AGREEMENT OF PURCHASE AND SALE between a Delaware limited liability company, as SELLER, and RF GROCERY LLC, an Illinois limited liability company, as BUYER Dated: May 27, 2020 Fresh Thyme Farmers Market,
Exhibit 6.1
between
0000 X.
XXXXX XXXXXX, LLC,
a
Delaware limited liability company, as SELLER,
and
RF
GROCERY LLC,
an
Illinois limited liability company, as BUYER
Dated:
May 27, 2020
Fresh
Thyme Farmers Market,
0000
Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxx
1
Table of Contents
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Page
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ARTICLE
I PURCHASE AND SALE OF PROPERTY
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5
|
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Section
1.1
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Sale.
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5
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Section
1.2
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Purchase
Price.
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6
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ARTICLE
II CONDITIONS
|
7
|
|
Section
2.1
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Buyer’s
Conditions Precedent.
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7
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Section
2.2
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Contingency
Period.
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8
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ARTICLE
III BUYER’S EXAMINATION
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8
|
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Section
3.1
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Representations
and Warranties of Seller.
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8
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Section
3.3
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No
Liability for Exception Matters.
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12
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Section
3.4
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Survival
of Representations and Warranties of Sale.
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12
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Section
3.5
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Seller’s
Knowledge.
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12
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Section
3.6
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Representations
and Warranties of Buyer.
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13
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Section
3.7
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Buyer’s
Independent Investigation.
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14
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Section
3.8
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Release.
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15
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Section
3.9
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Survival.
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16
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ARTICLE
IV TITLE
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16
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Section
4.1
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Conditions
of Title.
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16
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Section
4.2
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Evidence
of Title.
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17
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ARTICLE
V RISK OF LOSS CONDEMNATION AND CASUALTY
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18
|
|
Section
5.1
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Condemnation.
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18
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Section
5.2
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Casualty.
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18
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ARTICLE
VI BROKERS AND EXPENSES
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19
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Section
6.1
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Brokers.
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19
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Section
6.2
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Expenses.
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19
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ARTICLE
VII LEASES AND OTHER AGREEMENTS
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19
|
|
Section
7.1
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Buyer’s
Approval of New Leases and Agreements Affecting the
Property.
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19
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Section
7.2
|
Intentionally
Omitted.
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19
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Section
7.3
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Tenant
Notices.
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19
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Section
7.4
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Maintenance
of Improvements and Operation of Property; Removal of Tangible
Personal Property.
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20
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Section
7.5
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Service
Contracts.
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20
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ARTICLE
VIII CLOSING AND ESCROW
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20
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Section
8.1
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Escrow
Instructions.
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20
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Section
8.2
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Closing.
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20
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Section
8.3
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Deposit
of Documents.
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21
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Section
8.4
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Estoppel
Certificate and SNDA.
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22
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Section
8.5
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Prorations.
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23
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2
Table of Contents
(continued)
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Page
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ARTICLE
IX MISCELLANEOUS
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24
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Section
9.1
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Notices.
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24
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Section
9.2
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Entire
Agreement.
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26
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Section
9.3
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Entry
and Indemnity.
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26
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Section
9.4
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Time.
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27
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Section
9.5
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Attorneys’
Fees.
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27
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Section
9.6
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Assignment.
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27
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Section
9.7
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Counterparts.
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27
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Section
9.8
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Governing
Law.
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28
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Section
9.9
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Confidentiality
and Return of Documents.
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28
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Section
9.10
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Interpretation
of Agreement.
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28
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Section
9.11
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Limited
Liability.
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28
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Section
9.12
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Amendments.
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28
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Section
9.13
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No
Recording.
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28
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Section
9.14
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Drafts
Not an Offer to Enter into a Legally Binding Contract.
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29
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Section
9.15
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Bulk
Sales.
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29
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Section
9.16
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No
Partnership.
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29
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Section
9.17
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No
Third Party Beneficiary.
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29
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Section
9.18
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Intentionally
Omitted.
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30
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Section
9.19
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Limitation
on Liability.
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30
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Section
9.20
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Survival.
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30
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Section
9.21
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Survival
of Article IX.
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30
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Section
9.22
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Buyer’s
Audit.
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30
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3
Table of Contents
(continued)
LIST OF EXHIBITS AND SCHEDULES
Exhibits
Exhibit
A
Real Property
Description
Exhibit
B
List of Tenant
Leases & Delinquency Report
Exhibit
C
List of Service
Contracts
Exhibit
D
Form
Deed
Exhibit
E
Form Owner’s
Affidavit
Exhibit
F
Form Tenant
Notice
Exhibit
G
Intentionally
Deleted
Exhibit
H
Form Xxxx of
Sale
Exhibit
I-1
Form Assignment of
Leases
Exhibit
I-2
Form Assignment of
Warranties and Other Intangible Property
Exhibit
J
Form Estoppel
Certificate
Schedules
Schedule
1
Disclosure
Items
4
THIS
AGREEMENT OF PURCHASE AND SALE (this “Agreement”), effective as of the
Effective Date (as defined in Section 9.14 below), is between 0000
X. Xxxxx Xxxxxx, LLC, a Delaware limited liability company
(“Seller”), and
RF Grocery LLC, an Illinois limited liability company, together
with its successors and assigns expressly permitted by this
Agreement (“Buyer”).
ARTICLE I
Section
1.1 Sale.
Seller
agrees to sell to Buyer, and Buyer agrees to purchase from Seller,
subject to the terms, covenants and conditions set forth herein,
all of Seller’s right, title and interest in and to the
following property (collectively, the “Property”):
(a) Real
Property. That certain real property commonly known as Fresh
Thyme Farmers Market, 0000 Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxx,
all as more particularly described in Exhibit A
attached hereto and made a part hereof (the “Land”), together with (1) all
improvements located thereon (the “Improvements”), (2) all rights,
benefits, privileges, easements, tenements, hereditaments,
rights-of-way and other appurtenances thereon or in any way
appertaining thereto, including all mineral rights, development
rights, air and water rights, and (3) all strips and gores and
any land lying in the bed of any street, road or alley, open or
proposed, adjoining such Land (collectively, the
“Real
Property”);
(b) Lease.
All of the Seller’s interest as landlord in and to the Lease
(as defined below) of the Real Property;
(c) Tangible
Personal Property. All of the equipment, machinery,
furniture, furnishings, supplies and other tangible personal
property, if any, owned by Seller and now or hereafter located on
and used exclusively in the operation, ownership or maintenance of
the Real Property (collectively, the “Tangible Personal Property”), but
specifically excluding from the Tangible Personal Property (1) any
items of personal property owned by the Tenant of the Property, (2)
any items of personal property in Seller’s property
management office, if any, located on the Real Property, (3) any
items of personal property owned by third parties and leased to
Seller, and (4) proprietary computer software, systems and
equipment and related licenses used in connection with the
operation or management of the Property; and
(d) Intangible
Personal Property. To the extent assignable at no cost to
Seller, all intangible personal property, if any, owned by Seller
and related to the Real Property and the Improvements, including,
without limitation: any trade names and trademarks associated with
the Real Property and the Improvements (but specifically excluding
the names “Stockbridge” and any derivatives thereof;
and any Service Contracts (as defined in Section 2.1(b) below) and
other contract rights related to the Property that are not
expressly assumed by Buyer pursuant to the Assignment of Leases (as
defined in Section 8.3(a)(3) below)); and any governmental permits,
approvals and licenses (including any pending applications)
(collectively, the “Intangible Personal
Property”).
5
Section
1.2 Purchase
Price.
(a) The
purchase price of the Property is Eight Million One Hundred Fifty
Thousand and No/100th Dollars ($8,150,000.00) (the
“Purchase
Price”).
(b) The
Purchase Price shall be paid as follows:
(1) No
later than two (2) business days after the execution of this
Agreement by Buyer and Seller, Buyer shall deposit in escrow with
Chicago Title Insurance Company, 00 Xxxxx XxXxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, XX 00000 Attn: Xxxxx Xxxxxx (the “Title Company”) cash or other
immediately available funds in the amount of Two Hundred Thousand
and No/100th Dollars ($200,000.00) (the “Deposit”).
The
Deposit may be held in an interest bearing account and all interest
thereon, less investment fees, if any, shall be deemed a part of
the Deposit. If the sale of the Property as contemplated hereunder
is consummated, then the Deposit shall be paid to Seller at the
Closing (as defined in Section 1.2(b)(3) below) and credited
against the Purchase Price. IF THE
SALE OF THE PROPERTY IS NOT CONSUMMATED DUE TO SELLER’S
DEFAULT HEREUNDER, THEN BUYER MAY ELECT, AS BUYER’S SOLE AND
EXCLUSIVE REMEDY, EITHER TO: (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 AS PROVIDED
IN SECTION 6.1, SECTION 9.3 AND SECTION 9.9 BELOW, OR (2) ENFORCE
SPECIFIC PERFORMANCE OF THIS AGREEMENT. NOTWITHSTANDING ANYTHING IN
THIS AGREEMENT TO THE CONTRARY, IF BUYER ELECTS TO PURSUE THE
REMEDY OF SPECIFIC PERFORMANCE AND SOLELY DUE TO THE WRONGFUL OR
INTENTIONAL ACT OF SELLER ON OR PRIOR TO CLOSING, SUCH REMEDY IS
NOT AVAILABLE, BUYER MAY SEEK ANY OTHER RIGHT OR REMEDY AVAILABLE
AT LAW OR IN EQUITY BUT ONLY IF BUYER FILES ANY SUCH ACTION (AND
DELIVERS CONCURRENT NOTICE TO SELLER OF THE SAME) NO LATER THAN
SIXTY (60) DAYS AFTER THE CLOSING DATE STATED HEREIN. EXCEPT AS
OTHERWISE EXPRESSLY STATED HEREIN TO THE CONTRARY, BUYER SHALL NOT
HAVE ANY OTHER RIGHTS OR REMEDIES HEREUNDER AS A RESULT OF ANY
DEFAULT BY SELLER PRIOR TO CLOSING, AND BUYER HEREBY WAIVES ANY
OTHER SUCH REMEDY AS A RESULT OF A DEFAULT HEREUNDER BY SELLER
PRIOR TO CLOSING.
IN
ALTERNATIVE TO THE FOREGOING, AND NOTWITHSTANDING ANYTHING HEREIN
TO THE CONTRARY, IF (X) A REPRESENTATION OR WARRANTY MADE BY SELLER
WAS FACTUALLY INCORRECT WHEN MADE AND SELLER HAD KNOWLEDGE OF SUCH
INCORRECTNESS WHEN MADE, OR BECOMES FACTUALLY INCORRECT AS A RESULT
OF AN INTENTIONAL ACT OF SELLER, (Y) SELLER WILLFULLY DEFAULTS ON
SELLER’S OBLIGATION TO MAKE THE DEPOSITS REQUIRED UNDER
SECTION 8.3(A) OR SECTION 8.3(C), OR SELLER FAILS TO CURE ANY
REQUIRED CURE ITEM OR (Z) SELLER WILLFULLY FAILS TO CONSUMMATE THE
TRANSACTION UNDER THIS AGREEMENT, AND BUYER ELECTS TO TERMINATE
THIS AGREEMENT (INSTEAD OF ENFORCING THE REMEDY OF SPECIFIC
PERFORMANCE OF THIS AGREEMENT) AS A RESULT OF ANY OF THE FOREGOING
EVENTS DESCRIBED IN THIS SENTENCE, THEN AND IN ANY SUCH EVENT
BUYER, IN ADDITION TO BUYER’S RECEIPT OF THE DEPOSIT UPON THE
TERMINATION OF THIS AGREEMENT (AS SET FORTH HEREIN ABOVE), BUYER
SHALL ALSO BE ENTITLED TO REIMBURSEMENT OF BUYER’S ACTUAL
REASONABLE THIRD PARTY OUT OF POCKET EXPENSES (INCLUDING REASONABLE
ATTORNEYS’ FEES) INCURRED IN CONNECTION WITH BUYER’S
INTENDED ACQUISITION OF THE PROPERTY, IN AN AGGREGATE AMOUNT NOT TO
EXCEED THE LESSER OF: (1) BUYER’S ACTUAL REASONABLE OUT OF
POCKET EXPENSES INCURRED FOR THIS TRANSACTION AT THE TIME OF SUCH
SELLER’S DEFAULT; OR (2) ONE HUNDRED THOUSAND AND NO/100TH
DOLLARS ($100,000.00) (THE “PURSUIT COSTS”). SUCH
PURSUIT COSTS SHALL BE PAID BY SELLER WITHIN TEN (10) DAYS
FOLLOWING WRITTEN REQUEST TO SELLER, ACCOMPANIED BY EVIDENCE OF
SUCH COSTS INCURRED BY BUYER. SELLER SHALL MAINTAIN A SUFFICIENT
NET WORTH TO COVER THE PURSUIT COSTS. (NOTHING HEREIN SHALL LIMIT
BUYER’S RIGHTS AND REMEDIES WITH RESPECT TO ANY BREACH OF A
REPRESENTATION OR WARRANTY OF SELLER FIRST DISCOVERED BY BUYER
FOLLOWING THE CLOSING).
6
IF
THE SALE IS NOT CONSUMMATED DUE TO ANY DEFAULT BY BUYER HEREUNDER,
THEN SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES AND AS
SELLER’S SOLE AND EXCLUSIVE REMEDY. THE PARTIES HAVE AGREED
THAT SELLER’S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO
CONSUMMATE THIS SALE DUE TO BUYER’S DEFAULT PRIOR TO CLOSING,
WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
DETERMINE.
AFTER
NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE
CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF
THE DEPOSIT IS A REASONABLE ESTIMATE OF ALL DAMAGES THAT SELLER
WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH
PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE
ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO
EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF
THIS LIQUIDATED DAMAGES PROVISION. THE FOREGOING IS NOT INTENDED TO
LIMIT EITHER PARTY’S RESPECTIVE OBLIGATIONS UNDER SECTION
6.1, SECTION 9.3 AND SECTION 9.9 BELOW.
INITIALS:
|
SELLER
________
|
BUYER
_______
|
(2) The
balance of the Purchase Price, which is Seven Million Nine Hundred
Fifty Thousand and No/100th Dollars ($7,950,000.00) (plus or minus
the prorations pursuant to Section 8.5 hereof) shall be paid to
Seller in cash or by wire transfer of other immediately available
funds at the consummation of the purchase and sale contemplated
hereunder (the “Closing”).
ARTICLE II
CONDITIONS
Section
2.1 Buyer’s
Conditions Precedent.
Subject
to the provisions of Section 9.3 hereof, Seller has provided and/or
shall provide Buyer and its consultants and other agents and
representatives with access to the Property to perform
Buyer’s inspections and review and determine the present
condition of the Property. Seller has delivered or made available
to Buyer, or shall within the Delivery Period (as defined below)
deliver or make available to Buyer, copies of all Due Diligence
Materials (as defined in Section 2.2 below) in Seller’s
possession, except as otherwise specifically provided herein.
Notwithstanding anything to the contrary contained herein, the Due
Diligence Materials shall expressly exclude (i) those portions of
the Due Diligence Materials that would disclose Seller’s cost
of acquisition of the Real Property, or cost of construction of the
Improvements and related soft costs, or any estimates of costs to
repair, replace, remediate or maintain the Real Property, (ii) any
reports, presentations, summaries and the like prepared for any of
Seller’s boards, committees, partners or investors in
connection with its consideration of the acquisition of the Real
Property, construction of the Improvements or sale of the Property,
(iii) any proposals, letters of intent, draft contracts or the like
prepared by or for other prospective purchasers of the Property or
any part thereof, (iv) Seller’s internal memoranda,
attorney-client privileged materials, internal appraisals,
structural or physical inspection reports, and projections; and (v)
any information which is the subject of a confidentiality agreement
between Seller and a third party (the items described in clauses
(i), (ii) (iii), (iv) and (v) being collectively referred to as the
“Confidential
Information”). The “Delivery Period” shall mean the
period which ends five (5) days after the Effective Date.
Buyer’s obligation to purchase the Property is conditioned
upon Buyer’s review and approval of the following, within the
applicable time periods described in Sections 2.2 and 4.1 hereof,
such conditions being deemed satisfied as provided in Section 3.6,
Section 4.1(e) and Section 4.2:
7
(a) Title
to the Property and survey matters in accordance with ARTICLE IV
below.
(b) The
Due Diligence Materials, including, but not limited to, that
certain lease with Lakes Venture, LLC (“Tenant”), any guaranties thereof
and any other occupancy agreements, and all amendments and
modifications thereof (collectively, the “Lease”) affecting the Property,
and all contracts pertaining to the operation of the Property,
including all management, leasing, service and maintenance
agreements, and equipment leases (collectively, the
“Service
Contracts”).
(c) The
physical condition of the Property.
(d) The
zoning, land use, building, environmental and other statutes,
rules, or regulations applicable to the Property.
(e) The
tenant correspondence files, operating statements and books and
records pertaining to the operation of the Property in each case
for each of the three (3) most recent years during which the
Property has been owned by Seller and for the current year (to the
extent available), current real estate tax bills, any warranties,
licenses, permits, certificates of occupancy, plans and
specifications, and any current rent roll, current accounts
receivable schedule and list of Tangible Personal Property in such
form as Seller shall have in its possession for the Property, and
other agreements or documents pertaining to the Property which will
be binding on Buyer after Closing.
(f) Any
other matters Buyer deems relevant to the Property.
Section
2.2 Contingency
Period.
Buyer
shall have until 5:00 p.m. (Central Time) on _____, 2020 (a date
which is 30 days from the Effective Date) (such period
being referred to herein as the “Contingency Period”) to review and
approve the matters described in Section 2.1, paragraphs (b)
through (f) above in Buyer’s sole discretion (title and
survey review and approval shall be governed by the provisions of
Section 4.1 below). If Buyer determines to proceed with the
purchase of the Property in Buyer’s sole and absolute
discretion, then Buyer shall, before the end of the Contingency
Period, so notify Seller in writing, in which case Buyer shall be
deemed to have approved all of the matters described in Section
2.1, paragraphs (b) through (f) above (subject to the provisions of
Section 4.1 below as to title and survey matters), including,
without limitation, those items specifically set forth on Schedule
1 attached hereto (the “Due
Diligence Materials”), and the Deposit shall become
nonrefundable except as expressly provided herein. If before the
end of the Contingency Period Buyer fails to give Seller such
written notice, then Buyer shall be deemed to have elected to
terminate this Agreement, the Deposit shall be returned to Buyer,
and neither party shall have any further rights or obligations
hereunder except as provided in Section 6.1, Section 9.3 and
Section 9.9 below.
ARTICLE III
BUYER’S
EXAMINATION
Section
3.1 Representations
and Warranties of Seller.
Subject
to the disclosures contained the Due Diligence Materials set forth
on Schedule 1
attached hereto and made a part hereof (the “Disclosure Items”), Seller hereby
makes the following representations and warranties with respect to
the Property Except for the Seller’s representations and
warranties as set forth herein, Seller shall have no liability with
respect to the accuracy and completeness of the information
contained in the Disclosure Items or in any other document
delivered in connection herewith.
8
(a) Seller
has not (i) made a general assignment for the benefit of creditors,
(ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller’s creditors,
(iii) suffered the appointment of a receiver to take possession of
all, or substantially all, of Seller’s assets, (iv) suffered
the attachment or other judicial seizure of all, or substantially
all, of Seller’s assets, (v) admitted in writing its
inability to pay its debts as they come due, or (vi) made an offer
of settlement, extension or composition to its creditors
generally.
(b) Seller
is not a “foreign person” as defined in Section 1445 of
the Internal Revenue Code of 1986, as amended (the
“Code”) and any
related regulations.
(c) (i)
this Agreement has been, and all documents executed by Seller which
are to be delivered to Buyer at Closing will be, duly authorized,
executed and delivered by Seller, and (ii) this Agreement does not
and such other documents will not violate any provision of any
agreement or judicial order to which Seller is a party or to which
Seller or the Property is subject.
(d) Seller
has the power and authority to enter into this Agreement and all
documents executed by Seller which are to be delivered to Buyer at
Closing and to perform its obligations hereunder and
thereunder.
(e) The
only Lease (including all amendments and assignments pertaining
thereto) in force for the Property is set forth on Exhibit B
attached hereto and made a part hereof. Exhibit B
also includes a true, correct and completely copy of a current
Tenant rent delinquency report (the “Delinquency Report”) used by
Seller in the management and ownership of the Property and which
Seller shall update at Closing. Seller represents and warrants that
the Lease (i) is in full force and effect and that the Lease has
not been modified, amended or supplemented by another agreement or
commitment between Seller and Tenant which has not been disclosed
to Buyer; (ii) there are no outstanding defaults by either Seller
(as landlord) and Tenant under the Lease; (iii) there are no
pending or current claims under the Lease that would entitle Tenant
to have any offsets against rent or other claims (including without
limitation, monetary claims) against the Seller under the Lease in
any respect; (iv) Tenant does not have any right to xxxxx rent
except as may be expressly set forth in the Lease and Tenant is not
currently abating rent; (v) Seller has not received any written
notice form Tenant either (x) exercising any termination right
terminating the Lease; or (y) notifying Seller of Tenant’s
insolvency, bankruptcy, assignment for the benefit of creditors or
other similar proceeding and Tenant has not provided any notice to
Seller indicating that it intends to cease operations at the
Property; (vi) Seller has not assigned its rights in the Lease or
the rents payable thereunder or any interest therein, other than a
collateral assignment to a mortgage lender that will be released at
the Closing; (vii) Tenant has not prepaid rent more than one month
in advance and Tenant is not entitled to pay any deferred rent or
reduced rent or has been voluntarily granted rent relief by Seller
(as landlord) in any respect; and (viii) there are no leasing
commissions, tenant improvement allowance, “Work to be
Reimbursed by Landlord” (including without limitation, the
“First Additional Reimbursement” and the “Second
Additional Reimbursement” as such terms are used and defined
in the Second Amendment) or other credits that may become due and
payable after the date of this Agreement under or relating to the
Lease.
(f) To
Seller’s knowledge, the only Service Contracts in force for
the Property are set forth in Exhibit C
hereto and made a part hereof. True, correct and complete copies of
each of the Service Contracts shall be made available to Buyer as
part of the Due Diligence Materials.
(g) To
Seller’s knowledge, Seller has not been served with any
litigation or governmental proceeding (including, but not limited
to any condemnation proceeding) that are pending or threatened with
respect to the Property, or with respect to Seller which impairs
Seller’s ability to perform its obligations under this
Agreement, nor has Seller received any written notice threatening
such actions.
9
(h) To
Seller’s knowledge, Seller has received no written notice
from any governmental authority of any violation of any law
applicable to the Property (including, without limitation, any
Environmental Law as defined in Section 3.6(a)(2) below) that has
not been corrected.
(i) To
Seller’s knowledge, all of the Due Diligence Materials
delivered or made available by Seller to Buyer in connection with
the Property are true and complete copies of such items in
Seller’s possession which are used by Seller in the operation
of the Property.
(j) Seller
has been duly organized, is validly existing, and is in good
standing in the state in which it was formed, and is qualified to
do business in the state in which the Real Property is
located.
(k) Seller
is (A) (x) not currently identified on the Specially Designated
Nationals and Blocked Persons List maintained by the Office of
Foreign Assets Control, Department of the Treasury
(“OFAC”) and/or on any other similar list maintained by
OFAC pursuant to any authorizing statute, executive order or
regulation (collectively, the “List”), and (y) not a
person or entity with whom a citizen of the United States is
prohibited to engage in transactions by any trade embargo, economic
sanction, or other prohibition of United States law, regulation, or
Executive Order of the President of the United States, (B) none of
the funds or other assets of Seller constitute property of, or are
beneficially owned, directly or indirectly, by any Embargoed Person
(as hereinafter defined), and (C) no Embargoed Person has any
interest of any nature whatsoever in Seller (whether directly or
indirectly). Notwithstanding the immediately preceding sentence,
the individual retirement beneficiaries of Seller’s affiliate
are expressly excluded from the foregoing provisions of this
Section 3.1(k).
The
term “Embargoed Person” means any person, entity or
government subject to trade restrictions under U.S. law, including
but not limited to, the International Emergency Economic Powers
Act, 50 U.S.C. §1701 et seq., The Trading with the Enemy Act,
50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder with the result that the investment in
Seller is prohibited by law or Seller is in violation of
law.
Seller
also shall require, and shall take reasonable measures to ensure
compliance with the requirement, that no person who owns any other
direct interest in Seller is or shall be listed on any of the Lists
or is or shall be an Embargoed Person. This Section shall not apply
to any person to the extent that such person’s interest in
the Seller is through a U.S. Publicly-Traded Entity. As used in
this Agreement, “U.S. Publicly-Traded Entity” means a
Person (other than an individual) whose securities are listed on a
national securities exchange, or quoted on an automated quotation
system, in the United States, or a wholly-owned subsidiary of such
a person.
(l) To
Seller’s knowledge, the execution and delivery of this
Agreement and the consummation of the transaction herein
contemplated will not conflict with any applicable law, ordinance,
regulation, statute, rule, restriction, or any judgment, order, or
decree of any court having jurisdiction over Seller or the Property
or any agreement of Seller.
(m) Neither
the execution nor delivery of this Agreement by Seller, nor the
performance of Seller’s obligations hereunder, will result in
a breach, violation or default by Seller of any provision of its
organizational documents.
(n) Seller
has not received written notice that the Property is not properly
zoned for its present use.
10
(o) To
Seller’s knowledge, as of the Effective Date Seller has not
received any written notice from any governmental authority either
(i) alleging a violation of any laws, ordinances or agreements
regulating the use of the Real Property or (ii) notifying Seller
that a condemnation or similar proceeding against the Property, or
any portion thereof, is contemplated.
(p) The
Property is not subject to any outstanding agreement of sale,
option, right of first refusal, right of first offer or other right
of any third party to acquire any interest therein, except this
Agreement or except as may be set forth in the Lease.
(q) Seller
has not entered into any commitments or agreements that remain
effective with obligations yet to be performed with any
governmental authorities or agencies affecting the Property that
have not been disclosed in writing to Buyer.
(r) Based
on Buyer’s representations and warranties set forth in
Section 3.6(e) below,
the sale and purchase of the Property pursuant to this Agreement
will not constitute a non-exempt “prohibited
transaction,” as such term is defined in Section 4975(c)(1)
of the Code and Section 406 of ERISA (as that term is hereinafter
defined) and will not result in a violation of Part 4 of Title 1,
Subtitle B of ERISA.
Each of
the representations and warranties of Seller contained in this
Section 3.1: (1) shall be true in all material respects as of the
date of Closing, subject in each case to (A) any Exception Matters
(as defined below), (B) the Disclosure Items, and (C) other matters
expressly permitted in this Agreement or otherwise specifically
approved in writing; and (2) shall survive the Closing as provided
in Section 3.3 below.
Section
3.2 Further
Covenants and Agreements
Seller
hereby covenants and agrees that, from and after the date hereof
and to and including the Closing Date (or the date this Agreement
is terminated), it will perform and comply with each of the
following covenants and agreements:
(a) Seller
shall promptly deliver to Buyer copies of any written notices
received by Seller from any governmental agency alleging any
violation of any applicable law or ordinance with respect to the
Property which, if the facts alleged therein were true, would
constitute a breach of any representation or warranty of Seller
herein contained. Seller shall promptly deliver to Buyer copies of
any notice of default on the part of Seller received pursuant to
the Lease.
(b) Between
the Effective Date and the date of Closing, Seller will not,
without Buyer’s prior written consent, create any
encumbrances on the Property which will not be released, terminated
or satisfied at or prior to Closing. For the purposes of this
subsection, the term “encumbrance” shall mean any lease,
liens, security interests, options, mortgages, encroachments,
easements, covenants, conditions or restrictions which will survive
Closing. Buyer shall notify Seller of Buyer’s decision to
either grant or deny such prior written consent within three (3)
business days after Seller’s request thereof or such request
shall be deemed approved.
(c) Subject
to the damage caused by casualty or condemnation, and except to the
extent that such maintenance is the obligation of the Tenant, until
Closing, Seller, subject to the terms of the Lease, shall maintain
the Property in its condition existing on the Effective Date,
normal wear and tear excepted.
11
Section
3.3 No
Liability for Exception Matters.
As used
herein, the term “Exception
Matter” shall refer to a matter which would make a
representation or warranty of Seller contained in this Agreement
untrue or incorrect and which is disclosed to Buyer in the Due
Diligence Materials or otherwise or discovered by Buyer before the
Closing, including, without limitation, matters disclosed in any
tenant estoppel certificate or from interviews with the Tenant,
property managers or any other person. If Buyer first obtains
knowledge of any material Exception Matter after the close of the
Contingency Period and prior to Closing and such Exception Matter
was not contained in the Due Diligence Materials, Buyer’s
sole remedy shall be to terminate this Agreement on the basis
thereof, upon written notice to Seller within five (5) days
following Buyer’s discovery of such Exception Matter or the
Closing, whichever occurs first, in which event the Deposit shall
be returned to Buyer, unless within five (5) days after receipt of
such notice or the Closing, as the case may be, Seller notifies
Buyer in writing that it elects to cure or remedy such Exception
Matter. Seller shall be entitled to extend the Closing Date (as
defined in Section 8.2 below) for up to fifteen (15) business days
in order to cure or remedy any Exception Matter. Buyer’s
failure to give notice within five (5) days after it has obtained
knowledge of an Exception Matter shall be deemed a waiver by Buyer
of such Exception Matter. Seller shall have no obligation to cure
or remedy any Exception Matter, even if Seller has notified Buyer
of Seller’s election to cure or remedy any Exception Matter
(except as specifically provided in Section 4.1(c) hereof), and,
subject to Buyer’s right to terminate this Agreement as set
forth above, Seller shall have no liability whatsoever to Buyer
with respect to any Exception Matters. Upon any termination of this
Agreement, neither party shall have any further rights nor
obligations hereunder, except as provided in Section 6.1, Section
9.3 and Section 9.9 below. If Buyer obtains knowledge of any
Exception Matter before the Closing, but nonetheless elects to
proceed with the acquisition of the Property, Seller shall have no
liability with respect to such Exception Matter, notwithstanding
any contrary provision, covenant, representation or warranty
contained in this Agreement or in any Other Documents (as defined
in Section 9.19 below).
Section
3.4 Survival
of Representations and Warranties of Sale.
The
representations and warranties of Seller contained herein or in any
estoppel delivered pursuant to Section 8.4 below or in any Other
Documents shall survive for a period of nine (9) months after the
Closing. Any claim which Buyer may have at any time against Seller
for a breach of any such representation or warranty, whether such
breach is known or unknown, which is not specifically asserted by
written notice to Seller within such nine (9) month period shall
not be valid or effective, and Seller shall have no liability with
respect thereto.
Section
3.5 Seller’s
Knowledge.
For
purposes of this Agreement and any document delivered at Closing,
whenever the phrase “to the
best of Seller’s knowledge” or the
“knowledge” of
Seller or words of similar import are used, they shall be deemed to
mean and are limited to the current actual knowledge only of
Xxxxxxxxx Xxxxxxxx, as Vice President, the times indicated only,
and not any implied, imputed or constructive knowledge of such
individuals or of Seller or any Seller Related Parties (as defined
in Section 3.7 below), and without any independent investigation or
inquiry having been made or any implied duty to investigate, make
any inquiries or review the Due Diligence Materials, except that
Xxxxxxxxx Xxxxxxxx has reviewed the representations and warranties
of Seller contained herein with the Seller’s property manager
of the Property. Furthermore, it is understood and agreed that such
individuals shall have no personal liability in any manner
whatsoever hereunder or otherwise related to the transactions
contemplated hereby.
12
Section
3.6 Representations
and Warranties of Buyer.
Buyer
represents and warrants to Seller as follows:
(a) This
Agreement and all documents executed by Buyer which are to be
delivered to Seller at Closing do not and at the time of Closing
will not violate any provision of any agreement or judicial order
to which Buyer is a party or to which Buyer is
subject.
(b) Buyer
has not (i) made a general assignment for the benefit of creditors,
(ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Buyer’s creditors,
(iii) suffered the appointment of a receiver to take possession of
all, or substantially all, of Buyer’s assets, (iv) suffered
the attachment or other judicial seizure of all, or substantially
all, of Buyer’s assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of
settlement, extension or composition to its creditors
generally.
(c) Buyer
has been duly organized, is validly existing and is in good
standing in the state in which it was formed, and is qualified to
do business in the state in which the Real Property is located.
This Agreement has been, and all documents executed by Buyer which
are to be delivered to Seller at Closing will be, duly authorized,
executed and delivered by Buyer.
(d) Buyer
is purchasing the Property as investment rental property, and not
for Buyer’s own operations or use.
(e) Buyer
is not a party in interest with respect to any employee benefit or
other plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”), or of
Section 4975(e)(1) of the Code, which is subject to ERISA or
Section 4975 of the Code and which is an investor to any plan in
which the sponsor is AT&T Inc. or a subsidiary
thereof.
(f) Other
than Seller’s Broker (as defined in Section 6.1 below), Buyer
has had no contact with any broker or finder with respect to the
Property.
(g) Buyer
represents and warrants that (i) Buyer and its affiliates (A) are
not currently identified on the List, and (B) are not persons or
entities with whom a citizen of the United States is prohibited to
engage in transactions by any trade embargo, economic sanction, or
other prohibition of United States law, regulation, or Executive
Order of the President of the United States, (ii) none of the funds
or other assets of Buyer constitute property of, or are
beneficially owned, directly or indirectly, by any Embargoed
Person, and (iii) Buyer has implemented procedures, and will
consistently apply those procedures, to ensure the foregoing
representations and warranties remain true and correct at all
times.
Buyer
also shall require, and shall take reasonable measures to ensure
compliance with the requirement, that no person who owns any other
direct interest in Buyer is or shall be listed on any of the Lists
or is or shall be an Embargoed Person. This Section shall not apply
to any person to the extent that such person’s interest in
the Buyer is through a U.S. Publicly-Traded Entity.
Each of
the representations and warranties of Buyer contained in this
Section 3.5 shall be deemed remade by Buyer as of the Closing and
shall survive the Closing.
13
Section
3.7 Buyer’s
Independent Investigation.
(a) By
Buyer electing to proceed under Section 2.2, Buyer will be deemed
to have acknowledged and agreed that it has been given a full
opportunity to inspect and investigate each and every aspect of the
Property, either independently or through agents of Buyer’s
choosing, including, without limitation:
(1) All
matters relating to title and survey, together with all
governmental and other legal requirements such as taxes,
assessments, zoning, use permit requirements and building
codes.
(2) The
physical condition and aspects of the Property, including, without
limitation, the interior, the exterior, the square footage within
the improvements on the Real Property and within the Tenant space
therein, the structure, seismic aspects of the Property, the
foundation, roof, paving, parking facilities, utilities, and all
other physical and functional aspects of the Property. Such
examination of the physical condition of the Property shall include
an examination for the presence or absence of Hazardous Materials,
as defined below, which shall be performed or arranged by Buyer
(subject to the provisions of Section 9.3 hereof) at Buyer’s
sole expense. For purposes of this Agreement, “Hazardous Materials” shall mean
inflammable explosives, radioactive materials, asbestos,
asbestos–containing materials, polychlorinated biphenyls,
lead, lead-based paint, radon, under and/or above ground tanks,
hazardous materials, hazardous wastes, hazardous substances, oil,
or related materials, which are listed or regulated in the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section
6901, et seq.), the Federal Pollution Control Act (33 U.S.C.
Section 1251, et seq.), the Safe Drinking Water Act (42 U.S.C.
Section 300f, et seq.), the Hazardous Materials Transportation Act
(49 U.S.C. Section 5101, et seq.), and the Toxic Substances Control
Act (15 U.S.C. Section 2601, et seq.), and any other applicable
federal, state or local laws (collectively, “Environmental Laws”).
(3) Any
easements and/or access rights affecting the Property.
(4) The
Lease and all matters in connection therewith, including, without
limitation, the ability of the Tenant to pay the rent and the
economic viability of the Tenant.
(5) The
Service Contracts and any other documents or agreements of
significance affecting the Property.
(6) All
other matters of material significance affecting the Property,
including without limitation all warranties received by Seller as
it pertains to the roof of the Building (the “Roof Warranty”) which Roof
Warranty will be assigned by Seller to Buyer at Closing, at
Seller’s sole cost and expense.
(b) Except
as expressly stated herein, Seller makes no representation or
warranty as to the truth, accuracy or completeness of any
materials, data or information delivered by Seller to Buyer in
connection with the transaction contemplated hereby. Buyer
acknowledges and agrees that all materials, data and information
delivered by Seller to Buyer in connection with the transaction
contemplated hereby are provided to Buyer as a convenience only and
that any reliance on or use of such materials, data or information
by Buyer shall be at the sole risk of Buyer, except as otherwise
expressly stated herein. Without limiting the generality of the
foregoing provisions, Buyer acknowledges and agrees that (a) any
environmental or other report with respect to the Property which is
delivered by Seller to Buyer shall be for general informational
purposes only, (b) Buyer shall not have any right to rely on any
such report delivered by Seller to Buyer, but rather will rely on
its own inspections and investigations of the Property and any
reports commissioned by Buyer with respect thereto, (c) neither
Seller, any affiliate of Seller nor the person or entity which
prepared any such report delivered by Seller to Buyer shall have
any liability to Buyer for any inaccuracy in or omission from any
such report and (d) the failure to deliver any report as to the
environmental or other condition of the Property, including any
proposal for work at the Property which was not performed by
Seller, shall not be actionable by Buyer under this Agreement or
otherwise.
14
(c) EXCEPT
AS EXPRESSLY SET FORTH IN SECTION 3.1 ABOVE AND ELSEWHERE IN THIS
AGREEMENT, BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER
IS SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN “AS IS
WITH ALL FAULTS” BASIS AND THAT BUYER IS NOT RELYING ON ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR
IMPLIED, FROM SELLER, ANY SELLER RELATED PARTIES, OR THEIR AGENTS
OR BROKERS, OR ANY OTHER PERSON ACTING OR PURPORTING TO ACT ON
BEHALF OF SELLER, AS TO ANY MATTERS CONCERNING THE PROPERTY,
INCLUDING WITHOUT LIMITATION: (i) the quality, nature, adequacy and
physical condition and aspects of the Property, including, but not
limited to, the structural elements, seismic aspects of the
Property, foundation, roof, appurtenances, access, landscaping,
parking facilities and the electrical, mechanical, HVAC, plumbing,
sewage, and utility systems, facilities and appliances, the square
footage within the improvements on the Real Property and within
each Tenant space therein, (ii) the quality, nature, adequacy, and
physical condition of soils, geology and any groundwater, (iii) the
existence, quality, nature, adequacy and physical condition of
utilities serving the Property, (iv) the development potential of
the Property, and the Property’s use, habitability,
merchantability, or fitness, suitability, value or adequacy of the
Property for any particular purpose, (v) the zoning or other legal
status of the Property or any other public or private restrictions
on use of the Property, (vi) the compliance of the Property or its
operation with any applicable codes, laws, regulations, statutes,
ordinances, covenants, conditions and restrictions of any
governmental or quasi-governmental entity or of any other person or
entity, (vii) the presence of Hazardous Materials on, under or
about the Property or the adjoining or neighboring property, (viii)
the quality of any labor and materials used in any improvements on
the Real Property, (ix) the condition of title to the Property, (x)
the Lease, Service Contracts, or other documents or agreements
affecting the Property, or any information contained in any rent
roll furnished to Buyer for the Property, (xi) the value, economics
of the operation or income potential of the Property, or (xii) any
other fact or condition which may affect the Property, including
without limitation, the physical condition, value, economics of
operation or income potential of the Property. In addition, Seller
shall have no legal obligation to apprise Buyer regarding any event
or other matter involving the Property which occurs after the
Effective Date or to otherwise update the Due Diligence Materials,
unless and until an event or other matter which would cause Seller
to be unable to remake any of its representations or warranties
contained in this Agreement occurs, provided however that Seller
shall have the legal obligation to apprise Buyer of any written
notices or other correspondence received by Seller from the
Tenant.
Section
3.8 Release.
Without
limiting the above, and subject to the representations and
warranties of Seller contained in Section 3.1 hereof, Buyer on
behalf of itself and its successors and assigns waives its right to
recover from, and forever releases and discharges, Seller,
Seller’s affiliates, Seller’s investment advisor, the
partners, trustees, beneficiaries, shareholders, members, managers,
directors, officers, employees and agents and representatives of
each of them, and their respective heirs, successors, personal
representatives and assigns (collectively, the “Seller Related Parties”), from any
and all demands, claims, legal or administrative proceedings,
losses, liabilities, damages, penalties, fines, liens, judgments,
costs or expenses whatsoever (including, without limitation, court
costs and attorneys’ fees and disbursements), whether direct
or indirect, known or unknown, foreseen or unforeseen, that may
arise on account of or in any way be connected with (i) the
physical condition of the Property including, without limitation,
all structural and seismic elements, all mechanical, electrical,
plumbing, sewage, heating, ventilating, air conditioning and other
systems, the environmental condition of the Property and the
presence of Hazardous Materials on, under or about the Property, or
(ii) any law or regulation applicable to the Property, including,
without limitation, any Environmental Law and any other federal,
state or local law.
15
Section
3.9 Survival.
The
provisions of this ARTICLE III shall survive the Closing subject to
the limitations and qualifications contained in such provisions and
in Section 9.11 and Section 9.19 hereof.
ARTICLE IV
TITLE
Section
4.1 Conditions
of Title.
(a) Upon
execution of this Agreement, within ten (10) days of the Effective
Date Seller shall deliver to Buyer an updated preliminary title
report or commitment (the “Title Report”) from the Title
Company, which shall be delivered to Seller, together with copies
of all underlying documents relating to title exceptions referred
to therein, promptly upon Buyer’s receipt thereof. Seller
shall furnish to Buyer within the Delivery Period the existing ALTA
survey of the Property in Seller’s possession (the
“Existing ALTA
Survey”). Buyer may, within three (3) business days of
receipt of the Existing ALTA Survey, order a plat or survey of the
Property or any update thereto from a duly licensed surveyor (the
“Survey”) if
desired by Buyer. If obtained by Buyer, Buyer shall provide Seller
a copy of the Survey, which shall be certified to the Title
Company, Buyer and Seller. If timely ordered by Buyer (and Seller
receives sufficient evidence of the same from Buyer) and Closing
occurs, Seller shall pay the entire cost of the Survey. If Closing
does not occur, Buyer or Buyer fails to timely order the Survey,
Buyer shall pay the entire cost of the Survey.
(b) Within
ten (10) business days prior to the last day of the Contingency
Period (the “Title Review
Date”), or five (5) business days after Buyer’s
receipt of the Title Report and Survey, whichever occurs first,
Buyer shall furnish Seller with a written statement of objections,
if any, to the title to the Property, including, without
limitation, any objections to any matter shown on the Survey
(collectively, “Objections”). In the event the
Title Company amends or updates the Title Report after the Title
Review Date (each, a “Title
Report Update”), Buyer shall furnish Seller with a
written statement of Objections to any matter first raised in a
Title Report Update within three (3) business days after its
receipt of such Title Report Update (each, a “Title Update Review Period”).
Should Buyer fail to notify Seller in writing of any Objections in
the Title Report prior to the Title Review Date, or to any matter
first disclosed in a Title Report Update prior to the Title Update
Review Period, as applicable, Buyer shall be deemed to have
approved such matters which shall be considered to be
“Conditions of
Title” as defined in Section 4.1(e)
below.
(c) If
Seller receives a timely Objection in accordance with Section
4.1(b) (“Buyer’s
Notice”), Seller shall have the right, but not the
obligation, within five (5) business days after receipt of
Buyer’s Notice (“Seller’s Response Period”),
to elect to cure any such matter upon written notice to Buyer
(“Seller’s
Response”), and may extend the Closing Date for up to
fifteen (15) business days to allow such cure. If Seller does not
give any Seller’s Response, Seller shall be deemed to have
elected not to cure any such matters. Notwithstanding the
foregoing, Seller shall in any event be obligated to cure all
matters or items (i) that are mortgage or deed of trust liens or
security interests against the Property, in each case granted by
Seller (and not Tenant or other third parties of Tenant as may be
permitted by the Lease), (ii) real estate tax liens, other than
liens for taxes and assessments not yet due and payable after the
date of Closing and (iii) that have been voluntarily placed against
the Property by Seller (and not Tenant or other third parties of
Tenant as may be permitted by the Lease) after the date of this
Agreement and that are not otherwise permitted pursuant to the
provisions hereof. Seller shall be entitled to apply the
Seller’s proceeds from the Purchase Price towards the payment
or satisfaction of such liens, and may cure any Objection by
causing the Title Company to insure against collection of the same
out of the Property.
16
(d) If
Seller elects (or is deemed to have elected) not to cure any
Objections raised in any Buyer’s Notice timely delivered by
Buyer to Seller pursuant to Section 4.1(b), or if Seller notifies
Buyer that it elects to cure any such Objection but then does not
for any reason effect such cure on or before the Closing Date as it
may be extended hereunder, then Buyer, as its sole and exclusive
remedy, shall have the option of terminating this Agreement by
delivering written notice thereof to Seller within three (3)
business days after (as applicable) (i) its receipt of
Seller’s Response stating that Seller will not cure any such
Objection or (ii) the expiration of Seller’s Response Period
if Seller does not deliver a Seller’s Response or (iii)
Seller’s failure to cure by the Closing Date (as it may be
extended hereunder) any Objection which Seller has previously
elected to cure pursuant to a Seller’s Response. In the event
of such a termination, the Deposit shall be returned to Buyer, and
neither party shall have any further rights or obligations
hereunder except as provided in Section 6.1, Section 9.3 and
Section 9.9 below. If no such termination notice is timely received
by Seller hereunder, Buyer shall be deemed to have elected to take
title as it then is and proceed to Closing, thereby waiving all
such Objections in which event those Objections shall become
“Conditions of
Title” under Section 4.1(e).
(e) At
the Closing, Seller shall convey title to the Property to Buyer by
special warranty deed in the form of Exhibit D
attached hereto (the “Deed”) subject to no exceptions
other than:
(1) Building
and zoning ordinances and regulations and any other laws,
ordinances or governmental regulations restricting, regulating or
relating to the use, occupancy or enjoyment of the
Property;
(2) Interests
of Tenant in possession under the Lease;
(3) Matters
created by or with the written consent of Buyer;
(4) Condition
of the Property as revealed by a current inspection;
(5) Matters
shown on the Survey;
(6) The
lien of real estate taxes and assessments which are not yet due and
payable; and
(7) Any
exceptions disclosed by the Title Report and any Title Report
Update which is approved or deemed approved by Buyer in accordance
with this ARTICLE IV above, and any other exceptions to title
disclosed by the public records or which would be disclosed by an
inspection and/or survey of the Property.
All of
the foregoing exceptions shall be referred to collectively as the
“Conditions of
Title.” Subject to the terms and conditions contained
elsewhere in this Agreement, by acceptance of the Deed and the
Closing of the purchase and sale of the Property, (x) Buyer agrees
it is assuming for the benefit of Seller all of the obligations of
Seller with respect to the Conditions of Title from and after the
Closing, and (y) Buyer agrees that Seller shall have conclusively
satisfied its obligations with respect to title to the Property.
The provisions of this Section shall survive the
Closing.
Section
4.2 Evidence
of Title.
Delivery of title
in accordance with the foregoing shall be evidenced by the
willingness of the Title Company to issue, at Closing, its
Owner’s ALTA Policy of Title Insurance in the amount of the
Purchase Price showing title to the Real Property vested in Buyer,
subject to the Conditions of Title (the “Title Policy”). The Title Policy
may contain such endorsements as reasonably required by Buyer
provided that the issuance of such endorsements shall not be a
condition to Buyer’s obligations hereunder. Buyer shall pay
the costs for all such endorsements. Seller shall have no
obligation to provide any indemnity or agreement to the Title
Company or Buyer to support the issuance of the Title Policy or any
such endorsements other than Seller’s standard form of
owner’s affidavit (the “Owner’s Affidavit”) attached
hereto as Exhibit
E.
17
ARTICLE V
RISK OF
LOSS CONDEMNATION AND CASUALTY
Section
5.1 Condemnation.
In the
event that Seller receives written notice on or prior to the
Closing Date that all or any part of the Property is to be taken by
exercise of the right of eminent domain, Seller will give Buyer
immediate notice (a “Condemnation Notice”) of such
event. If, prior to the Closing Date, the Property shall be taken
or threatened in writing to be taken by exercise of the right of
eminent domain, or there shall be taken or threatened in writing to
be taken such a material part thereof that, as determined by the
terms of the Lease, the taking materially interferes or would
materially interfere with the economic operation or use of the
Property, then Buyer may elect to terminate its obligations under
this Agreement by written notice to such effect given to Seller
within ten (10) days after receipt by Buyer of the Condemnation
Notice, in which event the Deposit shall be returned to Buyer and
no party shall have any further obligation and liability to the
other parties hereunder other than the obligations which expressly
survive the Closing as indicated herein. If Buyer does not so elect
to terminate its obligations hereunder, then the Closing of the
sale hereby contemplated shall take place as herein provided
without any abatement of the Purchase Price, and at the Closing
Seller shall assign to Buyer, by written instrument, all of
Seller’s right, title and interest in and to any condemnation
award (but not any portion of an award to which the Tenant may be
entitled) which may be payable to Seller on account of such
condemnation. If, prior to the Closing Date, one or more portions
of the Real Property shall be taken by exercise of right of eminent
domain in a manner which does not, as determined by the terms of
the Lease, materially interfere with the economic operation or use
of the affected Property, then Buyer shall not have the right to
terminate its obligations hereunder by reason thereof and, at the
Closing, Seller shall assign to Buyer, by written instrument, all
of Seller’s right, title and interest in and to any
condemnation awards which may be payable to Seller (but expressly
excluding any amount to which the Tenants may be entitled) on
account of such condemnation, and the Purchase Price shall not be
reduced.
Section
5.2 Casualty.
If,
prior to Closing, the Property, or any part thereof, suffers any
material damage (that is, any damage to the Property to the extent
that the Tenant has the right terminate the Lease pursuant to the
terms thereof) from fire or other casualty, then Seller shall
promptly provide Buyer with written notice thereof and Buyer may
either: (a) terminate this Agreement by notice to Seller and Escrow
Agent, in which event the Deposit shall be promptly refunded to
Buyer, and neither party shall have any further right or obligation
hereunder, other than any obligations expressly surviving the
termination hereof, or (b) consummate the Closing, in which latter
event all of Seller’s right, title and interest in and to the
proceeds of any insurance covering such damage, and including any
and all rent loss insurance proceeds relating to the period from
and after the Closing Date, if payable, shall be assigned to Buyer
at the Closing and Buyer shall receive a credit against the
Purchase Price in an amount equal to the amount of Seller’s
deductible under its insurance policy which has not previously been
paid out by Seller. If the Property, or any part thereof, suffers
any non-material damage (that is, any damage to the Property which
obligates Tenant to continue the payment of rent without abatement)
prior to the Closing, Buyer agrees that it will consummate the
Closing and accept the assignment of the proceeds of any insurance
covering such damage, including without limitation any and all rent
loss insurance proceeds relating to the period from and after the
Closing Date, if payable (plus receive a credit against the
Purchase Price in an amount equal to the amount of Seller’s
deductible under its insurance policy which has not previously been
paid out by Seller), and there shall be no other reduction in the
Purchase Price.
18
ARTICLE VI
BROKERS
AND EXPENSES
Section
6.1 Brokers.
The
parties represent and warrant to each other that no broker or
finder was instrumental in arranging or bringing about this
transaction except for CBRE Group, Inc. (“Seller’s Broker”). At
Closing, Seller shall pay, at its sole cost and expense, the
commission due, if any, to Seller’s Broker, which shall be
paid pursuant to a separate agreement between Seller and
Seller’s Broker. If any other person brings a claim for a
commission or finder’s fee based upon any contact, dealings
or communication with Buyer or Seller, then the party through whom
such person makes his claim shall defend the other party (the
“Indemnified
Party”) from such claim, and shall indemnify the
Indemnified Party and hold the Indemnified Party harmless from any
and all costs, damages, claims, liabilities or expenses (including
without limitation, court costs and reasonable attorneys’
fees and disbursements) incurred by the Indemnified Party in
defending against the claim. The provisions of this Section 6.1
shall survive the Closing or, if the purchase and sale is not
consummated, any termination of this Agreement.
Section
6.2 Expenses.
Except
as provided in ARTICLE IV above, and Section 8.3(b) and Section 9.5
below, each party hereto shall pay its own expenses incurred in
connection with this Agreement and the transactions contemplated
hereby.
ARTICLE VII
LEASES
AND OTHER AGREEMENTS
Section
7.1 Buyer’s
Approval of New Leases and Agreements Affecting the
Property.
Between
the Effective Date and the Closing, Seller shall not amend or
terminate the Lease in any respect without Buyer’s prior
written consent. If Buyer does not consent, Buyer shall specify in
detail the reasons for its disapproval. If Buyer fails to give
Seller notice of its approval or disapproval of any such proposed
action requiring its approval under this Section 7.1 within three
(3) business days after Seller notifies Buyer of Seller’s
desire to take such action, then Buyer shall be deemed to have
given its approval.
Section 7.2 Intentionally
Omitted.
Section
7.3 Tenant
Notices.
At the
Closing, Seller shall furnish Buyer with one (1) original signed
notice to be duplicated by Buyer and given to Tenant in
substantially the form attached hereto as Exhibit F
and made a part hereof, with such reasonable, informational
modifications thereto as Buyer may reasonably request (the
“Tenant
Notice”). Buyer covenants to deliver a Tenant Notice
to Tenant as soon as reasonably possible after Closing. This
Section 7.3 shall survive Closing.
19
Section
7.4 Maintenance
of Improvements and Operation of Property; Removal of Tangible
Personal Property.
To the
extend not maintained by Tenant, Seller agrees to keep its
customary property insurance covering the Property in effect until
the Closing (provided, however, that the terms of any such coverage
maintained in blanket form may be modified as Seller deems
necessary). Seller shall maintain all Improvements substantially in
their present condition (ordinary wear and tear and casualty
excepted), and shall operate and manage the Property in a manner
consistent with Seller’s practices in effect prior to the
Effective Date, provided that Seller shall in no event be obligated
to make any capital expenditures or repairs. Seller shall not
remove any Tangible Personal Property, except as may be required
for necessary repair or replacement, and replacement shall be of
approximately equal quality and quantity as the removed item of
Tangible Personal Property.
Section
7.5 Service
Contracts.
There
are currently no Service Contracts entered into by Seller in effect
at the Property. Between the Effective Date and the date of
Closing, Seller will not, without Buyer’s prior written
consent, enter into any Service Contracts with respect to the
Property that will not be terminated prior to Closing.
Notwithstanding the foregoing, Seller shall terminate as of the
Closing Date, all existing management agreements, leasing
agreements, broker agreements and locator agreements with respect
to the Property.
ARTICLE VIII
CLOSING
AND ESCROW
Section
8.1 Escrow
Instructions.
Upon
execution of this Agreement, the parties hereto shall deposit an
executed counterpart of this Agreement with the Title Company, and
this instrument shall serve as the instructions to the Title
Company as the escrow holder for consummation of the purchase and
sale contemplated hereby. Seller and Buyer agree to execute such
reasonable additional and supplementary escrow instructions as may
be appropriate to enable the Title Company to comply with the terms
of this Agreement; provided, however, that in the event of any
conflict between the provisions of this Agreement and any
supplementary escrow instructions, the terms of this Agreement
shall control.
Section
8.2 Closing.
The
Closing hereunder shall be held and delivery of all items to be
made at the Closing under the terms of this Agreement shall be made
at the offices of the Title Company or as otherwise mutually agreed
on July 17, 2020, and before 11:00 a.m. local time, or such other
earlier date and time as Buyer and Seller may mutually agree upon
in writing (the “Closing
Date”). Except as expressly provided herein, such date
and time may not be extended without the prior written approval of
both Seller and Buyer, and neither party or its agents shall be
required to attend the Closing in person. The Closing shall occur
at the offices of the Title Company by means of a so-called New
York style closing (i.e., meaning the concurrent delivery of the
documents of title, transfer of interests, delivery of the Title
Policy or “marked-up” title commitment as described
herein and the payment of the Purchase Price). No party shall be
obligated to agree to any date or time for Closing except the date
and time herein set forth except at its sole and absolute
discretion.
20
Section
8.3 Deposit
of Documents.
(a) At
or before the Closing, Seller shall deposit into escrow the
following items:
(1) the
duly executed and acknowledged Deed in the form attached hereto as
Exhibit
C conveying the
Real Property from Seller to Buyer or its assignee subject only to
the Conditions of Title;
(2) four
(4) duly executed counterparts of the Xxxx of Sale in the form
attached hereto as Exhibit H
(the “Xxxx of
Sale”);
(3) four
(4) duly executed counterparts of an Assignment and Assumption of
Leases, in the form attached hereto as Exhibit I-1
pursuant to the terms of which Buyer shall assume all of
Seller’s obligations under the Lease, (the
“Lease
Assignment”);
(4) four
(4) duly executed counterparts of an Assignment and Assumption of
Warranties and Other Intangible Property in the form attached
hereto as Exhibit I-2
pursuant to the terms of which Buyer shall assume all of
Seller’s obligations under the Warranties and Other
Intangible Property and other documents and agreements affecting
the Property (the “General
Assignment”);
(5) a
FIRPTA Affidavit in the form required by Section 1445 of the
Internal Revenue Code;
(6) the
Owner’s Affidavit;
(7) one
(1) duly executed Tenant Notice;
(8) either
(i) evidence of bulk sales tax clearance from the State of Illinois
(in the form of a bulk sales stop order or release or similar
document issued by the State of Illinois), or (ii) one (1) Bulk
Sales Indemnity pursuant to Section 9.15 below;
(9) A
“Closing Statement” in form reasonably satisfactory to
the parties reflecting the prorations and apportionments of the
Purchase Price as required by the terms and provisions contained in
this Agreement (the “Closing
Statement”);
(10) any
necessary transfer or recording tax or stamp declarations or forms
required to be signed by Seller with respect to the transactions
contemplated under this Agreement;
(11) All
access codes related to the Property; and,
(12) A
bring down certificate certifying that Seller representations and
warranties set forth in Section 3.1 above remain true and correct
in all material respects as of the Closing Date or advising Buyer
of any material changes to the same, duly executed by the
Seller.
(b) At
or before Closing, Buyer shall deposit into escrow the following
items:
(1) immediately
available funds necessary to close this transaction, including,
without limitation, the Purchase Price (less the Deposit and
interest thereon net of investment fees, if any) and funds
sufficient to pay Buyer’s closing costs and share of
prorations hereunder;
21
(2) four
(4) duly executed counterparts of the Lease
Assignment;
(3) four
(4) duly executed counterparts of the General
Assignment;
(4) two
(2) duly executed counterparts of the Closing Statement;
and
(5) any
necessary transfer or recording tax or stamp declarations or forms
required to be signed by Buyer with respect to the transactions
contemplated under this Agreement.
(c) Seller
and Buyer shall each execute and deposit such other instruments as
are reasonably required by the Title Company or otherwise required
to close the escrow and consummate the acquisition of the Property
in accordance with the terms hereof. Seller and Buyer hereby
designate Title Company as the “Reporting Person” for the
transaction pursuant to Section 6045(e) of the Code and the
regulations promulgated thereunder and agree to execute such
documentation as is reasonably necessary to effectuate such
designation.
(d) All
documents required to be delivered at or prior to the Closing in
accordance with the provisions of this Section 8.3 shall be (i) in
the form attached to this Agreement as provided herein or (ii) in
form reasonably satisfactory to each of the parties hereto and
their respective counsel. Any documents, including deeds or other
instruments of assignment or conveyance, intended to be recorded in
any public office, shall be in recordable form.
(e) Seller
shall deliver possession of the Property, subject to the Lease and
the rights of Tenant thereunder and the Conditions of Title, to
Buyer or Buyer’s nominee at the Closing. Seller shall also
coordinate with Buyer to deliver all keys with respect to the
Property promptly after Closing
(f) Within
one (1) business days prior to the Closing Date, Seller shall
deliver or make available at the Property to Buyer: originals (or
copies provided a fully signed original is not available) of the
Lease, the Tenant correspondence files (during Seller’s
ownership of the Property), and originals of any other items which
Seller was required to furnish Buyer copies of or make available at
the Property pursuant to Sections 2.1(b) or (e) above, to the
extent in Seller’s possession, except for Seller’s
original general ledger and other original internal books or
records which shall be retained by Seller.
Section
8.4 Estoppel
Certificate and SNDA.
(a) If
in accordance with ARTICLE II of this Agreement Buyer elects to
proceed with the purchase of the Property, then Seller shall obtain
an estoppel certificate from Tenant substantially in the form
attached hereto as Exhibit J
(the “Estoppel Certificate”), or as otherwise provided
below. It shall be a condition to Buyer’s obligation to close
the sale and purchase of the Property that on or before the
Closing, Buyer is able to obtain the Estoppel Certificate from
Tenant. The Estoppel Certificate shall be dated no more than thirty
(30) days prior to the Closing Date. Prior to the expiration of the
Contingency Period, Buyer shall work with Tenant to agree on a form
of Estoppel Certificate reasonable acceptable to Tenant and Buyer
and shall deliver to Seller a copy of the approved form at the
expiration of the Contingency Period. If Tenant refuses to sign the
Estoppel Certificate in the form attached hereto as Exhibit J or
the form so approved by Tenant (after discussions and negotiations,
as necessary, with Tenant and Buyer), an Estoppel Certificate from
Tenant will be deemed reasonably acceptable to Buyer if it contains
the following information: confirming the dates of the term and the
termination date, the rents, taxes and all other charges due and
payable under the Lease; that no rent has been paid more than one
month in advance; that the Tenant Allowance, the Work to be
Reimbursed by Landlord (including without limitation, the First
Additional Reimbursement and the Second Additional Reimbursement as
set forth in the Second Amendment) have been paid in full and
Tenant is not entitled to any other credits, allowances or payments
from the Landlord; that the Lease is in full force and effect and
that a true and correct copy of the Lease with all amendments and
modifications is attached; that all work to be performed by
landlord has been performed and that Tenant has no knowledge of any
landlord default. The Estoppel Certificate shall be addressed to
Buyer and any lender of Buyer, as Buyer directs, and can be relied
upon by both Buyer and any lender of Buyer.
22
(b) If
Tenant’s Estoppel Certificate discloses a circumstance that
would, in the reasonable judgment of Buyer, have an adverse effect
on the Property following Closing or reflects information
materially inconsistent with the Rent Roll or otherwise reflects a
materially adverse issue under the Lease, Buyer shall notify Seller
thereof no later than five (5) days after Buyer’s receipt of
the Tenant’s Estoppel Certificate, and Seller shall have the
right to adjourn Closing for a period of time not to exceed fifteen
(15) days to resolve the issue to the satisfaction of Seller, Buyer
and the Tenant. If, at the end of such 15-day period the adverse
circumstance at issue has not been corrected to the satisfaction of
Seller, Buyer and the Tenant, Buyer shall have the right to either
waive its objection to such issue and close with no reduction in
Purchase Price, or terminate this Agreement whereupon the Deposit
shall be returned to Buyer. If Buyer fails to deliver written
notice to Seller setting forth Buyer’s reasonable objections
to any fact or circumstance raised in a Tenant’s Estoppel
Certificate or material modification to the Tenant’s Estoppel
Certificate within five (5) days after Buyer’s receipt of the
Tenant’s Estoppel Certificate, Buyer shall be conclusively
deemed to have approved such Tenant’s Estoppel
Certificate.
(c) Upon
Buyer’s request, which request shall provide Seller with all
relevant information, Seller shall deliver to Tenant at no
additional cost or expense to Seller (i) a Subordination,
Non-Disturbance and Attornment Agreement (the “SDNA”) by and between Buyer,
Buyer’s lender and Tenant similar in form and content as set
forth in Exhibit E of the Lease (subject to modifications as
mutually agreed to by the parties thereto), and (ii) Buyer’s
lender’s contact information. Buyer’s receipt of the
SNDA from the Tenant shall not be a condition of Buyer’s
obligations to close hereunder.
Section
8.5 Prorations.
(a) Subject
to the other provisions of this Section 8.5, the following matters
and items shall be prorated and apportioned between the parties
hereto, or, where applicable, credited in total to a particular
party, as of 11:59 pm on the day before the Closing Date (the
“Cut Off Time”),
with net credits, whether in favor of Buyer or Seller, to be
settled in cash at the Closing; and for purposes of calculating
prorations, (i) Seller shall be deemed to be in title to the
Property, and therefore entitled to the income therefrom and
responsible for the expenses thereof up to the Cut Off Time, and
Buyer to be in title to the Property on and after the Cut Off Time,
and (ii) all prorations shall be made on the basis of the actual
number of days of the year and month that have elapsed as of the
Closing Date.
(b) Rents
that have been collected for the month of the Closing will be
prorated at the Closing, effective as of the date of the Closing.
Not less than five (5) business days prior to Closing, Seller shall
furnish to Buyer a schedule of all rents from Tenant which are then
due and payable but which have not been collected. With regard to
due and payable rents that are uncollected as of the Closing Date,
(i) no proration will be made at the Closing, (ii) Buyer shall make
a reasonable effort after the Closing to collect the rents in the
usual course of Buyer’s operation of the Property, and (iii)
Buyer shall apply all rents collected (A) first to the then-current
month’s rental obligation due from Tenant, (B) then second
towards any delinquent amounts relating to the period from and
after the Closing Date, and (C) then third towards delinquent rents
owed to Seller with respect to the period prior to the Closing
Date. It is further agreed, however, that Buyer will not be
obligated to institute any lawsuit or other collection procedures
to collect uncollected rents, and Seller shall not be entitled to
xxx the Tenant to collect same. Notwithstanding any of the
foregoing provisions to the contrary, rents collected by Buyer
after the Closing Date applicable to the month of Closing and to
which Seller is entitled shall be promptly paid to Seller, and any
rents received by Seller after the Closing Date applicable to the
month of Closing and to which Buyer is entitled, shall be promptly
paid to Buyer. There are no common area maintenance expenses,
administrative fees, insurance costs and property management fees
payable to Seller by Tenant under the Lease. There is no security
deposit made or required to be made by Tenant under the
Lease.
23
(c) There
shall be no proration of real estate taxes as Tenant pays real
estate taxes directly to the applicable governmental authority and
has paid the first installment of 2019 real estate taxes payable in
2020.
(d) Buyer
shall pay the following costs of closing this
transaction:
(1) Any
and all expense(s) incurred by Buyer or its representative(s) in
inspecting or evaluating the Property, except as otherwise
expressly provided in this Agreement;
(2) The
cost of any extended coverage or special endorsements to the Title
Policy, including any additional premium charge(s) for endorsements
and/or deletion(s) of exception items and any cancellation
charge(s) imposed by the Title Company in the event a Title Policy
is not issued, unless caused by default of Seller
hereunder;
(3) Any
and all recording fees for the Deed;
(4) One-half
of any and all escrow fees associated with the purchase and sale
transaction contemplated herein, and all escrow fees associated
with Buyer’s financing, if any; and
(5) The
fees and disbursements of Buyer’s counsel.
(e) Seller
shall pay the following costs of closing the
transaction:
(1) One-half
of any and all escrow fees;
(2) Any
and all state and county real estate transfer, stamp or documentary
taxes;
(3) All
title charges and the cost of the Title Policy, excepting the cost
of any extended coverage or special endorsements to the Title
Policy, including any additional premium charge(s) for endorsements
and/or deletion(s) of exception items and any cancellation
charge(s) imposed by the Title Company in the event a Title Policy
is not issued, unless caused by default of Seller
hereunder;
(4) Subject
to Section 4.1(a), all costs relating to the Survey;
(5) Except
as set forth in Section 8.5(d)(3) above, any and all recording
fees; and
(6) The
fees and disbursements of Seller’s counsel.
(f) The
provisions of this Section 8.5 shall survive the
Closing.
ARTICLE IX
MISCELLANEOUS
Section
9.1 Notices.
Any
notices required or permitted to be given hereunder shall be given
in writing and shall be delivered (a) in person, (b) by certified
mail, postage prepaid, return receipt requested, (c) by a
commercial overnight courier that guarantees next day delivery and
provides a receipt, or (d) by e-mail if followed by one of the
other methods, and such notices shall be addressed as
follows:
24
To
Buyer:
|
GK Real
Estate, Inc.257 X. Xxxx Xxxxxx
Xxxxx
000
Xxxxxxxxxx,
Xxxxxxxx 00000 Attention: Xxxxx Xxxxx, Xx. Vice President –
Acquisitions & DispositionsPhone No.: 847-277-2028E-Mail:
xxxxx@xx-xx.xxx
|
with a
copy to:
|
GK Real
Estate, Inc.257 X. Xxxx Xxxxxx
Xxxxx
000
Xxxxxxxxxx,
Xxxxxxxx 00000 Attention: Xxxx Xxx Xxxxxx, Xxx.Xxxxx No.:
847-277-9168E-Mail: xxxx@xx-xx.xxx
|
To
Seller:
|
0000 X.
Xxxxx Xxxxxx, LLC
c/o
Stockbridge Capital Group
000
Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 60654Attention: Xxx Xxxxxx Phone No.: 312-819-4033E-Mail:
Xxxxxx@xxxxxxxxxxx.xxx
|
with a
copy to:
|
Seyfarth
Xxxx LLP
000
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxx X. Xxxxx
Phone
No.: (000) 000-0000
E-Mail:
xxxxxx@xxxxxxxx.xxx
|
or to
such other address as either party may from time to time specify in
writing to the other party. Any notice or other communication sent
as hereinabove provided shall be deemed effectively given (a) on
the date of delivery, if delivered in person; (b) on the date
mailed if sent by certified mail, postage prepaid, return receipt
requested or by a commercial overnight courier; or (c) on the date
of transmission, if sent by facsimile with confirmation of receipt
or by e-mail. Such notices shall be deemed received (a) on the date
of delivery, if delivered by hand or overnight express delivery
service; (b) on the date indicated on the return receipt if mailed;
or (c) on the date of transmission, if sent by facsimile or e-mail
and received during normal business hours. If any notice mailed is
properly addressed but returned for any reason, such notice shall
be deemed to be effective notice and to be given on the date of
mailing. Any notice sent by the attorney representing a party,
shall qualify as notice under this Agreement.
25
Section
9.2 Entire
Agreement.
This
Agreement, together with the Exhibits and schedules hereto,
contains all representations, warranties and covenants made by
Buyer and Seller and constitutes the entire understanding between
the parties hereto with respect to the subject matter hereof. Any
prior correspondence, memoranda or agreements are replaced in total
by this Agreement together with the Exhibits and schedules
hereto.
Section
9.3 Entry
and Indemnity.
In
connection with any entry by Buyer, or its agents, employees or
contractors onto the Property, Buyer shall give Seller reasonable
advance notice of such entry and shall conduct such entry and any
inspections in connection therewith (a) during normal business
hours, (b) so as to minimize, to the greatest extent possible,
interference with Seller’s business and the business of
Tenant, (c) in compliance with all applicable laws, and (d)
otherwise in a manner reasonably acceptable to Seller. Without
limiting the foregoing, prior to any entry to perform any on-site
testing, including but not limited to any borings, drillings or
samplings, Buyer shall give Seller written notice thereof,
including the identity of the company or persons who will perform
such testing and the proposed scope and methodology of the testing.
Seller shall approve or disapprove, in Seller’s sole
discretion, the proposed testing within one (1) business day after
receipt of such notice. If Seller fails to respond within such one
(1) business day period, Seller shall be deemed to have disapproved
the proposed testing. If Buyer or its agents, employees or
contractors take any sample from the Property in connection with
any such approved testing, Buyer shall provide to Seller a portion
of such sample being tested to allow Seller, if it so chooses, to
perform its own testing. Buyer shall permit Seller or its
representative to be present to observe any testing or other
inspection or due diligence review performed on or at the Property.
Upon the request of Seller, Buyer shall promptly deliver to Seller
copies of any reports relating to any testing or other inspection
of the Property performed by Buyer or its agents, representatives,
employees, contractors or consultants. Notwithstanding anything to
the contrary contained herein, Buyer shall not contact any
governmental authority or Tenant without first obtaining the prior
written consent of Seller thereto in Seller’s sole
discretion, and Seller, at Seller’s election, shall be
entitled to have a representative participate in any telephone or
other contact made by Buyer to a governmental authority or Tenant
and present at any meeting by Buyer with a governmental authority
or Tenant. Buyer shall maintain, and shall assure that its
contractors maintain, public liability and property damage
insurance in amounts and in form and substance adequate to insure
against all liability of Buyer and its agents, employees or
contractors, arising out of any entry or inspections of the
Property pursuant to the provisions hereof, and Buyer shall provide
Seller with evidence of such insurance coverage upon request by
Seller. Buyer shall indemnify and hold Seller harmless from and
against any actual, provable costs, damages, liabilities, losses,
expenses, liens or claims (including, without limitation, court
costs and reasonable attorneys’ fees and disbursements)
solely arising out of or directly relating to any entry on the
Property by Buyer, its agents, employees or contractors in the
course of performing the inspections, testings or inquiries
provided for in this Agreement, including, without limitation, any
release of Hazardous Materials above levels allowed by law or any
significant or material damage to the Property; provided that Buyer
shall not be liable to Seller as a result of the discovery by Buyer
of a pre-existing condition on the Property to the extent the
activities of Buyer, its agents, representatives, employees,
contractors or consultants do not exacerbate the condition above
levels allowed by law. The foregoing indemnity shall survive beyond
the Closing, or, if the sale is not consummated, beyond the
termination of this Agreement. Buyer’s right of entry, as
provided in this Section 9.3, shall continue up through the date of
Closing.
26
Section
9.4 Time.
Time is
of the essence in the performance of each of the parties’
respective obligations contained herein. If the time period by
which any right, option or election provided under this Agreement
must be exercised, or by which any act required hereunder must be
performed, or by which the Closing must be held, expires on a
Saturday, Sunday or legal or bank holiday, then such time period
shall be automatically extended through the close of business on
the next regularly scheduled business day. Unless otherwise
specified herein, all references herein to a “day” or
“days” shall refer to calendar days and not business
days. A “business day” shall mean any day that is not a
Saturday, Sunday or legal or bank holiday in the jurisdiction in
which the Property is located. The last day of any period of time
described herein shall be deemed to end at 5:00 p.m. Central
Time.
Section
9.5 Attorneys’
Fees.
If
either party hereto fails to perform any of its obligations under
this Agreement or if any dispute arises between the parties hereto
concerning the meaning or interpretation of any provision of this
Agreement, whether prior to or after Closing, or if any party
defaults in payment of its post-Closing financial obligations under
this Agreement, then the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and
all costs and expenses incurred by the other party on account of
such default and/or in enforcing or establishing its rights
hereunder, including, without limitation, court costs and
reasonable attorneys’ fees and disbursements.
Section
9.6 Assignment.
Buyer’s
rights and obligations hereunder shall not be assignable without
the prior written consent of Seller in Seller’s sole
discretion. Notwithstanding the foregoing, Buyer shall have the
right, without the necessity of obtaining Seller’s consent
but with prior written notice to Seller, to assign its right, title
and interest in and to this Agreement to an entity owned and
controlled by Buyer at any time before the Closing Date. Buyer
shall in no event be released from any of its obligations or
liabilities hereunder in connection with any assignment. Without
limiting and notwithstanding the above, in no event shall Buyer
have the right to assign its rights or obligations hereunder to any
party which could not make the representation and warranty
contained in Section 3.5(e) above, and in connection with any
assignment pursuant to the terms hereof, the assignee shall
reconfirm in a written instrument acceptable to Seller and
delivered to Seller prior to the effective date of the assignment
said representation and warranty as applied to the assignee and
that all other terms and conditions of this Agreement shall apply
to such assignee. Subject to the provisions of this Section, this
Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and
assigns.
Section
9.7 Counterparts.
This
Agreement may be executed and delivered in any number of
counterparts, each of which so executed and delivered shall be
deemed to be an original and all of which shall constitute one and
the same instrument. This Agreement so executed in counterparts
shall effective upon delivery to the parties hereto. In the event
that any signature to this Agreement is delivered by transmission
by facsimile or by electronic mail in form of any
“.pdf”, “.jpg”, “.tiff”,
“.bmp”, “.png”, “.gif”, and/or
any other electronically-formatted image and/or document
(collectively, an “Electronic Transmission”), such
signature shall create a valid and legally binding obligation of
the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such signature page sent via
Electronic Transmission were an original thereof.
27
Section
9.8 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the
laws of the State in which the Real Property is
located.
Section
9.9 Confidentiality
and Return of Documents.
Buyer
and Seller shall each maintain as confidential any and all material
obtained about the other or, in the case of Buyer, about the
Property, this Agreement or the transactions contemplated hereby,
and shall not disclose such information to any third party. Except
as may be required by law, Buyer will not divulge any such
information to other persons or entities including, without
limitation, appraisers, real estate brokers, or competitors of
Seller. Notwithstanding the foregoing, Buyer shall have the right
to disclose information with respect to the Property to its
officers, directors, employees, attorneys, accountants,
environmental auditors, engineers, potential lenders, and permitted
assignees under this Agreement and other consultants to the extent
necessary for Buyer to evaluate its acquisition of the Property
provided that all such persons are told that such information is
confidential and agree (in writing for any third party engineers,
environmental auditors or other consultants) to keep such
information confidential. If Buyer acquires the Property from
Seller, Seller shall have the right, subsequent to the Closing of
such acquisition, to publicize the transaction (other than the
parties to or the specific economics of the transaction) in
whatever manner it deems appropriate; provided that any press
release or other public disclosure regarding this Agreement or the
transactions contemplated herein, and the wording of same, must be
approved in advance by both parties. The provisions of this
paragraph shall survive the Closing or any termination of this
Agreement. In the event the transaction contemplated by this
Agreement does not close as provided herein, upon the request of
Seller, Buyer shall promptly return to Seller all Due Diligence
Materials and other documents and copies obtained by Buyer in
connection with the purchase of the Property
hereunder.
Section
9.10 Interpretation
of Agreement.
The
article, section and other headings of this Agreement are for
convenience of reference only and shall not be construed to affect
the meaning of any provision contained herein. Where the context so
requires, the use of the singular shall include the plural and vice
versa and the use of the masculine shall include the feminine and
the neuter. The term “person” shall include any
individual, partnership, joint venture, corporation, trust,
unincorporated association, any other entity and any government or
any department or agency thereof, whether acting in an individual,
fiduciary or other capacity.
Section
9.11 Limited
Liability.
The
obligations of Seller under this Agreement and under all of the
Other Documents are intended to be binding only on the property of
Seller and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any Seller Related
Parties.
Section
9.12 Amendments.
This
Agreement may be amended or modified only by a written instrument
signed by Buyer and Seller.
Section
9.13 No
Recording.
Neither
this Agreement or any memorandum or short form thereof may be
recorded by Buyer.
28
Section
9.14 Drafts
Not an Offer to Enter into a Legally Binding Contract.
The
parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party
to be an offer to enter into a legally binding contract with
respect to the purchase and sale of the Property. The parties shall
be legally bound with respect to the purchase and sale of the
Property pursuant to the terms of this Agreement only if and when
the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the
parties in their respective sole discretion, and both Seller and
Buyer have fully executed and delivered to each other a counterpart
of this Agreement (or a copy by Electronic Transmission) (the
“Effective
Date”) pursuant to which the “Effective Date” for purposes of
this Agreement shall be the date of last execution by Seller and
Buyer.
Section
9.15 Bulk
Sales.
Seller
shall be solely responsible for and shall pay all sums due under
the Bulk Sales Laws (as hereinafter defined) in connection with
Seller’s ownership and operation of the Property. Within two
(2) business days after the expiration of the Contingency Period,
if not earlier, in Seller’s sole discretion, Seller shall
request and shall use good faith diligent efforts to obtain with
respect to the Property (and Buyer shall reasonably cooperate (at
no expense to Buyer) and execute any necessary documentation in
connection therewith) (a) a full release of claims letter issued to
Buyer by the Illinois Department of Revenue showing that Buyer has
no liability for the payment of any of Seller’s assessed but
unpaid taxes, penalties or interest due under the Illinois Income
Tax Act, 35 ILCS 120/5j et. seq. and any tax, penalty or interest
due under the Retailer’s Occupation Tax Act 35 ILCS 5/902 et.
seq. (the “Bulk Sales
Act”). Seller shall provide Buyer with evidence of
Seller’s timely requests for such release letters and/or
certificate in accordance with the Bulk Sales Act promptly after
filing same. It shall be a condition precedent to the obligation of
Buyer to close the transaction contemplated in this Agreement, that
Buyer receive such release letters and/or certificate from the
State of Illinois under the Bulk Sales Act . If any of the release
letters, certificates or confirmation from the State of Illinois
under the Bulk Sales Act are not received by Closing, then the
Closing shall occur and Seller shall be obligated to execute an
indemnification agreement, in form and substance reasonably
satisfactory to Buyer, indemnifying Buyer against any and all
claims by any of the State of Illinois if a letter, certificate or
confirmation was not provided for any unpaid taxes, penalties or
interest owed by Seller (any such indemnity agreement is called a
“Bulk Sales
Indemnity”) and also establishing a holdback from
Seller’s net proceeds of sale an amount equal to 2.5 times
stated in the release letters, certificates or confirmation from
the State of Illinois under the Bulk Sales Act and if any such
amount is not stated than an amount determined by the Title Company
and Buyer in order for the Title Company to either insure over or
endorse over any such claims as additional assurance in support of
Buyer’s acceptance of the Bulk Sales Indemnity.
Section
9.16 No
Partnership.
The
relationship of the parties hereto is solely that of Seller and
Buyer with respect to the Property and no joint venture or other
partnership exists between the parties hereto. Neither party has
any fiduciary relationship hereunder to the other.
Section
9.17 No
Third Party Beneficiary.
The
provisions of this Agreement are not intended to benefit any third
parties.
29
Section
9.18 Intentionally
Omitted.
Section
9.19 Limitation
on Liability.
Notwithstanding
anything to the contrary contained herein, after the Closing: (a)
the maximum aggregate liability of Seller, and the maximum
aggregate amount which may be awarded to and collected by Buyer
(including, without limitation, for any breach of any
representation, warranty and/or covenant by Seller) under this
Agreement or any documents executed pursuant hereto or in
connection herewith, including, without limitation, the Deed, the
Xxxx of Sale, the Assignment and any Seller estoppel certificate
(collectively, the “Other
Documents”, shall under no circumstances whatsoever
exceed Three Hundred Thousand and No/100th Dollars ($300,000.00);
and (b) no claim by Buyer alleging a breach by Seller of any
representation, warranty and/or covenant of Seller contained herein
or in any of the Other Documents may be made, and Seller shall not
be liable for any judgment in any action based upon any such claim,
unless and until such claim, either alone or together with any
other claims by Buyer alleging a breach by Seller of any such
representation, warranty and/or covenant is for an aggregate amount
in excess of Twenty-Five Thousand and No/100th Dollars ($25,000.00)
(the “Floor
Amount”), in which event Seller’s liability
respecting any final judgment concerning such claim or claims shall
be for the entire amount thereof, subject to the limitation set
forth in clause (a) above; provided, however, that if any such
final judgment is for an amount that is less than or equal to the
Floor Amount, then Seller shall have no liability with respect
thereto.
Section
9.20 Survival.
Except
as expressly set forth to the contrary herein, no representations,
warranties, covenants or agreements of Seller contained herein
shall survive the Closing.
Section
9.21 Survival
of Article IX.
The
provisions of this ARTICLE IX shall survive the
Closing.
Section
9.22 Buyer’s
Audit.
Buyer
has informed Seller that Buyer desires to complete an audit with
respect to certain matters relating to the Property (“Buyer’s Audit”). Not
less than ten (10) days prior to expiration of the Contingency
Period, Seller shall make available to Buyer at Seller’s
offices such information, to the extent it is in existence and in
Seller’s possession, as is reasonably requested by Buyer in
connection with the performance of Buyer’s Audit, including,
but not limited, the general ledger and current aging report.
Seller shall also provide answer to questions relating to the
Property as Buyer or its auditors may reasonable request; provided
that no additional investigation shall be required by Seller;
provided, further, Seller’s answers to such questions shall
not constitute representations and warranties of Seller and Seller
shall have no liability to Buyer or its auditors with respect
thereto. Buyer’s completion of Buyer’s Audit shall not
be a condition precedent to Buyer’s obligation to consummate
the transaction contemplated by this Agreement and Buyer shall
satisfy itself with regard to Buyer’s Audit prior to the
expiration of the Contingency Period.
[Remainder of Page Intentionally Left Blank. Signatures Follow
Next.]
30
IN WITNESS WHEREOF, The parties hereto
have executed this Agreement as of the date set forth in the first
paragraph of this Agreement.
SELLER:
|
0000 X.
Xxxxx Xxxxxx, XXX,x Delaware limited liability company
|
|
By:
/s/ Xxxxxx X.
Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Its:
Managing Director
|
Date of
Execution: May 26, 2020
|
|
BUYER:
|
RF
GROCERY LLC,
|
|
an
Illinois limited liability company
|
|
By:
/s/ Xxxx
Xxxxxxxxx
Name:
Xxxx Xxxxxxxxx
Its:
President
|
Date of
Execution: May 26, 2020
|
31
LIST OF EXHIBITS AND SCHEDULES
Exhibits
Exhibit
A
Real Property
Description
Exhibit
B
List of Tenant
Lease & Delinquency Report
Exhibit
C
List of Service
Contracts
Exhibit
D
Form
Deed
Exhibit
E
Form Owner’s
Affidavit
Exhibit
F
Form Tenant
Notice
Exhibit
G
Intentionally
Deleted
Exhibit
H
Form Xxxx of
Sale
Exhibit
I-1
Form Assignment of
Leases
Exhibit
I-2
Form Assignment of
Warranties and Other Intangible Property
Exhibit
J
Form Estoppel
Certificate
Schedules
Schedule
1
Disclosure
Items
32