PURCHASE AND SALE AGREEMENT
MG-ALAMO, LLC,
A COLORADO LIMITED LIABILITY COMPANY,
SELLER
HARVARD PROPERTY TRUST, LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
D/B/A BEHRINGER HARVARD FUNDS
PURCHASER
October 18, 2004
TABLE OF CONTENTS
ARTICLE 1 - PURCHASE AND SALE.....................................................................................1
1.1 PURCHASE AND SALE...............................................................................1
1.2 PURCHASE PRICE: PAYMENT OF THE PURCHASE PRICE...................................................1
1.3 PERSONAL PROPERTY...............................................................................2
ARTICLE 2 -- CLOSING..............................................................................................3
2.1 CLOSING.........................................................................................3
2.2 SELLER'S CLOSING ITEMS..........................................................................4
2.3 PURCHASER'S CLOSING ITEMS.......................................................................5
2.4 OTHER CLOSING DOCUMENTS.........................................................................5
2.5 CONDITIONS TO PURCHASER'S OBLIGATIONS...........................................................6
ARTICLE 3 - CLOSING AND POST-CLOSING ADJUSTMENTS.................................................................15
3.1 CLOSING ADJUSTMENTS............................................................................15
3.2 COLLECTION OF RECEIVABLES......................................................................16
3.3 LEASING COMMISSIONS............................................................................17
3.4 TENANT IMPROVEMENTS AND OTHER EXPENSES.........................................................18
3.5 POST-CLOSING APPORTIONMENTS....................................................................18
ARTICLE 4 - DEFAULT..............................................................................................19
4.1 DEFAULT AND TERMINATION........................................................................19
ARTICLE 5 - CASUALTY AND CONDEMNATION............................................................................20
5.1 CASUALTY.......................................................................................20
5.2 CONDEMNATION...................................................................................21
ARTICLE 6 - OPERATION OF THE PROPERTY; LEASING; SERVICE CONTRACTS................................................21
6.1 OPERATION OF THE PROPERTY......................................................................21
6.2 LEASING........................................................................................22
6.3 SERVICE CONTRACTS..............................................................................23
ARTICLE 7 - GENERAL DISCLAIMER...................................................................................23
ARTICLE 8 - MISCELLANEOUS........................................................................................24
8.1 CONFIDENTIALITY................................................................................24
8.2 AUTHORITY OF SELLER AND PURCHASER..............................................................24
8.3 BROKERS........................................................................................25
8.4 ASSIGNABILITY..................................................................................25
8.5 NOTICES AND CONSENTS...........................................................................26
8.6 BINDING EFFECT.................................................................................26
8.7 ENTIRE AGREEMENT; MODIFICATION.................................................................27
8.8 HEADINGS.......................................................................................27
8.9 NO MERGER; SURVIVAL............................................................................27
8.10 COUNTERPARTS...................................................................................27
8.11 SEVERABILITY...................................................................................27
8.12 NO WAIVER......................................................................................27
8.13 CONSTRUCTION OF AGREEMENT......................................................................27
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8.14 GOVERNING LAW; ATTORNEYS' FEES.................................................................27
8.15 EXCLUSIVITY....................................................................................27
8.16 RECORDATION....................................................................................28
8.17 RELATIONSHIP OF PARTIES........................................................................28
8.18 EXHIBITS; PARAGRAPH REFERENCES.................................................................28
8.19 DATE OF THIS AGREEMENT.........................................................................28
8.20 COMPUTATION OF TIME............................................................................28
8.21 TIME OF THE ESSENCE............................................................................28
8.22 TIC INVESTORS..................................................................................28
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as
of the 18th day of October, 2004, by and between MG-Alamo, LLC, a Colorado
limited liability company ("Seller") and Harvard Property Trust, LLC, a Delaware
limited liability company, d/b/a Behringer Harvard Funds ("Purchaser").
ARTICLE 1 - PURCHASE AND SALE
1.1 PURCHASE AND SALE. Subject to the terms and provisions in this
Agreement, Seller agrees to sell to Purchaser and Purchaser agrees to purchase
from Seller that certain parcel of land located in the City and County of
Denver, State of Colorado, as described on EXHIBIT 1.1 (the "Land), and each of
the following as is applicable to the respective portion of the Land: (i) all of
Seller's interest in the improvements, fixtures, and other items of real
property permanently affixed and located on said Land, including the office
building and parking garage constructed on the Land (which office building is
known as Alamo Plaza, having an address of 0000 00xx Xxxxxx, Xxxxxx, Xxxxxxxx
00000); (ii) and the Personal Property (as defined in Section 1.3) (the Land
together with those of items (i) and (ii) set forth in this Section shall be
collectively referred to as the "Property."
1.2 PURCHASE PRICE: PAYMENT OF THE PURCHASE PRICE. The purchase
price of the Property is Forty-One Million, Seven Hundred Fifty Thousand and
No/100 Dollars ($41,750,000.00) (the "Purchase Price"). The Purchase Price
(subject to the prorations to be made pursuant to this Agreement) is payable by
Purchaser as follows:
(a) DEPOSIT. Within two business days following delivery by
Title Company (as hereinafter defined) to Purchaser and to Purchaser's Counsel
(identified in Section 10.5 hereof) of a fully executed copy of this Agreement,
Purchaser shall deposit with LandAmerica Commercial Services having its office
at 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, Attn: Xxxxxxxx (Peppy)
Xxxxxx (tel: 303/000-0000; fax: 303/000-0000) (the "Title Company"), as agent
for Commonwealth Land Title Insurance Company ("Title Insurer"), the sum of Five
Hundred Thousand and No/100 Dollars ($500,000.00) (the "Initial Deposit") in
good funds, either by certified bank or cashier's check or by federal wire
transfer. No later than two business days following the expiration of the
Inspection Period (defined below) and as long as Purchaser has not provided
Seller with notice of termination in accordance with Section 3.4 below,
Purchaser shall deposit with Title Company an additional sum of Two Million,
Five Hundred Thousand and No/100 Dollars ($2,500,000.00) (the "Second Deposit").
The Initial Deposit, the Second Deposit, and, if applicable, the Extension
Deposit (as hereinafter defined), shall be referred to herein as the "Deposit".
The Deposit shall be in good funds, either by certified bank or cashier's check
or by federal wire transfer. The Title Company shall hold the Deposit in an
interest-bearing account reasonably acceptable to Seller and Purchaser, in
accordance with the terms and conditions of this Agreement. All interest on such
sum shall be deemed income of Purchaser, and Purchaser shall be responsible for
the payment of all costs and fees imposed on the Deposit account. The Deposit
and all accrued interest shall be distributed in accordance with the terms of
this Agreement. The failure of Purchaser to timely deliver any Deposit hereunder
shall be a material default, and shall entitle Seller, at Seller's sole option,
to terminate this
Agreement immediately. If this Agreement is terminated and such termination is
not of a nature which would or may entitle Seller to retain the Deposit, the
Deposit shall be returned to Purchaser following such termination.
(b) PAYMENT OF PURCHASE PRICE. The Purchase Price (less the
Deposit held by the Title Company and paid to Seller on the Closing Date) shall
be paid to Seller, as adjusted by the prorations, on the Closing Date in cash by
wire transfer of immediately available federal funds.
(c) TITLE COMPANY. The Title Company shall act as escrow
agent and shall hold and dispose of the Deposit in accordance with the terms of
this Agreement. Seller and Purchaser agree that the duties of Title Company with
respect to the Deposit hereunder are purely ministerial in nature and shall be
expressly limited to the safekeeping and disposition of the Deposit in
accordance with this Agreement. Title Company shall incur no liability in
connection with the safekeeping or disposition of the Deposit for any reason
other than Title Company's willful misconduct or gross negligence. In the event
that Title Company shall be in doubt as to its duties or obligations with regard
to the Deposit, or in the event that Title Company receives conflicting
instructions from Purchaser and Seller with respect to the Deposit, Title
Company shall not be required to disburse the Deposit and may, at its option,
continue to hold the Deposit until both Purchaser and Seller agree as to its
disposition, or until a final judgment is entered by a court of competent
jurisdiction directing its disposition, or Title Company may interplead the
Deposit in accordance with the laws of the State of Colorado. Title Company
shall not be responsible for any interest on the Deposit except as is actually
earned, or for the loss of any interest resulting from the withdrawal of the
Deposit prior to the date interest is posted thereon. Title Company shall
execute this Agreement solely for the purpose of being bound by the provisions
of this Section 1.2.
1.3 PERSONAL PROPERTY. Included in the sale of the Property and
subject to the provisions of this Agreement, are the following (collectively,
the "Personal Property"):
(a) LEASES. All of landlord's interest in the leases and
rental agreements in effect as of the Closing with respect to the Property,
including parking agreements contained therein (collectively, the "Leases"),
together with any security deposits, letters of credit and guaranties of any
Leases.
(b) CONTRACTS. Subject to Section 6.3, all of Seller's
right, title and interest in and to the service, supply, leasing, management,
maintenance, equipment leases, parking agreements (other than parking agreements
contained in the Leases), telecommunications and roof-top license agreements,
courier drop-off agreements and other contracts in effect and entered into in
connection with the operation, leasing, maintenance and repair of the Property,
excluding Leases and warranties (collectively, the "Contracts").
(c) LICENSES, PERMITS AND WARRANTIES. To the extent they may
be transferred by Seller and are in effect (i) all licenses, permits, approvals,
development rights (if any) and authorizations required for the use and
operation of the Property (exclusive of tenant operating licenses and permits
(collectively, the "Permits")); and (ii) unexpired warranties covering any
portion of the Property ("Warranties").
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(d) SURVEYS AND PLANS. All of Seller's right, title and
interest in and to all existing surveys, blueprints, drawings, plans and
specifications for improvements on the Land, tenant improvements, operating
manuals and similar documents, plans and specifications (including, without
limitation, structural, HVAC, mechanical and plumbing plans and specifications)
in Seller's possession or control (collectively, the "Plans").
(e) LEASING MATERIALS. All of Seller's right, title and
interest in and to all tenant lists, lease files for current Leases, lease
booklets, manuals and promotional and advertising materials concerning the
Property or used in connection with the operation of the Property, to the extent
they are located at the Property or in the property manager's office (the
"Leasing Materials").
(f) OTHER PERSONAL PROPERTY. The tangible personal property
owned by Seller that is located at the Property and used in connection with the
operation and maintenance of the Property, including, but not limited to, (i)
the books, records and operating statements in the possession of Seller
pertaining to the operation of the Property (expressly excluding the income tax
returns of Seller and similar financial records pertaining to Seller as a
business entity), with the understanding that Seller shall transfer the
originals of all books, records and operating statements and tenant
correspondence and leasing files maintained at the Land and copies of other
books, records and operating statements maintained elsewhere and Seller shall
have a right to continue to possess such other books, records and operating
statements, (ii) furniture, artwork, furnishings, fixtures, equipment,
machinery, maintenance equipment, tools, parts, construction materials and
hardware not yet installed, some, but not all of which, shall be further
described on the list of personal property delivered or to be delivered by
Seller to Purchaser during the Inspection Period and to be attached to the Xxxx
of Sale as Exhibit B thereto, as well as trade names, trademarks, logos owned by
Seller or appurtenant to the Property and used by Seller in the operation and
identification of the Land and improvements thereon, if any (the "Other Personal
Property"); it is understood that Other Personal Property excludes trade
fixtures and other furniture, fixtures and equipment belonging to tenants under
the Leases.
ARTICLE 2 -- CLOSING
2.1 CLOSING. Upon mutual execution of this Agreement, Seller and
Purchaser shall deposit executed counterparts of this Agreement with Title
Company and this Agreement shall serve as instructions to Title Company as
escrow holder for consummation of the purchase and sale contemplated hereby.
Seller and Purchaser shall execute such additional escrow instructions as may be
appropriate to enable Title Company to comply with the terms of this Agreement;
provided that in the event of any conflict between the terms of this Agreement
and any supplementary escrow instructions, the terms of this Agreement shall
control. The date of the Closing of the purchase and sale of the Property (the
"Closing Date") shall be 30 days following the expiration of the Inspection
Period, or such earlier date as Seller and Purchaser may mutually agree upon,
provided however that Purchaser may extend the Closing Date to a date not later
than January 15, 2005 by giving notice to Seller not later than five days prior
to the Closing Date and depositing with the Title Company, not later than two
days prior to the Closing Date, an additional amount (to be included in the
Deposit) of One Million and No/100 Dollars ($1,000,000.00) (the "Extension
Deposit"). Time is of the essence with respect to the obligations of Seller and
Purchaser to deliver documents and items permitting the closing of the purchase
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and sale pursuant to this Agreement on the Closing Date, except as expressly
provided in this Agreement.
2.2 SELLER'S CLOSING ITEMS. On or before the Closing, Seller shall
execute, deliver and/or provide to Title Company or Purchaser, or cause to be
executed, delivered and provided to Title Company or Purchaser, the following:
(a) DEED. A special warranty deed (the "Deed") conveying fee
title to the Property to Purchaser, subject to the Permitted Exceptions, in the
form attached hereto as EXHIBIT 2.2(A).
(b) ASSIGNMENT OF LEASES. An assignment to and assumption by
Purchaser of the Leases for the Property, in the form attached hereto as EXHIBIT
2.2(B).
(c) ASSIGNMENT OF CONTRACTS. An assignment to and assumption
by Purchaser of the Contracts, in the form attached hereto as EXHIBIT 2.2(C).
(d) XXXX OF SALE. A xxxx of sale transferring Seller's
interest in the Other Personal Property to Purchaser, in the form attached
hereto as EXHIBIT 2.2(D).
(e) ESTOPPEL LETTERS. The tenant estoppel letters to be
obtained in accordance with Section 2.5(b) and any Seller's estoppel letters to
be delivered pursuant to Section 2.5(b).
(f) NON-FOREIGN AFFIDAVIT. An affidavit from each Seller
stating that Seller is not a "foreign person" within the meaning of Section 1445
of the Internal Revenue Code, in the form attached hereto as EXHIBIT 2.2(F).
(g) LEASES AND CONTRACTS. Originals of all Leases and
Contracts in the possession of or subject to the control of Seller that are in
the possession of or subject to the control of Seller; provided, however, that
if an original of any Contract or Lease is not available, a photocopy will be
provided to Purchaser.
(h) AUTHORIZATION DOCUMENTS. Such certificates of good
standing or other evidence of organization and authority as the Title Insurer
may reasonably require in order to issue the Title Policy.
(i) OWNER'S TITLE POLICY. The Title Policy referred to in
Section 2.5(c), dated the date of Closing or a letter, in form approved by
Purchaser, binding the Title Insurer to issue the policy in accordance with the
Commitment, updated to the Closing Date, showing Purchaser in title to the
Property subject only to the Permitted Exceptions, and otherwise issued in
accordance with the Commitment approved by Purchaser, together with any
customary title affidavits required by the Title Insurer to delete so-called
"standard exceptions" for mechanics' liens and parties in possession.
(j) NOTICES TO TENANTS. A notice to the tenants of the
Property informing them of the sale of the Property to Purchaser.
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(k) OTHER PROPERTY. Any Permits, Warranties, Leasing
Materials and Other Personal Property which are in Seller's possession or
control, together with any documentation reasonably requested by Purchaser to
transfer said items from Seller to Purchaser, and all keys and security codes
for the Property.
(l) CURRENT RENT ROLL. The most recent rent roll for the
Property, generally in the form attached hereto as EXHIBIT 2.2(L), but updated
to a date not sooner than two business days prior to Closing in accordance with
Seller's standard operating procedures.
(m) SELLER'S CLOSING CERTIFICATES. Each Seller's certificate
of representations to be provided in accordance with Section 2.5(e).
(n) ASSIGNMENT. An assignment of all Permits and Plans in
the form attached hereto as EXHIBIT 2.2(N).
(o) For purposes of this Agreement, documents or other items
shall be deemed in "possession" or in the "control of Seller" if such documents
are in the possession of Seller, the Seller's property manager, or the
Representative, as hereinafter defined. The items set forth in (g) and (k) may
be delivered by making such items available at the respective Building or the
office of Seller's property manager.
2.3 PURCHASER'S CLOSING ITEMS. At the Closing, Purchaser shall
execute, deliver and/or provide to Title Company or Seller, or cause to be
executed, delivered and provided to Title Company or Seller, the following:
(a) AUTHORIZATION DOCUMENTS. Such certificates of good
standing or other evidence of organization and authority as the Title Insurer
may reasonably require in order to issue the Title Policy.
(b) PURCHASE PRICE. The Purchase Price as provided in
Section 1.2 (subject to the prorations to be made pursuant to this Agreement).
(c) ASSIGNMENTS. The assignment and assumption agreements
executed and delivered by Seller pursuant to Section 2.2.
2.4 OTHER CLOSING DOCUMENTS. In addition to the documents referred
to in Sections 2.2 and 2.3, each party agrees to execute and deliver at the
Closing such other documents as may be required in this Agreement or as may be
reasonably necessary to carry out its obligations under this Agreement; provided
that such documents shall not require Seller or Purchaser to make any additional
warranties and representations or incur any other liabilities other than those
contemplated by this Agreement. Without limiting the generality of the
foregoing, either Purchaser, Seller or both may elect that its transfer or
acquisition of the Property occur as part of a tax-deferred exchange under
Section 1031 of the Internal Revenue Code. Each of Purchaser and Seller shall
cooperate with the other and shall sign all documents reasonably necessary to
accomplish any exchange (including assignment of either of Purchaser's or
Seller's rights in this Agreement to a third party or facilitator), provided the
cooperating party incurs no additional expense or personal liability as a result
thereof, the exchanging party continues to be liable in
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accordance with this Agreement and all of its obligations, including those that
survive the Closing, and further provided that the Closing is not delayed
thereby.
2.5 CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligation of
Purchaser to purchase the Property pursuant to this Agreement is subject to
Seller's performance of its obligations pursuant to Section 2.2 and 2.4 hereof
in all material respects, and to the following conditions, except to the extent
such obligations or conditions are waived in writing or deemed waived under the
express terms of this Agreement:
(a) SELLER'S WARRANTIES AND REPRESENTATIONS. All
representations and warranties of Seller set forth in Section 2.5(e), as
supplemented or amended pursuant to that Section shall be true in all material
respects as of the Closing Date, subject to the provisions of Section 2.5(e).
(b) TENANT ESTOPPEL LETTERS AND SNDAS.
(i) TENANT ESTOPPEL LETTERS. No later than the fifth
(5th) day prior to the Closing Date, Seller shall have obtained estoppel
letters substantially in the form attached hereto as EXHIBIT 2.5(B) (or
the form or content required by any particular Lease, if different)
("Tenant Estoppel Certificates"), from the tenants which, in the
aggregate, lease 80% of the rentable space then-currently leased and
occupied in the Property in total, which Tenant Estoppel Certificates
shall have been executed and delivered by the tenant in question without
material modification therefrom. The required number of Tenant Estoppel
Certificates, executed and delivered by the respective tenants in the
manner required above, are referred to herein as the "Required
Estoppels." Notwithstanding anything to the contrary herein, in no event
shall a Tenant Estoppel Certificate be deemed to be unacceptable by
Purchaser as a result of a tenant's alternation, modification, or
deletion of the second sentence of Paragraph 5 to Exhibit 2.5(b). Seller
shall prepare a Tenant Estoppel Certificate for each tenant and forward
such draft estoppels to Purchaser for approval not later than the end of
the Inspection Period; Purchaser shall give Seller comments (by
facsimile or email) on the draft estoppels within two business days of
receipt or otherwise be deemed to have approved such drafts, which
process shall be repeated with respect to any comments received by
Seller in accordance with the foregoing. Following approval by Purchaser
(such approved tenant estoppels being the "Tenant Estoppel
Certificates"), Seller shall promptly (following the expiration of the
Inspection Period) deliver the certificates to the tenants and use
reasonable efforts to obtain an executed Tenant Estoppel Certificate
from each tenant prior to Closing. Seller shall deliver each Tenant
Estoppel Certificate (whether or not in compliance herewith) to
Purchaser promptly following Seller's receipt thereof. If as of the
fifth (5th) day prior to the Closing Date Seller has not obtained and
furnished to Purchaser the Required Estoppels, (i) Seller or Purchaser
(if Seller fails to elect) may elect to adjourn the Closing Date up to
10 days in order to allow more time to obtain the Required Estoppels, by
giving notice to the other party at or prior to the Closing Date; or
(ii) Seller may, either on the Closing Date or prior to the end of any
such adjournment, elect to satisfy this condition by executing and
delivering to Purchaser at the Closing its own certificate ("Landlord
Estoppel Certificates") with respect to the remainder of the Required
Estoppels. The Landlord Estoppel Certificate must contain a
certification from Seller (i) identifying the Lease in
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question and all amendments and modifications thereto; (ii) stating that
the landlord has fully performed all material obligations required to be
performed by landlord under the Lease in question as of such date and is
not in material default thereunder, (iii) stating that there is no
unperformed tenant improvement work or unpaid tenant inducements that
must be paid or performed prior to Closing. Seller shall be deemed to
have represented and warranted each item of information contained in its
Landlord Estoppel Certificates delivered to Purchaser, which
representations and warranties shall survive for a period terminating on
the earlier of (i) six months from the Closing Date, or (ii) the date on
which Purchaser has received an executed estoppel letter satisfying the
criteria for a Required Estoppel signed by the tenant under the
respective Lease. Seller and Purchaser agree to cooperate with each
other and to use good faith efforts for up to six months after the
Closing to obtain any Required Estoppels for which Seller executed its
own certificate at the Closing, with respect to Leases with terms
extending past six months after the Closing.
(ii) SNDAS. If, prior to Seller transmitting Tenant
Estoppel Certificates to tenants, Purchaser provides to Seller
subordination, non-disturbance and attornment agreements ("SNDA's")
addressed to Purchaser's lender in the form required by the applicable
lease (or, if no form is required, in a commercially reasonable form
satisfactory to Purchaser's lender), completed in accordance with the
applicable lease, Seller shall transmit the SNDAs to tenants and request
that they be completed and returned along with the Tenant Estoppel
Certificates, but receipt of the SNDAs shall not be a condition of
Closing.
(c) TITLE EVIDENCE; SURVEY; UCC SEARCHES.
(i) TITLE EVIDENCE. Promptly following delivery by
Title Company to Purchaser and to Purchaser's Counsel of a fully
executed copy of this Agreement, the Purchaser shall obtain for itself
and deliver a copy to Seller of a preliminary title insurance commitment
(the "Commitment") issued by the Title Company showing the status of
record title to the Property, together with copies of all recorded
documents listed as exceptions to title on Schedule B-2 of the
Commitment (collectively, the "Exception Documents"). During the
Inspection Period, Purchaser shall have the Title Company issue a
revised Commitment evidencing the obligation of the Title Insurer to
issue the current ALTA form Owner's Title Insurance Policy for the
Property ("Title Policy") in the amount of the Purchase Price, subject
to the following: the exception for taxes shall be revised to taxes for
the year of closing and thereafter only, not yet due and payable, the
exceptions listed on Schedule B-2 of the Commitment, and the exception
for right of parties in possession shall be limited to rights of tenants
under the Leases). If Purchaser desires to obtain an ALTA Extended
Coverage Owner's Title Insurance Policy or additional endorsements and
notifies the Title Company of such requested coverage and additional
endorsements at least five business days prior to expiration of the
Inspection Period, the Title Company shall confirm, at least three
business days prior to the end of the Inspection Period, the status of
meeting any requirements for obtaining the extended coverage and
additional endorsements, which requirements shall be subject to the
reasonable approval of Seller; if Seller reasonably objects to any
unsatisfied requirements for obtaining such coverage or endorsements, by
notice to Purchaser not less than two
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business days prior to the end of the Inspection Period, inclusion of
the respective endorsements shall not be a condition of Closing, in
which event, Purchaser may (i) waive its request for the extended
coverage or specific endorsements, or (ii) terminate this Agreement on
or before expiration of the Inspection Period. Seller shall pay the
basic premium cost for the ALTA Title Insurance Policy (Standard or
Extended Coverage, as applicable) and Purchase shall pay the cost for
any additional endorsements requested by Purchaser to such ALTA Title
Insurance Policy. The Commitments and the Exception Documents are
referred to as the "Title Materials."
(ii) TITLE OBJECTIONS; PERMITTED ENCUMBRANCES. If,
from its review of the Title Materials, the Existing Survey or the UCC
Searches (as hereinafter defined), Purchaser believes that any
encroachment on the Property or any exception to title shown in the
Title Materials, the Existing Survey, or UCC Searches with respect to
the Property, would, in Purchaser's sole and absolute judgment,
materially adversely affect the Property ("Title Objections"), Purchaser
shall deliver to Seller notice (the "Objection Notice") of the Title
Objections no later than 20 days after the date of this Agreement.
During the 20 day period following Seller's receipt of the Objection
Notice, Seller may elect (but shall have no obligation), at Seller's
sole cost, to remove or cure or, with Purchaser's consent (which consent
shall not be unreasonably withheld), obtain title insurance over any
Title Objections on or before the Closing Date (the "Cure Period"). If,
within said 20 day period, Seller does not make an election to cure or
is unable or unwilling to remove or cure or, with Purchaser's consent,
to obtain title insurance over all such Title Objections prior to the
end of the Cure Period, Purchaser may, in Purchaser's sole discretion by
notice (the "Election Notice") given to Seller within ten days after the
end of the Cure Period, elect:
(1) If requested by Seller, to grant Seller
an additional period of up to 30 days to cure or remove or, if
applicable, to obtain title insurance over, all uncured or
unremoved Title Objections and, if Closing is scheduled to occur
during such time period, the date of Closing shall be extended
accordingly; or
(2) To waive all uncured or unremoved Title
Objections; or
(3) To terminate this Agreement, after which
the Deposit shall be returned to Purchaser and Seller and
Purchaser shall have no further obligation or liability
hereunder, except as otherwise expressly provided in this
Agreement.
If Seller does not receive an Objection Notice within such 20 day
period, or after receiving an Objection Notice does not receive an
Election Notice within such ten day period, Purchaser shall be deemed to
have accepted the status of title to the Property as disclosed by the
Title Materials, and to have waived any uncured and unremoved Title
Objections.
(iii) PERMITTED EXCEPTIONS. Any matter that is
disclosed in the Title Materials, the Survey or the UCC Searches (other
than Liens, as defined in subsection (v)) and to which Purchaser does
not object (or is deemed to approve) pursuant to subsection (ii), (iv)
or (vii) (or to which Purchaser so objects but subsequently waives or
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consents to title insurance over), and any building, zoning, subdivision
and similar laws shall be "Permitted Exceptions."
(iv) ADDITIONAL DEFECT OF TITLE. If, at any time
prior to the Closing, Purchaser becomes aware, as a result of an updated
Commitment or the Survey (based on updating the Existing Survey), of any
encumbrance on or defect in title to the Property that is not a
Permitted Exception and that was not disclosed in the Title Materials or
Survey, and which would otherwise qualify for an Objection Notice (an
"Additional Title Objection"), Purchaser shall give Seller notice of the
Additional Title Objection no later than five days after receipt of the
updated Commitment, which shall be subject to the same rights,
requirements, elections and waivers as an Objection Notice and Election
Notice given under subsection (ii); provided, however, that in addition
to Seller's obligations under Section 2.5(c)(v) Seller shall be
obligated to cure any encumbrance on or defect in title to the Property
arising of record on or after the date of the Commitment if said matter
is caused by the willful acts or omissions of Seller in breach of this
Agreement. The Cure Period under subsection (ii) above for any such
Additional Title Objection shall be for a period of 30 days from and
after the date of the Objection Notice, and the Closing Date for the
Property shall be extended to the last day of the Cure Period if Seller
has elected and is making a good faith effort to cure such defect.
(v) SELLER'S OBLIGATION TO REMOVE CERTAIN LIENS.
Notwithstanding anything to the contrary in this Section 2.5(c), Seller
shall be obligated to remove from title to the Property at Closing, and
without any extension of the Closing Date, the following (collectively,
the "Liens"): (i) any deeds of trust, mortgages or security interests
created by Seller (other than those being assumed or taken subject to in
accordance with Contracts being assumed by Purchaser), (ii) any
mechanic's and materialmen's liens arising from the acts of Seller, and
(iii) any other exception to title not appearing in the Commitments
which qualifies as a Title Objection and was created or caused by the
willful acts or omissions of Seller, in connection with the ownership or
operation of the Property, after the date of this Agreement and that
encumber the Property as of Closing in violation of this Agreement.
Purchaser agrees that Seller may use the proceeds of the Purchase Price
for the Property for the purpose of removing Liens from the Property at
Closing.
Notwithstanding the above, with respect to mechanics' or materialmen's
liens, Purchaser will accept affirmative title protection rather than a
payoff by Seller if Seller wishes to contest any such lien; or Purchaser
will accept the removal of said lien by the furnishing of a bond or
bonds by Seller, if the effect of said bond is to irrevocably transfer
said lien to the bond so that said lien no longer constitutes an
encumbrance on title.
(vi) SURVEY. Seller has delivered to Purchaser a copy
of the survey for the Property prepared by Xxxxxx Xxxxxxx & Co. (the
"Existing Survey"). Purchaser shall have the right and obligation to
have the Existing Survey updated based on the Title Commitment and
certified to Purchaser and the Title Company. Seller shall pay the
reasonable cost and expense for updating the Existing Survey.
9
(vii) UCC SEARCHES. During the Inspection Period,
Purchaser shall have the right to order searches, certified to Purchaser
by the parties performing such searches (the "UCC Searches"), conducted
by the Title Insurer, CT Corporation System or such other nationally
recognized search service as Purchaser may select, of the records of (i)
the Clerk and Recorder for the City and County of Denver, State of
Colorado, (ii) the Secretary of State of Colorado, for uniform
commercial code financing statements, filed against the Seller or the
Property. Purchaser shall furnish Seller with copies of all such search
reports received by Purchaser. Any matter identified on said search
reports to which Purchaser does not object in writing to Seller during
the Inspection Period shall be deemed to have been accepted by
Purchaser. Purchaser shall not object to financing statements that only
encumber the rights of tenants under the Leases or with respect to
personal property of tenants. Purchaser, at its expense, shall have the
right to perform the follow up UCC Searches prior to Closing, and any
security interests or other matters identified on such follow up UCC
Searches arising after the date of the original UCC Searches, shall, as
objected to by Purchaser, be removed by Seller, to the extent required
by Section 2.5(c)(v), prior to and as a condition of closing and shall
not constitute Permitted Exceptions, unless said security interests or
other matters are created pursuant to Contracts that Purchaser has
agreed to assume at Closing.
(d) INSPECTION OF THE PROPERTY.
(i) INSPECTION PERIOD. During the period beginning
upon the Effective Date and ending at 5:00 p.m. (local time at the
Property) on November 2, 2004 (hereinafter referred to as the
"Inspection Period"), Purchaser shall have the right to make a physical
inspection of the Property, including, but not limited to, an inspection
of the environmental condition thereof pursuant to the terms and
conditions of this Agreement. In addition to copies of documents
previously delivered by Seller, as soon as practicable following the
Effective Date, Seller shall deliver to Purchaser or make available for
its review documents and files at its office concerning the maintenance,
operation and ownership of the Property, including, but not limited to,
reports relating to the physical and other conditions or defects in
respect to the Property (collectively the documents delivered or made
available are referred to as the "Due Diligence Documents") but
excluding Seller's partnership or corporate records, internal memoranda,
financial projections, budgets, appraisals, accounting and tax records,
pertaining to Seller as a business entity, and similar proprietary,
confidential, or privileged information (collectively, the "Confidential
Documents"). The documents and files that Seller shall make available to
Purchaser shall include third party reports (excluding appraisals and
excluding architectural plans for proposed development of the Property
other than civil engineering site plans). Purchaser acknowledges that
all such documents and files are delivered and/or made available without
any representation or warranty of any kind. Purchaser has advised Seller
that Purchaser must cause to be prepared up to three (3) years of
audited financial statements in respect of the Property in compliance
with the policies of Purchaser and certain laws and regulations,
including, without limitation, Securities and Exchange Commission
Regulation S-X, Rule 3-14. Seller agrees to use reasonable efforts to
cooperate with Purchaser's auditors in the preparation of such audited
financial statements (it being understood and agreed that the foregoing
covenant shall survive Closing). Without limiting the generality of the
preceding sentence (a)
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Seller shall, during normal business hours, allow Purchaser's auditors
reasonable access to the books and records maintained by Seller (and the
Property's property manager) in respect of the Property (excepting the
Confidential Documents); (b) Seller shall use reasonable efforts to
provide to Purchaser such financial information and supporting
documentation as are necessary for Purchaser's auditors to prepare
audited financial statements; (c) Seller will, promptly upon request of
Purchaser, provide to Purchaser's auditors a management representation
letter, reasonably satisfactory to Purchaser's auditors and Seller,
addressed to Purchaser's auditors; and (d) if Seller has audited
financial statements with respect to the Property, Seller shall promptly
provide Purchaser's auditors with a copy of such audited financial
statements. Purchaser shall pay for out-of-pocket costs incurred by
Seller in connection with responding to the requests of Purchaser's
auditors and in reviewing and providing such management representation
letter. If after Closing Seller obtains an audited financial statement
in respect of the Property for a fiscal period in 2003 or 2004 that was
not completed at the time of Closing, then Seller shall promptly provide
Purchaser with a copy of such audited financial statement, and the
foregoing covenant shall survive Closing.
(ii) Purchaser understands and agrees that any on
site inspections of the Property shall occur at reasonable times agreed
upon by Seller and Purchaser after reasonable prior written notice not
to exceed 24 hours (48 hours if a weekend or holiday is involved) to
Seller and shall be conducted so as not to interfere unreasonably with
the use of the Property by Seller. Seller reserves the right to have a
representative present during any such inspections. If Purchaser desires
to do any invasive testing at the Property, other than soil borings by a
soil testing engineer and environmental testing which are both hereby
approved, Purchaser shall do so only after notifying Seller and
obtaining Seller's prior written consent thereto, which consent may be
subject to any terms and conditions imposed by Seller in its reasonable
discretion. Purchaser agrees to provide the prompt restoration of the
Property to its condition prior to any such inspections or tests, at
Purchaser's sole cost and expense. Purchaser makes no representations or
warranties with respect to anything contained in such reports received
by Purchaser. All entries, studies and inspections shall be conducted
consistent with the terms of the Leases and so as not to unreasonably
disturb any tenants or unreasonably interfere with the operation or
management of the Property. Purchaser agrees that, in making any
inspections of, or conducting any testing of, on, or under the Property,
Purchaser shall maintain and shall require its agents and consultants to
maintain, in full force and effect, statutory worker's compensation
insurance coverage and public liability and property damage insurance
coverage in the minimum amount of $2,000,000.00, which covers the
indemnity described below. Purchaser shall advise Xxxx Xxxxxxxxxx,
orally (at 303-773-0369) or in writing (at Seller's address), at least
72 hours in advance of any such entry, study or inspection and of the
names of the persons who will be making, and the nature of, the entry,
study or inspection. Seller or its authorized employee or agent shall
have the right to be present during each such entry, study and
inspection. All entries on and inspections or studies of the Property
shall be at the sole risk and expense of Purchaser, and Purchaser shall
indemnify and hold Seller harmless from and against any and all liens,
claims, demands, injuries, damages, costs, expenses (including also
reasonable attorney's fees) or liability incurred by or asserted against
Seller or the Property as a result of any of those entries, inspections
or studies, which obligations shall
11
survive the Closing or any termination of this Agreement. Purchaser
shall not contact any lenders or other contracting party with Seller
without prior written or oral consent of Seller, which consent shall not
be unreasonably withheld, and Seller or its representative may be
present at any meetings or telephone conferences with such parties.
Seller shall be given reasonable advance notice of any scheduled
meetings or telephone conferences with such parties. It is expressly
agreed that Purchaser shall have the right to conduct interviews with
tenants of the Property, subject to the rights of Seller or its
representatives to receive notice of and be present at such interviews
as set forth in the preceding two sentences.
If for any reason Purchaser, in its sole and absolute discretion
determines that the Property is not suitable for purchase by Purchaser,
Purchaser shall have the right to terminate this Agreement, by giving
notice to Seller on or before 5:00 p.m. Eastern Time on the expiration
of the Inspection Period, in which event this Agreement shall terminate,
the Deposit shall be returned to Purchaser, and, except as otherwise
expressly provided in this Agreement, neither party shall have any
further obligations or liability under this Agreement. If Purchaser
fails to terminate this Agreement on or before the expiration of the
Inspection Period, Purchaser shall be deemed to be satisfied with the
condition of the Property (subject to Articles 5 and 6) and its
suitability for purchase by Purchaser and this Agreement shall continue
in full force and effect. Notwithstanding anything contained herein to
the contrary, Seller shall not be considered to warrant the quality,
suitability, accuracy, or any other conclusions or matters set forth in
any tests, reports, studies, or other documents prepared by third
parties which are provided to Purchaser with respect to the Property.
Purchaser shall repair any damage caused by any of those entries,
inspections or studies so as to restore the Property to its same
condition before the damage. If this Agreement is terminated for any
reason, within 15 days thereafter, Purchaser shall deliver to Seller all
Due Diligence Documents and other documents it obtained from Seller or
Seller's property manager with regard to the Property, and copies of all
physical or environmental studies, tests, and reports relating to the
Property performed by Purchaser or at Purchaser's request without
warranty of any kind by Purchaser and Purchaser shall maintain in
confidence the information it obtained about the Property.
(e) REPRESENTATIONS OF SELLER. Notwithstanding anything
herein to the contrary, Seller warrants and represents, as of the date of this
Agreement (subject to being updated as provided in Section 2.5(e)) to Purchaser
that:
(i) To Seller's knowledge, except as set forth in
the Due Diligence Documents, the Property is not in violation of any
federal, state, or local law, ordinance, or regulation relating to the
use, storage, disposal or generation of any Hazardous Materials on,
under, or about the Property, including but not limited to soil and
groundwater. To Seller's knowledge, there are no environmental, health,
or safety hazards on, under, or about the Property, including but not
limited to soil and groundwater conditions, or any of the other matters
described above in Section 5.1. To Seller's knowledge, neither Seller
nor any third party (including but not limited to Seller's predecessors
in title to the Property) has used or installed any underground tank, or
used,
12
generated, manufactured, treated, stored, placed, deposited, or disposed
of on, under, or about the Property or transported to or from the
Property any Hazardous Materials. For purposes of this Agreement,
"Hazardous Materials" includes substances defined as "hazardous
substances, hazardous materials, or toxic substances" in the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 United States Code ss.ss.9601, et seq.), the
Hazardous Materials Transportation Act (49 United States Code
ss.ss.1801, et seq.), the Resource Conservation and Recovery Act (42
United States Code ss.ss.6901, et seq.), the substances defined as
Hazardous Materials under the law of the state where the Property is
located; and in the regulations adopted and publications promulgated
under each of the aforesaid laws. Seller has no actual knowledge, except
as otherwise disclosed to Purchaser in writing, of the existence on the
Property of any Hazardous Material, other than de minimis amounts of
household cleaners or office supplies.
(ii) Except as set forth in EXHIBIT 2.5(E)(II), there
is no litigation, arbitration or legal or administrative proceedings
pending or, to the knowledge of Seller, threatened against or with
respect to the Property that is not fully covered by insurance except
for the deductible portion.
(iii) There is no condemnation or similar proceeding
currently pending or, to the knowledge of Seller, threatened against the
Property.
(iv) Attached hereto as EXHIBIT 2.5(E)(IV)(A) is a
list of all Contracts, other than the Leases, currently in effect,
together with any amendments or modifications, currently in effect.
Attached hereto as EXHIBIT 2.5(E)(IV)(B) is a list of Leases, together
with any amendments or modifications, currently in effect. Complete and
accurate copies of all Contracts and Leases have been provided for
Purchaser's review, and said copies constitute the entire agreements
between Seller and the contracting parties or tenants, as the case may
be.
(v) With respect to the Leases, except as set forth
on EXHIBIT 2.5(E)(V), there are not as of the date of this Agreement any
delinquencies in excess of 30 days in the payment of rent or other
regularly scheduled amounts payable by tenants nor to the knowledge of
Seller are any tenants in bankruptcy proceedings; and Seller, as
landlord under the Leases, has not committed any material defaults which
are uncured, and, to the knowledge of Seller, has not given any tenant
any written notice of alleged material defaults under the Leases which
are uncured.
(vi) Except as set forth on EXHIBIT 2.5(E)(VI), to
the knowledge of Representative, Seller is not in material default under
any Contract.
(vii) Except as set forth on EXHIBIT 2.5(E)(VII), to
the knowledge of Representative, Seller has not received any written
notice from any governmental authority of any alleged violations (which
are uncured as of the date of this Agreement) of any zoning, building,
health, safety or other laws, ordinances, orders, codes or regulations
with respect to the Property.
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(viii) Attached hereto as EXHIBIT 2.2(L) are rent rolls
for the Property, prepared in the ordinary course of business by Seller
as of the date set forth therein.
(ix) The operating statements of income and expenses
of the Property included in the Due Diligence Documents for the calendar
years 2002 and 2003, and the portion of 2004 ended September, 2004 have
been prepared by Seller in the ordinary course of business and, to
Seller's knowledge, are true, correct and complete in all material
respects and fairly represent the income and expenses of the Property
for the periods covered in accordance with the standards and practices
described therein, if any.
(x) Any and all property management contracts and
leasing agreements with respect to the Property shall be terminated by
Seller as of the Closing, with Seller having fully paid and discharged
any and all obligations accruing thereunder, subject to the provisions
of Section 3.3 governing the payment of leasing commissions. Seller
shall terminate the Master Lease for Alamo Plaza Parking Garage between
Seller and MG Leasing, LLC (and cause MG Leasing, LLC to terminate the
Parking Garage Operating Agreement with Republic Parking Systems, Inc.)
effective at Closing and such lease shall not be deemed a Lease to be
assigned at Closing under Section 1.3(a) or a Lease under Section
2.5(b).
To the extent the above or other provisions in this Agreement are
qualified to Seller's knowledge or in the knowledge of Seller, knowledge shall
mean to the actual personal present knowledge of Xxxx Xxxxxxxxxx and Xxxx Xxxxx
(collectively, the "Representative"), without inquiry or investigation, and
without imputation of any knowledge of any other person, or any employee,
representative, agent or advisor of Seller. Seller represents that Xxxx
Xxxxxxxxxx and Xxxx Xxxxx are the representatives of Seller who have the most
knowledge about the Property. Each Seller shall promptly advise Purchaser in
writing if, subsequent to the date of this Agreement and prior to the Closing,
it acquires actual knowledge that any of the representations and warranties set
forth in this Section 2.5(e) are no longer true or correct in any material
respect as a result of changes after the date of this Agreement, and if the
modifications are unacceptable Purchaser shall have the right to terminate this
Agreement (in which event the Deposit shall be returned to Purchaser); provided,
however, that Purchaser must notify Seller within seven days following receipt
of Seller's notice of such material modifications and provided that Seller does
not elect to correct the change in the representation or warranty so as to make
it acceptable to Purchaser in all material respects within 15 days after receipt
of Purchaser's notice of termination. Purchaser shall advise Seller in writing
if, subsequent to the date of this Agreement and prior to the Closing, it
acquires actual knowledge that any of the representations and warranties set
forth in this Section 2.5(e) or in the Tenant Estoppel Certificates is no longer
true or correct in any material respect, which notice shall be given to Seller
within five days after learning of such facts (but not later than the Closing
Date). If Purchaser gives notice to Seller, Seller shall have until the later of
the Closing Date or 15 days after receipt of Purchaser's notice to correct such
failure (and the Closing Date shall be extended accordingly). If Seller cannot
or does not elect to correct the change in the representation or warranty so as
to make it acceptable to Purchaser within such period in all material respects,
then Purchaser shall have the right to terminate this Agreement in accordance
with the following provision. These warranties and representations, as
supplemented or amended by any such subsequent disclosure, shall be restated at
Closing in Seller's Closing Certificate and shall survive Closing for a period
of six
14
months; provided that Purchaser shall be deemed to have waived any breach of a
representation or warranty of Seller of which Purchaser had actual knowledge
prior to Closing.
If prior to the Closing Date Seller notifies Purchaser or Purchaser
otherwise becomes aware that one or more of the representations or warranties
are no longer true or correct in any material respect and are not waived by
Purchaser on or before the Closing Date, then unless otherwise agreed to by
Seller and Purchaser, Purchaser's exclusive remedy shall be to give notice to
Seller of Purchaser's desire to terminate this Agreement, whereupon the Deposit
shall be returned to Purchaser and this Agreement shall terminate and, except as
otherwise expressly provided in this Agreement, neither party shall have any
further rights or obligations under this Agreement. Purchaser shall not be
entitled to terminate this Agreement because of (i) any default by Seller under
any Lease or by Seller under any Contract which is cured or waived in writing by
the tenant or other contracting party, as applicable, by Closing; (ii) any
default by Seller under any Contract in question to be terminated at or prior to
Closing; or (iii) a non-monetary and non-material default under a Lease by a
tenant.
ARTICLE 3 - CLOSING AND POST-CLOSING ADJUSTMENTS
3.1 CLOSING ADJUSTMENTS. Unless otherwise specified, the following
are to be apportioned at the Closing on a per diem basis through and including
11:59 p.m. of the day preceding the Closing Date (provided, however, that if
Purchase Price is received by Seller after 2:00 p.m. Mountain Time on the
Closing Date, the apportionment shall be readjusted following Closing to 11:59
p.m. of the Closing Date, at Seller's option):
(a) TAXES AND ASSESSMENTS. Real estate taxes in Colorado are
paid in arrears. By way of example, real estate taxes assessed for calendar year
2004 are payable in 2005. Seller and Purchaser shall each be responsible for
real estate taxes assessed for their respective periods of ownership of the
Property irrespective of when such taxes are due and payable, and such taxes
shall be apportioned accordingly. The apportionment made with respect to the
year of Closing for which the tax rate or assessed valuation, or both, have not
yet been fixed shall be based upon the tax rate and/or assessed valuation last
fixed. Such proration shall be a final settlement between Seller and Purchaser
and shall not be subject to further adjustment following Closing based on the
actual taxes.
(b) UTILITIES. Unless final meter readings are obtained up
to the Closing Date (for which Seller shall be solely responsible), water and
sewer service charges, and charges for all other public utilities, including,
without limitation, telephone, electricity and gas based on the most recent
received xxxxxxxx therefor. The right to the return of any deposits with utility
companies shall be retained by Seller, and Seller shall not receive any credit
at Closing for those deposits. Purchaser agrees to immediately make any
replacement deposits which may be required by the utility companies in order for
Seller to obtain a refund of those deposits.
(c) RENTS. Base rents and any other amounts (including
without limitation charges for increases in operating expenses) paid for the
billing period in progress on the Closing Date. Within 60 days after Closing,
Purchaser and Seller will make a further adjustment for such rents or other
amounts which may have accrued prior to the date of Closing, but not billed or
paid as of that date to the extent collected. In addition, if following the end
of the particular
15
calendar year in which the Closing occurs it is determined that the estimated
operating expense pass-throughs actually paid by tenants under the Leases for
such year are more than the actual operating expenses allocable to such tenants
for the period for which such expenses are prorated, Purchaser will promptly
adjust the proration of such operating expenses and the Seller shall pay to
Purchaser any amount required as a result of such adjustment which amounts shall
be credited to the tenants, as applicable, pursuant to the terms of the Leases.
Similarly, if such estimated operating expense pass-throughs are less than the
actual operating expenses allocable to such tenants, Purchaser shall remit such
amounts to Seller if and when collected in accordance with Section 3.2 hereof.
(d) PERMIT AND LICENSE FEES. Permit fees and license fees
with respect to permits and licenses assigned to Purchaser.
(e) OPERATING ACCOUNTS. All funds in any operating accounts
or any other accounts pertaining to the Property on the Closing Date, whether in
the name of Seller or the property manager, shall be retained by Seller, and all
funds to which Seller is entitled (including without limitation, in coin
operated machines) located on the Property shall be determined by the property
manager on the Closing Date and shall be paid to Seller.
(f) SECURITY DEPOSITS. The security deposits and advance
rents shall not be apportioned, but instead shall be credited to Purchaser at
Closing, except to the extent such security deposits are forfeited or applied to
tenant's obligations under the Leases prior to the Closing. If any security
deposits are in the form of letters of credit, Seller shall arrange for them to
be transferred or reissued in favor of Purchaser or (if necessary) to be held
for benefit of Purchaser and Seller shall cooperate with Purchaser to draw upon
such letter of credit in accordance with the applicable Leases; such transfer or
reissuance may be completed after Closing if not practically capable of being
completed on or before Closing. Any letter of credit, transfer or reissue fees
charged by the issuing banks shall be paid by Purchaser, to the extent not
required to be paid by the respective tenant.
(g) CLOSING COSTS; ATTORNEYS' FEES. All real estate
recording and documentary fees payable in connection with the conveyance of the
Property and all premiums for the Title Policy, including endorsements, shall be
paid by Purchaser. All costs and expenses incurred for closing services, such as
closing fees and document preparation fees charged by the Title Company (but not
the premiums for the Title Policy), shall be paid in equal shares by Purchaser
and Seller. Except as otherwise expressly provided in this Agreement, each party
shall pay its own attorneys' fees and other expenses incurred in the preparation
of this Agreement and the sale of the Property.
(h) OTHER APPORTIONMENTS. Such other items as are
customarily apportioned by the Title Company at a closing of the sale of an
office building in the City and County, of Denver, Colorado or as provided in
Section 3.5.
3.2 COLLECTION OF RECEIVABLES. Receivables," as used in this
Section, means all rental payments, expense reimbursements and other monetary
obligations of any kind past due and owing or to become past due and owing by
tenants to Seller with respect to any period prior to the Closing Date under the
Leases. Purchaser shall undertake reasonable efforts on behalf of Seller
16
to collect all Receivables for a period of six months from the Closing Date
(which shall include the submission of monthly invoices and follow-up invoices,
and may (but need not) include the commencement or continuation of litigation or
other proceedings), it being agreed that any monies received by Purchaser from
and after the Closing Date from any person liable for any portion of the
Receivables (including, without limitation, payments by tenants for operating
expenses in excess of their estimated payments) shall be applied (after payment
of all reasonable costs of collection, including reimbursement to Purchaser of
any legal fees or collection costs reasonably incurred by Purchaser) as follows,
unless the tenant properly identifies the payment as being for a specific item:
first to any current sums and arrearages owed to Purchaser (relating to billing
periods after the billing period in progress as of the Closing Date), second to
the payment of monies owed to Seller and Purchaser for the billing period in
progress on the Closing Date, and last to the balance of the Receivables. All
monies received by Purchaser or Seller which are to be applied pursuant to the
preceding sentence shall be held in trust by Purchaser or Seller for the benefit
of the party entitled thereto and remitted to such party promptly after receipt
in accordance with the preceding sentence.
Notwithstanding the foregoing, Seller shall retain the sole right to
collect (in such manner as it shall deem appropriate) Receivables due from
tenants who have vacated the Property prior to the Closing Date and Purchaser
shall not be required to undertake any collection efforts with respect to those
Receivables. With respect to any pending litigation or other proceedings to
collect any Receivables from tenants in occupancy on the Closing Date, Purchaser
shall have the option of either (i) continuing the litigation or proceedings
(the costs of which shall be equitably apportioned between Seller and Purchaser,
based upon the amounts ultimately paid to each, and reimbursed out of the first
monies collected, if any) and Purchaser shall be substituted as the plaintiff,
if necessary, or (ii) not continuing the litigation, whereupon the Seller may
continue such litigation in its own name and at its sole cost and expense,
provided that such litigation shall not result in the eviction of the tenant or
the termination or modification (as to future obligations) of its Lease without
Purchaser's consent, and all sums collected by Seller as a result of the
litigation (after payment of all costs and expenses) shall be applied in full
satisfaction of the applicable Receivables.
If, within six months following the Closing Date, any of the Receivables
to be collected by Purchaser have not been collected and paid to Seller, then
Seller may undertake its own efforts to collect those Receivables, including the
commencement of litigation and other proceedings (but Seller shall not seek to
evict any tenant or terminate any Lease), and all sums collected by Seller as a
result of such litigation (after payment of all costs and expenses) shall be
applied in full satisfaction of the applicable Receivables. Purchaser and Seller
shall reasonably cooperate with each other in the collection of Receivables and
shall execute any documents reasonably requested by the other to collect those
Receivables.
3.3 LEASING COMMISSIONS. Seller shall be responsible for the payment
of all leasing commissions and referral fees relating to Leases entered into
prior to the execution hereof (and any Lease expansions for which the expansion
space was added to the leased premises prior to the date of this Agreement, and
any lease renewals with respect to leases expiring prior to Closing). Any
leasing commissions and referral fees as a result of any Leases executed on or
after the date of this Agreement (and any Lease expansion for which the
expansion space was added to the leased premises on or after the date of this
Agreement, and any lease renewals with respect
17
to leases expiring on or after Closing) shall be prorated based on prorating
such commissions and fees over the period that such tenant is obligated to pay
rent (after any deferred or free rent periods), with the Seller bearing amounts
for rent periods prior to Closing and Purchaser bearing amounts attributable to
the Closing and thereafter. Likewise, any legal fees incurred by Seller in
negotiating and evidencing any Leases executed on or after the date of this
Agreement (and any Lease expansion for which the expansion space was added to
the leased premises on or after the date of this Agreement, and any lease
renewals with respect to leases expiring on or after the date of this Agreement)
shall be likewise prorated based on the same method. Purchaser shall reimburse
Seller at the Closing to the extent Seller has paid any such leasing
commissions, referral fees or legal fees which are the responsibility of
Purchaser. Each party agrees to indemnify, defend and hold the other harmless
from and against any and all liability for leasing commissions, referral fees
and other costs and expenses owed by that party under this Section.
3.4 TENANT IMPROVEMENTS AND OTHER EXPENSES. Seller shall be
responsible for the payment of all tenant improvement expenses (including all
hard and soft construction costs, whether payable to the contractor or to the
tenant), tenant allowances, moving expenses and other out-of-pocket costs
attributable to the Property which are the obligation of the landlord under the
new Leases entered into prior to the date of this Agreement (and any Lease
expansions for which the expansion space was added to the leased premises prior
to the date of this Agreement, and any lease renewals with respect to Leases
expiring prior to the date of this Agreement). Provided Purchaser has assumed
all future obligations for any of the above, the aggregate unpaid amounts for
which Seller is responsible shall be paid to Purchaser as a credit at Closing.
Tenant improvement expenses (including all hard and soft construction costs,
whether payable to the contractor or to the tenant), tenant allowances, moving
expenses and other out-of-pocket costs with respect to new Leases entered into
on or after the date of this Agreement (and any Lease expansions for which the
expansion space was added to the leased premises on or after the date of this
Agreement and any lease renewals with respect to leases expiring on or after the
date of this Agreement) shall be prorated based on prorating such commissions
and fees over the period that such tenant is obligated to pay rent under such
Leases or under such renewal or for such expansion space (after any deferred or
free rent periods), with Seller bearing amounts for rent periods prior to
Closing and Purchaser bearing amounts attributable to the Closing and
thereafter. Purchaser shall reimburse the Seller at the Closing to the extent
Seller has paid any such expenses which are the responsibility of Purchaser.
Seller shall in no event be obligated to pay for any change order or additions
to the tenant improvements or changes in the scope of the work or the
specifications agreed to by Purchaser and issued on or after the Closing Date.
3.5 POST-CLOSING APPORTIONMENTS. Seller and Purchaser agree to use
reasonable efforts to calculate all apportionments (apportioned retroactive to
the Closing Date) required under this Article 3 (and to make the applicable
payments resulting from those calculations) with respect to those items of
income and expense that have not been finally determined on the Closing Date by
no later than 130 days after the Closing Date, other than operating expense
pass-throughs that are to be determined in accordance with Section 3.1. The
parties agree that each party shall have the right following Closing, on
reasonable notice to the other, from time to time to review the books and
records of such other party pertaining solely to the operation of the Property
to the extent necessary to confirm the amounts of adjustments payable to Seller
and/or Purchaser following the Closing, and Seller and Purchaser shall instruct
their respective property
18
managers and former property managers to make their books and records available
for this purpose.
Purchaser and Seller shall cooperate as necessary following the Closing
Date in order to promptly and in good faith discharge their respective
obligations under this Article 3. Notwithstanding the foregoing, any claim for
an adjustment under Section 3.1 will be valid if made in writing with reasonable
specificity within six months of the Closing Date, except in the case of items
of adjustment which at the expiration of that period are subject to pending
litigation or administrative proceedings or pending tenant audits of operating
expense pass-throughs as expressly provided for under the respective leases for
periods prior to Closing and except for matters to be adjusted or paid pursuant
to Section 3.3 and 3.4. Claims with respect to items of adjustment which are
subject to litigation or administrative proceedings or such tenant audits will
be valid if made on or before the later to occur of (i) the date that is six
months after the Closing Date, and (ii) the date that is six months after a
final order is issued in such litigation or administrative hearing or the claims
subject to audit are resolved. Both parties shall use good faith efforts to
resolve any disputed claims promptly. All post Closing adjustments shall be made
in cash. The provisions of this Article 3, including, but not limited to,
Sections 3.3 and 3.4, shall survive the Closing indefinitely.
3.6 POST-CLOSING MANAGEMENT OF THE PROPERTY. After acquisition of
the Property, Purchaser intends to retain Behringer Harvard TIC Management
Services LP, a Texas limited partnership ("BH Management") to manage and lease
the Property. At Closing, Purchaser shall cause BH Management to join with
Vector Property Services LLC, a Colorado limited liability company ("Vector") in
the execution of a subcontract for the management and leasing of the Property
whereby Vector will manage and lease the Property for a minimum period of one
year after Closing upon terms mutually acceptable to BH Management and Vector.
The parties shall endeavor to agree upon the form of agreement between BH
Management and Vector during the Inspection Period.
ARTICLE 4 - DEFAULT
4.1 DEFAULT AND TERMINATION.
(a) PURCHASER'S DEFAULT. If Purchaser defaults in its
obligation to close Seller shall have the right, as its sole and exclusive
remedy, to terminate this Agreement and retain the Deposit as liquidated
damages. If Purchaser otherwise defaults prior to Closing or at or after Closing
and fails to cure such default within five business days following receipt of
written notice from Seller that such a default has occurred, Seller shall have
the right to obtain actual out-of-pocket money damages (excluding lost profits,
speculative or consequential damages); provided, however, that the foregoing
limitations shall not relieve or limit Purchaser's indemnification obligations
in accordance with Section 2.5(d)). THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL
DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER IN ITS OBLIGATION TO CLOSE WOULD
BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE THE PARTIES
ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE
PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES IN THE EVENT THAT PURCHASER
DEFAULTS IN ITS OBLIGATION TO CLOSE.
19
(b) SELLER'S DEFAULT. If Seller defaults in its obligation
to close or otherwise commits a material default under this Agreement and fails
to cure such default within five business days following receipt of written
notice from Purchaser that such a default has occurred, Purchaser shall have, as
its exclusive remedies, the following rights: (a) if the default occurs prior to
or at Closing then Purchaser may (i) terminate this Agreement and obtain the
return of the Deposit, or (ii) subject to the following limitations, treat this
Agreement as being in full force and effect and obtain specific performance
(which action shall be commenced within 60 days after the scheduled Closing
Date) to compel Seller to remove any Liens in accordance with Section 2.5(c)(v)
and convey to Purchaser such title to the Property in question as Seller is able
to convey, without any reduction in the Purchase Price except with respect to
the cost of removal of any such Liens under Section 2.5(c)(v) (if not otherwise
paid by Seller), and to recover Purchaser's actual out-of-pocket money damages
(excluding lost profits, speculative or consequential damages) from Seller only
resulting from such default, but such right to specific performance and damages
shall only be available if Seller willfully and wrongfully refuses to close in
accordance with this Agreement, despite there being no default by Purchaser and
Purchaser's being ready, willing and able to close in accordance with this
Agreement; or (b) if the default occurs after Closing, then Purchaser may obtain
its actual out-of-pocket money damages (excluding lost profits, speculative or
consequential damages) from Seller.
(c) TERMINATION OF AGREEMENT. Upon termination of this
Agreement in the manner set forth in this Section, except as otherwise expressly
provided in this Agreement, neither party shall have any further obligations or
liabilities hereunder. Upon termination of this Agreement, the Deposit shall be
returned to Purchaser unless such termination is of a nature which would or may
entitle Seller to retain the Deposit as set forth in this Agreement.
ARTICLE 5 - CASUALTY AND CONDEMNATION
5.1 CASUALTY. In the event that prior to the Closing Date the
improvements on the Property are damaged by fire or other casualty, Seller shall
promptly notify Purchaser. If the casualty is material (defined below),
Purchaser shall have the option either (a) to terminate this Agreement by notice
given to Seller within 30 days after Purchaser receives the notice of the
casualty, or (b) to close the purchase of such Property by paying Seller the
entire Purchase Price for the Property and to the extent the damage has not been
repaired prior to the Closing, receiving all of the Seller's rights with respect
to recovery for such unrepaired damage caused by the fire or casualty under
Seller's existing insurance policies (subject to the provisions of Seller's
policy), together with a credit on the Purchase Price, for the amount of the
deductible applicable to such insurance. In the event Purchaser elects to
terminate this Agreement, the Deposit shall be returned to Purchaser and, except
as otherwise expressly provided in this Agreement, neither party shall have any
further liability or obligation to the other. A material casualty is one that
results in damage to the improvements on the Property in excess of
$1,000,000.00. If the casualty is not material and has not been completely
repaired prior to the Closing, and the remaining costs of repair are fully
covered by insurance (except for the deductible portion), Purchaser may elect to
either (x) extend the Closing until Seller shall have completed all repairs
necessary to return such Property to its pre casualty condition; or (y) close on
the scheduled Closing Date by paying Seller the entire Purchase Price for the
Property and to the extent the damage has not been repaired prior to the
Closing, receiving all of the Seller's rights with respect to recovery for such
unrepaired damage caused by the fire or casualty under Seller's existing
insurance policies
20
(subject to the provisions of Seller's policy). To the extent assignable, Seller
shall assign to Purchaser Seller's right to any proceeds available to Seller for
loss of rents as the result of that casualty after the Closing; provided,
however, that Seller makes no representation or warranty that any proceeds shall
be available to Purchaser for loss of rents with respect to periods after
Closing. If necessary, Seller agrees to assign its rights in such insurance to
Purchaser with respect to such casualty, subject to the provisions of Seller's
policy. Seller shall be responsible for the payment of any such repairs made
prior to the Closing and shall be entitled to the insurance proceeds applicable
to those repairs. If the casualty is not material and is not fully covered
(except for the deductible portion) by insurance of Seller and unless Seller is
willing to comply with either (x) or (y) above, Purchaser may terminate this
Agreement as Purchaser's sole remedy (in which event the Deposit shall be
returned to Purchaser). If Purchaser does not terminate this Agreement,
Purchaser shall be responsible for any such repair costs that are not covered by
insurance.
5.2 CONDEMNATION. If, between the date of this Agreement and
Closing, any portion of the Property that is of such size and configuration or
character to be, in Purchaser's reasonable judgment, material to the operation
of the Property, is taken in condemnation (a "Material Taking") or proceedings
are commenced with respect to a Material Taking, Purchaser shall have the right
to terminate this Agreement, after which the Deposit shall be returned to
Purchaser and Seller and Purchaser shall have no further liability or obligation
under this Agreement, except as otherwise provided in this Agreement and
Purchaser shall have no right to any condemnation proceeds paid to Seller. If
Purchaser does not terminate this Agreement, Seller shall be entitled to retain
all condemnation proceeds and the Purchase Price for the Property shall be
reduced by the amount of said proceeds or, if such condemnation is not completed
as of the Closing, Seller shall assign such right to proceeds to Purchaser
without adjustment of the Purchase Price. If, between the date of this Agreement
and Closing, any portion of the Property is taken in condemnation that is not a
Material Taking, Purchaser may not terminate this Agreement for that reason, and
Seller and Purchaser shall perform their respective obligations under this
Agreement, except with respect to the part of such Property so taken, Seller
shall be entitled to all the condemnation proceeds and the Purchase Price for
the respective Property shall be decreased by the net amount of those
condemnation proceeds. If proceedings with respect to a taking which is not a
Material Taking are commenced and not completed prior to the Closing, the Seller
shall assign such right to proceeds to Purchaser without adjustment of the
Purchase Price.
ARTICLE 6 - OPERATION OF THE PROPERTY; LEASING; SERVICE CONTRACTS
6.1 OPERATION OF THE PROPERTY Seller agrees that between the date of
this Agreement and the Closing Date:
(a) Seller shall, subject only to conditions beyond Seller's
reasonable control, continue to operate and maintain the Property in its present
condition and in accordance with Seller's existing procedures, standards and
practices, ordinary wear and tear excepted; provided, however, Seller shall not
be required to expend more than Fifty Thousand and No/100 Dollars ($50,000.00)
in the aggregate on repairs and replacements for the Property over and above
that amount which is intended, pursuant to the current budget for the Property,
to be expended for such matters for the period from the date of this Agreement
to Closing and are includable as operating expenses. If such costs exceed Fifty
Thousand and No/100 Dollars ($50,000.00)
21
(exclusive of reimbursements due from tenants, insurance or other parties) and
the Seller is unwilling to pay the excess, Purchaser may either (i) as its sole
remedy elect to terminate this Agreement, in which case, the Deposit shall be
returned to Purchaser and except as otherwise expressly provided in this
Agreement, neither Seller nor Purchaser shall have any further liability to the
other, or (ii) subject to Closing, elect to pay the excess, in which case
Purchaser shall pay the full Purchase Price without any credit for such excess.
Purchaser shall make its election within five business (5) days after notice
from Seller that Seller is unwilling to pay the excess. Purchaser's failure to
respond shall be deemed an election under (i).
(b) Seller shall not initiate or consent to any proposed
changes in the zoning or other governmental land use requirements applicable to
all or any part of the Property.
(c) Seller shall maintain in full force or effect their
existing insurance coverage on the Property as disclosed to Purchaser.
(d) Subject to the above provisions of Section 6.1(a),
Seller shall use commercially reasonable efforts to preserve in force all
existing permits and to cause all those expiring prior to the Closing Date to be
renewed. If any such permit shall be suspended or revoked, Seller shall promptly
so notify Purchaser and shall take all reasonable measures necessary to cause
the reinstatement of such permit prior to Closing without any additional
limitation or condition.
(e) Seller will not dispose of any portion of the Property,
except in the ordinary course of business (which shall include the normal use of
consumable supplies) and in accordance with this Agreement. Seller shall
maintain or cause to be maintained through Closing a normal inventory of
supplies and Other Personal Property in accordance with Seller's existing
procedures, standards and practices.
6.2 LEASING. From the date of this Agreement until the expiration of
the Inspection Period, before entering into any new Leases for space at the
Property or into an agreement with a tenant to materially modify or terminate
any Leases, Seller shall provide Purchaser with a courtesy copy of any term
sheet, and promptly after entering into any such new Leases or agreements,
Seller shall provide Purchaser with a copy of each executed new Lease and
agreements, but in no event shall Purchaser's consent be required during this
period for the execution of any new Leases or such agreements. However, from the
expiration of the Inspection Period until the Closing Date, Seller shall not,
without Purchaser's prior written approval: (i) voluntarily terminate (except in
the case of a default and provided Purchaser is notified prior to termination),
modify, renew, or accept a surrender in whole or in part (except in the case of
a renewal, modification, expansion, or expiration pursuant to the terms of the
Lease and with respect to which the landlord is not entitled to exercise
discretion) of any of the Leases, or (ii) enter into any new Leases. Purchaser
shall notify Seller in writing within five business days after its receipt of
each proposed termination, modification or renewal of an existing Lease or
proposed new Lease, along with the final form of the new Lease or Lease
amendment, if applicable, all available exhibits to those Leases, any written
information Seller has received about the tenant, and the cost of all tenant
improvement work and leasing commissions to be incurred by the landlord in
connection with the Lease, of either its approval or disapproval. If Purchaser
fails to notify Seller of its approval or disapproval of any such termination,
modification, renewal or proposed new
22
Lease within this five business day period, Purchaser shall be deemed to have
approved it. Seller agrees, from and after the date of this Agreement, to
provide Purchaser with copies of all material written notices or correspondence
given to or by a tenant under the Leases.
6.3 SERVICE CONTRACTS. Seller agrees that after the date of this
Agreement it will not enter into any Contracts which cannot be terminated by
Seller at no cost to Purchaser on or before the Closing Date without the prior
written consent of Purchaser. At least two business days before the end of the
Inspection Period, Purchaser shall deliver a notice to Seller specifying which
of the Contracts it intends to assume and which Contracts Purchaser requests
that Seller terminate on or before the Closing Date. On or before the Closing
Date, Seller shall terminate all Contracts that Purchaser has so requested to be
terminated, if such Contracts can be legally terminated.
(a) With respect to those Contracts that cannot be
terminated, Purchaser shall be deemed to have agreed to assume those Contracts
unless Purchaser terminates this Agreement under Section 2.5(d)(i).
(b) With respect to those Contracts which can be terminated,
but only with the payment of a fee or penalty which Seller is unwilling to pay,
Purchaser shall be deemed to have agreed to pay such fee and assume those
Contracts if Purchaser does not terminate this Agreement under Section
2.5(d)(i).
ARTICLE 7 - GENERAL DISCLAIMER
Except as otherwise expressly stated in this Agreement or in any
agreement or instrument executed and delivered by Seller to Purchaser at the
Closing, including but not limited to representations and warranties set forth
in Section 2.5(e) of this Agreement and the limited warranty of title expressly
set forth in the Deed (collectively, the "Surviving Representations"), Seller
hereby expressly disclaims making any and all representations and warranties of
any kind or character, express or implied, with respect to the Property, and
Purchaser agrees to accept the Property "as is, where is, with all faults."
Without limiting the generality of the preceding sentence or any other
disclaimer set forth herein, Seller and Purchaser hereby agree that, except for
the Surviving Representations, Seller has not made and is not making any
representations or warranties, express or implied, written or oral, as to (a)
the nature or condition, physical or otherwise, of the Property or any aspect
thereof, including, without limitation, any warranties of habitability,
suitability, merchantability or fitness for a particular use or purpose; (b) the
nature or quality of construction, structural design or engineering of the
improvements or the state of repair or lack or repair of any of the
improvements; (c) the quality of the labor or materials included in the
improvements; or (d) the compliance of the Property or the operation or use of
the Property with any laws, ordinances or regulations of any governmental body,
including, without limitation, the Americans with Disabilities Act, any
Environmental Laws, and any zoning laws or ordinances.
Purchaser has been or will be given the opportunity to inspect the
Property and the Leases, Contracts, and Due Diligence Materials (including,
without limitation, Title Materials) relating to the Property that Purchaser
deemed necessary to inspect and review in connection with this Agreement, and
Purchaser has retained such environmental consultants, structural
23
engineers, and other experts as it deemed necessary to inspect the Property and
review such materials and to make its own determination as to the condition of
the Property and its suitability for Purchaser's purposes, as to whether
hazardous or toxic materials were used, released or stored on the Property or
constitute a present hazard with respect to the Property, and otherwise.
Purchaser is relying on its own investigation and the advice of its experts
regarding the Property, and upon its review of Leases, Contracts, and Due
Diligence Materials, and not on any representations or warranties of Seller
(other than the Surviving Representations), and Purchaser acknowledges that the
Purchase Price reflects the fact that this is an "as is, where is" transaction
except as may be expressly set forth in the Surviving Representations. Purchaser
specifically waives any claim it may have against Seller arising from (1) any
condition which now exists or may be found to exist in, on, under or about the
Property, (2) a determination that the Property or any portion violates any
applicable environmental or health or safety law, ordinance, regulation or
ruling, and (3) the presence, use, generation, storage, release, threatened
release, or containment, treatment, or disposal of any Hazardous Materials. The
covenants and agreements of Purchaser in this paragraph shall survive the
Closing and consummation of the transactions contemplated by this Agreement.
ARTICLE 8 - MISCELLANEOUS
8.1 CONFIDENTIALITY. Subject to the provisions of Section 8.22 of
this Agreement, Purchaser and its representatives shall hold in confidence all
data and information obtained with respect to Seller or its business, whether
obtained before or after the execution and delivery of this Agreement, and shall
not disclose the same to others; provided, however, that it is understood and
agreed that Purchaser may disclose such data and information to (a) the
employees, consultants, accountants, attorneys and prospective lenders of
Purchaser provided that such persons agree to treat such data and information
confidentially in accordance with this provision, and (b) as permitted by the
provisions of Section 8.22. In the event this Agreement is terminated or
Purchaser fails to perform hereunder, Purchaser shall, upon the written request
of Seller, promptly return to Seller any statements, documents, schedules,
exhibits or other written information obtained from Seller or any agent of
Seller in connection with this Agreement or the transaction contemplated herein.
In the event of a breach or threatened breach by Purchaser or its agent or
representatives of this Section 8.1, Seller shall be entitled to an injunction
restraining Purchaser or its agents or representatives from disclosing, in whole
or in part, such confidential information. Nothing herein shall be construed as
prohibiting Seller from pursuing any other available remedy at law or in equity
for such breach or threatened breach except that Purchaser shall not be liable
for any consequential, special or punitive damages. The provisions of this
Section 8.1 shall survive Closing. Notwithstanding anything contained
hereinabove to the contrary, (i) this provision shall not apply to any
information that is or becomes generally available to the public from a source
other than Purchaser or its representatives or is disclosed to Purchaser or its
representatives by a third party who is not known to Purchaser to be subject to
a similar provision and (ii) Purchaser may disclose any such information
pursuant to a court order, subpoena, or similar judicial requirement.
8.2 AUTHORITY OF SELLER AND PURCHASER.
(a) PURCHASER. Purchaser represents and warrants that as of
the date of this Agreement and as of the date of Closing, Purchaser is and shall
be a duly organized and validly
24
existing limited liability company under the laws of the State of Delaware, is
and shall be in good standing under the laws of the State of Delaware, and has
and shall have full and lawful right and authority to execute and deliver this
Agreement and to consummate and perform the transactions contemplated in it.
Furthermore, Purchaser represents and warrants that the person or persons
executing this Agreement and any documents required under it on behalf of
Purchaser have the full legal power and authority to do so. Purchaser also
represents and warrants that the consummation and performance of the
transactions contemplated by this Agreement will not constitute a default or
result in the breach of any term or provision of any contract or agreement to
which Purchaser is a party so as to adversely affect the consummation of these
transactions.
(b) SELLER. Seller represents and warrants that as of the
date of this Agreement and as of the date of Closing, Seller is and shall be
duly formed and validly existing limited liability company under the laws of the
State of Colorado, and has and shall have full and lawful right and authority to
execute and deliver this Agreement and to consummate and perform the
transactions contemplated in it. Furthermore, Seller represents and warrants
that the person or persons executing this Agreement and any documents required
under it on its behalf have the authority to do so. Seller also represents and
warrants that the consummation and performance of the transactions contemplated
by this Agreement will not constitute a default or result in the breach of any
term or provision of any contract or agreement to which Seller is a party so as
to adversely affect the consummation of these transactions.
8.3 BROKERS. Seller represents and warrants to Purchaser that no
broker or finder has been engaged by Seller has a right to a commission in
connection with the sale contemplated by this Agreement except for Xxxxxxx &
Xxxxxxxxx, Inc. ("Seller's Broker"). Purchaser represents and warrants to Seller
that no broker or finder has been engaged by Purchaser in connection with the
sale contemplated by this Agreement. Each party further represents and warrants
to the other that no person or entity claims or will claim any commission,
finder's fee or other amounts by, through, under or as a result of any
relationship with such party because of this transaction except that Seller
shall pay any commission due to Seller's Broker. Each party agrees to hold the
other party harmless from and against any and all costs, expenses, claims,
losses or damages, including reasonable attorneys' fees, resulting from any
breach of the representations and warranties contained in this Section.
8.4 ASSIGNABILITY.
(a) PURCHASER'S ASSIGNABILITY. Purchaser cannot assign all
or any part of its rights or obligations hereunder without the prior written
consent of Seller; provided, however, that Purchaser may assign its rights to an
Affiliate, provided (i) Purchaser shall not be relieved of its liability under
this Agreement, and (ii) Purchaser shall notify Seller and Title Company of any
such assignment not later than two (2) business days prior to the Closing Date.
Any assignment made in violation of the terms of this Section shall be void and
of no force and effect. For purposes of this Section 8.4, the term "Affiliate"
shall mean: (1) an entity that controls, is controlled by, or is under common
control with Purchaser; (2) any partnership in which Purchaser or Purchaser's
controlling member is the general partner; or (3) any fund or entity sponsored
by Purchaser.
25
(b) SELLER'S ASSIGNABILITY. Seller may not assign, prior to
Closing, all or any part of its rights and obligations hereunder without the
written consent of Purchaser.
8.5 NOTICES AND CONSENTS. All notices and consents required or
permitted under this Agreement shall be in writing and given by telefax (with a
confirmation of receipt), registered or certified mail, postage prepaid, or by
hand delivery, directed as follows:
If intended for Seller, to: MG-Alamo, LLC
c/o Miller Global Properties, LLC
0000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
303/000-0000; Fax 303/000-0000
with a copy to: Isaacson, Rosenbaum, Xxxxx & Levy, P.C.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxx, Xx., Esq.
303/000-0000; Fax 303/000-0000
If intended for Purchaser, to: Harvard Property Trust, LLC
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxx Xxxxxx
214/000-0000; Fax 214/000-0000
with a copy to: Xxxxxx & Xxxxxxx, L.L.P.
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxx
214/000-0000; Fax 214/000-0000
Any notice delivered by registered or certified mail in accordance with this
Section shall be deemed to have been duly given on the third business day after
the same is deposited with the United States Postal Service. Any notice
delivered by telecopier in accordance with this Section shall be deemed to have
been duly given upon receipt (if sent on Monday through Friday during business
hours, or the next business day if sent after business hours) if a copy of said
notice is sent by regular mail on the same day to that intended recipient with
telephone or facsimile machine confirmation of receipt. Any notice delivered by
hand shall be deemed to have been duly given upon actual receipt or refusal to
receive. Any notice sent by reputable overnight courier shall be deemed received
on the next business day following deposit with such courier. Either party, by
notice given as above, may change the address to which future notices or copies
of notices may be sent.
8.6 BINDING EFFECT Subject to Section 8.4, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
successors and permitted assigns.
26
8.7 ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter of this
Agreement and may not be modified in any manner except by an instrument in
writing signed by both parties. This Agreement supersedes and replaces all
earlier agreements or understandings of the parties, whether written or oral,
with respect to the subject matter hereof.
8.8 HEADINGS. The headings herein are inserted only for convenient
reference and do not define, limit or prescribe the scope of this Agreement or
any Section or subsection.
8.9 NO MERGER; SURVIVAL. The representations, covenants and
agreements contained herein shall not merge into the various documents executed
and delivered at the Closing and shall survive Closing, except as limited in
this Agreement. The provisions of Sections 8.1 and 8.3 and all post-closing
obligations, including but not limited to the obligations under Sections 3.3,
3.4, and 3.5, shall survive the Closing.
8.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts which together shall constitute a final Agreement. Facsimile
signatures are as binding as original signatures.
8.11 SEVERABILITY. If any provision of this Agreement or its
application to any person or situation, to any extent, shall be held invalid or
unenforceable, the remainder of this Agreement, and the application of that
provision to persons or situations other than those to which it has been held
invalid or unenforceable, shall not be affected, but shall continue valid and
enforceable to the fullest extent permitted by law.
8.12 NO WAIVER. No waiver by either party of any provision hereof
shall be deemed a waiver of any other provision or of any subsequent breach by
either party of the same or any other provision.
8.13 CONSTRUCTION OF AGREEMENT. Seller and Purchaser acknowledge each
to the other that both they and their counsel have reviewed and revised this
Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments or exhibits to it. Any
words following the words "include," "including," "such as," "for example," or
similar words or phrases shall be illustrative only and are not intended to be
exclusive, whether or not language of non-limitation is used.
8.14 GOVERNING LAW; ATTORNEYS' FEES. This Agreement shall be governed
by and construed in accordance with the laws of the State of Colorado. In the
event of any litigation between the parties with respect to the subject matters
of this Agreement, the prevailing party shall be entitled to recover all of its
reasonable attorneys' fees from the other party.
8.15 EXCLUSIVITY. So long as this Agreement has not been terminated
and so long as Purchaser is not in default hereunder, Seller agrees that during
the period from and after the date of this Agreement Seller shall not solicit or
respond to offers from others relative to the sale of the Property or enter into
or negotiate any contract, letter of intent or term sheet for the sale of the
Property to any prospective purchaser other than Purchaser.
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8.16 RECORDATION. Purchaser shall not place this Agreement or any of
its terms and provisions, or any notice, memorandum or other written evidence of
it, of record without the prior written consent of Seller, which Seller may
withhold in its sole discretion. Any violation of the terms and conditions of
this Section by Purchaser shall, at the option of Seller, render this entire
Agreement null and void and of no further force or effect.
8.17 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be
construed or deemed to make or constitute Seller and Purchaser partners, joint
venturers or any other form of joint participants in the acquisition and
ownership of the Property, and Seller and Purchaser agree and acknowledge that
the sole and exclusive nature of their relationship is as seller and purchaser.
8.18 EXHIBITS; PARAGRAPH REFERENCES. All exhibits to this Agreement
are a part of this Agreement and are incorporated into it by reference.
References to section numbers and exhibits, unless otherwise stated, are to
sections in and exhibits to this Agreement.
8.19 DATE OF THIS AGREEMENT. References to the "date of this
Agreement" mean the date on page 1 of this Agreement.
8.20 COMPUTATION OF TIME. If any time period expires on a Saturday,
Sunday, or legal holiday of the State of Colorado, the date of performance shall
be the next day which is not a Saturday, Sunday, or legal holiday.
8.21 TIME OF THE ESSENCE. Time shall be deemed of the essence in
construing this Agreement.
8.22 TIC INVESTORS. Purchaser has advised Seller that Purchaser may
solicit investments in the Property from investors that will acquire undivided
interests in the Property and become tenants-in-common therein ("TIC
Investors"). Notwithstanding anything contained in this Agreement to the
contrary, Seller and Purchaser agree as follows: (a) Purchaser shall have the
right to distribute information about the Property and this Agreement to brokers
who may facilitate the sale of such tenant in common interests and to potential
TIC Investors and their advisors, subject to data and information with respect
to Seller's business being disclosed on a confidential basis (such information
may be disclosed in a confidential private placement memorandum) (Seller shall
incur no liability in connection with Purchaser's distribution of information to
and facilitation with the TIC Investors as described herein); and (b) Purchaser
shall have the right to assign its rights under this Agreement in accordance
with Section 8.4 to two related parties (each referred to herein as a "Behringer
Entity"), Behringer Harvard Alamo Plaza H, LLC, and Behringer Harvard Alamo
Plaza S, LLC, with the understanding that following the Closing such Behringer
Entity may convey interests in the Property directly to such TIC Investors. The
TIC Investors shall not be deemed third party beneficiaries under this
Agreement; provided, however, each Behringer Entity may pursue any rights under
this Agreement on their own behalf or on behalf of the TIC Investors. Purchaser
and each Behringer Entity agrees to indemnify, hold harmless and defend Seller
from and against any loss, cost, claim, cause of action, damage, or expense,
including reasonable attorneys' fees, which Seller may incur, or which may be
asserted against Seller under this Agreement by any or all of the TIC Investors
except that such indemnity shall not apply if Seller is deemed by a court of
competent jurisdiction to have committed fraud in connection with the sale of
the Property or to be in
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breach of this Agreement which breach relates to the claims by any or all of the
TIC Investors.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
PURCHASER:
HARVARD PROPERTY TRUST, LLC,
a Delaware limited liability company, d/b/a
Behringer Harvard Funds
By:
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Name:
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Title:
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SELLER:
MG-ALAMO, LLC, a Colorado
limited liability company
By:
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Name:
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Authorized Signatory
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Title Company executes this Agreement solely for the purpose of being
bound by the provisions of Sections 1.2, 2.1 and 2.5(c) hereof and the following
provisions. The Deposit shall be held and disbursed by the Title Company in
accordance with the provisions of this Agreement. The duties of the Title
Company hereunder are purely ministerial in nature and shall be expressly
limited to the safekeeping and disposition of the Deposit in accordance with
this Agreement. Title Company shall incur no liability in connection with the
safekeeping or disposition of the Deposit for any reason other than Title
Company's willful misconduct or gross negligence. In the event that Title
Company shall be in doubt as to its duties or obligations with regard to the
Deposit, or in the event that Title Company receives conflicting instructions
from Purchaser and Seller with respect to the Deposit, Title Company shall not
be required to disburse the Deposit and may, at its option, continue to hold the
Deposit until both Purchaser and Seller agree as to its disposition, or until a
final judgment is entered by a court of competent jurisdiction directing its
disposition, or Title Company may interplead the Deposit in accordance with the
laws of the State of Colorado. Title Company shall not be responsible for any
interest on the Deposit except as is actually earned, or for the loss of any
interest resulting from the withdrawal of the Deposit prior to the date interest
is posted thereon.
LANDAMERICA COMMERCIAL SERVICES
By:
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Name:
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Title:
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