AGREEMENT OF PURCHASE AND SALE
Exhibit 10.45
AGREEMENT OF PURCHASE AND SALE
ARTICLE 1: PROPERTY/PURCHASE PRICE
1.1 | Certain Basic Terms. | |||||
(a) | Purchaser and Notice Address: | With a copy to: |
Asset Capital Partners, X.X. |
Xxxxxxxx Lamishaw & Rossi LLP | |
Attn: Xxxxx Xxxxxx |
Attn: Xxxxxx Xxxxxxxxx | |
0000 Xxxxxxxxx Xxxxxx, Xxxxx |
000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000 | |
Xxxxxxxx, XX 00000 |
Xxx Xxxxxxx, XX 00000 | |
Telephone: 301/000-0000 |
Telephone: 213/000-0000 | |
Facsimile: 301/656-1960 |
Facsimile: 213/312-1266 | |
E-mail: xxxxxxx@xxxxxxxxxxxxxxxx.xxx |
E-mail: xxxxxxxxxxxxxxx@xxxxxxx.xxx |
(b) |
Seller and Notice Address: | With a copy to: |
C-9813 and X-0000 Xxxxxx Xxxxx LLC |
REMAX Realty Services | |||||||
Attn: |
Xxxx and Xxxxxxxxx Xxxxxxxx | Attn: | Xxx XxXxxxx | |||||
0000 Xxxxxxxx Xxxx |
0000 Xxxxxxxx Xxxxxx, Xxxxx 000 | |||||||
Xxxxxxxx, XX 00000 |
Xxxxxxxx, XX 00000 | |||||||
Telephone: 301/000-0000 | Telephone: 301/000-0000 | |||||||
Facsimile: 301/652-4444 | ||||||||
E-mail: xxxxxxxxxx@xxxx.xxx |
(c) |
Title Company: | Escrow Agent: |
Chicago Title Insurance Company | Chicago Title Insurance Company | |||||||
Attn: Xxxxxx Xxxxx | Attn: Xxxxxx Xxxxx | |||||||
0000 00xx Xxxxxx, XX | 0000 00xx Xxxxxx, XX | |||||||
Xxxxxxxxxx, X.X. 00000 | Xxxxxxxxxx, X.X. 00000 | |||||||
Telephone: 202/000-0000 | Telephone: 202/000-0000 | |||||||
Facsimile: 202/955-5769 | Facsimile: 202/955-5769 | |||||||
xxxxxx@xxx.xxx | xxxxxx@xxx.xxx |
(c)
|
Date of this Agreement: |
The latest date of execution by the Seller or the Purchaser, as indicated on the signature page. | ||
(d)
|
Purchase Price: |
$6,250,000.00 | ||
(e)
|
Xxxxxxx Money: |
$75,000.00 initial deposit with an additional $175,000.00 to be deposited following the completion of the due-diligence period for a total of $250,000.00, together with interest thereon, and all other amounts designated as “Xxxxxxx Money” hereunder. | ||
(f)
|
Due Diligence Period: |
The period ending 30 days after the Date of this Agreement. | ||
(g)
|
Closing Date: | As designated by the Purchaser upon not less than 5 business days’ prior notice, but no later than 30 days after the Due Diligence Period. | ||
(h)
|
Broker: | CBRE, Inc. and RE/MAX Realty Services |
1.2 Property. Subject to the terms and conditions of this
Agreement of Purchase and Sale (the “Agreement”), Seller agrees to sell to Purchaser, and
Purchaser agrees to purchase from Seller, all of Seller’s right, title and interest in and to the
following property (collectively, the “Property”):
(a) The “Real Property,” being the land described
in Exhibit A attached hereto, together with (i) all improvements located thereon
(“Improvements”), and (ii) all and singular the rights, easements, tenements, and
appurtenances thereon.
(b) The landlord’s interest in the “Leases”, being all
leases, rental agreements and other agreements permitting occupancy of the Improvements,
including leases which may be made by Seller after the date hereof and prior to Closing as
permitted by this Agreement.
(c) The “Tangible Personal Property,” being all
equipment, machinery, furniture, furnishings, supplies and other tangible personal property
owned by Seller, and Seller’s interest and corresponding obligation in any such property
leased by Seller, now or hereafter located in and used in connection with the operation,
ownership or management of the Real Property.
(d) The “Intangible Personal Property,” being all
intangible personal property in the Sellers' possession related to the Real Property and the Improvements, including,
without limitation: all trade names and trade marks associated with the Real Property and
the Improvements; the plans and specifications and other architectural and engineering
drawings for the Improvements; warranties and guaranties; contract rights related to the
construction, operation, or ownership of the Real Property (but only to the extent Seller’s
obligations thereunder are expressly assumed by Purchaser pursuant to this Agreement);
governmental permits, approvals and licenses; tenant lists and correspondence; all records
and promotional materials relating to the Property; and telephone exchange numbers.
1.3 Xxxxxxx Money. Within 3 business days after receipt of a
fully executed copy of this Agreement, Purchaser shall deposit the Xxxxxxx Money with the Escrow
Agent. The Xxxxxxx Money shall be applied to the Purchase Price at Closing. If this Agreement
terminates pursuant to any express right of Purchaser or Seller to terminate this Agreement other
than as a result of Purchaser’s default, the Xxxxxxx Money shall be refunded to Purchaser
immediately upon request, and all further rights and obligations of the parties under this
Agreement shall terminate. The Xxxxxxx Money shall be held and disbursed by the Escrow Agent
pursuant to Article 9 of this Agreement.
ARTICLE 2: INSPECTION
2.1 Seller’s Delivery of Specified Documents. To the extent
such items are in Seller’s possession or control, Seller shall provide to Purchaser the following
(the “Property Information”) within 5 business days after the Date of this Agreement:
(a) Rent Roll. A current rent roll and delinquency
report (“Rent Roll”) for the Property;
(d) Tax Statements; Tax Consultant. Copies of all ad
valorem tax statements relating to the Property for the current tax year and for the 24
months preceding the Agreement;
(h) Business License and Permit. Copies of all
certificates, approvals, licenses and/or permits required for the operation of the Property
(collectively, the “Permits”);
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(k) List of Capital Improvements. A list of all capital
improvements known to the Seller and performed on the Property within the 36 months
preceding this Agreement;
(n) Existing Title and Survey. Copy of Seller’s
existing title insurance policy and any existing ALTA “as-built” survey of the Property.
In addition, Seller shall make available to Purchaser at the Property all of the documents and
information in the Sellers' possession more particularly described in Exhibit G attached hereto, and any other
information regarding the Property which Purchaser shall reasonably request. Seller shall during
the pendency of this Agreement provide Purchaser with any document described above coming into
Seller’s possession or produced by Seller after the initial delivery of the Property Information.
Seller shall provide Purchaser with an updated Rent Roll, dated as of the last day of the month,
for each month during the pendency of this Agreement.
2.2 Due Diligence. Purchaser shall have through the last
day of the Due Diligence Period in which to examine, inspect, and investigate the Property and, in
Purchaser’s sole and absolute judgment and discretion, to determine whether the Property is
acceptable to Purchaser and to obtain all necessary internal approvals. Purchaser may terminate
this Agreement for any reason by giving written notice of termination to Seller (the “Due
Diligence Termination Notice”) on or before the last day of the Due Diligence Period. If
Purchaser does not give a notice of its intent to continue this Agreement beyond the expiration of
the Due Diligence Period, Purchaser shall be deemed to have given a Due Diligence Termination
Notice, and this Agreement shall be deemed terminated. Purchaser shall have reasonable access to
the Property and Seller’s books and records for the purpose of conducting inspections, studies, or
tests reasonably required by Purchaser. During the Due Diligence Period, Purchaser will advise
Seller of those Service Contracts which Purchaser will assume and which Service Contracts are to be
terminated by Seller at Closing.
ARTICLE 3: TITLE AND SURVEY REVIEW
3.1 Delivery of Title Commitment and Survey. Purchaser shall
cause to be prepared: (i) a current, effective commitment for title insurance (the “Title
Commitment”) issued by the Title Company, in the amount of the Purchase Price with Purchaser as
the proposed insured, and accompanied by true, complete, and legible copies of all documents
referred to in the Title Commitment; and (ii) a current ALTA-ACSM survey of the Property (the
“Survey”). During the Due Diligence Period, Purchaser shall review title to the Property as
disclosed by the Title Commitment and the Survey. Seller will reasonably cooperate with Purchaser
in curing any objections Purchaser may have to title to the Property.
ARTICLE 4: OPERATIONS AND RISK OF LOSS
4.1 Ongoing Operations. During the pendency of this
Agreement:
(a) Performance under Leases and Service
Contracts. Seller shall (i) carry on its business and activities relating to and
otherwise maintain the Property substantially in the same manner as it did before the Date
of this Agreement, and (ii) shall perform its material obligations under the Leases and
Service Contracts and other agreements that may affect the Property. Without Purchaser’s
prior written consent in each instance, Seller will not amend or terminate any existing
Lease, or enter into a new Lease concerning the Property.
(b) Listings and Other Offers. Seller will not
list the Property with any broker or otherwise solicit or make or accept any offers to sell
the Property, engage in any discussions or negotiations with any third party with respect
to the sale or other disposition of the Property, or enter into any contracts or agreements
(whether binding or not) regarding any disposition of the Property.
4.2 Damage; Condemnation. Risk of loss or condemnation up to
and including the Closing Date shall be borne by Seller.
4.3 Estoppel Certificates. Following the expiration of the
Due Diligence Period and prior to the Closing Date, Seller shall obtain tenant estoppel
certificates in a form to be supplied by Purchaser or its lender (“Tenant Estoppel Certificate”)
from each tenant under Leases applicable to any portion of the Property.
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ARTICLE 5: CLOSING
5.1 Closing. The consummation of the transaction contemplated
herein (“Closing”) shall occur on the Closing Date at the offices of the Escrow Agent.
Closing shall occur through an escrow with the Escrow Agent. Upon satisfaction or completion of all
closing conditions and deliveries, the parties shall direct the Escrow Agent to immediately record
and deliver the closing documents to the appropriate parties and make disbursements according to
the closing statements executed by Seller and Purchaser.
5.2 Conditions to the Parties’ Obligations to Close. In
addition to all other conditions set forth herein, the obligation of Seller, on the one hand, and
Purchaser, on the other hand, to consummate the transactions contemplated hereunder shall be
contingent upon the following:
(a) The other party’s representations and warranties
contained herein shall be true and correct as of the date of this Agreement and the Closing
Date;
(b) As of the Closing Date, the other party shall have
performed its obligations hereunder and all deliveries to be made at Closing have been
tendered;
(c) There shall exist no pending or threatened action,
suit or proceeding with respect to the other party before or by any court or administrative
agency which seeks to restrain or prohibit, or to obtain damages or a discovery order with
respect to, this Agreement or the consummation of the transactions contemplated hereby;
(d) The obligation of Purchaser to consummate the
transactions contemplated hereunder shall also be subject to the conditions that:
(i) Purchaser shall be satisfied that none of Seller or any of its
affiliates is listed on any Government Lists and that the sale of the Property to
Purchaser will not result in a violation of the Patriot Act, any OFAC Laws and
Regulations or any other anti-terrorism or anti-money laundering laws and
regulations, including, without limitation, the Bank Secrecy Act, as amended and
the Money Laundering Control Act of 1986, as amended. Seller shall deliver to
Purchaser upon Purchaser’s request from time to time such information requested by
Purchaser regarding the identity of Seller in order for Purchaser to comply with
the Patriot Act, the OFAC Laws and Regulations and such other anti-terrorism and
anti-money laundering laws and regulations; and
(ii) Title Company shall be unconditionally committed to deliver to
Purchaser at Closing an Owner’s Policy of Title Insurance (the “Title
Policy”), with extended coverage and such additional endorsements as Title
Company shall have committed to provide prior to the expiration of the Due
Diligence Period, issued by the Title Company as of the date and time of the
recording of the Deed, in the amount of the Purchase Price, insuring Purchaser as
owner of good, marketable and indefeasible fee simple title to the Property, and
subject only to the Permitted Exceptions. Seller shall execute at Closing an
owner’s affidavit in such form as the Title Company shall reasonably require for
the issuance of the Title Policy. The term “Permitted Exceptions” shall
mean: the specific exceptions (exceptions that are not part of the promulgated
title insurance form) in the Title Commitment that the Title Company has not agreed
to insure over or remove from the Title Commitment as of the end of the Due
Diligence Period and that Seller is has not agreed to remove; items shown on the
Survey, which have not been removed as of the end of the Due Diligence Period; real
estate taxes not yet due and payable; and tenants in possession as tenants only
under the Leases without any option to purchase or acquire an interest in the
Property.
So long as a party is not in default hereunder, if any condition to such party’s obligation to
proceed with the Closing hereunder has not been satisfied as of the Closing Date, such party may,
in its sole discretion, (i) terminate this Agreement by delivering written notice to the other
party on or before the Closing Date, in which event the Xxxxxxx Money shall be returned to
Purchaser, (ii) elect to extend the Closing until such condition is satisfied, and (iii) elect to
consummate the transaction, notwithstanding the non-satisfaction of such condition, in which event
such party shall be deemed to have waived any such condition. The failure of a condition due to the
breach of a party shall not relieve such breaching party from any liability it would otherwise have
hereunder.
5.3 Seller’s Deliveries in Escrow. At least one business day
prior to the Closing Date, Seller shall deliver in escrow to the Escrow Agent the following:
(a) Deed. A special warranty deed (warranting
title from Seller) in form provided for under the law of the state where the Property is
located, or otherwise in conformity with the custom in such jurisdiction and mutually
satisfactory to the parties, executed and acknowledged by Seller, conveying to Purchaser
good, indefeasible and marketable fee simple title to the Real Property, subject only to
the Permitted Exceptions (the “Deed”);
(b) Xxxx of Sale and Assignment of Leases and
Contracts. A Xxxx of Sale and Assignment of Leases and Contracts in the form of
Exhibit D attached hereto (the “Assignment”),
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executed and acknowledged by Seller, vesting in Purchaser good title to the property
described therein free of any claims, except for the Permitted Exceptions to the extent
applicable;
(c) State Law Disclosures. Such disclosures and
reports as are required by applicable state and local law in connection with the conveyance
of real property;
(d) FIRPTA. A Foreign Investment in Real
Property Tax Act affidavit executed by Seller;
(e) Certificate of Representations and
Warranties. A certificate, executed by Seller, reaffirming and updating to the Closing
Date the representations and warranties given by Seller under Article 7, which certificate
will include an updated Rent Roll, list of Service Contracts, and Operating Statements;
(f) Contract Terminations. Written evidence of
the termination of all leasing and management agreements affecting the Property, as well as
any Service Contracts which Purchaser did not agree to assume during the Due Diligence
Period;
(g) Estoppel Certificate. The Estoppel
Certificate(s), which shall be in a form acceptable to Purchaser with no adverse disclosure
therein.
(h) Authority. Evidence of the existence,
organization and authority of Seller and of the authority of the persons executing
documents on behalf of Seller reasonably satisfactory to the Escrow Agent and the Title
Company; and
(i) Additional Documents. Any additional
documents that Purchaser, Escrow Agent or the Title Company may reasonably require for the
proper consummation of the transaction contemplated by this Agreement.
5.4 Purchaser’s Deliveries in Escrow. Except as set forth
below, at least one business day prior to the Closing Date, Purchaser shall deliver in escrow to
the Escrow Agent the following:
(a) Purchase Price. On or before the Closing
Date, the Purchase Price, less the Xxxxxxx Money that is applied to the Purchase Price,
plus or minus applicable prorations and adjustments;
(b) Xxxx of Sale and Assignment of Leases and
Contracts. The Assignment, executed by Purchaser;
(c) State Law Disclosures. Such disclosures and
reports as are required by applicable state and local law in connection with the conveyance
of real property; and
(d) Additional Documents. Any additional
documents that Seller, Escrow Agent or the Title Company may reasonably require for the
proper consummation of the transaction contemplated by this Agreement.
5.5 Closing Statements. At least one business day prior to
the Closing Date, Seller and Purchaser shall deposit with the Escrow Agent executed closing
statements consistent with this Agreement in the form required by the Escrow Agent.
5.6 Possession. Seller shall deliver possession of the
Property to Purchaser at the Closing subject only to the Permitted Exceptions.
5.7 Delivery of Books and Records. Immediately after the
Closing, Seller shall deliver to Purchaser’s property manager at the Property: the original Leases;
copies or originals of all books and records of account, contracts, copies of correspondence with
tenants and suppliers, receipts for deposits, unpaid bills and other papers or documents which
pertain to the Property; all advertising materials, booklets, keys and other items, if any, used in
the operation of the Property; an electronic version of all data maintained by Seller regarding
each of the Leases, each of the tenants under the Leases, correspondence and working files and
other books and records relating to the operation and management of the Property; and, if in
Seller’s possession or control, the original “as-built” plans and specifications and all other
available plans and specifications.
5.8 Notice to Tenants. Seller and Purchaser shall deliver to
each tenant immediately after the Closing a notice regarding the sale in substantially the form
Exhibit E attached hereto, or such other form as may be required by applicable state law.
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ARTICLE 6: PRORATIONS
6.1 Prorations. The items in this Paragraph 6.1 shall
be prorated between Seller and Purchaser as of the close of the day immediately preceding the
Closing Date, the Closing Date being a day of income and expense to Purchaser:
(a) Taxes and Assessments. Purchaser shall
receive a credit for any accrued but unpaid general real estate and personal property taxes
and assessments (including without limitation any assessments imposed by private covenant,
“Taxes”) applicable to any period before the Closing Date, even if such Taxes are
not yet due and payable. If the amount of any Taxes has not been determined as of Closing,
such credit shall be based on 105 percent of the most recent ascertainable Taxes and shall
be reprorated upon issuance of the final tax xxxx. Purchaser shall receive a credit for
any special assessments which are levied or charged against the Property, only if due and
payable.
(b) Collected Rent. All collected rent and other
income, including base rent, additional rent and other charges payable under Leases in
effect on the Closing Date. Seller shall be charged and Purchaser credited with any
rentals collected by Seller before Closing but applicable to any period of time after
Closing. Uncollected rent and other income shall not be prorated. If Purchaser collects
delinquencies after Closing, Purchaser shall apply such rent to the obligations owing
Purchaser for its period of ownership and to costs of collection, remitting the balance, if
any, to Seller. Purchaser shall xxxx and attempt to collect such delinquent rent in the
ordinary course of business, but shall not be obligated to engage a collection agency or
take legal action to collect any delinquencies. Seller shall not have the right to seek
collection of any rents delinquent for any period prior to the Closing unless the tenant
has vacated the premises under the Lease before the Closing Date and the Lease is not
assigned to Purchaser.
(c) Utilities. Utilities, including water,
sewer, electric, and gas, based upon the last reading of meters prior to the Closing, and
common expenses associated with operation of the Property. Seller shall endeavor to obtain
meter readings on the day before the Closing Date, and if such readings are obtained, there
shall be no proration of such items. Seller shall pay at Closing the bills therefor for
the period to the day preceding the Closing, and Purchaser shall pay the bills therefor for
the period subsequent thereto. If the utility company or vendor will not issue separate
bills, Purchaser will receive a credit against the Purchase Price for Seller’s portion and
will pay the entire xxxx prior to delinquency after Closing. If Seller has paid any
utilities no more than 30 days in advance in the ordinary course of business, then
Purchaser shall be charged its portion of such payment at Closing.
(d) Fees and Charges under Service Contracts.
Fees and charges under such of the Service Contracts as are being assigned to and assumed
by Purchaser at the Closing, on the basis of the periods to which such Service Contracts
relate.
6.2 Final Adjustment After Closing. In the event that final
bills are not available or cannot be issued prior to Closing for any item being prorated under
Paragraph 6.1, then Purchaser and Seller agree to allocate such items on a fair and
equitable basis as soon as such bills are available, final adjustment to be made as soon as
reasonably possible after the Closing. Payments in connection with the final adjustment shall be
due within 30 days of written notice.
6.3 Tenant Deposits. All tenant and other security deposits
(and interest thereon if required by law or contract to be earned thereon) shall be transferred or
credited to Purchaser at Closing. As of the Closing, Purchaser shall assume Seller’s obligations
related to tenant security deposits, but only to the extent they are properly credited and
transferred to Purchaser.
6.4 Utility Deposits. Seller shall receive a credit for the
amount of deposits, if any, with utility companies that are transferable and that are assigned to
Purchaser at the Closing.
6.5 Title and Survey Costs. The cost of the Survey, including
any revisions necessary to make the Survey conform to the requirements of this Agreement, shall be
paid by Purchaser. The premium for the Title Policy shall be paid by Seller. Fees due Escrow
Agent shall be shared equally by Purchaser and Seller.
6.6 Sales, Transfer, and Documentary Taxes. Seller and
Purchaser shall share all sales, gross receipts, compensating, documentary, excise, transfer, deed
or similar taxes and fees imposed in connection with this transaction under applicable state or
local law in accordance with local custom in the state in which the Property is located.
Notwithstanding the foregoing, Seller shall be responsible for Grantor’s Tax and deed
preparation costs and Purchaser shall be responsible for all other transfer and recording fees.
6.7 Wages. Seller shall pay the wages, and the employment
taxes and fringe benefits applicable thereto, payable to employees of Seller as of their discharge
on the Closing Date.
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6.8 Commissions. Seller and Purchaser represent and warrant
each to the other that they have not dealt with any real estate broker, sales person or finder in
connection with this transaction other than Broker. If this transaction is closed, Seller shall
pay Broker in accordance with their separate agreement. Broker is an independent contractor and is
not authorized to make any agreement or representation on behalf of either party. Except as
expressly set forth above, in the event of any claim for broker’s or finder’s fees or commissions
in connection with the negotiation, execution or consummation of this Agreement or the transactions
contemplated hereby, each party shall indemnify and hold harmless the other party from and against
any such claim based upon any statement, representation or agreement of such party.
6.9 Seller’s Obligations. Other than those obligations of
Seller expressly assumed by Purchaser hereunder or expressly agreed to in writing by Purchaser,
Seller shall pay and discharge any and all liabilities of each and every kind arising out of or by
virtue of the conduct of its business before and as of the Closing Date on or related to the
Property.
ARTICLE 7: REPRESENTATIONS AND WARRANTIES
7.1 Seller’s Representations and Warranties. As a material
inducement to Purchaser to execute this Agreement and consummate this transaction, Seller
represents and warrants to Purchaser that:
(a) Organization and Authority. Seller has been
duly organized, is validly existing, and is in good standing as a limited liability company
in its state of formation. Seller is in good standing and is qualified to do business in
the state where the Property is located. Seller has the full right and authority and has
obtained any and all consents required to enter into this Agreement and to consummate or
cause to be consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Seller at the Closing will be, authorized and
properly executed and constitutes, or will constitute, as appropriate, the valid and
binding obligation of Seller, enforceable in accordance with their terms.
(b) Conflicts and Pending Actions or Proceedings.
There is no agreement to which Seller is a party or, to Seller’s knowledge, binding on
Seller which is in conflict with this Agreement. There is no action or proceeding pending
or, to Seller’s knowledge, threatened against Seller or relating to the Property, which
challenges or impairs Seller’s ability to execute or perform its obligations under this
Agreement.
(c) Rent Roll. All information set forth in any
Rent Roll delivered to Purchaser shall be true, correct, and complete in all material
respects as of its date. Except as shown on the Rent Roll, no tenant under any Lease is
entitled to any concession or allowance, nor has any tenant paid rent more than for the
current month. There are no leasing or other commissions due, nor will any become due, in
connection with any existing Lease, and no understanding or agreement with any party exists
as to payment of any leasing commissions or fees regarding future leases or as to the
procuring of tenants. No person is entitled to occupy all or any portion of the Property
except as reflected in the Leases and the Rent Roll, and no person has any option, right of
first refusal or other right to acquire title to the Property or any interest therein other
than Purchaser.
(d) Leases. The Leases and copies of Leases to
be delivered to Purchaser pursuant to this Agreement will be true, correct, and complete as
of the date of its delivery and as of the Closing Date, and are accurately reflected on the
Rent Roll. To Seller’s knowledge, no tenants have asserted nor are there any defenses or
offsets to rent accruing after the Closing Date and no default or breach exists on the part
of any tenant. Seller has not received any notice of any default or breach on the part of
the landlord under any Lease, nor, to the best of Seller’s knowledge, does there exist any
such default or breach on the part of the landlord. Neither Seller nor, to Seller’s
knowledge, any other party is in default under any Lease.
(e) Service Contracts. The list and copies of
Service Contracts to be delivered to Purchaser pursuant to this Agreement will be true,
correct, and complete as of the date of its delivery and as of the Closing Date. Neither
Seller nor, to Seller’s knowledge, any other party is in default under any Service
Contract.
(f) Operating Statements. The Operating
Statements to be delivered to Purchaser pursuant to this Agreement will show all items of
income and expense (operating and capital) incurred in connection with Seller’s ownership,
operation, and management of the Property for the periods indicated and will be true,
correct, and complete in all material respects, and represent the financial information on
which Seller has relied in its operation, management and ownership of the Property.
(g) Notice of Violations or Defects. Seller has
received no written notice from any governmental agency and has no knowledge that the
Property or the use thereof violates any governmental law or regulation, nor has Seller
received any notice from the property owners’ association
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under the CC&Rs or acquired knowledge regarding any violation of any covenants or
restrictions encumbering the Property or from any insurance company or underwriter of any
defect that would materially adversely affect the insurability of the Property or cause an
increase in insurance premiums.
(h) Environmental. Seller has no knowledge and
has received no written notice of any violation of Environmental Laws related to the
Property or the presence or release of Hazardous Materials on or from the Property except
as disclosed in the Property Information. To the best of Seller’s knowledge, Seller has
not manufactured, introduced, released or discharged from or onto the Property any
Hazardous Materials or any toxic wastes, substances or materials (including, without
limitation, asbestos), and Seller has not used the Property or any part thereof for the
generation, treatment, storage, handling or disposal of any Hazardous Materials, in
violation of any Environmental Laws. The term “Environmental Laws” includes
without limitation the Resource Conservation and Recovery Act and the Comprehensive
Environmental Response Compensation and Liability Act and other federal laws governing the
environment as in effect on the date of this Agreement together with their implementing
regulations and guidelines as of the date of this Agreement, and all state, regional,
county, municipal and other local laws, regulations and ordinances that are equivalent or
similar to the federal laws recited above or that purport to regulate Hazardous Materials.
The term “Hazardous Materials” includes petroleum, including crude oil or any
fraction thereof, natural gas, natural gas liquids, liquified natural gas, or synthetic gas
usable for fuel (or mixtures of natural gas or such synthetic gas), asbestos and asbestos
containing materials and any substance, material waste, pollutant or contaminant listed or
defined as hazardous or toxic under any Environmental Law. To Seller’s knowledge, there
are not now, nor have there been, any above-ground or underground storage tanks located on
the Property.
(i) Property Information. To Seller’s
knowledge, the Property Information delivered and made available to Purchaser is true,
correct and complete in all material respects.
(j) Anti-Terrorism/Anti-Money Laundering.
Neither Seller nor any of its affiliates (i) is listed on any Government Lists, (ii) has
been determined by competent authority to be subject to the prohibitions contained in
Presidential Executive Order No. 13244 (September 23, 2001) or in any enabling or
implementing legislation or other Presidential Executive Orders in respect thereof, (iii)
is a person or entity who has been previously indicted for or convicted of any felony
involving a crime or crimes of moral turpitude or for any violation of the Patriot Act, or
(iv) is currently under investigation by any governmental authority for alleged criminal
activity. Seller has no reason to believe that this transaction, including, without
limitation, the source of its funds, would result in a violation by Purchaser or Seller of
the Patriot Act, OFAC Laws and Regulations, or any other anti-terrorism or anti-money
laundering laws or regulations, including, without limitation, the Bank Secrecy Act, as
amended, or the Money Laundering Control Act of 1986, as amended.
7.2 Purchaser’s Representations and Warranties. As a material
inducement to Seller to execute this Agreement and consummate this transaction, Purchaser
represents and warrants to Seller that:
(a) Organization and Authority. Purchaser has
been duly organized and is validly existing as a limited partnership in its state of
formation and will be qualified to do business in the state in which the Real Property is
located on the Closing Date if required under applicable law. Subject only to obtaining
certain internal approvals on or before the expiration of the Due Diligence Period,
Purchaser has the full right and authority and has obtained any and all consents required
to enter into this Agreement and to consummate or cause to be consummated the transactions
contemplated hereby. This Agreement has been, and all of the documents to be delivered by
Purchaser at the Closing will be, authorized and properly executed and constitutes, or will
constitute, as appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.
(b) Conflicts and Pending Action. There is no
agreement to which Purchaser is a party or to Purchaser’s knowledge binding on Purchaser
which is in conflict with this Agreement. There is no action or proceeding pending or, to
Purchaser’s knowledge, threatened against Purchaser which challenges or impairs Purchaser’s
ability to execute or perform its obligations under this Agreement.
(c) Anti-Terrorism/Anti-Money Laundering.
Neither Purchaser nor any of its affiliates (i) is listed on any Government Lists, (ii) has
been determined by competent authority to be subject to the prohibitions contained in
Presidential Executive Order No. 13244 (September 23, 2001) or in any enabling or
implementing legislation or other Presidential Executive Orders in respect thereof, (iii)
is a person or entity who has been previously indicted for or convicted of any felony
involving a crime or crimes of moral turpitude or for any violation of the Patriot Act, or
(iv) is currently under investigation by any governmental authority for alleged criminal
activity. Purchaser has no reason to believe that this transaction, including, without
limitation, the source of its funds, would result in a violation by Purchaser or Seller of
the Patriot Act, OFAC Laws and Regulations, or any other anti-terrorism or anti-money
laundering laws or
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regulations, including, without limitation, the Bank Secrecy Act, as amended, or the
Money Laundering Control Act of 1986, as amended.
7.3 Survival of Representations and Warranties. The
representations and warranties set forth in this Article 7 are made as of the date of this
Agreement and are remade as of the Closing Date and shall not be deemed to be merged into or waived
by the instruments of Closing, but shall survive the Closing for a period of 12 months. Seller and
Purchaser shall have the right to bring an action thereon only if Seller or Purchaser, as the case
may be, has given the other party written notice of the circumstances giving rise to the alleged
breach within such 12 month period. Each party agrees to defend and indemnify the other against
any claim, liability, damage or expense asserted against or suffered by such other party arising
out of the breach or inaccuracy of any such representation or warranty.
ARTICLE 8: DEFAULT AND REMEDIES
8.1 Seller’s Default. If Seller defaults in its obligation to
sell and convey the Property to Purchaser pursuant to this Agreement, Purchaser’s sole remedy shall
be to elect one of the following: (a) to terminate this Agreement, in which event Purchaser shall
be entitled to the return by the Escrow Agent to Purchaser of the Xxxxxxx Money and recovery of
Purchaser’s actual out-of-pocket expenses in entering into this Agreement and performing its
obligations hereunder, or (b) to bring a suit for specific performance provided that any suit for
specific performance must be brought within 60 days of Seller’s default, to the extent permitted by
law, Purchaser hereby waives the right to bring suit at any later date; provided, however, that if
specific performance is not a remedy available to Purchaser due to the willful or intentional act
of Seller (such as the prior conveyance of the Property to third party in violation of this
Agreement), then in lieu of specific performance, Purchaser shall have the right to recover to
pursue any and all available remedies, at law or in equity.
8.2 Purchaser’s Default. In the event that Purchaser fails,
without legal excuse, to complete the purchase of the Property, the Xxxxxxx Money deposit made by
Purchaser shall be forfeited to the Seller as the sole and exclusive remedy available to the Seller
for such failure. The parties acknowledge that Seller’s actual damages in the event of a default
by Purchaser under this Agreement will be difficult to ascertain, and that such liquidated damages
represent the parties’ best estimate of such damages.
ARTICLE 9: XXXXXXX MONEY PROVISIONS
9.1 Investment and Use of Funds. The Escrow Agent shall
invest the Xxxxxxx Money in a government insured interest-bearing account satisfactory to Purchaser
at an institution having assets of not less than $125,000,000, shall not commingle the Xxxxxxx
Money with any funds of the Escrow Agent or others, and shall promptly provide Purchaser and Seller
with confirmation of the investments made. If the Closing under this Agreement occurs, the Escrow
Agent shall deliver the Xxxxxxx Money to, or upon the instructions of, Purchaser on the Closing
Date. Provided such supplemental escrow instructions are not in conflict with this Agreement as it
may be amended in writing from time to time, Seller and Purchaser agree to execute such
supplemental escrow instructions as may be appropriate to enable Escrow Agent to comply with the
terms of this Agreement.
9.2 Termination before Expiration of Due Diligence Period.
The Purchaser shall notify the Escrow Agent of the date that the Due Diligence Period ends promptly
after such date is established under this Agreement, and Escrow Agent may rely upon such notice.
If Purchaser elects to terminate the Purchase Agreement pursuant to Paragraph 2.2, Escrow
Agent shall pay the entire Xxxxxxx Money to Purchaser one business day following receipt of the Due
Diligence Termination Notice from Purchaser (as long as the current investment can be liquidated in
one day) and this Agreement shall thereupon terminate, in which event Purchaser agrees to return to
Seller the Property Information. No notice to Escrow Agent from Seller shall be required for the
release of the Xxxxxxx Money to Purchaser by Escrow Agent. The Xxxxxxx Money shall be released and
delivered to Purchaser from Escrow Agent upon Escrow Agent’s receipt of the Due Diligence
Termination Notice, despite any objection or potential objection by Seller. Seller agrees it shall
have no right to bring any action against Escrow Agent which would have the effect of delaying,
preventing, or in any way interrupting Escrow Agent’s delivery of the Xxxxxxx Money to Purchaser
pursuant to this paragraph, any remedy of Seller being against Purchaser, not Escrow Agent.
9.3 Other Terminations. Upon a termination of this Agreement
other than as described in Paragraph 9.2, either party to this Agreement (the
“Terminating Party”) may give written notice to the Escrow Agent and the other party (the
“Non-Terminating Party”) of such termination and the reason for such termination. Such
request shall also constitute a request for the release of the Xxxxxxx Money to the Terminating
Party. The Non-Terminating Party shall then have five business days in which to object in writing
to the release of the Xxxxxxx Money to the Terminating Party. If the Non-Terminating Party
provides such an objection, then the Escrow Agent shall retain the Xxxxxxx Money until it receives
written instructions executed by both Seller and Purchaser as to the disposition and
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disbursement of the Xxxxxxx Money, or until ordered by final court order, decree or judgment,
which is not subject to appeal, to deliver the Xxxxxxx Money to a particular party, in which event
the Xxxxxxx Money shall be delivered in accordance with such notice, instruction, order, decree or
judgment.
9.4 Interpleader. Except as provided in Paragraph 9.2
above, Seller and Purchaser mutually agree that in the event of any controversy regarding the
Xxxxxxx Money, unless mutual written instructions are received by the Escrow Agent directing the
Xxxxxxx Money’s disposition, the Escrow Agent shall not take any action, but instead shall await
the disposition of any proceeding relating to the Xxxxxxx Money or, at the Escrow Agent’s option,
the Escrow Agent may interplead all parties and deposit the Xxxxxxx Money with a court of competent
jurisdiction in which event the Escrow Agent may recover all of its court costs and reasonable
attorneys’ fees. Seller or Purchaser, whichever loses in any such interpleader action, shall be
solely obligated to pay such costs and fees of the Escrow Agent, as well as the reasonable
attorneys’ fees of the prevailing party in accordance with the other provisions of this Agreement.
9.5 Liability of Escrow Agent. The parties acknowledge that
the Escrow Agent is acting solely as a stakeholder at their request and for their convenience, that
the Escrow Agent shall not be deemed to be the agent of either of the parties, and that the Escrow
Agent shall not be liable to either of the parties for any action or omission on its part taken or
made in good faith, and not in disregard of this Agreement, but shall be liable for its negligent
acts and for any loss, cost or expense incurred by Seller or Purchaser resulting from the Escrow
Agent’s mistake of law respecting the Escrow Agent’s scope or nature of its duties. Seller and
Purchaser shall jointly and severally indemnify and hold the Escrow Agent harmless from and against
all costs, claims and expenses, including reasonable attorneys’ fees, incurred in connection with
the performance of the Escrow Agent’s duties hereunder, except with respect to actions or omissions
taken or made by the Escrow Agent in bad faith, in disregard of this Agreement or involving
negligence on the part of the Escrow Agent.
9.6 Escrow Fee. Except as expressly provided herein to the
contrary, the escrow fee, if any, charged by the Escrow Agent for holding the Xxxxxxx Money or
conducting the Closing shall be shared equally by Seller and Purchaser.
ARTICLE 10: MISCELLANEOUS
10.1 Parties Bound. Neither party may assign this Agreement
without the prior written consent of the other, and any such prohibited assignment shall be void;
provided, however, that Purchaser may assign this Agreement without Seller’s consent to an
Affiliate or to effect an Exchange pursuant to Paragraph 10.15 hereof. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the respective legal
representatives, successors, assigns, heirs, and devisees of the parties. For the purposes of this
paragraph, the term “Affiliate” means (a) an entity that directly or indirectly controls,
is controlled by or is under common control with the Purchaser, or (b) an entity at least a
majority of whose economic interest is owned by Purchaser; and the term “control” means the power
to direct the management of such entity through voting rights, ownership or contractual
obligations.
10.2 Invalidity and Waiver. If any portion of this Agreement is
held invalid or inoperative, then so far as is reasonable and possible the remainder of this
Agreement shall be deemed valid and operative, and, to the greatest extent legally possible, effect
shall be given to the intent manifested by the portion held invalid or inoperative. The failure by
either party to enforce against the other any term or provision of this Agreement shall not be
deemed to be a waiver of such party’s right to enforce against the other party or any
other such term or provision in the future.
10.3 Governing Law. This Agreement shall, in all respects, be
governed, construed, applied, and enforced in accordance with the law of the state in which the
Real Property is located.
10.4 Survival. The provisions of this Agreement that contemplate
performance after the Closing and the obligations of the parties not fully performed at the Closing
shall survive the Closing and shall not be deemed to be merged into or waived by the instruments of
Closing.
10.5 No Third Party Beneficiary. This Agreement is not intended
to give or confer any benefits, rights, privileges, claims, actions, or remedies to any person or
entity as a third party beneficiary, decree, or otherwise.
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10.6 Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all prior agreements and understandings relating to
the Property. This Agreement may be amended or supplemented only by an instrument in writing
executed by the party against whom enforcement is sought.
10.7 Time. Time is of the essence in the performance of this
Agreement.
10.8 Confidentiality. Seller and Purchaser shall make no public
announcement or disclosure of any information related to this Agreement to outside brokers or third
parties, before or after the Closing, without the prior written specific consent of the other;
provided, however, that Seller and Purchaser may make disclosure of this Agreement to its lenders,
creditors, officers, employees and agents as necessary to perform its obligations hereunder, and
either party may disclose information which, by its nature, is a matter of public record.
10.9 Notices. All notices required or permitted hereunder shall
be in writing and shall be served on the parties at the addresses set forth in Paragraph
1.1. Any such notices shall be either (a) sent by overnight delivery using a nationally
recognized overnight courier, in which case notice shall be deemed delivered one business day after
deposit with such courier, (b) sent by telefax, in which case notice shall be deemed delivered upon
transmission of such notice, or (c) sent by personal delivery, in which case notice shall be deemed
delivered upon receipt. A party’s address may be changed by written notice to the other party;
provided, however, that no notice of a change of address shall be effective until actual receipt of
such notice. Copies of notices are for informational purposes only, and a failure to give or
receive copies of any notice shall not be deemed a failure to give notice. Notices given by
counsel to the Purchaser shall be deemed given by Purchaser and notices given by counsel to the
Seller shall be deemed given by Seller.
10.10 Construction. The parties acknowledge that the parties and
their counsel have reviewed and revised this Agreement and agree 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 exhibits or amendments hereto.
10.11 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event after which the
designated period of time begins to run is not to be included and the last day of the period so
computed is to be included at, unless such last day is a Saturday, Sunday or legal holiday for
national banks in the location where the Property is located, in which event the period shall run
until the end of the next day which is neither a Saturday, Sunday, or legal holiday. The last day
of any period of time described herein shall be deemed to end at 6:00 p.m. local time where the
Property is located.
10.12 Audit Cooperation. At Purchaser’s request, at any time before
or after Closing, Seller shall provide to Purchaser’s designated independent auditor access to the
books and records of the Property, and all related information regarding the period for which
Purchaser is required to have the Property audited under the regulations of the Securities and
Exchange Commission, and Seller shall provide to such auditor a representation letter regarding the
books and records of the Property, in substantially the form of Exhibit F attached hereto,
in connection with the normal course of auditing the Property in accordance with generally accepted
auditing standards. The Purchaser agrees to indemnify and hold harmless the Seller from any claim,
damage, loss, or liability to which Seller is at any time subjected by any person who is not a
party to this Agreement as a result of Seller’s compliance with this paragraph.
10.13 Procedure for Indemnity. The following provisions govern
actions for indemnity under this Agreement. Promptly after receipt by an indemnitee of notice of
any claim, such indemnitee will, if a claim in respect thereof is to be made against the
indemnitor, deliver to the indemnitor written notice thereof and the indemnitor shall have the
right to participate in and, if the indemnitor agrees in writing that it will be responsible for
any costs, expenses, judgments, damages, and losses incurred by the indemnitee with respect to such
claim, to assume the defense thereof, with counsel mutually satisfactory to the parties; provided,
however, that an indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnitor, if the indemnitee reasonably believes that representation of
such indemnitee by the counsel retained by the indemnitor would be inappropriate due to actual or
potential differing interests between such indemnitee and any other party represented by such
counsel in such proceeding. The failure of indemnitee to deliver written notice to the indemnitor
within a reasonable time after indemnitee receives notice of any such claim shall relieve such
indemnitor of any liability to the indemnitee under this indemnity only if and to the extent that
such failure is prejudicial to its ability to defend such action, and the omission so to deliver
written notice to the indemnitor will not relieve it of any liability that it may have to any
indemnitee other than under this indemnity. If an indemnitee settles a claim without the prior
written consent of the indemnitor, then the indemnitor shall be released from liability with
respect to such claim unless the indemnitor has unreasonably withheld such consent.
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10.14 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original, and all of such
counterparts shall constitute one Agreement. To facilitate execution of this Agreement, the
parties may execute and exchange by telephone facsimile counterparts of the signature pages.
10.15 Section 1031 Exchange. Either party may consummate the
purchase or sale (as applicable) of the Property as part of a so-called like kind exchange (an
“Exchange”) pursuant to § 1031 of the Internal Revenue Code of 1986, as amended (the
“Code”), provided that: (a) the Closing shall not be delayed or affected by reason of the
Exchange nor shall the consummation or accomplishment of an Exchange be a condition precedent or
condition subsequent to the exchanging party’s obligations under this Agreement; (b) the exchanging
party shall effect its Exchange through an assignment of this Agreement, or its rights under this
Agreement, to a qualified intermediary (c) neither party shall be required to take an assignment of
the purchase agreement for the relinquished or replacement property or be required to acquire or
hold title to any real property for purposes of consummating an Exchange desired by the other
party; and (d) the exchanging party shall pay any additional costs that would not otherwise have
been incurred by the non-exchanging party had the exchanging party not consummated the transaction
through an Exchange. Neither party shall by this Agreement or acquiescence to an Exchange desired
by the other party have its rights under this Agreement affected or diminished in any manner or be
responsible for compliance with or be deemed to have warranted to the exchanging party that its
Exchange in fact complies with § 1031 of the Code.
10.16 Attorneys’ Fees. Should either party employ attorneys to
enforce any of the provisions hereof, the party against whom any final judgment is entered agrees
to pay the prevailing party all reasonable costs, charges, and expenses, including attorneys’ fees,
expended or incurred in connection therewith.
10.17 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by either party at Closing, each
party agrees to perform, execute and deliver, but without any obligation to incur any additional
liability or expense, on or after the Closing any further deliveries and assurances as may be
reasonably necessary to consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of the Property to Purchaser.
Date:
|
6/13/06 | By: | /s/ Xxxx X. Xxxxxxxx Xx. | |||||
Name: | Xxxx X. Xxxxxxxx Xx. | |||||||
Title: | Member | |||||||
“Seller" | ||||||||
ASSET CAPITAL PARTNERS, L.P. | ||||||||
Date:
|
6/21/06 | By: | /s/ Xxxxxxxxx X. Xxxxxxxx | |||||
Name: | Xxxxxxxxx X. Xxxxxxxx | |||||||
Title: | Chief Investment Officer | |||||||
“Purchaser" |
Escrow Agent has executed this Agreement in order to confirm that the Escrow Agent has received and
shall hold the Xxxxxxx Money and the interest earned thereon, in escrow, and shall disburse the
Xxxxxxx Money, and the interest earned thereon, pursuant to the provisions of Article 9.
CHICAGO TITLE INSURANCE COMPANY | ||||||||
By: | /s/ Xxxxxx X. Xxxxx | |||||||
Name: | Xxxxxx X. Xxxxx | |||||||
Date:
|
6/22/06 | Title: | Assistant Vice President & Commercial Counsel | |||||
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