PURCHASE AGREEMENT
("AGREEMENT")
THIS PURCHASE AGREEMENT is made and entered into as of the 12th day of May,
2003, between MAXUS Operating Limited Partnership, a Delaware Limited
Partnership ("Seller"), and XXX XXXXXXX ASSOCIATES, INC., a Minnesota
Corporation, ("Purchaser").
In consideration of the covenants and agreements contained herein, the
parties agree as follows:
1. Property To Be Purchased. Subject to compliance with the terms and
conditions of this Agreement, Seller shall sell to Purchaser and Purchaser
shall purchase from Seller the real property located at in the City of
Bloomington, County of Hennepin, State of Minnesota, (the "Property"),
legally described as follows:
Xxx 0, Xxxxx 0, Xxxxx Business Center, Second Addition
Property Tax I.D. Number: 01 027 24 13 0011
Property Address: 0000 Xxxx 00xx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
The Property shall include the following:
a. Real Property. The real property together with all buildings and
improvements constructed thereon, as described in paragraph 1.
b. Personal Property. All fixtures, furniture, furnishings, equipment,
materials, supplies, and other personal property, and located on the
premises as if the date of this Contract, which are owned by Seller and
are used in connection with and for the occupancy, management,
maintenance and operation of the subject premises.
c. Contracts. Seller's interest in service and maintenance contracts,
leases, equipment leases, other contracts regarding real and personal
property, permits, licenses, warranties or guarantees concerning
acquisition, construction, design, use, operation, management or
maintenance of the premises.
d. Records. Copy of all records including current real estate tax
assessments, special assessment notices, insurance policies, tenant
records, records of maintenance, repairs, services and improvements to
the Property.
e. Leases. Seller's interest as Lessor in all leases in effect on the
Property.
f. Permits. Seller's interest in any permits and licenses relating to the
Property.
g. Warranties. Seller's interests in all warranties and guarantees given
to, assigned to, or benefiting Seller or the real Property or the
personal property regarding the acquisition, construction, design, use,
operation, management or maintenance of the real Property and the
personal property ("warranties").
h. Plans. All originals and copies of the "As-Built" blue prints, plans and
specifications regarding the real Property and the personal property in
Seller's possession, if any ("Plans").
2. Purchase Price. The purchase price for the Property ("Purchase Price")
shall be the sum of Five Million One Hundred Seventeen Thousand Five
Hundred Dollars ($5,117,500.00). The Purchase Price shall be payable as
follows:
a. One Hundred Thousand Dollars ($100,000.00) as xxxxxxx money (the
"Xxxxxxx Money") which shall be deposited in the Trust Account of the
listing broker, or, by agreement, in an escrow account with the Title
Company providing the title insurance for this transaction, but to be
returned to Purchaser if this Purchase Agreement is not accepted by
Seller or the Purchase Agreement is terminated according to the terms of
this Agreement.
b. Five Million Seventeen Thousand Five Hundred Dollars ($5,017,500.00)
cash or certified funds at the time of closing.
3. Title to be Delivered. Seller agrees to convey marketable fee simple title
in the Property to Purchaser subject only to such exceptions to title as
Purchaser approves in writing.
a. As soon hereafter as reasonably possible and in any event within ten
(10) days of the date hereof, Seller, at its sole cost and expense,
shall cause to be issued and delivered to Purchaser a commitment for an
ALTA Form B extended coverage owner's title insurance policy (the
"Commitment") issued by a title company approved by Purchaser (the
"Title Company") wherein said Title Company agrees to issue to Purchaser
upon the recording of the warranty deed and other conveyance documents
referred to herein an ALTA Form B Owner's Title Insurance Policy (the
"Title Policy") in the full amount of the Purchase Price with a zoning
endorsement and so-called owner's extended coverage endorsement. The
Commitment will be accompanied by copies of all recorded documents
affecting the Property; and
b. Purchaser shall have three (3) days after receipt of the Title
Commitment to render objections to title ("Objections") in writing to
Seller and Seller shall have five (5) days from the date it receives
such Objections to have the same removed or cured to Purchaser's
reasonable satisfaction. If Seller shall fail to have such Objections
removed or cured within that time, Purchaser may, at its sole
discretion, either (a) terminate this Agreement without any liability on
its part and receive a refund of the Xxxxxxx Money (together with
accrued interest), or (b) if
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the Objections are such that they may not be removed by the
expenditure of sums of money, take title subject to such Objections.
Seller agrees to use its best efforts to promptly satisfy any such
Objections.
4. Representations and Warranties of Seller. In order to induce Purchaser to
enter into this Agreement and purchase the Property, Seller hereby
represents and warrants to Purchaser to the best of Seller's knowledge as
follows:
a. Condemnation. No action in condemnation, eminent domain or public taking
proceedings are now pending or contemplated against the Property
provided, however, that this representation does not include future
actions of the Metropolitan Airports Commission;
b. Assessments. No ordinance or hearing is now before any local
governmental body which either contemplates or authorizes any public
improvements or special tax levies, the cost of which may be assessed
against the Property. There are no special assessments currently a lien
against or encumbering the Property;
c. Title. Seller has good and marketable fee simple title interest to the
Property;
d. Authority. The individuals executing this Agreement on behalf of Seller
have the requisite authority to execute this Agreement and such other
documents as are contemplated or to be delivered by Seller herein, and
to bind Seller thereto; and Seller has the full and complete authority
to sell the Property;
e. FIRPTA. Seller is not a foreign person, foreign partnership, foreign
trust or foreign estate as those terms are defined in Section 1445 of
the Internal Revenue Code;
f. Bankruptcy. There have been no bankruptcy or dissolution proceedings
involving Seller during the xxxx Xxxxxx has had any interest in the
Property; there are no unsatisfied judgments or state or federal tax
liens of record against Seller; and there have been no labor or
materials furnished to the Property for which payment has not been made;
g. Seller Contracts. There are no unrecorded mortgages, contracts, purchase
agreements, options, leases (except as to leases for tenants currently
in possession of the premises), easements or other agreements or
interests relating to the Property and there are no persons in
possession of any portion of the Property except as may be disclosed by
the Title Commitment.
h. Right of Way. The Property has legal access to a public right of way;
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i. Seller Obligations. Seller is not in default in the performance of any
of Seller's obligations under any easement agreement, covenant,
condition, restriction or other instrument relating to the Property;
j. Leases. Seller has made available to Purchaser a correct and complete
copy of each lease and all its amendments. The information provided in
the leases is correct and complete as of the date of this Agreement. The
leases are in full force and neither Seller nor any tenant to the best
knowledge of Seller are in default under the leases. There are no other
leases or possessory rights of others regarding the real Property.
k. Sewage Treatment System. To Seller's knowledge, there are no abandoned
individual sewage treatment systems on the described real property.
l. Liens and Encumbrances. The Property will as of the Closing Date be free
and clear of all liens, security interests, all encumbrances, leases or
other restrictions or objections to title except as permitted by this
Agreement;
m. Utilities. Seller has received no notice of actual or threatened
reduction or curtailment of any utility service now supplied to the
property.
n. Contamination. To the best of Seller's knowledge, no toxic or hazardous
substances (including, without limitation, asbestos, urea formaldehyde,
the group of organic compounds known as polychlorinated biphenyls, and
any hazardous substance as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), 42
X.X.X.xx. 9601-9657, as amended) have been generated, treated, stored,
released or disposed of, or otherwise deposited in or located on the
Entire Property, including without limitation, the surface and
subsurface waters of the Entire Property, nor has any activity been
undertaken on the Entire Property which would cause (i) the Subject
Property to become a hazardous waste treatment, storage or disposal
facility within the meaning of, or otherwise bring the Subject Property
within the ambit of, the Resource Recovery and Conservation Act of 1976
("RCRA"), 41 U.S.C.ss.6901, et seq., or any similar state law or local
ordinance or any other Environmental Law, (ii) a release -- --- or
threatened release of hazardous waste from the Entire Property within
the meaning of, or otherwise bring the Entire Property within the ambit
of CERCLA, or any similar state law or local ordinance or any other
Environmental Law or (iii) the discharge of pollutants or effluents into
any water source or system, or the discharge into the air of any
emissions, which would require a permit under the Federal Water
Pollution Control Act, 33 U.S.C.ss.1251 et -- seq., or the Clean Air
Act, 42 X.X.X.xx. 7401 et seq., or any similar state law or local
ordinance or any other Environmental Law. To the best of Seller's
knowledge there are no substances or conditions in or on the Entire
Property which may support a claim or cause of action under RCRA, CERCLA
or any other federal, state or local environmental statutes,
regulations, ordinances or
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other environmental regulatory requirements. To the best of Seller's
knowledge no underground deposits which cause hazardous wastes or
underground storage tanks are located on the Entire Property.
o. Proceedings. Seller represents and warrants that the Seller has made a
good faith review of all records pertaining to the Property which Seller
currently knows to be in Seller's possession. Based upon such good faith
review, Seller is not aware of any litigation, proceeding, claim, or
investigation pending or threatened, or of any contract or agreement to
which Seller is currently a party which would adversely affect the
Property. In the event that Seller becomes aware of any such matter
prior to Closing, Seller will immediately disclose all relevant
information regarding such matter to the Purchaser. Purchaser shall have
ten (10) days after the disclosure of any such information during which
Purchaser may elect, as its sole and exclusive remedy, to terminate this
Agreement. Upon any such termination, neither party shall have any
further obligation or responsibilities hereunder.
p. Rights of others to purchase Property. Seller has not entered into any
other contracts for the sale of the Property, nor are there any rights
of first refusal or options to purchase the Property or any other rights
of others that might prevent the consummation of this Agreement.
5. Purchaser Contingencies. The closing of the transaction contemplated by
this Agreement and all the obligations of Purchaser under this Agreement
are subject to fulfillment, on or before closing of the following
"Conditions Precedent"
a. The representations and warranties made by Seller in Section 4 shall be
correct as of the closing date with the same force and effect as if such
representations and warranties were made at such time;
b The status and marketability of title shall have been established to
Purchaser's satisfaction in accordance with Section 3;
c. Purchasers receipt, of a survey prepared by a registered Land Surveyor
properly licensed to practice in the State of Minnesota and reasonably
acceptable to Purchaser. The survey shall be certified to Purchaser and
show the real property and the location of all buildings, improvements
and easements located on the real Property and shall be prepared with
such requirements as may be required by the title company in order to
allow the title company to issue an owner's policy of title insurance
with regard to the real Property without any exception for survey
matters. Purchaser shall pay the cost of the survey, limited to a
maximum amount of $2500, provided, however, that Purchaser shall receive
a credit for this cost at the time of closing.
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d. Delivery to Purchaser of all existing environmental reports pertaining
to the Property which reports are in the possession of Seller or its
agents.
6. Closing, Possession. Subject to the fulfillment or waiver of the conditions
precedent and provided that all of the covenants, representations and
warranties of Seller are true and correct on the Closing Date as though
made on such date, the closing of the purchase and sale (the "Closing")
shall take place ten (10) days from the date a commitment for title
insurance is delivered to Purchaser or June 6, 2003 whichever date shall
first occur. The Closing shall take place at the Title Company or such
other place as Seller and Purchaser may mutually determine. Possession
shall be delivered on the Closing Date.
7. Seller's Obligations At Closing. At or prior to the Closing Date, Seller
shall:
a. Deliver to Purchaser a duly recordable warranty deed to the Property (in
a form satisfactory to Purchaser and the Title Company) conveying to
Purchaser marketable fee simple title to the Property and all rights
appurtenant thereto subject only to exceptions not objected to by
Purchaser;
b. Cause to be furnished and delivered to Purchaser the Title Policy;
c. Deliver to Purchaser and the Title Company an affidavit sufficient to
remove any exception in the Title Policy for mechanics' and
materialmen's liens and the rights of parties in possession;
d. Deliver to Purchaser a completed Minnesota Well Disclosure Certificate.
e. Deliver to Purchaser any notices, certificates and/or affidavits
relative to private sewage systems, underground storage tanks and
pollution as may be required by Minnesota Statutes;
f. Deliver to Purchaser a Warranty form Xxxx of Sale, in form reasonably
satisfactory to Purchaser, conveying the personal property to Purchaser,
free and clear of all encumbrances.
g. A rent roll, accurate as of the Closing Date.
h. Deliver to Purchaser assignments of all leases for the rental premises
located on the Property;
i. Deliver to Purchaser, Estoppel certificates from all Tenants under the
leases which shall disclose no facts which are material or contradictory
to facts previously disclosed to Purchaser and shall confirm the rents
payable by such Tenant. Seller shall use its best efforts to obtain
estoppel certificates from each of such tenants, provided Seller shall
not be required to expend significant monies or make
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significant concessions in order to obtain such estoppel certificates.
If a tenant shall fail to deliver an estoppel certificate, Seller shall
deliver at closing an estoppel certificate signed by Seller representing
the same facts as that tenant would have represented in the missing
estoppel certificate.
j. Notices to Tenants under the leases, in a form reasonably satisfactory
to Purchaser, advising them of the sale of the Property and directing
them to make future lease payments to Purchaser at the place designated
by Purchaser.
8. Delivery of Purchase Price; Obligations At Closing. At Closing, and subject
to the terms, conditions, and provisions hereof and the performance by
Seller of its obligations as set forth herein, Purchaser shall execute and
deliver any documents reasonably required for the performance of its
obligations hereunder. Purchaser shall deliver the balance of the Purchase
Price.
9. Closing Costs. The following costs and expenses shall be paid as follows in
connection with the Closing:
a. Seller shall pay:
i. The costs of all evidence of title, including the cost of the
Title Commitment.
ii. The state deed tax or transfer fee imposed on the conveyance;
iii. The recording fees due upon the recording of any documents (other
than the warranty deed) necessary to place record title in the
condition required by this Agreement;
iv. The Seller's share of real estate taxes and assessments, as
determined pursuant to Section 11;
v. One-half of the Closing Fee charged by the Title Company.
vi. Seller's attorneys' fees.
vii. Any costs expended by Purchaser to obtain a survey as required
pursuant to Section 5.
b. Purchaser shall pay the following costs in connection with the closing:
i. The recording fee necessary to record the warranty deed;
ii. Purchaser's share of real estate taxes and assessments, as
determined pursuant to Section 11;
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iii. Purchaser's attorneys' fees;
iv. One-half of the Closing Fee charged by the Title Company.
v. The title insurance premium in connection with the issuance of
the Title Policy in accordance with the requirements of Section
3.
10. Prorations for Operations, Maintenance and Rent. All expenses relating to
the operation and maintenance of the Property not otherwise specified
herein, and any income from leases or otherwise, derived from the Property
shall be prorated to the Closing Date on a calendar basis, so that Seller
is charged or credited with that portion of such expenses or income which
accrued prior to the Closing Date and Purchaser is charged or credited with
that portion of such expenses or income which accrues on or after the
Closing Date. To the extent operating expenses, including real estate taxes
and special assessments are chargeable to tenants under the Leases,
Purchaser shall pay to Seller on the Closing Date the amount of all such
operating expenses prepaid by Seller which are reimbursable but not yet
reimbursed by tenants and Purchaser shall thereafter collect and retain all
tenant reimbursements. Seller shall transfer to Purchaser at the Closing
Date and without additional charge all security deposits and interest
thereon, prepaid rents and all deposits or payments by tenants with respect
to operating expenses.
11. Real Estate Taxes and Special Assessments. The parties shall pay and
allocate real estate taxes and special assessments with respect to the
Property as follows:
a. At or before Closing, Seller shall pay all real estate taxes, and any
penalties and interest thereon due and payable with respect to the
Property in and prior to 2003, including all deferred taxes attributable
to years prior to the year of Closing;
b. At or before Closing, Seller shall pay all special assessments levied,
pending or deferred against the property as of the Closing Date,
including special assessments certified for payment with the current
year's real estate taxes and all deferred assessments, including all
those which become due and payable as a result of the sale of the
Property to Purchaser;
c. Purchaser and Seller shall prorate the real estate taxes due and payable
in the year of Closing, on a per diem basis using a calendar year, to
the Closing Date;
d. Purchaser shall pay all real estate taxes due and payable in the years
following the year of Closing.
To the extent any amount owed by either party under this Section cannot be
ascertained prior to Closing, then the owing party shall escrow with the
Title Company 125% of the estimate of the applicable taxing authority of
the amount owed, and in the event no such estimate is available, then 125%
of the amount estimated to be owed by the Title
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Company. Upon receipt of accurate statements as to amounts owed, the Title
Company shall pay such amounts from the estimated funds and the owing party
shall be entitled to any remaining balance in the escrow and shall be
obligated immediately to fund any deficiency in such escrow.
12. Brokerage. If the transaction contemplated by this Agreement, is
consummated in the time and manner required by this Agreement, Seller shall
pay a brokerage commission to Colliers Xxxxx Xxxxxx Xxxxxx Xxxxxx as the
sole real estate brokerage commission regarding this transaction. Seller
and Purchaser represent and warrant to each other that they have dealt with
no other brokers in connection with this transaction, and agree to
indemnify each other and to hold each other harmless against all claims,
damages, costs or expenses of or for any such fees or commissions resulting
from their actions or agreements regarding the execution or performance of
this Agreement, and will pay all costs of defending any action or lawsuit
brought to recover any such fees or commissions incurred by the other
party, including reasonable attorneys fees.
13. Remedies. If Seller defaults in the performance of this Agreement,
Purchaser shall have the right to terminate this Agreement upon written
notice to Seller, in which event the Xxxxxxx Money shall be returned to
Purchaser. If Seller defaults in the performance of this Agreement and
Purchaser does not terminate this Agreement, Purchaser may recover from
Seller specific performance of this Agreement. Purchaser shall have no
right to seek damages from Seller for Seller's defaults hereunder. If
Purchaser defaults in the performance of this Agreement, Seller's sole and
exclusive remedy shall be to terminate this Agreement by written notice to
Purchaser, in which event the Xxxxxxx Money shall be retained by Seller as
liquidated damages.
14. Seller Responsibility for Specified New Leases and Renewals. The following
leases are either new and pending or renewals:
New Leases Renewals
Credit Management Control Accent Travel
Danka Office Imaging Company Best Meeting
Alliance of Computer Professionals
Seller shall be responsible for the payment of all costs associated with
the specified new leases or renewal leases including: tenant improvements,
commissions and any other fees associated with said leases.
15. Miscellaneous. The following general provisions govern this Agreement.
a. No Waivers. The waiver by either party hereto of any condition or the
breach of any term, covenant or condition herein contained shall not be
deemed to be a waiver of any other condition or of any subsequent breach
of the same or of any other term, covenant or condition herein
contained. Purchaser, in its sole discretion may waive any right
conferred upon Purchaser by this Agreement;
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provided that such waiver shall only be made by Purchaser giving Seller
written notice specifically describing the right waived.
b. Time of Essence. Time is of the essence with respect to all terms and
conditions of this Agreement.
c. Survival. All representation, warranties and agreement of the parties
set forth herein shall survive the Closing for a period of two (2)
years;
d. Governing Law. This Agreement is made and executed under and in all
respects to be governed and construed by the laws of the State of
Minnesota and the parties hereto hereby agree and consent and submit
themselves to any court of competent jurisdiction situated in Minnesota;
e. Notices. All notices and demands given or required to be given by any
party hereto to any other party shall be deemed to have been properly
given if and when delivered in person, sent by telegram (with
verification of receipt), sent by facsimile (with verification of
receipt) or three (3) business days after having been deposited in any
U.S. Postal Service and sent by registered or certified mail, postage
prepaid, addressed as follows (or sent to such other address as any
party shall specify to the other party pursuant to the provisions of
this Section):
If to Seller: Maxus Operating Limited Partnership
000 Xxxxxx Xxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Copy to: Colliers Xxxxx
Xxxxxx Xxxxxx Xxxxxx
000 X. 0xx Xx. #0000
Xxxx., XX 00000
Xxx Xxxxxxxx
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX. 00000
000-000-0000
Fax 000-000-0000
If to Purchaser: Xxx Xxxxxxx Associates, Inc.
000 X. Xxxxxxx Xx. #0000
Xxxx., XX 00000
Copy to: Xxxxxxx X. Xxxxxxx
Attorney at Law
0000 Xxxxxxx 00
Xxxxx Xxxx Xxxx, XX 00000
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000-000-0000
Fax 000-000-0000
In the event either party delivers a notice by facsimile, as set forth
above, such party agrees to deposit the original of the notice in a post
office, branch post office, or mail depository maintained by the U.S.
Postal Service, postage prepaid and addressed as set forth above. Such
deposit in the U.S. Mail shall not affect the deemed delivery of the notice
by facsimile, provided that the procedures set forth above are fully
complied with. Any party, by notice given as aforesaid, may change the
address to which subsequent notices are to be sent to such party;
f. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of each of the parties
hereto;
g. Invalidity. If for any reason any term or provision of this Agreement
shall be declared void and unenforceable by any court of law or equity
it shall only affect such particular term or provision of this Agreement
and the balance of this Agreement shall remain in full force and effect
and shall be binding upon the parties hereto;
h. Complete Agreement. All understandings and agreements heretofore had
between the parties are merged into this Agreement which alone fully and
completely expresses their agreement. This Agreement may be changed only
in writing signed by both of the parties hereto and shall apply to and
bind the successors and assigns of each of the parties hereto and shall
not merge with the deed delivered to Purchaser at Closing;
i. Attorneys' Fees and Costs. In the event of any litigation arising out of
breach or claimed breach of this Agreement, the prevailing party shall
be entitled to recover from the other all costs and expenses incurred in
connection therewith, including attorneys' fees and costs.
j. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but such counterparts
together shall constitute one in the same instrument.
16. Section 1031 Exchange. It is the intent of Seller to utilize this
transaction as part of a tax deferred exchange as provided in Internal
Revenue Code Section 1031. Purchaser shall cooperate with Seller in a
manner necessary to complete the exchange provided that the exchange
transaction will not delay the Closing or cause additional expense to
Purchaser.
17. Pending Real Estate Tax Appeal. Seller has retained KPMG, LLP to represent
Seller in a tax appeal regarding real estate taxes payable for the years
2001 and 2002. In the event a tax refund or credit is obtained as a result
of the appeal for the specified years, Seller shall
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receive the refund or credit. Purchaser shall incur no fees or costs
associated with the pending appeal.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
SELLER
Maxus Operating Limited Partnership
By: Maxus Realty G.P., Inc.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxxx
Its: President
PURCHASER
Xxx Xxxxxxx Associates, Inc.
By: /s/ illegible signature
Its: President/CEO
By: ___________________________________
Its: ________________________________
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