual
basis up to and including the Proration Date on the basis of the most
recent ascertainable amounts of or other reliable information in
respect to each such item of income and expense.
When actual Expense Contributions for the year in which Closing
occurs are known, Purchaser shall xxxx the tenant for the additional
amount, if any, owed by it as a result of non-payment or underpayment
of the tenant's share of Expense Contributions for the year to which
such Expense Contributions apply under the Tenant Lease. Upon
collection of such amounts, the same shall be prorated between Seller
and Purchaser, and Purchaser shall pay Seller all amounts due Seller
for the period prior to the Proration Date. The amount of any refund
or credit to the tenant as a result of collection by Seller prior to
the Closing Date of payments by the tenant for Expense Contributions
which exceed the actual amount of such Expense Contributions owed by
the tenant for the period prior to the Closing Date shall be paid to
Purchaser as soon as reasonably practical after such Expense
Contributions are known. Until but not after the first anniversary of
the Closing, Seller shall have the right to inspect the books and
records of the Property to verify that Purchaser is remitting to
Seller all amounts to be remitted to Seller according to the terms of
this Agreement, and for any other purpose related to Seller's prior
ownership of the Property. Notwithstanding the foregoing, if the
amounts to be prorated hereunder can be established with certainty at
Closing, the appropriate party shall receive credit therefor at
Closing, which credit shall be final and in lieu of any proration
contemplated hereby. The parties agree that any re-adjustment of the
items referenced in this Section 6.5 shall occur within two years
after the Closing Date; if not re-adjusted prior to the date two years
after the Closing Date, no further re-adjustment thereof shall be
thereafter made.
All basic rent and other amounts payable by the tenant to
landlord under the Tenant Lease will be prorated as of the Proration
Date. In the event that on the Closing Date the tenant is delinquent
13
for a period of thirty (30) days or less in the payment of rent (base
rent, additional rent or otherwise) or other charges unpaid at the
time of Closing, a proportionate share of said delinquent rent shall
be credited in favor of Seller, it being understood that if the tenant
is delinquent for a period of thirty (30) days or less in the payment
of current monthly rent but is also delinquent for a period of more
than thirty (30) days for past monthly rent, all such rent shall be
considered delinquent for purposes of this paragraph. In the event
that on the Closing Date the tenant is delinquent for a period of more
than thirty (30) days in the payment of rent (base rent, additional
rent or otherwise) or other charges unpaid at the time of Closing,
then no proration shall be made at Closing, and, after Closing, Seller
shall have the right to proceed against the tenant for collection of
such past due amounts, which proceedings may include instituting
litigation for damages, but not eviction from or dispossession of the
leased premises. Purchaser shall diligently cooperate in good faith,
without cost or expense to Purchaser, with Seller in Seller's
collection efforts. If Seller recovers any such delinquent amounts,
the same shall be distributed in the following order of priority: (i)
to Seller for amounts due or accrued from the tenant prior to the
Proration Date, then (ii) the balance to Purchaser; if Purchaser
recovers any such delinquent amounts, the same shall be distributed in
the following order of priority: (i) to Purchaser for amounts due or
accrued from the tenant from and after the Proration Date, then (ii)
the balance to Seller.
Seller agrees that it shall be responsible for and shall
indemnify, defend and hold Purchaser harmless from, and promptly pay
when due, all real estate commissions due under the Tenant Lease (but
in all events excluding any real estate commissions due and payable
with respect to any renewal, extension or expansion of the Tenant
Lease which may occur subsequent to the Closing, which shall be the
sole obligation of Purchaser). In addition, Seller shall be
responsible for and promptly pay when due any remaining tenant
improvement allowances which Seller may owe the tenant under the
Tenant Lease relating to the initial tenant improvements to be
constructed pursuant to the Tenant Lease.
(d) PREPAID RENT AND SECURITY DEPOSITS. The amount of all prepaid
rents, security and other tenant deposits for the Property and
interest due thereon, if any, shall be credited to Purchaser. Seller
shall deliver to Purchaser a true and correct listing of such prepaid
rents and deposits for the Project as of the Closing. In consideration
of such credit, Purchaser shall and hereby does assume full
responsibility and liability for all such prepaid rents and deposits
for the Project at Closing. Purchaser hereby agrees to indemnify,
defend, protect and hold harmless Seller from and against any loss,
claim, liability, damage or expense (including all reasonable
attorneys' fees) arising from or related to said prepaid rents or
deposits from and after the Closing. The obligations of Seller and
Purchaser under this Section 6.5 shall survive the Closing.
14
(e) EARLY CLOSING. Notwithstanding anything to the contrary in
this Section 6.5, if Purchaser elects to cause the Closing to occur
prior to the date set forth in the first sentence of Section 6.1, then
Seller and Purchaser shall use good faith efforts to agree upon the
prorations set forth in Sections 6.5(a-c). The parties acknowledge
that it is generally the case that such items shall be prorated to the
date of satisfaction, or deemed satisfaction, of the Delivery
Conditions described in the first sentence of Section 6.1. However,
nothing in this Agreement shall affect the allocation of such costs
between Seller and the tenant under the Tenant Lease.
6.6 TENANT REIMBURSEMENTS. Seller and Purchaser acknowledge and agree
that, pursuant to the Tenant Lease, the tenant under the Tenant Lease may
be required to reimburse Seller for certain costs incurred by Seller in the
completion of the Improvements being constructed by Seller for such tenant,
including without limitation those items described in the next-to-last
paragraph of Section 2 of the Work Letter attached as Exhibit "B-1" to the
Tenant Lease, and the tenant under the Tenant Lease may owe to Seller other
sums that have accrued prior to the Closing Date. All such sums shall
remain the exclusive property of Seller and shall not be deemed to have
been conveyed by Seller to Purchaser hereunder. Seller shall have the right
to proceed against the tenant for collection of any such amounts, which
proceedings may include instituting litigation for damages, but not
eviction from or dispossession of the leased premises.
6.7 WORK LETTER OBLIGATIONS. Notwithstanding anything to the contrary
in this Agreement, Seller shall retain and be solely liable for all
warranties, rights and obligations of the landlord under the Tenant Lease
that are set forth in Exhibit "B-1" to the Tenant Lease, and Purchaser
shall not be assigned or assume the same and shall have no liability or
responsibility therefor. Seller and Purchaser acknowledge that, pursuant to
Article II and the first paragraph of Exhibit "B-1" of the Tenant Lease,
such warranties, rights and obligations remain the personal warranties,
rights and obligations of Seller and do not transfer to Purchaser as the
successor landlord under the Tenant Lease.
6.8 LICENSE. From and after the Closing, Seller shall have an
irrevocable license to enter the Property for its and its affiliates'
employees, contractors, materialmen and laborers to exercise all rights and
perform all obligations of the landlord under Exhibit "B-1" to the Tenant
Lease, including without limitation the completion of the Landlord's
Improvements (as defined in the Tenant Lease). Each of Seller and Purchaser
(without expense to Purchaser) shall reasonably cooperate with the other
party to allow Seller to exercise its rights and perform its obligations
under Exhibit "B-1" to the Tenant Lease. The provisions of this Section 6.8
shall survive the Closing.
15
6.9 CONSTRUCTION; CONSTRUCTION WARRANTY. If during the first year of
the term of the Tenant Lease (i) either the tenant thereunder vacates or
abandons the Demised Premises (as defined in the Tenant Lease) or any of
the other defaults specified in Section 12.1.4 of the Tenant Lease occur,
and (ii) during such first year of the term thereof the tenant under the
Tenant Lease defaults in its obligation to pay Rent (as defined in the
Tenant Lease), then Seller shall be deemed to have made the following
covenants to Purchaser as of such date:
(a) The Landlord's Improvements (as defined in the Tenant Lease)
shall be constructed in a good and workmanlike manner in accordance
with the Outline Specifications (as defined in the Tenant Lease) and
Seller agrees to complete the construction thereof in accordance with
the applicable building code as it is interpreted and enforced by the
government bodies having jurisdiction thereof as of the date the
building permit for the Landlord's Improvements is issued (the
"Applicable Code"); and
(b) Seller guarantees the Landlord's Improvements against
defective workmanship and/or materials (including any failure of the
Landlord's Improvements to comply with the Applicable Code) for a
period of one year from the date of substantial completion of
Landlord's Improvements (or, if Seller constructs the tenant
improvements under the Tenant Lease, then for a period of one year
from the Commencement Date (as defined in the Tenant Lease)), and
Seller agrees, at its sole cost and expense, to repair or replace any
defective item occasioned by poor workmanship and/or materials of
which the tenant under the Tenant Lease or Purchaser specifically
notifies Seller in writing prior to the expiration of said one-year
period, and performance of such one-year guaranty shall be Seller's
sole and exclusive obligation with respect to defective workmanship
and/or materials. PURCHASER'S RIGHTS TO ENFORCE SUCH ONE-YEAR GUARANTY
SHALL BE PURCHASER'S SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO SUCH
DEFECTIVE WORKMANSHIP AND/OR MATERIALS IN LIMITATION OF ANY CONTRACT,
TORT, WARRANTY OR OTHER RIGHTS OR CLAIMS, WHETHER EXPRESS OR IMPLIED,
THAT PURCHASER MAY OTHERWISE HAVE UNDER APPLICABLE LAW. ALL OTHER
WARRANTIES ARE EXPRESSLY DISCLAIMED. The Landlord's Improvements shall
be considered substantially completed at such time as the municipality
having jurisdiction thereof issues a certificate of occupancy, a
completion letter, or similar document or permit (whether conditional,
unconditional, temporary or permanent) which must be obtained as a
condition to the commencement of the tenant improvement work within
the building constructed on the Land. From and after the expiration of
the one-year guaranty of Seller against defective workmanship and
materials, Seller agrees to cooperate with Purchaser or the tenant
under the Tenant Lease in the enforcement by such parties, at such
16
parties' sole cost and expense, of any express warranties or
guaranties of workmanship or materials given by subcontractors or
materialmen that are not affiliated with Seller that guarantee or
warrant against defective workmanship or materials for a period of
time in excess of the one-year period described above and to cooperate
with Purchaser and the tenant under the Tenant Lease in the
enforcement by such parties, at such parties' sole cost and expense,
of any service contracts with non-affiliates of Seller that provide
service, repair or maintenance to any item incorporated in the
building constructed on the Land for a period of time in excess of
such one-year period. The provisions of this Section 6.9 shall survive
the Closing for a period of one year thereafter.
7. DAMAGE. If, prior to the Closing Date, all or any part of the Property
is substantially damaged by fire, casualty, the elements or any other cause,
Seller shall immediately give notice to Purchaser of such fact and at
Purchaser's option (to be exercised prior to the earlier of the Closing Date or
fifteen (15) days after Seller's notice to Purchaser), this Agreement shall
terminate, in which event neither party will have any further obligations under
this Agreement, except for those obligations which expressly survive the
termination of this Agreement, and the Deposit shall be refunded to Purchaser.
If Purchaser fails to timely elect to terminate despite such substantial damage,
or if the Property is damaged but not substantially, there shall be no reduction
in the Purchase Price, and Seller shall assign to Purchaser at the Closing all
of Seller's right, title and interest in and to the proceeds of all insurance
related to such damage (except that Seller shall not sign, and Seller shall
retain, the proceeds of any rent loss insurance relating to the period prior to
Closing or, if Purchaser closes early, to any period prior to the date that the
tenant under the Tenant Lease is required to pay Annual Basic Rent thereunder),
along with Seller's payment to Purchaser of an amount equal to any insurance
deductibles related to such damage. For purposes of this Section, the words
"substantially damaged" mean damage that would cost Five Hundred Thousand and
No/100ths Dollars ($500,000.00) or more to repair, or which would adversely
affect the Loan Commitment referenced in Section 3.2 hereof.
8. CONDEMNATION. If, prior to the Closing Date, eminent domain
proceedings are commenced against all or any part of the Property, Seller shall
immediately give notice to Purchaser of such fact and at Purchaser's option (to
be exercised prior to the earlier of the Closing Date or fifteen (15) days after
Seller's notice to Purchaser), this Agreement shall terminate, in which event
neither party will have further obligations under this Agreement, except for
those obligations which expressly survive the termination of this Agreement, and
the Deposit shall be refunded to Purchaser. If Purchaser fails to timely elect
to terminate despite such eminent domain proceedings, there shall be no
reduction in the Purchase Price, and Seller shall assign to Purchaser at the
Closing all of Seller's right, title and interest in and to any award made or to
be made in the eminent domain proceedings. Prior to the Closing Date, Seller
shall not designate counsel, appear in or otherwise act with respect to the
eminent domain proceedings without Purchaser's prior written consent.
17
9. REPRESENTATIONS AND WARRANTIES; "AS-IS" SALE.
9.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents
and warrants to Purchaser that the following are true and correct as of the
date of this Agreement and, subject to the last paragraph of this Section
9.1, shall be true and correct as of the Closing Date:
(a) Seller is a Minnesota corporation duly incorporated and in
good standing under the laws of the State of Minnesota and is
authorized to consummate the transactions contemplated by this
Agreement.
(b) The execution of this Agreement and all documents and
instruments executed pursuant to this Agreement by Seller, the
delivery thereof to Purchaser, Seller's performance hereof and the
transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of Seller and do not conflict
with or result in a violation of Seller's Articles of Incorporation,
bylaws or any judgment, order or decree of any court or proceeding to
which Seller is a party and all such documents are valid and binding
obligations of Seller and are enforceable in accordance with their
terms.
(c) Seller has received no written notice of the actual or
threatened reduction or curtailment of any utility service now
supplied to the Property.
(d) Seller is not a "foreign person", "foreign partnership",
"foreign trust" or "foreign estate" as those terms are defined in
Section 1445 of the Internal Revenue Code.
(e) To Seller's knowledge, there is no action, litigation,
investigation, condemnation or similar proceeding pending or
threatened of any kind against any portion of the Property which would
have a material adverse effect upon any portion of the Property.
(f) To Seller's knowledge and except as may be disclosed in any
environmental assessment (i) delivered to Purchaser by Seller or
Seller's consultants or agents at least five (5) days prior to the end
of the Investigation Period or (ii) received by Purchaser, there has
been no production, disposal or storage on the Property of any
hazardous substances or material or hazardous waste or pollutant (as
that term is defined in X.X.X.xx. 49-201(23)) or other toxic or
radioactive substance or matter by Seller in violation of applicable
statutes, laws, rules or regulations, including those materials
identified inss. 49-921 of the Arizona Revised Statutes and Title 40,
Part 261 of the Code of Federal Regulations, as they may be amended
from time to time, and including those materials subject to regulation
under the Resource Conservation and Recovery Act (as amended by the
Hazardous and Solid Waste Amendments of 1984), the Comprehensive
Environmental Response, Compensation and Liability Act (as amended by
18
the Superfund Amendments and Reauthorization Act of 1986), or any
other applicable Federal, state or local environmental protection law
or regulation (collectively, "Hazardous Materials"). To Seller's
knowledge and except as may be disclosed in any environmental
assessment (i) delivered to Purchaser by Seller or Seller's
consultants or agents at least five (5) days prior to the end of the
Investigation Period or (ii) received by Purchaser, there is no
governmental proceeding or inquiry by any authority with respect
thereto, and Seller has not received any written notice from any
governmental authority of any violation of the above-mentioned
statutes, laws, rules or regulations, and there do not exist any
underground or above-ground storage tanks, asbestos or PCBs on the
Property in violation of applicable statutes, laws, rules or
regulations.
Whenever any representation or warranty of Seller is stated in this
Agreement to be "to Seller's knowledge", "to Seller's actual knowledge" or
"to the best of Seller's knowledge", such words shall mean and be strictly
limited and confined to the actual present knowledge, without any
obligation of inquiry or investigation, of Xxxxxx X. Xxxxxxx, Xxxxxxx X.
Xxxxx or Xxxxx X. Xxxxxxx. Notwithstanding the foregoing provisions of this
Section 9.1, (i) if Purchaser learns of any actual or alleged material
inaccuracy in Seller's representations or warranties after the date hereof
and prior to the Closing Date, Purchaser shall promptly notify Seller
thereof, and (ii) if Seller learns of any actual or alleged material
inaccuracy in such representations or warranties, Seller shall promptly
notify Purchaser thereof. Seller shall, on or before the earlier of the
scheduled Closing Date or the date ten (10) days after receiving such
written notice from Purchaser or of learning of such actual or alleged
material inaccuracy, make commercially reasonable efforts, without cost or
expense to Seller, to cure such inaccuracy; provided, however, such
obligation to make commercially reasonable efforts to cure shall apply only
to Section 9.1(f). If Seller cannot cure or is unable to cure such alleged
material inaccuracy, Seller shall, within the period described in the
preceding sentence, notify Purchaser in writing of such inability or
failure to cure, and Purchaser's sole and exclusive remedy in such event
shall be to elect, on or before the earlier of the scheduled Closing Date
or the date five (5) business days after receiving such written notice from
Seller, to either (y) waive such breach and proceed to consummate the
transaction contemplated by this Agreement without reduction in the
Purchase Price or (z) terminate this Agreement, whereupon the Escrow Agent
shall return to Purchaser the Deposit, and neither party will have any
further rights or obligations regarding this Agreement or the Property
except for any obligations which are to expressly survive the expiration or
termination of this Agreement. Seller's representations and warranties as
contained herein shall survive the Closing Date for a period of one (1)
year, but not thereafter, it being the intention of the parties that all
suits or actions for breach of any such representations or warranties
herein, and any action for indemnity against liabilities resulting from any
such breach, must identify with specificity such breach and must be brought
19
within such one-year period or they shall be forever barred; provided,
however, Seller shall have no liability whatsoever to Purchaser with
respect to a breach of any of the representations and warranties herein
contained if Purchaser obtains knowledge of a fact or circumstance the
existence of which would constitute a breach of Seller's representations
and warranties hereunder prior to the Closing Date. In such event, if
Purchaser proceeds to Closing, without exercising the right of termination
set forth above, each representation or warranty shall be deemed
automatically amended to conform with the knowledge of Purchaser as of the
Closing Date, and Seller shall have no liability whatsoever for such
previously inaccurate representation or warranty. Whenever this Agreement
refers to the knowledge of Purchaser, such words shall mean and be strictly
limited and confined to the actual present knowledge, without any
obligation of inquiry or investigation, of Xxx X. Xxxxxx or Xxxxx Xxxxx;
provided, however, each of Xxx X. Xxxxxx and Xxxxx Xxxxx shall be deemed to
have actual knowledge of any fact or circumstance set forth in the estoppel
certificate delivered to Purchaser, in the Title Commitment or the
exception documents referenced therein, in the Survey and in any
environmental assessment received by Purchaser. The representations and
warranties herein contained shall be deemed automatically modified to the
extent information contained in such estoppel certificate delivered to
Purchaser prior to Closing, or in the Title Commitment or the exception
documents referenced therein, in the Survey, or in any environmental
assessment received by Purchaser prior to Closing is inconsistent with the
matters covered herein.
9.2 "AS IS" SALE. Except as expressly provided in this Agreement,
Purchaser acknowledges that neither Seller, nor any officer, director,
shareholder, member, employee, agent, representative or affiliate of Seller
(collectively, "Seller's Affiliates"), has made any statement,
representation or promise (whether oral or in writing) regarding the
subject matter of this transaction or the Property, including without
limitation any statement or representation as to the physical nature or
condition of the Property, soil and subsoil conditions, environmental
conditions, surface water, underground water, the Property's feasibility
for any particular purpose, the Property's zoning, development, use,
potential use or operation, the value of the Property, compliance of the
Property or its operation with law, or any other matter or thing affecting
or related to the Property or any use, development, enjoyment or operation
thereof. Purchaser acknowledges and agrees that Purchaser will conduct its
own investigations and studies of the Property and all aspects thereof,
including without limitation the Property's characteristics, its physical
condition (including any defects therein), all legal requirements
applicable thereto, the operation and use thereof, the environmental
condition of the Property and all matters described in the preceding
sentence; if for any reason whatsoever Purchaser is precluded by Seller
20
from conducting such investigations and studies, Purchaser shall be
required to give written notice thereof to Seller prior to the expiration
of the Investigation Period. Purchaser, by its approval of its review of
the Property during the Investigation Period and by its payment of the
Purchase Price and acquisition of the Property, acknowledges that Purchaser
has approved all such investigations and studies and the Property and all
aspects thereof, including all items described in the preceding sentences.
Purchaser agrees that Purchaser is acquiring the Property in its present
condition and state of repair, "AS IS, WHERE IS", with all defects, faults
and liabilities, patent or latent. Except as expressly provided in Section
6.9 and Section 9.1, by so acquiring the Property, (i) Purchaser
unconditionally releases Seller and Seller's Affiliates from all contract
and/or tort claims, liabilities, actions, costs and expenses of any kind or
nature whatsoever, known or unknown, suspected or unsuspected, fixed or
contingent, which it now or hereafter may have arising out of or relating
to the Property, the physical condition of the Property, any governmental
law or regulation (including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act, the Americans With
Disabilities Act and other environmental laws) applicable to the Property
and the presence of any hazardous substances and/or hazardous materials on,
in or about the Property, and (ii) Purchaser agrees that no patent or
latent condition affecting the Property in any way (including, without
limitation, the presence or effects of any hazardous substances and/or
hazardous materials or any violations of applicable law on the Property),
whether or not known or discovered or hereafter discovered, shall give rise
to any right of damages, specific performance, rescission or other claims
by Purchaser against Seller. Purchaser has requested that Seller furnish
Purchaser with certain studies, reports and other information in Seller's
possession with respect to the Property, including environmental studies
and surveys. As an accommodation to Purchaser, Seller has agreed to furnish
to Purchaser such information; provided, however, Purchaser hereby
acknowledges and agrees that Seller is making absolutely no representation
or warranty whatsoever with respect to any such studies, reports or
information provided by Seller to Purchaser. Purchaser acknowledges and
agrees that Purchaser shall be required to verify the accuracy and details
of all such studies, reports and information so provided by Seller to
Purchaser in such manner as Purchaser deems appropriate.
9.3 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to Seller that the following are true and correct
as of the date of this Agreement and, subject to the last paragraph of this
Section 9.3, shall be true and correct as of the Closing Date:
(a) Purchaser is authorized to consummate the transactions
contemplated by this Agreement.
(b) The execution of this Agreement and all documents and
instruments executed pursuant to this Agreement by Purchaser, the
delivery thereof to Seller, Purchaser's performance hereof and the
transactions contemplated hereby have been duly authorized by all
requisite action on the part of Purchaser and do not conflict with or
result in a violation of any judgment, order or decree of any court or
21
proceeding to which Purchaser is a party and all such documents are
valid and binding obligations of Purchaser and are enforceable in
accordance with their terms.
Purchaser's representations and warranties as contained herein shall survive the
Closing Date for a period of one (1) year, but not thereafter, it being the
intention of the parties that all suits or actions for breach of any such
representations or warranties herein, and any action for indemnity against
liabilities resulting from any such breach, must identify with specificity such
breach and must be brought within such one-year period or they shall be forever
barred; provided, however, Purchaser shall have no liability whatsoever to
Seller with respect to a breach of any of the representations and warranties
herein contained if Seller obtains knowledge of a fact or circumstance the
existence of which would constitute a breach of Purchaser's representations and
warranties hereunder prior to the Closing Date. In such event, if Seller
proceeds to Closing, without exercising the right of termination set forth
above, each representation or warranty shall be deemed automatically amended to
conform with the knowledge of Seller as of the Closing Date, and Purchaser shall
have no liability whatsoever for such previously inaccurate representation or
warranty.
10. DEFAULT.
10.1 DEFAULT BY SELLER. If Seller fails to perform any of Seller's
covenants under this Agreement, or if Seller otherwise defaults hereunder,
Purchaser shall have the right of specific performance of Seller's
obligation to convey title to the Property to Purchaser pursuant to this
Agreement, or Purchaser, at its option, may elect to terminate this
Agreement, in which event the Deposit shall be returned to Purchaser on
written demand pursuant to the escrow provisions herein; provided, however,
if specific performance is not available as a remedy to Purchaser as a
result of Seller's conveying the Property to a third party prior to
Closing, then in that event Purchaser may pursue Seller for Purchaser's
actual damages resulting therefrom (subject to the provisions of the last
sentence of Section 13.4 hereof). Purchaser hereby acknowledges and agrees
with Seller that the terms of the preceding sentence shall constitute
Purchaser's sole and exclusive rights and remedies in the event of a breach
or default hereunder by Seller prior to Closing, and Purchaser hereby
irrevocably waives and relinquishes any and all other rights, in equity or
at law, which it might otherwise have against Seller, including, but not
limited to, any action for damages against Seller. Notwithstanding anything
in this Section 10.1 or this Agreement to the contrary, the foregoing
provisions of this Section 10.1 shall not limit Seller's indemnification
obligations under this Agreement or any obligation of Seller which is to
survive termination or expiration of this Agreement, and Seller shall be
liable for such obligations.
10.2 DEFAULT BY PURCHASER. In the event prior to Closing Purchaser
should fail to consummate the transaction contemplated herein for any
reason except for (i) any permissible reasons set forth herein or (ii)
Seller's failure to close in accordance with the requirements of this
22
Agreement, Seller may demand that Escrow Agent pay to Seller the Deposit,
such sum being agreed upon as liquidated damages for the failure of
Purchaser to perform the duties, liabilities and obligations imposed upon
it by the terms and provisions of this Agreement and because of the
difficulty, inconvenience and uncertainty of ascertaining actual damages,
and no other damages, rights or remedies shall in any case be collectible,
enforceable or available to Seller other than as provided in this Section
10.2. Seller agrees to accept and take the Deposit as its total damages and
relief hereunder in such event. Notwithstanding anything in this Section
10.2 or this Agreement to the contrary, the foregoing provisions of this
Section 10.2 shall not limit Purchaser's indemnification obligations under
this Agreement or any obligation of Purchaser which is to survive
termination or expiration of this Agreement, and Purchaser shall be liable
for such obligations.
10.3 ATTORNEYS' FEES AND COSTS. In the event of any litigation between
the parties arising out of this Agreement or the collection of any funds
due Purchaser or Seller pursuant to this Agreement, the prevailing party
shall be entitled to recover from the non-prevailing party all costs
incurred, including without limitation reasonable attorneys' and
paralegals' fees and costs, whether such fees and costs are incurred at
trial, on appeal or in any bankruptcy proceedings.
11. BROKERAGE COMMISSION.
11.1 BROKER. Seller and Purchaser warrant each to the other that they
have not dealt with any real estate broker with regard to this transaction
other than Xxxxx & Xxxxx Company (Xxxxx Xxx) (the "Broker"). At Closing, if
and only if the transaction contemplated in this Agreement actually closes
pursuant to the terms of this Agreement, Seller shall pay to the Broker a
brokerage commission in the amount of $177,215.50, as full payment of all
sums due the Broker in connection with the transaction contemplated under
this Agreement; provided, however, if the Purchase Price is adjusted
pursuant to the provisions of Section 2.2 hereof, then the brokerage
commission due from Seller to the Broker hereunder shall be changed to
equal the product of the adjusted Purchase Price multiplied by .007092.
Seller and Purchaser warrant each to the other that they have not dealt
with any real estate broker other than Broker with regard to this
transaction. Purchaser agrees to indemnify, defend and hold harmless Seller
from any and all commissions claimed by any broker or third party, other
than the Broker, arising by virtue of this transaction whose commissions
might legally arise from acts of Purchaser. Seller agrees to indemnify,
defend and hold harmless Purchaser from any and all commissions claimed by
any broker or third party (including the Broker) arising by virtue of this
transaction whose commissions might legally arise from acts of Seller. The
obligations of indemnity of Purchaser and Seller as contained in this
Section 11.1 shall survive the Closing.
23
12. ESCROW.
12.1 ESCROW AGENT AND ESCROW PROCEDURE. Escrow Agent, by acceptance of
the funds deposited by Purchaser hereunder, agrees to hold such funds and
to disburse the same only in accordance with the terms and conditions of
this Agreement, which shall serve as escrow instructions to Escrow Agent.
In the event of a termination of this Agreement or a default under this
Agreement, the Deposit (inclusive of the interest accrued thereon) shall be
delivered or disbursed by Escrow Agent as provided in this Agreement.
13. OTHER CONTRACTUAL PROVISIONS.
13.1 ASSIGNMENT. Purchaser may not assign its rights under this
Agreement without the prior written consent of Seller, which consent shall
not be unreasonably withheld or delayed; provided, however, upon prior
written notice to Seller, Purchaser may assign all (but not less than all)
of its rights and obligations to an entity controlled by the principals of
Purchaser or to an entity controlled by, controlling or under common
control with Purchaser. Notwithstanding the foregoing, no such assignment
may be made unless any such permitted assignee assumes all obligations of
Purchaser hereunder in writing in form reasonably acceptable to Seller. Any
assignment consented to by Seller shall be subject to all the provisions,
terms, covenants and conditions of this Agreement, and the assignor shall,
in any event, continue to be and remain liable under this Agreement.
13.2 NOTICES. All notices which are required or permitted hereunder
must be in writing and shall be deemed to have been given, delivered or
made, as the case may be (i) when delivered by personal delivery, (ii)
three (3) business days after having been deposited in the United States
mail, certified or registered, return receipt requested, sufficient postage
affixed and prepaid, (iii) one (1) business day after having been deposited
with an expedited, overnight courier service, or (iv) when delivered by
telecopy or facsimile, addressed to the party to whom notice is intended to
be given at the address set forth below:
Purchaser: Stratford American Corporation
2400 East Arizona Biltmore Circle, Building Two
Phoenix, Arizona 85016
Attn: Xx. Xxx X. Xxxxxx
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
With a copy to: Xxxxx & Xxxxxx L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
24
Seller: Opus West Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: President
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
With copies to: Xxxxxxxxx & Xxxxxxx, P.A.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xx. Xxxxxxx X. Xxxx
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
and
Opus Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Legal Department
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
Escrow Agent: Chicago Title Insurance Company
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxx
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
Any party may change the address to which its notices are sent by
giving the other party written notice of any such change in the manner
provided in this Section, but notice of change of address is effective only
upon receipt.
13.3 ENTIRE AGREEMENT. This Agreement embodies and constitutes the
entire understanding among the parties with respect to the transaction
contemplated herein, and all prior or contemporaneous agreements,
understandings, representations and statements, oral or written, are merged
into this Agreement. Neither this Agreement nor any provision hereof may be
waived, modified, amended, discharged or terminated except by an instrument
in writing signed by the party against which the enforcement of such
waiver, modification, amendment, discharge or termination is sought, and
then only to the extent set forth in such instrument.
25
13.4 APPLICABLE LAW; JURISDICTION; VENUE; DAMAGE. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Arizona. The parties hereby consent to jurisdiction and venue in Maricopa
County, Arizona, and agree that such jurisdiction and venue shall be sole
and exclusive for any and all actions or disputes related to this Agreement
or any related instruments. Each of Seller and Purchaser hereby waive any
right to collect any punitive, special, exemplary or consequential damages
against the other party.
13.5 HEADINGS. Descriptive headings are for convenience only and shall
not control or affect the meaning or construction of any provision of this
Agreement.
13.6 BINDING EFFECT. Subject to the provisions of Section 13.1, this
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their successors and assigns.
13.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original instrument,
but all such counterparts together shall constitute one and the same
instrument.
13.8 INTERPRETATION. Whenever the context hereof shall so require, the
singular shall include the plural, the male gender shall include the female
gender and neuter and vice versa. This Agreement and any related
instruments shall not be construed more strictly against one party than
against the other by virtue of the fact that initial drafts were made and
prepared by counsel for one of the parties, it being recognized that this
Agreement and any related instruments are the product of extensive
negotiations between the parties hereto and that both parties hereto have
contributed substantially and materially to the final preparation of this
Agreement and all related instruments.
13.9 SEVERABILITY. In case any one or more of the provisions contained
in the Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
13.10 TIME OF ESSENCE. Time is of the essence of each and every term,
provision and covenant of this Agreement. Should any period of time
prescribed herein end on a Saturday, Sunday or legal holiday recognized in
Maricopa County, Arizona, the period of time shall automatically be
extended to the next business day. The term "business day" as used in this
Agreement shall mean any calendar day which is not a Saturday, Sunday or
legal holiday recognized in Maricopa County, Arizona.
13.11 AUTHORITY OF PARTIES. Seller and Purchaser represent to each
other that each has full power and authority to enter into and perform this
Agreement, all related instruments and the documentation contemplated
26
hereby and thereby in accordance with their respective terms and that the
delivery and performance of this Agreement, all related instruments and the
documentation contemplated hereby and thereby has been duly authorized by
all necessary action.
13.12 NO WAIVER. Neither the failure of either party to exercise any
power given such party hereunder or to insist upon strict compliance by the
other party with its obligations hereunder, nor any custom or practice of
the parties at variance with the terms hereof, shall constitute a waiver of
either party's right to demand exact compliance with the terms hereof.
13.13 IRS REPORTING REQUIREMENTS. Seller and Purchaser acknowledge and
agree that Section 6045(e) of the Internal Revenue Code of 1986 requires
that notice of the sale and purchase of the Property described in this
Agreement be provided to the Internal Revenue Service (herein "IRS") by
preparation of and filing with the IRS of IRS Form 1099-B; and further,
Seller and Purchaser agree to furnish and provide to the Escrow Agent any
and all information that the Escrow Agent may require in order for the
Escrow Agent to (a) comply with all instructions to the IRS Form 1099-B in
the preparation thereof, and (b) prepare and timely file with the IRS said
IRS Form 1099-B with respect to this transaction. Escrow Agent shall duly
and timely prepare and file all such filings as required herein.
13.14 AGREEMENT NOT RECORDABLE. Neither this Agreement nor any notice
thereof shall be recorded by any party hereto, or any agent of same, in any
public records. Purchaser agrees that it will not attempt to record this
Agreement or any notice thereof and that any attempt to record this
Agreement or any notice thereof shall constitute a default on the part of
Purchaser hereunder.
13.15 RETURN OF DOCUMENTS; CONFIDENTIALITY. In the event that this
Agreement is terminated or cancelled without Purchaser acquiring the
Property pursuant to the terms hereof, Purchaser shall, within five (5)
business days thereafter, deliver to Seller all due diligence items,
including all Tests and Studies, regarding the Property in Purchaser's
possession or control and all other information furnished to or obtained by
Purchaser with respect to the Property. Purchaser agrees not to disclose
any of the information provided in the documents referenced in the
preceding sentence or in this Agreement.
13.16 CONTINUED MARKETING OF THE PROPERTY. The parties agree that
Seller shall have the right to continue to market the Property to other
prospective purchasers, so that Seller may obtain back-up offers therefor
in the event Purchaser does not acquire the Property pursuant to this
Agreement. Notwithstanding the foregoing, upon the earlier of (i) the
expiration of the Financing Contingency Period and the deposit by Purchaser
of the sums described in Section 2.1(b) hereof, or (ii) the date that
Purchaser waives its rights to terminate this Agreement pursuant to
Sections 3.1 and 3.2 hereof and deposits with the Escrow Agent the sum
described in Section 2.1(b) hereof and otherwise acknowledges in writing
the non-refundability of the Deposit (subject to the fulfillment of
27
Seller's obligations hereunder and the waiver or satisfaction of each of
the Conditions Precedent), then Seller will terminate its sales marketing
effort with respect to the Property.
13.17 ACTIONS BY SELLER RELATING TO THE TENANT LEASE. Prior to
Closing, Seller shall have the right to execute such documents as may be
required by the Tenant Lease, including the execution of an amendment to
the Tenant Lease setting forth the Annual Basic Rent (as described in
Section 3.1 of the Tenant Lease) and the execution of a commencement date
memorandum, setting forth the Commencement Date (as defined in the Tenant
Lease).
28
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
SELLER:
OPUS WEST CORPORATION,
a Minnesota corporation
By /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
----------------------------------
Title: Senior Vice President
---------------------------------
PURCHASER:
STRATFORD AMERICAN CORPORATION,
an Arizona corporation
By /s/ Xxx Xxxxxxx
-------------------------------------
Name: Xxx Xxxxxxx
----------------------------------
Title: President
---------------------------------
Federal Taxpayer Identification No.:
00-0000000
----------------------------------------
BROKER'S ACCEPTANCE
The undersigned, Xxxxx & Xxxxx Company, agrees to the provisions of Section
11.1 of the foregoing Agreement.
XXXXX & XXXXX COMPANY
By /s/ Xxxxx Xxx
-------------------------------------
Xxxxx Xxx
29
ESCROW AGENT'S ACCEPTANCE
The undersigned, Chicago Title Insurance Company, agrees to act as
Escrow Agent in accordance with the foregoing Agreement.
CHICAGO TITLE INSURANCE COMPANY
By /s/ Xxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
30
SCHEDULE OF EXHIBITS
EXHIBIT A - Description of the Project
EXHIBIT B - Legal Description of the Project
EXHIBIT C - Tenant Lease
EXHIBIT D - Tenant Estoppel Certificate Form
EXHIBIT E - Special Warranty Deed
EXHIBIT F - Assignment and Assumption of Lease
EXHIBIT G - Blanket Transfer, Assignment and Assumption
EXHIBIT H - Notice to Tenant
EXHIBIT I - Survey Requirements
(Pursuant to Regulation S-B, Item 601(b)(2), Registrant agrees to furnish
supplementally to the Commission a copy of the exhibits to this agreement
upon request.)
31
