EXHIBIT 99.1
PURCHASE/CONTRIBUTION AGREEMENT
BETWEEN
RYANCO PARTNERS LTD. NO. X
AS SELLER,
AND
BEHRINGER HARVARD OPERATING PARTNERSHIP I LP
AS BUYER
TABLE OF CONTENTS
ARTICLE 1 PURCHASE PRICE AND XXXXXXX MONEY................................................................2
Section 1.1 Agreement to Sell and Purchase.......................................................2
Section 1.2 Purchase Price.......................................................................2
Section 1.3 Xxxxxxx Money........................................................................4
ARTICLE 2 TITLE INSURANCE, OTHER INFORMATION, AND SURVEY..................................................5
Section 2.1 Title Insurance......................................................................5
Section 2.2 Other Information....................................................................6
Section 2.3 Survey...............................................................................7
ARTICLE 3 TITLE REVIEW AND DUE DILIGENCE..................................................................7
Section 3.1 Title Review.........................................................................7
Section 3.2 Due Diligence Period.................................................................8
ARTICLE 4 SELLER'S REPRESENTATIONS, WARRANTIES, AND COVENANTS.............................................9
Section 4.1 Seller's Representations and Warranties..............................................9
Section 4.2 Survival of Representations and Warranties..........................................13
Section 4.3 Knowledge Standard..................................................................14
Section 4.4 Seller's Covenants..................................................................14
ARTICLE 5 BUYER'S REPRESENTATIONS AND WARRANTIES.........................................................16
Section 5.1 Buyer's Representations and Warranties..............................................16
Section 5.2 Buyer's Covenants...................................................................17
ARTICLE 6 CLOSING AND PRORATIONS.........................................................................18
Section 6.1 Closing Date........................................................................18
Section 6.2 Closing Matters.....................................................................19
Section 6.3 Prorations..........................................................................21
Section 6.4 Closing Costs.......................................................................23
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Section 6.5 Assumption Approval.................................................................23
Section 6.6 Defeasance..........................................................................23
Section 6.7 Seller's and Buyer's Joint Covenants Regarding Taxation
of Cash/Unit Purchase...............................................................24
Section 6.8 ....................................................................................24
ARTICLE 7 DEFAULTS AND REMEDIES..........................................................................24
Section 7.1 Default by Buyer....................................................................24
Section 7.2 Default by Seller...................................................................26
ARTICLE 8 CASUALTY AND CONDEMNATION......................................................................26
Section 8.1 Risk of Loss and Notice.............................................................26
Section 8.2 Minor Casualty......................................................................26
Section 8.3 Major Casualty and Condemnation.....................................................27
ARTICLE 9 MISCELLANEOUS..................................................................................28
Section 9.1 Notices.............................................................................28
Section 9.2 Performance.........................................................................29
Section 9.3 Binding Effect......................................................................29
Section 9.4 Entire Agreement....................................................................29
Section 9.5 Assignment..........................................................................30
Section 9.6 Commissions.........................................................................30
Section 9.7 Headings............................................................................30
Section 9.8 Holidays, Etc.......................................................................31
Section 9.9 Legal Fees..........................................................................31
Section 9.10 Governing Law.......................................................................31
Section 9.11 Severability........................................................................31
Section 9.12 Disclaimers, Waivers, and Releases..................................................31
Section 9.13 Rule of Construction................................................................33
Section 9.14 Effective Date......................................................................33
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Section 9.15 Counterparts and Facsimile Signatures...............................................33
Section 9.16 No Recording........................................................................33
Section 9.17 Further Acts........................................................................33
Section 9.18 Conditions Precedent of Buyer.......................................................34
Section 9.19 Confidentiality.....................................................................34
Section 9.20 Option to Guarantee Debt on Property................................................35
Section 9.21 Buyer's Indemnification.............................................................35
Section 9.22 Seller's Indemnification............................................................35
Section 9.23 Waiver of Call Right................................................................36
EXHIBIT A Legal Description of the Real Property
EXHIBIT B List of Service Contracts
EXHIBIT C List of Designated Owners and Allocation of Net Amount
EXHIBIT C-1 Subscription Agreement and Accredited Investor Questionnaire
EXHIBIT C-2 Subscription Agreement and Accredited Investor Questionnaire
EXHIBIT D List of Delivered Loan Documents
EXHIBIT E Litigation
EXHIBIT F Notices from Governmental Authorities
EXHIBIT G Buyer's Partnership Agreement
EXHIBIT H Knowledge Individuals
EXHIBIT I Deed
EXHIBIT J Xxxx of Sale
EXHIBIT K Assignment of Leases, Contracts, Security Deposits and
Warranties
EXHIBIT L IRC Section 1445 Certification
EXHIBIT M Tenant Notice Letter
EXHIBIT N Estoppel Certificate
EXHIBIT O-1 Form of Buyer's Counsel Legal Opinion
EXHIBIT O-2 Form of Buyer's Counsel Securities Opinion
EXHIBIT O-3 Form of Buyer's Counsel Tax Opinion
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PURCHASE/CONTRIBUTION AGREEMENT
This Purchase/Contribution Agreement (this "CONTRACT") is between RYANCO
PARTNERS LTD. NO. X, a California limited partnership ("Seller"), and BEHRINGER
HARVARD OPERATING PARTNERSHIP I LP, a Texas limited partnership ("BUYER").
BACKGROUND
Buyer has agreed to purchase from Seller, and Seller has agreed to sell to
Buyer, upon the terms and subject to the conditions set forth in this Contract:
a. the real property located in Burbank, California, more
particularly described on EXHIBIT A attached to this Contract
(the "REAL PROPERTY"), and all rights and appurtenances
pertaining to the Real Property, including any interest of
Seller in adjacent streets, alleys, easements, and
rights-of-way;
b. all improvements, structures, and fixtures located on the Real
Property (collectively, the "IMPROVEMENTS");
c. the landlord's interest in that certain Standard Form Office
Lease dated September 26, 1989 between Landlord and The Xxxx
Disney Company (now known as Disney Enterprises, Inc. and
referred to herein as "TENANT"), as supplemented and amended by
Lease Addendum dated November 6, 1989, Second Lease Addendum
dated November 5, 1999 and Third Lease Addendum dated January 1,
2004 (the "LEASE"), and any related security deposit ("DEPOSIT")
and guaranties ("GUARANTIES");
d. the Service Contracts listed in EXHIBIT B attached to this
Contract not terminated on or before the Closing Date (defined
in SECTION 6.1) (the "SERVICE CONTRACTS");
e. Seller's interest in all personal property located on the Real
Property and in the name "Buena Vista Plaza" and any other trade
names and logos used in connection with the Real Property and
Improvements (the "PERSONAL PROPERTY");
f. Seller's interest in all plans for the Improvements (the
"PLANS");
g. Seller's interest in all warranties and guaranties relating to
the Improvements, if any, including all unexpired third party
warranties and guarantees, if any, received in connection with
the construction, improvement, or equipping of the Improvements
(the "WARRANTIES"); and
h. all records and correspondence relating to the Real Property,
the Improvements, the Lease, the Service Contracts or the
Personal Property in Seller's possession excluding all documents
that are subject to an attorney-client privilege (the RECORDS).
The Real Property, the Improvements, the Leases, the Deposit, the Guaranties,
the Service Contracts, the Personal Property, the Plans, the Warranties, and the
Records are collectively called the "PROPERTY".
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ARTICLE 1
PURCHASE PRICE AND XXXXXXX MONEY
Section 1.1 AGREEMENT TO SELL AND PURCHASE.
Seller shall sell and/or contribute to Buyer, and Buyer shall purchase from
Seller, the Property, free and clear of any and all liens and encumbrances
(except the Existing Loan, as defined in SECTION 2.2(G), to the extent the
Existing Loan is not defeased pursuant to SECTION 6.6 hereof) and subject only
to the Permitted Exceptions (defined in SECTION 3.1), upon the terms contained
in this Contract.
Section 1.2 PURCHASE PRICE.
(a) The PURCHASE PRICE of the Property is $32,950,000, subject to
all prorations and credits set forth herein.
(b) The Purchase Price is payable at Closing (defined in SECTION
6.1) as follows:
(i) By Buyer taking title to the Property assuming (subject
to and inclusive of the non-recourse provisions thereof)
all obligations accruing from and after the Closing Date
under the Existing Loan (as defined in SECTION 2.2(G))
which are generally described in SECTION 2.2(G), but
excluding those obligations resulting from a default by
Seller under the Existing Loan. Seller shall cooperate
with and assist Buyer, but at no cost or expense to
Seller (other than its attorney's fees) and without
Seller having to incur any additional obligations, in
connection with Buyer seeking consent from the Lender
for the assumption of the Existing Loan (subject to and
inclusive of, the non-recourse provisions thereof) on
terms and conditions acceptable to Buyer in its sole
discretion and specifically without Buyer being required
to agree to any material change of any term of any
Existing Loan document as a condition to Lender's
approval of the assumption (the "Assumption"). Any and
all fees or expenses required to be paid to Lender in
connection with the Assumption shall be borne by Buyer;
provided, however, any fees, expenses or payments (but
not payments representing all or substantially all of
the remaining balance of the Existing Loan) resulting
from a default by Seller under the Existing Loan prior
to Closing shall be paid solely by Seller at Closing.
Additionally, Buyer shall use commercially reasonable
efforts to obtain a release, reasonably acceptable to
Seller, of all liabilities, indemnities and guarantees
(except as otherwise provided in SECTION 9.20) of Seller
and Affiliates of Seller accruing from and after the
Closing Date under the Existing Loan (the "SELLER
Releases") but Buyer shall not be obligated to incur any
costs or assume any obligations to the Lender in excess
of the costs and obligations otherwise required for
Buyer to assume the Existing Loan to do so; and
(ii) at the election of Seller, notice of which shall be
delivered in writing to Buyer by no later than June 30,
2005 (the "ELECTION NOTICE"), either:
(A) By (i) Buyer paying cash, by wire transfer for
disbursement to Seller at Closing, in the amount
of the Purchase Price, less the
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total amount of unpaid principal and accrued but
unpaid interest owing on the Existing Loan as of
the Closing Date, subject to prorations and
other debits or credits provided for in this
Contract (the "NET AMOUNT"); or (ii) Buyer
paying and delivering to Seller or Seller's
designees (the "DESIGNATED OWNERS"), cash and
units of limited partnership interest in the
Buyer ("UNITS") for disbursement to Seller and
to the Designated Owners at Closing in an
aggregate amount equal to the Net Amount.
(B) All cash payable at Closing shall be sent by
wire transfer to the Title Company for
disbursement to Seller at Closing. If all of the
Net Amount is payable to Seller in cash, Seller
hereby directs the Buyer to pay the cash on the
Closing Date to the Seller as set forth in
SECTION 1.2(B).
(C) If Seller makes an election pursuant to SECTION
1.2(B)(II)(A) to receive any portion of the Net
Amount in Units, Seller shall deliver to Buyer,
together with the Election Notice, a schedule to
this Contract, which shall become EXHIBIT C
hereto, which shall set forth (i) the names of
all Designated Owners, (ii) the total portion of
the Net Amount payable to Seller and each
Designated Owner, (iii) the portion of such
amount payable to Seller which shall be in the
form of cash, (iv) the portion of such amount
which shall be payable to Seller or for the
benefit of Seller for the Designated Owner(s) in
Units (the "UNIT VALUE") and, if more than one
recipient of Units is designated, the specific
proportions to be issued to each. The number of
Units to be issued at Closing to any Designated
Owner shall be equal to (i) the Unit Value set
forth in EXHIBIT C for such Designated Owner,
divided by (ii) the per share price at which the
common stock (the "COMMON STOCK") of Behringer
Harvard REIT I, Inc., a Maryland corporation
(the "REIT"), is offered to the public pursuant
to the offering registered under the
Registration Statement on Form S-3, Registration
No. 333-119945 (the "REGISTRATION STATEMENT")
filed with the Securities and Exchange
Commission (the "SEC"), a copy of which has been
delivered to Seller, less applicable
underwriters' fees and commissions and
organizational and operating expense
reimbursements (currently a net per share price
of $8.90). Within five (5) days after the
delivery of the Election Notice to Buyer, Buyer
shall provide to Seller a subscription agreement
and accredited investor questionnaire in the
form attached hereto as EXHIBIT C-1 and made a
part hereof. Seller shall also provide to each
Designated Owner a subscription agreement and
accredited investor questionnaire in the form of
the subscription agreement and accredited
investor questionnaire which is attached hereto
as EXHIBIT C-2 and made a part hereof. Seller
and each Designated Owner must deliver a
subscription agreement and accredited investor
questionnaire, duly executed, to Buyer not less
than five (5) days prior to the Closing Date to
be eligible to receive Units. If the Net Amount
is payable to Seller (or the Designated Owners)
in a combination of cash and Units, Seller
hereby directs Buyer to
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pay, issue and distribute (as applicable) the
cash and certificates for the Units (or if not
certificated, register the applicable Designated
Owners as owning the Units on the books and
records of Buyer) on the Closing Date to Seller
and/or the Designated Owners, through Escrow, in
accordance with EXHIBIT C. Buyer may in its
discretion issue fractional Units hereunder to
applicable Designated Owners rounded up to the
nearest hundredths. If Buyer chooses not to
issue fractional Units as consideration
hereunder, it shall pay in lieu of issuing
fractional Units, the value thereof in cash to
the applicable Designated Owner. Each Designated
Owner shall acknowledge that any certificates
evidencing the Units (or other documentation
relating thereto if the Units are not
certificated) will bear appropriate legends
indicating (1) that the Units have not been
registered under the Securities Act of 1933, as
amended ("SECURITIES ACT"), and (2) that the
Buyer's Agreement of Limited Partnership (the
"BUYER'S PARTNERSHIP AGREEMENT") will restrict
the transfer of the Units but such restriction
shall not be more restrictive than that which
affects other third party Unit holders. Upon
receipt of the Units, the Designated Owners
shall become limited partners of the Buyer and
shall execute Buyer's Partnership Agreement or
other documentation evidencing their becoming
such limited partners.
Section 1.3 XXXXXXX MONEY.
(a) Within two (2) business days after the Effective Date (defined
in SECTION 9.14), as a condition to the continued effectiveness
of this Contract, Buyer shall deposit with Partners Title
Company ("ESCROW HOLDER"), 000 Xxxx Xxxxxx, Xxxxx 0000X,
Xxxxxxx, Xxxxx, Attention: Xxxx Xxxxxxxx, Phone: (000) 000-0000,
Fax: (000) 000-0000, $3,000,000 in immediately available federal
funds (the "INITIAL XXXXXXX MONEY"). At the end of the DUE
DILIGENCE PERIOD (as defined in SECTION 3.2), Buyer will, if
Buyer has not theretofore terminated this Contract, deposit an
additional $3,000,000 in immediately available federal funds
with the Escrow Holder (the "ADDITIONAL XXXXXXX MONEY"). The
Initial Xxxxxxx Money and the Additional Xxxxxxx Money are
collectively referred to herein as the "XXXXXXX MONEY".
(b) At the end of the Due Diligence Period, if Buyer has not
theretofore terminated this Contract, Escrow Holder shall
release $500,000 of the Initial Xxxxxxx Money to Seller as
consideration for entering into this Contract. This
consideration is not refundable to Buyer unless the transaction
contemplated by this Contract fails to close by reason of
Seller's default (including any inability of Seller to convey
title to the Property to Purchaser subject only to the Permitted
Exceptions).
(c) The Xxxxxxx Money (including any portion thereof released to
Seller pursuant to Section 1.3(b) above) shall be refundable to
Buyer only if (i) Seller fails or refuses to close the
transaction contemplated hereby for any reason (including the
exercise by Tenant of its right of first refusal to purchase the
Property) other than Buyer's default; or (ii) Seller fails to
obtain the ESTOPPEL CERTIFICATE (as defined in SECTION 9.18) and
as a result Buyer elects not to close this transaction. The
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Xxxxxxx Money (including any portion thereof released to Seller
pursuant to Section 1.3(b) above) will be applied to the
Purchase Price at the Closing.
(d) If this Contract does not close, the Xxxxxxx Money will be
disbursed as provided elsewhere in this Contract. The Escrow
Holder shall, promptly upon receipt, place the wire transferred
Xxxxxxx Money in a federally insured, interest bearing account.
All interest on the Xxxxxxx Money becomes part of the Xxxxxxx
Money. All interest on the Xxxxxxx Money will be reported to the
Internal Revenue Service as income of Buyer. Buyer shall
promptly execute and deliver to the Escrow Holder all forms
reasonably requested by the Title Company with respect to the
Xxxxxxx Money.
(e) The Escrow Holder is authorized and directed to pay the Xxxxxxx
Money to the party entitled to receive the Xxxxxxx Money under
the terms of this Contract. Sellers or Buyer, as appropriate,
shall deliver a letter of instruction to the Escrow Holder
directing the disbursement of the Xxxxxxx Money to the party or
parties entitled to receive the Xxxxxxx Money promptly upon
receipt of a demand from that party or parties.
ARTICLE 2
TITLE INSURANCE, OTHER INFORMATION, AND SURVEY
Section 2.1 TITLE INSURANCE.
(a) Seller shall cause Lawyers Title Company, through LandAmerica
Commercial Services (the "TITLE COMPANY"), 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxxxx, 00000 Attention: Xxxxx
Xxxx, Senior Commercial Title Officer, Phone: (000) 000-0000,
Fax: (000) 000-0000, Email: xxxxx@xxxxxx.xxx, to agree to issue
to Buyer as soon as practicable after Closing a CLTA Standard
Coverage Owner Policy of Title Insurance for the Real Property
and Improvements on the standard form in use in California (the
"OWNER POLICY"), which may be based on a marked up title
commitment or binder agreed to and delivered by the Title
Company at Closing (it being agreed between Buyer and Seller
that Seller's only obligation is to cause delivery of the Owner
Policy and Seller has no obligation to cause the Title Company
to provide a marked up title commitment or binder). The Owner
Policy shall be dated as of the date the Deed is recorded by the
Title Company, shall be in the amount of the Purchase Price, and
shall insure good and marketable fee simple title to the Real
Property and Improvements. Buyer may request that Title Company
issue available endorsements to the Owner Policy, but Seller is
responsible only for payment of the premium for the Standard
Coverage Owner Policy. Buyer shall pay the premiums charged for
and costs associated with obtaining extended coverage
endorsements to the Owner Policy and for any loan policy or
endorsements required by the Lender or any other lenders of
Buyer. Upon issuance, the Owner Policy will except only to the
Permitted Exceptions (including, without limitation, the
Existing Loan) which remain at Closing after the title
commitment or binder has been marked up as agreed to between the
Buyer and the Title Company.
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(b) Within five (5) days from the date of this Contract, Seller
shall cause to be prepared and delivered to Buyer a current
Preliminary Title Report (the "PTR"), issued by the Title
Company, describing the Real Property, listing Buyer as the
prospective named insured and showing the Purchase Price as the
policy amount. The PTR shall set forth the state of title to the
Real Property and Improvements together with all exceptions or
conditions to title, including, but not limited to, all
easements, restrictions, rights-of-way, covenants, reservations
and all other encumbrances affecting the Property which would
appear in an owner's title policy, if issued. At such time as
the PTR is furnished to Buyer, the Title Company shall furnish
to Buyer legible copies of all instruments referred to in the
PTR as conditions or exceptions to title to the Real Property
and Improvements and a certificate from the Title Company (or
another firm acceptable to Buyer) stating that a search has been
made of both the state and county records in which financing
statements and security agreements are filed under the Uniform
Commercial Code of the state in which the Property is located
and that such search indicates that no security interests or
liens of any kind or nature, including, but not limited to, any
equipment financing or leasing arrangements, are claimed by any
person against the Property or any part thereof, or, if such
search reveals any such security interests or liens, copies of
the filed financing statements shall be delivered to Buyer.
Section 2.2 OTHER INFORMATION.
Within ten (10) days after the Effective Date, Sellers shall deliver to Buyer
the following (collectively, the "DOCUMENTS"):
(a) a rent roll in form and content reasonably acceptable to Buyer
("RENT ROLL"), certified to be true and correct in all material
respects by Seller, dated no earlier than five days prior to the
date Seller delivers same.
(b) copies of all environmental, soil, structural, water or other
tests or studies (collectively, the "REPORTS") in Seller's
possession with respect to the Property, which Reports shall be
delivered "AS IS" and, except as specifically set forth in
SECTION 4.1(H), Seller makes no representation or warranty
concerning the accuracy, correctness, completeness, suitability
or utility of the Reports or the information contained or not
contained therein;
(c) copies of all Service Contracts;
(d) copies of all certificates of occupancy and other permits or
licenses necessary for the operation of the Property which are
in Seller's possession;
(e) a copy of the most recent as-built survey of the Real Property
and Improvements in Seller's possession;
(f) copies of ad valorem tax statements for tax years 2003 and 2004;
(g) copies of the documents and instruments listed on EXHIBIT D
executed in connection with the indebtedness (the "EXISTING
LOAN") payable to the order of Credit Suisse First Boston
Mortgage Capital LLC and its successors and assigns as Lender
("LENDER");
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(h) financial statements showing income and expense for the years
2003 and 2004 (on a monthly basis), certified true, correct, and
complete in all material respects by an authorized
representative of Seller; and
(i) all written reports of any inspection of the Real Property and
Improvements conducted by any governmental instrumentality or
insurance carrier.
Additionally, Seller shall furnish an operating statement for the
current year (updated monthly within twenty (20) days after the end of
the month through Closing) detailing all income and expense items for
the Property, certified true, correct and complete in all material
respects by an authorized representative of Seller.
Section 2.3 SURVEY.
Within fifteen (15) days after the Effective Date, Seller shall deliver to Buyer
an as-built, ALTA/ACSM (or similar) survey of the Property prepared by Xxxxxx
Surveying and Mapping, Inc., a professional engineer registered in the State of
California (the "Survey"). The Survey shall set forth the boundary lines of the
Real Property; locate all buildings and other Improvements situated thereon;
locate all easements, drives, parking areas and parking spaces; designate any
encroachments on the Real Property or, if there are no such encroachments, set
forth thereon a statement to that effect; designate any encroachment on real
property not included in Real Property by buildings or other Improvements
purported to be located on any portion of the Real Property, or, if there are no
such encroachments, set forth thereon a statement to that effect; locate all
dedicated public streets or other roadways providing access to the Real
Property, including all curb cuts; show any portion of the Real Property lying
within a flood plain; and locate all set back lines and similar restrictions
covering the Property or any part thereof and any violation of such
restrictions.
ARTICLE 3
TITLE REVIEW AND DUE DILIGENCE
Section 3.1 TITLE REVIEW.
(a) Buyer shall have a period of ten (10) days (the "TITLE REVIEW
PERIOD") from the date of its receipt of the last of (i) the PTR
and the copies of all instruments referred to therein as
exceptions to title and (ii) the Survey, to review the same and
to deliver to Seller written notice (the "TITLE OBJECTION
NOTICE") of any objections Buyer may have to anything contained
or set forth in the PTR or the Survey. Any title exceptions or
other matters which are set forth in the PTR or the Survey and
to which Buyer does not object within the Title Review Period
shall be deemed to be permitted exceptions to title to the
Property (the "PERMITTED EXCEPTIONS"). In the event Buyer timely
raises objections to anything contained in the PTR or Survey
(the "TITLE OBJECTIONS"), Seller shall have a period of thirty
(30) days (the "TITLE CURE PERIOD") within which to cure such
objections, but except as hereinafter provided, Seller shall
have no obligation to do so. Notwithstanding anything to the
contrary contained in the preceding sentence, Seller shall be
obligated within the Title Cure Period to cure or agree in
writing to cure any objections to encumbrances on the Property
which evidence some form of debt and can be removed by the
payment of money other than the Existing Loan (subject to
Seller's obligation of cooperation in connection
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with the defeasance of the Existing Loan as provided below). In
the event that Seller fails or refuses to cure or agree to cure
Title Objections raised by Buyer within the Title Review Period
on or prior to the end of the Title Cure Period Buyer may, at
its option, either accept Seller's title to the Property or
terminate this Contract, in which event (a) the Initial Xxxxxxx
Money shall be paid to Seller and any Additional Xxxxxxx Money
and all accrued interest thereon shall be immediately refunded
to Buyer, (b) this Contract shall terminate and become null and
void, and (c) neither Buyer nor Seller shall have any further
obligations hereunder.
Section 3.2 DUE DILIGENCE PERIOD.
(a) Any term or condition of this Contract to the contrary
notwithstanding, the obligations of Buyer specified in this
Agreement are wholly conditioned on Buyer's having determined,
in its sole and absolute discretion, during the period
commencing on the Effective Date and continuing for twenty-one
(21) days thereafter (the "DUE DILIGENCE PERIOD"), based on such
tests, examinations, studies and inspections of the Property as
Buyer deems necessary or desirable, that it finds the Property
acceptable for its purposes. If Buyer notifies Seller in writing
during the Due Diligence Period that the Property is not
acceptable to Buyer, then (a) the Xxxxxxx Money and all accrued
interest thereon shall be immediately refunded to Buyer, (b)
this Contract shall terminate and become null and void, and (c)
neither Buyer nor Seller shall have any further obligations
hereunder.
(b) Until this Contract is terminated in accordance with its terms,
Buyer may enter the Real Property and Improvements to conduct
inspections of the Real Property and Improvements, including any
third party inspections, review the Records, and review and
analyze all materials, surveys, maps, and reports provided by
Sellers under this Contract. Buyer must notify Seller of its or
its agents or contractors intention to enter the Real Property
and Improvements at least 24 hours prior to each intended entry.
No invasive testing or inspections may be performed without
prior written approval of Seller, which approval may be withheld
or given in Seller's reasonable discretion. Seller may, at its
option, have a representative present for each inspection or
test. Buyer shall conduct its tests and inspections in a manner
which is not disruptive to the Tenant or to the operation of the
Property.
(c) Buyer shall perform, and shall cause its agents, employees, and
contractors to perform, all inspections and reviews of the
Property so as not to cause any damage, loss, cost, or expense
to, or claims against Seller or the Property. Buyer shall, at
its expense, promptly repair any damage to the Property caused
by or attributable to Buyer's inspections or testing to the
condition existing prior to the inspection or testing. Buyer
shall indemnify, defend, and hold Seller and its agents and
employees harmless for, from and against any damage, loss, cost,
expense (including, without limitation, reasonable legal fees,
court costs, and other legal expenses), or claims caused by,
attributable to, or resulting from the acts or omissions on or
about the Property by Buyer, its agents, employees, contractors,
or consultants. Notwithstanding the foregoing, Buyer shall have
no liability for pre-existing conditions discovered by Buyer's
tests, inspections or reviews, except to the extent any such
conditions are materially exacerbated by
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the acts of Buyer, its agents, employees or contractors. Buyer
shall cause any lien filed against the Real Property by a
consultant, contractor, subcontractor, or other person or entity
arising by, through, or under Buyer or otherwise attributable to
Buyer's inspection, testing, and review of the Property to be
released of record (whether through payment or bonding) within
twenty (20) days after receipt of notice from Seller of the
filing of any lien.
(d) The terms of this SECTION 3.2 survive the Closing or any
termination of this Contract.
ARTICLE 4
SELLER'S REPRESENTATIONS, WARRANTIES, AND COVENANTS
Section 4.1 SELLER'S REPRESENTATIONS AND WARRANTIES.
Seller represents and warrants to Buyer that:
(a) Seller is a limited partnership, validly existing and in good
standing under the laws of the State of California.
(b) Seller has the authority to execute this Contract and to perform
its obligations under this Contract. The person executing this
Contract on behalf of Seller is duly authorized to do so.
(c) To Seller's knowledge, other than as listed on EXHIBIT E
attached hereto and made a part hereof, there is no pending or,
to Seller's knowledge, overtly threatened litigation, or other
process, private or regulatory, affecting the Property or any
entity comprising Seller that, if decided adversely, would have
a Material Adverse Effect on the use or operation of the
Property or Seller's ability to perform its obligations
hereunder.
(d) To Seller's knowledge, Seller is in compliance with the
requirements of Executive Order No. 133224, 66 Fed. Reg. 49079
(Sept. 25, 2001) (the "ORDER") and other similar requirements
contained in the rules and regulations of the Office of Foreign
Assets Control, Department of the Treasury ("OFAC") and in any
enabling legislation or other Executive Orders or regulations in
respect thereof (the Order and such other rules, regulations,
legislation, or orders are collectively called, the "ORDERS").
(e) To Seller's knowledge, neither Seller nor any beneficial owner
of Seller nor any Person who provides loans to Seller:
(i) is listed on the Specially Designated Nationals and
Blocked Persons List maintained by OFAC pursuant to the
Order and/or on any other list of terrorists or
terrorist organizations maintained pursuant to any of
the rules and regulations of OFAC or pursuant to any
other applicable Orders (such lists are collectively
referred to as, the "LISTS");
(ii) is an individual, corporation, partnership, limited
liability company, unincorporated organization,
government or any agency or political
Page 9
subdivision thereof or any other form of entity
(collectively, a "PERSON") who has been determined by
competent authority to be a Person with whom a U.S.
Person is prohibited from transacting business, whether
such prohibition arises under U.S. law, regulation,
executive orders or any lists published by the United
States Department of Commerce, the United States
Department of Treasury or the United States Department
of State including any agency or office thereof;
(iii) is owned or controlled by, or acts for or on behalf of,
any Person on the Lists or any other Person who has been
determined by competent authority to be a Person with
whom a U.S. Person is prohibited from transacting
business, whether such prohibition arises under U.S.
law, regulation, executive orders or any lists published
by the United States Department of Commerce, the United
States Department of Treasury or the United States
Department of State including any agency or office
thereof; or
(iv) is under investigation by any governmental authority
for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist-related
activities, any crimes which in the United States would
be predicate crimes to money laundering, or any
violation of any Anti-Money Laundering Laws.
For purposes of this Section and Section 5.1, ("U.S. PERSON")
means any United States citizen, any entity organized under the
laws of the United States or its constituent states or
territories, or any entity, regardless of where organized, with
a principal place of business within the United States or any of
its territories. For purposes of this Section and SECTION 5.1,
("ANTI-MONEY LAUNDERING LAWS") means those laws, rules,
regulations, orders and sanctions, state and federal, criminal
and civil, that (i) limit the use of and/or seek the forfeiture
of proceeds from illegal transactions; (ii) limit commercial
transactions with designated countries or individuals believed
to be terrorists, narcotic dealers or otherwise engaged in
activities contrary to the interests of the United States; or
(iii) are designed to disrupt the flow of funds to terrorist
organizations. Such laws, regulations and sanctions are deemed
to include the Executive Order Number 13224 on Terrorism
Financing (September 23, 2001), the Patriot Act; the Currency
and Foreign Transactions Reporting Act (also known as the Bank
Secrecy Act, 31), the Trading with the Enemy Act, 50 U.S.C.
Appx. Section 1 ET SEQ., the International Emergency Economics
Powers Act, 50 U.S.C. Section 1701 ET SEQ., and the sanction
regulations promulgated pursuant thereto by OFAC, as well as
laws relating to prevention and detection of money laundering in
18 U.S.C. Sections 1956 and 1957, as amended.
(f) To Seller's knowledge, there are no attachments, executions,
assignments for the benefit of creditors, or voluntary or
involuntary proceedings in bankruptcy or under other debtor
relief laws contemplated by, pending, or, to the Seller's
knowledge, threatened against Seller, or the Property. Seller
has been and will be solvent at all times prior to and
immediately following the transfer of the Property to Buyer.
Page 10
(g) The copies of Lease heretofore delivered by Seller to Buyer are
true and correct copies of the actual Lease and are the complete
written documentation of the agreement between Seller, as
landlord, and Tenant.
(h) The Service Contracts, Plans, Warranties, Records, and Reports
provided or to be provided to Buyer by Seller are true and
correct copies of all such documents in Seller's possession.
(i) Except for the right of first refusal held by Tenant, there are
no rights, options, or other agreements of any kind to purchase
or otherwise acquire or sell or otherwise dispose of the
Property or any interest in the Property.
(j) Except for the consent of Lender to the transfer of the Property
to Buyer and Buyer's assumption of the Existing Loan, no further
consent, approval, authorization, order, license, certificate,
permit, registration, designation or filing by or with any third
party or governmental agency or body is necessary for the
execution, delivery and performance of this Contract and the
transactions contemplated hereby by Seller.
(k) Seller's execution, delivery and performance of this Contract
and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate,
partnership or limited liability company action of the Seller
and no other action is required by law, or pursuant to the
Seller's limited partnership agreement for such authorization;
this Contract is the legal, valid, and binding obligation of,
and is enforceable against Seller in accordance with its terms,
except to the extent such enforcement may be affected by general
principles of equity, or by bankruptcy and other laws affecting
the rights of creditors generally; assuming the consent required
of the Lender for the assumption of the Existing Loan and the
transfer of the Property is obtained, the execution and delivery
of this Contract and the compliance with the terms and
conditions of this Contract by Seller will not breach or
conflict with any of the terms, conditions, or provisions of any
agreement or instrument to which Seller is a party or by which
Seller is or may be bound, or constitute a default thereunder;
and, to Seller's knowledge, and except as otherwise provided
under the Existing Loan, the authorization, execution, and
delivery of this Contract and the consummation of the
transaction contemplated hereby, will not, with or without the
giving of notice or passage of time or both:
(i) violate, conflict with or result in the breach of any
terms or provisions of, or require any notice, filing,
or consent which has not been obtained, under:
(A) the limited partnership agreement of Seller; or
(B) any statutes, laws, rules, or regulations of any
governmental body applicable to Seller; or
(C) any judgment, decree, writ, injunction, order or
award of any arbitrator, court or governmental
authority binding upon either Seller or the
Property.
Page 11
(ii) conflict with, result in the breach of any terms or
provisions of, give rise to a right of termination of,
or constitute a default under, the Lease or any
agreement or instrument of any kind to which the Seller
is a party or by which the Property is bound; or
(iii) result in any lien, claim, encumbrance or restriction on
the Property.
(l) With respect to the Property, as of the Effective Date of this
Contract:
(i) There are no maintenance, management, or service
contracts in effect with respect to or affecting the
Property or any part thereof that will not be terminated
as of the Closing, other than the Service Contracts to
be delivered to Buyer pursuant to SECTION 2.2(C).
(ii) There are no persons now employed by Seller or an
Affiliate of Seller who Buyer will be obligated to hire
or retain at or after Closing.
(iii) To Seller's knowledge, there are no condemnation
proceedings pending or threatened against the Real
Property, the Improvements or any part thereof.
(iv) Seller has not received any written notice and to
Seller's knowledge, which knowledge is deemed to be
limited to the environmental reports included as part of
the Reports (collectively, the "ESA"), and except for
matters and materials present at the Real Property and
Improvements in the ordinary course of operation of the
Real Property and Improvements as an office building,
there are no Hazardous Materials (defined in SECTION
9.12(A) present at the Real Property and Improvements
other than any specified in the ESA.
(m) Except for Tenant and its subtenant, Disney Federal Credit
Union, no person has any right to occupy the Property.
(n) The Documents required by SECTION 2.2 to be certified by the
Seller as true and correct are or will be true and correct in
all material respects.
(o) Seller is not in material default under the Lease.
(p) Seller owns all of the tangible Personal Property which is used
in and, individually or in the aggregate with other such
property, is material to the operation of the Property. Except
for liens securing the Existing Loan, to the Seller's knowledge,
such Personal Property is free and clear of all liens. All
Personal Property located at or on the Property shall remain and
not be removed prior to the Closing, except in the ordinary
course of business or for equipment that becomes obsolete or
unusable, which may be replaced in the ordinary course of
business.
(q) To Seller's knowledge, no event of default exists (which remains
uncured) under any of the Service Contracts which would have a
Material Adverse Effect. For purposes of this Contract,
"MATERIAL ADVERSE EFFECT" means an event that would
Page 12
have a material adverse effect on the business, financial
condition or results of operations of the Property.
(r) The environmental reports to be delivered by Seller to Buyer
will be the latest reports obtained by Seller with respect to
the Property.
(s) The list of documents set forth on EXHIBIT D is a complete list
of all material Loan Documents (as hereinafter defined) related
to the Existing Loan. To Seller's knowledge, the Existing Loan
and the documents entered into in connection therewith
(collectively, the "LOAN DOCUMENTS") are in full force and
effect as of the Effective Date. To the Seller's knowledge, no
event of default or event that with the passage of time or
giving of notice or both would constitute an event of default
has occurred as of the Effective Date under any of the Loan
Documents which would have a Material Adverse Effect. True and
complete copies of the Loan Documents have been provided to
Buyer.
(t) Except as set forth on EXHIBIT F, Seller has received no written
notice concerning the Real Property or the Improvements from any
Governmental Authority stating that the Real Property or the
Improvements are in violation of any federal, state, county, or
city statute, ordinance, code, rule, or regulation which remains
uncured or which, if uncured at Closing, would have a Material
Adverse Effect. The terms "GOVERNMENTAL AUTHORITY" and
"GOVERNMENTAL AUTHORITIES" mean the United States of America,
the State, the county, and city where the Real Property is
located, and any other political subdivision in which the Real
Property is located or that exercises jurisdiction over the Real
Property and Improvements or the construction of improvements on
the Real Property, and any agency, department, commission,
board, bureau, property owners association, utility district,
flood control district, improvement district, or similar
district, or other instrumentality of any of them.
(u) To Seller's knowledge, there is no pending or, to Seller's
knowledge, threatened condemnation or change in zoning affecting
the Property. Except as disclosed in writing to Buyer, to
Seller's knowledge no portion of any Property is a designated
historic property or located within a designated historic area.
Section 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties in SECTION 4.1 will be deemed
made on and as of the Closing Date with the same force and
effect as if made at that time and shall survive Closing for a
period of one hundred and eighty (180) days. Any claim which
Buyer may have against Seller for a breach of any such
representation or warranty, whether such breach is known or
unknown, which is not specifically asserted by written notice to
Seller within such one hundred and eighty (180) day period shall
not be valid or effective, and Seller shall have no liability
with respect thereto.
(b) The provisions of this SECTION 4.2 survive the Closing or any
termination of this Contract.
Page 13
Section 4.3 KNOWLEDGE STANDARD.
For purposes of this Contract, the terms "SELLER'S KNOWLEDGE" and "BUYER'S
KNOWLEDGE" mean the current, actual knowledge of the individuals listed on
EXHIBIT H attached to this Contract, without independent inquiry and without any
actual or implied duty to inquire, and does not include knowledge imputed to
Seller or to Buyer, as the case may be, from any other person. The named
individuals are acting for and on behalf of Seller or Buyer, as the case may be,
and in a capacity as an officer of Seller or Buyer, respectively or one or more
of Seller's or Buyer's Affiliates and are in no manner expressly or impliedly
making any representations or warranties in an individual capacity. Buyer and
Seller waive any right to xxx or to seek any personal judgment or claim against
any of the named individuals.
Section 4.4 SELLER'S COVENANTS.
Seller covenants with Buyer as follows:
(a) At all times from the Effective Date to the Closing Date, Seller
shall maintain in force property insurance and commercial
general liability insurance covering the Real Property and the
Improvements in accordance with Seller's past practices.
(b) At all times from the Effective Date to the Closing Date, Seller
shall keep and perform or cause to be kept and performed all of
the material obligations to be performed by the landlord under
the Lease.
(c) Seller shall not, without Buyer's prior consent, modify,
terminate or amend the Lease.
(d) After the Effective Date, Seller shall not remove any Personal
Property from the Improvements without replacing it with items
of like kind and quality.
(e) Seller agrees to obtain Buyer's written approval prior to
entering into any new Service Contract that is not terminable on
thirty (30) days notice.
(f) Seller will manage, operate, repair and maintain the Property in
generally the same manner as it managed, operated, repaired and
maintained the same prior to the date hereof and, to its
reasonable ability, will keep the Property in its present state
of repair subject to normal wear and tear, exercising the same
degree of care in such matters as Seller has previously
exercised.
(g) Seller will use its reasonable business efforts to renew all of
the licenses and permits applicable to the Property and which
are necessary for the continued operation of the Property as
they expire from time to time and shall notify Buyer at least
thirty (30) days prior to the expiration date or threatened
cancellation date of any license or operating permit.
(h) Seller will not cause any action to be taken which would cause
any of the representations or warranties made by Seller in this
Contract to be false on or as of Closing Date.
(i) Seller shall not enter into or record any easement, covenant,
license, permit, agreement or other instrument against the
Property or any portion thereof except
Page 14
as may be required to enable Seller to perform its obligations
under this Contract or to operate in the ordinary course of
business.
(j) Effective as of the Closing, Seller shall terminate all
management agreements relating to the Property.
(k) Seller shall not change the existing use of the Property.
(l) Seller shall not knowingly violate or fail to use commercially
reasonable efforts to prevent the violation of any applicable
laws in any way related to the Property.
(m) Seller shall not materially alter the manner of keeping its
books, accounts or records or the accounting methods therein
reflected.
(n) Buyer has advised Seller that Buyer must cause to be prepared
audited financial statements in respect of the Property for up
to Seller's three most recent fiscal years ended prior to the
fiscal year in which the Closing occurs, and unaudited financial
statements in respect of the Property for the portion of
Seller's fiscal year which ends on the Closing Date, all in
compliance with the policies of Purchaser and certain laws and
regulations, including, without limitation, SEC Regulation S-X,
Rule 3-14. Seller agrees to use reasonable efforts to cooperate
with Buyer's auditors in the preparation of such audited
financial statements, at Buyer's expense (it being understood
and agreed that the foregoing covenant shall survive Closing).
Without limiting the generality of the preceding sentence (a)
Seller shall, during normal business hours, allow Buyer's
auditors reasonable access to the books and records maintained
by Seller (and the Property's property manager) in respect of
the Property; (b) Seller shall use reasonable efforts to provide
to Buyer such financial information and supporting documentation
as are necessary for Buyer's auditors to prepare audited
financial statements; (c) Seller shall make Seller's property
manager and Seller's asset manager in respect of the Property
available for interview in connection with the conduct of such
audit; (d) Seller will, promptly upon request of Buyer, provide
to Buyer's auditors a management representation letter,
reasonably satisfactory to Buyer's auditors, addressed to
Buyer's auditors; and (e) if Seller has audited financial
statements with respect to the Property, Seller shall promptly
provide Buyer's auditors with a copy of such audited financial
statements. If after Closing Seller obtains an audited financial
statement in respect of the Property for a fiscal period in 2004
or 2005 that was not completed at the time of Closing, then
Seller shall promptly provide Buyer with a copy of such audited
financial statement, and the foregoing covenant shall survive
Closing.
(o) From the Effective Date until Closing Seller shall continue to
perform all its obligations under the Existing Loan, and shall
not enter into any modification, amendment or restatement
thereof that would have a Material Adverse Effect without
Buyer's consent, which consent will not be unreasonably
withheld.
Page 15
ARTICLE 5
BUYER'S REPRESENTATIONS AND WARRANTIES
Section 5.1 BUYER'S REPRESENTATIONS AND WARRANTIES.
Buyer represents and warrants to Seller as of the Effective Date which
representations and warranties are also deemed to be made on and as of the
Closing Date and shall survive until the expiration of the applicable statute of
limitations:
(a) Buyer is a limited partnership, validly existing and in good
standing under the laws of the State of Texas, and, at Closing,
will be, to the extent necessary, qualified to do business in
the State of California.
(b) Buyer has the authority to execute this Contract and to perform
its obligations under this Contract. The person executing this
Contract on behalf of Buyer is duly authorized to do so.
(c) To Buyer's knowledge, there are no attachments, executions,
assignments for the benefit of creditors, or voluntary or
involuntary proceedings in bankruptcy or under other debtor
relief laws contemplated by, pending, or threatened against
Buyer.
(d) To Buyer's knowledge, Buyer is in compliance with the
requirements of the Orders and other similar requirements
contained in the rules and regulations of the OFAC and in any
enabling legislation or other Executive Orders or regulations in
respect thereof.
(e) To Buyer's knowledge, neither Buyer nor any beneficial owner of
Buyer:
(i) is listed on the Lists;
(ii) is a Person who has been determined by competent
authority to be a Person with whom a U.S. Person is
prohibited from transacting business, whether such
prohibition arises under U.S. law, regulation, executive
orders or any lists published by the United States
Department of Commerce, the United States Department of
Treasury or the United States Department of State
including any agency or office thereof; or
(iii) is owned or controlled by, or acts for or on behalf of,
any Person on the Lists or any other Person who has been
determined by competent authority to be a Person with
whom a U.S. Person is prohibited from transacting
business, whether such prohibition arises under U.S.
law, regulation, executive orders or any lists published
by the United States Department of Commerce, the United
States Department of Treasury or the United States
Department of State including any agency or office
thereof; or
(iv) is under investigation by any governmental authority
for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist-related
activities, any crimes which in the United States would
be predicate crimes to money laundering, or any
violation of any Anti-Money Laundering Laws.
Page 16
(f) The Units, when issued, will have been duly and validly
authorized and issued, free of any preemptive or similar rights,
and will be fully paid and nonassessable, without any obligation
to restore capital except as required by the Texas Revised
Uniform Limited Partnership Act (the "LIMITED PARTNERSHIP ACT").
Each Designated Owner shall be admitted as a limited partner of
Buyer as of the Closing Date and shall be entitled to all of the
rights and protections of a limited partner under the Limited
Partnership Act and the provisions of Buyer's Partnership
Agreement, with the same rights, preferences, and privileges as
all other limited partners on a pari passu basis. The shares of
Common Stock for which the Units may be redeemed have been
validly authorized and will be duly and validly issued, fully
paid and nonassessable, free of preemptive or similar rights.
(g) Buyer has not relied on any representation or warranty made by
or on behalf of Seller, other than those expressly stated in
SECTION 4.1 of this Contract and those set forth in the
Subscription Agreement and Accredited Investor Questionnaire
entered into by Seller, and, except for Seller's express
representations and warranties stated in SECTION 4.1 of this
Contract, Buyer is relying solely on its own investigation of
all conditions relating to the Property, in acquiring the
Property AS IS, WHERE IS AND SUBJECT TO ALL FAULTS, as more
specifically described in SECTION 9.12 of this Contract.
(h) The General Partner of Buyer qualifies as a real estate
investment trust for federal tax purposes and will elect to be
taxed as a REIT, commencing with its taxable year which ended
December 31, 2004.
(i) The offer and sale of the Units have been and will continue to
be conducted in compliance with all applicable federal and state
securities laws, except to the extent any failure to comply with
such law (including any exemptions from reporting or
qualification contained therein) are caused by Seller or any
Designated Owner.
(j) Buyer's General Partner has not acquired, nor will it acquire at
any time in the future during which Seller or Designated Owners
or their assigns, successors or heirs own Units, any real
properties or other investments that will be owned by any entity
other than Buyer and its subsidiaries, provided, however, that
Buyer's General Partner may, after the Closing, acquire real
properties or other investments through an entity other than
Buyer and Buyer's subsidiaries if such acquisition is made in
compliance with the terms of the Partnership Agreement.
(k) Buyer is and has at all times since its formation been a
partnership for federal income tax purposes.
Section 5.2 BUYER'S COVENANTS.
Buyer covenants and agrees:
Page 17
(a) that Buyer shall use commercially reasonable and diligent
efforts to assume the Existing Loan on the terms and conditions
stated in the Existing Loan documents, together with any
additional terms and conditions reasonably required by the
Existing Lender and reasonably acceptable to Buyer; provided,
that Buyer is not required to agree to any material change of
any term of the Existing Loan document as a condition to
Lenders' approval of the Assumption.
(b) Buyer will forward to Lender, or a third party entity designated
by Lender, if applicable, the documentation and information
requested in Lender's loan assumption package on or before the
date (the "ASSUMPTION SUBMISSION DATE") that is ten (10) days
after the later of (i) Effective Date or (ii) the date that
Seller delivers to Buyer Lender's loan assumption package.
(c) Buyer will on or before the Assumption Submission Date, if
required by Lender, (i) provide to Lender organizational
documents of Buyer, (ii) provide to Lender financial statements
of Buyer, (iii) authorize Lender to conduct credit reports on
Buyer, (iv) authorize Lender to contact other lenders who hold
loans from Buyer, (v) execute and return the application for the
assumption of the Existing Loan on Lender's approved form, and
(vi) pay all processing fees and expenses required to be paid at
such time by Lender.
(d) Buyer will respond timely to all requests from Lender, but in no
event later than 5 business days and will deliver to Seller
copies of all correspondence (other than correspondence
consisting of its financial statements and financial condition,
or correspondence deemed by Buyer to be confidential to Buyer or
its Affiliates) between Buyer, Lender, and any agent of Lender
as soon as reasonably practicable.
(e) Buyer shall deliver the executed Tenant Notice Letter to Tenant
within ten (10) days after Closing. This provision shall survive
Closing.
(f) Following the Closing, Buyer will not obtain a new loan
encumbering the Property unless (i) the substitute lender
permits the Designated Owners to exercise the option to
guarantee a portion of the debt on the Property which is
described in SECTION 9.20 and (ii) any new loan must encumber
the Property simultaneously with the payment of the Existing
Loan or any then existing replacement loan guaranteed pursuant
to SECTION 9.20, as applicable.
ARTICLE 6
CLOSING AND PRORATIONS
Section 6.1 CLOSING DATE.
The CLOSING of this Contract will take place in Escrow Holder's offices
commencing at 10:00 a.m., Houston, Texas time, or such other place as is
mutually agreeable to the parties on or before July 15, 2005. Notwithstanding
any other provision of this Contract, if all conditions to Closing have not been
satisfied or waived, and if Closing has not occurred by 5:00 p.m., Houston,
Texas time on July 15, 2005, then the parties' respective rights to purchase and
sell the Property under this Contract shall terminate, the Xxxxxxx Money shall
be returned to Buyer (unless the failure to close is a result of Buyer's
default, in which event Section 7.1 shall apply),
Page 18
Escrow shall be cancelled, and the parties shall have no further rights and
obligations under this Contract, except those that expressly survive the
termination of this Contract.
Section 6.2 CLOSING MATTERS.
(a) Expressly conditioned upon Buyer's compliance with its
obligations under SECTION 6.2(B), Seller shall deliver at
Closing:
(i) a California form of Grant Deed for the Property (the "DEED"),
duly executed and acknowledged by Seller, containing no
exceptions or conditions except the Permitted Exceptions,
conveying to Buyer, fee simple title to the Real Property and
Improvements as specified in SECTION 2.1(A), substantially in
the form attached to this Contract as EXHIBIT I;
(ii) at least 2 counterparts of a Xxxx of Sale for the
Property (the "XXXX OF SALE"), duly executed by Seller,
substantially in the form attached to this Contract as
EXHIBIT J;
(iii) at least 2 counterparts of an Assignment of Lease,
Contracts and Warranties for the Property (the
"ASSIGNMENT OF LEASE") duly executed by Seller,
substantially in the form attached to this Contract as
EXHIBIT K.
(iv) an IRC Section 1445 Certification, duly executed by
Seller, substantially in the form attached to this
Contract as EXHIBIT L;
(v) at least one counterpart of a notice to Tenant (the
"TENANT NOTICE LETTER"), duly executed by Seller in
substantially the form attached to this Contract as
EXHIBIT M, to be addressed to Tenant at the Real
Property;
(vi) at least one counterpart of all assumption documents
required to be executed by Seller with respect to
Buyer's assumption of the Existing Loan;
(vii) possession of the Property, subject to the Permitted
Exceptions and the rights of Tenant;
(viii) the following to the extent they are in the Seller's
possession or control:
(A) originals of the Lease, the Service Contracts,
the Plans, the Warranties, and the Records; and
(B) all keys to the Improvements, which keys shall
be marked and identified;
(ix) a fully executed termination of any management agreement
for the Property at Seller's sole cost and expense;
(x) such evidence or documents as may be reasonably required
by the Title Company evidencing the status and capacity
of Seller and the authority of
Page 19
the person or persons who are executing the various
documents on behalf of the Seller in connection with the
sale of the Property;
(xi) Seller's written approval of the estimated closing
statement of the prorations and the distribution of the
closing proceeds; provided, that the closing statement
will only be delivered to the Escrow Holder and will not
be delivered to Buyer;
(xii) if Units are to be issued to any Designated Owners,
signature pages of the Buyer's Partnership Agreement
duly executed by such Designated Owners as limited
partners; and
(xiii) a quitclaim deed from Tenant, executed in accordance
with the provisions of Section 9 of that certain Shared
Appreciation Agreement amended and restated as of
January 1, 2000 between Seller and Tenant, relinquishing
any interest of Tenant in the Property other than the
Lease;
(xiv) the ESTOPPEL CERTIFICATE (as defined in SECTION 9.19);
and
(xv) a California FTB Form 593-C, duly executed by Seller.
(b) No later than 4:00 p.m., Houston, Texas time, on the Closing
Date, Buyer shall deliver to the Escrow Holder as a condition
precedent to the obligation of Seller to perform its obligations
under SECTION 6.2(A):
(i) by wire transfer or other immediately available federal
funds, the cash portion of the Purchase Price, subject
to applicable prorations and credits; and
(ii) at least two counterparts of the Assignment of Lease and
the Xxxx of Sale, duly executed by Buyer;
(iii) at least one counterpart of all assumption documents
with respect to Buyer's assumption of the Existing Loan,
duly executed by Buyer and Lender;
(iv) at least one counterpart of the Tenant Notice Letter,
duly executed by Buyer;
(v) such evidence or documents as may be reasonably required
by the Title Company evidencing the status and capacity
of Buyer and the authority of the person or persons who
are executing the various documents on behalf of Buyer
in connection with the purchase of the Property;
(vi) Buyer's written approval of the estimated closing
statement of the prorations and the distribution of the
closing proceeds;
(vii) if Units are issued, and if the Units are to be
certificated certificates representing the Units duly
issued by Buyer in the name of each Designated Owner, as
of the Closing Date representing the Units to which
Page 20
such Designated Owner is entitled pursuant to SECTION
1.2 of this Contract;
(viii) if Units are to be issued at the Closing, a fully
executed Buyer's Amended and Restated Partnership
Agreement, with the originally duly executed signature
of its general partner, and original or photostatic
copies of the signatures of all existing limited
partners.
(ix) opinions of Buyer's counsel addressed to Seller and
dated as of the Closing Date, substantially in the form
attached hereto as EXHIBITS O-1, O-2 AND O-3 (the
"Opinions").
(c) Seller and Buyer shall execute and deliver to the appropriate
parties any additional documents and instruments that, in the
mutual opinion of Buyer's counsel and Seller's counsel, are
necessary to consummate this transaction.
Section 6.3 PRORATIONS.
The following provisions shall govern the apportionment of income and expenses
with respect to the Property between Seller and Buyer:
(a) Real estate taxes and assessments and personal property taxes
shall be prorated between Seller and Buyer at Closing. If the
Closing shall occur before the amount of taxes is fixed, the
apportionment of taxes shall be made based upon one hundred
percent (100%) of the tax rate for the preceding year, applied
to the latest assessed valuation of the Property. Upon receipt
of the actual tax xxxx for the Property, the proration of taxes
made at Closing shall be subject to adjustment pursuant to
SECTION 6.3(E) below.
(b) Seller shall arrange for final meter readings on all utilities
at the Property to be taken on the day preceding Closing. Seller
shall be responsible for the payment of utilities used through
the day preceding the Closing Date and Buyer shall be
responsible for the payment of utilities used on or after the
Closing Date. With respect to any utility for which there is no
meter, the expenses for such utility shall be prorated between
Seller and Buyer at Closing based upon the most current xxxx for
such utility. Any deposits for utilities shall inure to the
benefit of and be deemed assigned to Buyer, and Buyer shall
reimburse Seller for the amount of such deposits at the Closing.
Seller and Buyer shall cooperate to cause the transfer of
utility company accounts and deposits from Seller to Buyer.
Page 21
(c) Basic rents ("BASIC RENT") and additional rent relating to
escalation and pass-throughs of operating and other similar
expenses ("ADDITIONAL RENT") shall be prorated between Seller
and Buyer based upon Basic Rent and Additional Rent actually
collected. All prepaid Basic Rent, Additional Rent and other
income from the Property shall be credited to Buyer at Closing,
to the extent same is attributable to a period of time after
Closing. With respect to Additional Rent which is paid based
upon an estimate, with an end-of-year accounting and adjustment,
after Closing Seller and Buyer shall make any adjustments to the
proration of such items made at Closing at such time as the
final tax and operating expenses numbers become available and
such end-of-year accountings are completed but no later than six
(6) months after the Closing Date, based on the best estimates
then available. Any Additional Rent which may be due Seller as a
result of such re-prorations shall be paid by Buyer to Seller if
and when such Additional Rent is collected by Buyer.
(d) Basic Rent and Additional Rent which is delinquent and remains
uncollected at Closing shall not be prorated between Seller and
Buyer at Closing. At Closing, Seller shall furnish to Buyer a
schedule of any delinquent Basic Rent and Additional Rent due
under the Lease. Buyer shall pay Seller's prorata share of any
delinquent Basic Rent and Additional Rent if and when collected
by Buyer; provided, however, that Buyer shall have no obligation
to collect or pursue the collection of same. It is understood
and agreed that any Basic Rent or Additional Rent collected by
Buyer after Closing shall be applied first to currently due
Basic Rent and Additional Rent. Buyer shall hold all landlord's
liens in the entireties thereof to enforce the payment of
rentals to which Buyer is entitled, and Seller shall be deemed
to have transferred to Buyer all of such landlord's liens.
(e) The prorations described in this SECTION 6.3 shall be made as of
12:01 a.m. on the Closing Date, as if Buyer were vested with
title to the Property during the entire day upon which Closing
occurs. All prorations described in this SECTION 6.3 shall be
effected by increasing or decreasing, as the case may be, the
amount of cash to be paid by Buyer to Seller at Closing. Seller
and Buyer agree to adjust between themselves after Closing any
errors or omissions in the prorations made at Closing; provided,
however, that such prorations shall be deemed final and not
subject to further post Closing adjustments if no such
adjustments have been requested within six (6) months after the
Closing Date.
(f) If Existing Lender does not release to Seller all amounts held
in escrow by Existing Lender for taxes, insurance and all
repairs, replacement and rollover reserves (collectively, the
"IMPOUND ACCOUNTS"), Seller shall assign all of its rights and
interests in the Impound Accounts to Buyer, and Buyer shall
reimburse Seller therefor at the Closing.
(g) If the unpaid balance of "LEASEHOLD IMPROVEMENT ALLOWANCE", as
defined in Section 6 of the Third Lease Addendum shall be
greater or less than $575,620, then (i) Seller will be charged,
and Buyer will be credited for any excess of the unpaid balance
of Leasehold Improvement Allowance over $575,620 and (ii) Buyer
will be charged and Seller will be credited the amount by which
$575,620 exceeds the unpaid balance of the Leasehold Improvement
Allowance.
Page 22
Section 6.4 CLOSING COSTS.
Costs of closing this transaction will be allocated between Sellers and Buyer as
follows:
(a) Sellers shall pay (i) the cost of providing the PTR, (ii) 50% of
any escrow fees or similar charges of Escrow Holder, (iii) the
cost of the premiums for a "standard coverage" CLTA Owner
Policy, (iv) any and all transfer fees and sales, intangibles,
and conveyance taxes (or equivalents) related to the Closing, if
any, (v) the cost of the Survey, and (vi) the costs, if any,
incurred by Seller in connection with the performance of its
obligations under this Contract, including any endorsement to
the Title Policy which Seller, in its sole and absolute
discretion, agrees to obtain in order to cure title defects.
(b) Buyer shall pay (i) any premiums related to title insurance for
extended coverage or any endorsements or modifications to any
policy requested by Buyer and all premiums related to any
mortgagee policy, (ii) the cost of recording the Deed and any
other conveyance documents that Buyer may choose to record,
(iii) 50% of any escrow fee or similar charges of Escrow Holder
(iv) all costs payable to the Lender in connection with Buyer's
assumption of the Existing Loan.
(c) All other expenses incurred by any Seller or Buyer with respect
to the Closing, including, but not limited to, legal fees of
Buyer and Seller, will be borne and paid exclusively by the
party incurring same, without reimbursement, except to the
extent otherwise specified in this Contract.
Section 6.5 ASSUMPTION APPROVAL.
In the event that by 5:00 p.m., Houston, Texas time on June 25, 2005 (the
"ASSUMPTION APPROVAL DEADLINE") Lender has not approved the Assumption on terms
acceptable to Buyer, subject to Buyer's rights under SECTION 6.6, Buyer shall
waive its right to terminate this Contract for matters related to the Assumption
by proceeding to Closing.
Section 6.6 DEFEASANCE.
(a) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, Buyer shall have the right pursuant to the
applicable provisions of the Loan Documents either (i) to
defease the Existing Loan at Closing in lieu of assuming the
Existing Loan or (ii) to defease the Existing Loan subsequent to
the Closing. At the Closing, Seller will, whether or not
Existing Loan is defeased at the Closing, be charged (and Buyer
will be credited) with any costs of defeasing the Existing Loan
("DEFEASEMENT COSTS") in excess of $2,574,000, and if the
Defeasement Costs are less than $2,574,400 Buyer will pay to
Seller an amount equal to the excess of $2,574,400 over the
amount of the Defeasement Costs. Seller and Buyer acknowledge
that the defeasance may not occur contemporaneously with the
Closing and that even if it does, the exact amount of the
Defeasement Costs may not be known at the Closing. No later than
three (3) business days prior to the Closing Seller and
Purchaser shall either (x) agree on an estimate of the
Defeasance Costs to be used as a basis for making the adjustment
described in this Section 6.6 or (y) make any adjustments at the
Closing for Defeasance Costs incurred as of the Closing Date and
agree on a method for reserving for, tracking and reconciling
any unknown Defeasance Costs for a reasonable period of time,
not to exceed three (3) months, after the Closing.
Page 23
(b) Seller agrees to cooperate with Buyer in connection with any
defeasement of the Existing Loan, including a defeasement of the
Existing Loan by Seller using funds provided by Buyer.
Section 6.7 SELLER'S AND BUYER'S JOINT COVENANTS REGARDING TAXATION OF
CASH/UNIT PURCHASE.
For all federal, state and local income tax purposes:
(a) Buyer and Seller agree to treat Seller's contribution of
Property to Buyers in exchange for Units as a nontaxable
transaction under Section 721 of the Internal Revenue Code of
1986, as amended (the "CODE"), and Buyer and Seller will not
take an inconsistent position therewith except to the extent
required by a "determination" as that term is defined under
Section 1313 of the Code. Notwithstanding anything to the
contrary contained in this Contract, including without
limitation the use of words and phrases such as "sell," "sale,"
"purchase," and "pay," the parties agree that it is their intent
that to the extent that consideration for the transfer of the
Property takes the form of the issuance of Units, the
transactions contemplated hereby shall be treated for federal
income tax purposes pursuant to Section 721 of the Code as the
contribution of the Property by the Seller to Buyer, in exchange
for the Units.
(b) Buyer and Seller agree that the Existing Loan (together with any
fees and expenses required to be paid to Lender in connection
with the Assumption to the extent assumed by Buyer under SECTION
1.2(B)(I)) will be reported as a "qualified liability", as that
term is defined under Treasury Regulation Section 1.707-5 and
any fees and expenses required to be paid Lender in connection
with the Assumption to the extent satisfied by Buyer will be
treated as a qualified liability assumed by Buyer. Buyer and
Seller agree that they will not take positions inconsistent with
the preceding sentence except to the extent required by a
"determination" as that term is defined under Section 1313 of
the Code.
Section 6.8 ADDITIONAL CONDITIONS TO CLOSING.
In addition to other conditions specified in this Agreement, Closing shall not
occur until the following conditions have been satisfied, unless any such
condition has been waived in writing by Seller:
(a) The Lender or any substitute lender obtained by Buyer has agreed
to allow all Designated Owners to exercise the Option to
Guaranty Debt on the Property described in SECTION 9.20.
(b) Buyer's partners shall have executed an Amended and Restated
Limited Partnership Agreement in the form of the Amended and
Restated Limited Partnership Agreement attached hereto as
EXHIBIT G and made a part hereof.
ARTICLE 7
DEFAULTS AND REMEDIES
Page 24
Section 7.1 DEFAULT BY BUYER.
In the event that Buyer fails to consummate this Contract for any reason, except
Seller's default or the permitted termination of this Contract by Buyer as
herein expressly provided, Seller shall be entitled, as its sole remedy, to
terminate this Contract and receive the Xxxxxxx Money as liquidated damages for
the breach of this Contract. In the event that Buyer closes under this Contract
and then fails to fully and timely perform any of its other obligations under
this Contract that survive or are performable after the Closing, Seller may seek
all remedies available at law or in equity. IF THIS TRANSACTION FAILS TO CLOSE
DUE TO BUYER'S DEFAULT, SELLER WILL BE DAMAGED AND WILL BE ENTITLED TO
COMPENSATION FOR THOSE DAMAGES. SUCH DAMAGES WILL, HOWEVER, BE EXTREMELY
DIFFICULT AND IMPRACTICAL TO ASCERTAIN FOR THE FOLLOWING REASONS: (A) THE
DAMAGES TO WHICH SELLER WOULD BE ENTITLED IN A COURT OF LAW WILL BE BASED IN
PART ON THE DIFFERENCE BETWEEN THE ACTUAL VALUE OF THE PROPERTY AT THE TIME SET
FOR THE CLOSE OF ESCROW AND THE PURCHASE PRICE FOR THE PROPERTY AS SET FORTH IN
THIS CONTRACT; (B) PROOF OF THE AMOUNT OF SUCH DAMAGES WILL BE BASED ON OPINIONS
OF VALUE OF THE PROPERTY, WHICH CAN VARY IN SIGNIFICANT AMOUNTS; AND (C) IT IS
IMPOSSIBLE TO PREDICT AS OF THE DATE ON WHICH THIS AGREEMENT IS MADE WHETHER THE
VALUE OF THE PROPERTY WILL INCREASE OR DECREASE AS OF THE DATE SET FOR THE
CLOSING. FURTHERMORE, BUYER ACKNOWLEDGES SELLER HAD OTHER OPPORTUNITIES TO SELL
THE PROPERTY AND RELIED UPON THE REPRESENTATIONS OF BUYER THAT IT WOULD PERFORM
AND PURCHASE THE PROPERTY FROM SELLER. BUYER DESIRES TO LIMIT THE AMOUNT OF
DAMAGES FOR WHICH BUYER MIGHT BE LIABLE SHOULD BUYER BREACH THIS AGREEMENT.
BUYER AND SELLER WISH TO AVOID THE COSTS AND LENGTHY DELAYS WHICH WOULD RESULT
IF SELLER FILED A LAWSUIT TO COLLECT ITS DAMAGES FOR A BREACH OF THIS AGREEMENT.
THEREFORE, THE SUM REPRESENTED BY THE BUYER'S XXXXXXX MONEY SHALL BE DEEMED TO
CONSTITUTE A REASONABLE ESTIMATE OF SELLER'S DAMAGES UNDER THE PROVISIONS OF
SECTION 1671 OF THE CALIFORNIA CIVIL CODE AND SELLER'S SOLE AND EXCLUSIVE REMEDY
IN THE EVENT OF THE FAILURE TO CLOSE ESCROW DUE TO BUYER'S DEFAULT. THE PARTIES
ACKNOWLEDGE THAT PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A
FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTION 3275
OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO
CALIFORNIA CIVIL CODE SECTIONS 1671, 1676, AND 1677. IN CONSIDERATION OF THE
PAYMENT OF LIQUIDATED DAMAGES, SELLER WILL BE DEEMED TO HAVE WAIVED ALL OTHER
CLAIMS FOR DAMAGES OR RELIEF AT LAW OR IN EQUITY INCLUDING ANY RIGHTS SELLER MAY
HAVE PURSUANT TO SECTION 1680 OR SECTION 3389 OF THE CALIFORNIA CIVIL CODE. BY
INITIALING THIS PROVISION IN THE SPACES BELOW, SELLER AND BUYER EACH
SPECIFICALLY AFFIRM THEIR RESPECTIVE AGREEMENTS CONTAINED IN THIS SECTION.
_______________ BUYER'S INITIALS ________________ SELLER'S INITIALS
Page 25
Section 7.2 DEFAULT BY SELLER.
In the event that Seller fails fail to consummate this Contract for any reason,
except Buyer's default or the permitted termination of this Contract by Seller
or Buyer as herein expressly provided, Buyer shall be entitled, as its exclusive
remedies, either (i) to terminate this Contract by giving written notice thereof
to Seller, whereupon neither party shall have any further rights or obligations
under this Contract and the Xxxxxxx Money shall be returned to Buyer, or (ii) to
enforce specific performance of Seller's obligations under this Contract;
provided, however, if Seller's default is such that specific performance cannot
be granted as a judicial remedy, then Buyer may seek any and all other remedies
available at law or in equity. In the event Buyer closes under this Contract and
then Seller fails to fully perform any of its other obligations under this
Contract that survive or are performable after the Closing, Buyer may seek all
remedies available at law or in equity.
ARTICLE 8
CASUALTY AND CONDEMNATION
Section 8.1 RISK OF LOSS AND NOTICE.
Subject to all other provisions of the Contract the risk of loss or damage to
the Real Property and Improvements by fire or other casualty prior to the
Closing Date is borne by Seller. Seller shall give Buyer prompt notice of any
destruction of any part of the Real Property and Improvements or the
commencement of any condemnation proceedings against the Real Property and
Improvements between the Effective Date and the Closing Date.
Section 8.2 MINOR CASUALTY.
Whether or not the notice required by SECTION 8.1 is given, if Improvements are
destroyed by fire or other casualty and the estimated cost of repairs, as
reasonably determined by Seller based on a report by an independent construction
or architectural firm, is $250,000 or less (a "MINOR CASUALTY"), Closing will
occur with no reduction in the Purchase Price and at Closing:
(a) Seller shall assign to Buyer all proceeds of property insurance
payable to Seller, less any amounts paid by Seller to repair,
restore, or clean up the Real Property and Improvements;
(b) Buyer will receive a credit against the Purchase Price equal to
the amount of any unused deductible under Seller's property
insurance policy;
(c) Buyer shall accept the Real Property and remaining Improvements
in their damaged state;
(d) Buyer shall assume all of Seller's obligations to repair the
casualty damage pursuant to the Lease; and
(e) as between Buyer and Seller, Seller shall have no obligation to
repair or restore any damaged or destroyed portions of the Real
Property and Improvements.
Page 26
Section 8.3 MAJOR CASUALTY AND CONDEMNATION.
If condemnation proceedings are commenced against any portion of the Real
Property and Improvements, or if Improvements are destroyed by fire or other
casualty and the estimated cost of repairs, as reasonably determined by Seller
based on a report by an independent construction or architectural firm, is more
than $250,000 (a "MAJOR CASUALTY"), then this Contract shall automatically
terminate unless Buyer elects by written notice to Seller within ten (10) days
after notice from Seller of the occurrence of a Major Casualty or the initiation
of condemnation proceedings, to proceed with the Closing without reduction in
the Purchase Price, in which event at Closing:
(a) Seller shall assign its interest in all proceeds of property
insurance or condemnation awards to Buyer, less any amounts paid
by Seller to repair, restore, or clean up the Real Property and
Improvements;
(b) if a Major Casualty occurs:
(i) Buyer will receive a credit against the Purchase Price
equal to the amount of any unused deductible under
Seller's property insurance policy;
(ii) Buyer will accept the Real Property and remaining
Improvements in their damaged state;
(iii) Buyer shall assume all of Seller's obligations to repair
the casualty damage pursuant to the Lease; and
(iv) as between Buyer and Seller, Seller shall have no
obligation to repair or restore any damaged or destroyed
portions of the Real Property and Improvements; and
(c) if condemnation proceedings are begun, Buyer shall have the
option either to accept the Real Property and remaining
Improvements subject to the condemnation proceedings, or to
terminate this Contract. If Buyer does not elect to terminate
this Contract:
(i) Buyer shall be entitled to any portion of the
condemnation award that is not payable to the tenant,
and shall assume any obligation of the landlord under
the Lease to restore the Property;
(ii) Seller shall have no liability with respect to any
portion of the Real Property and Improvements that is
condemned, or with respect to any costs or expenses
incurred by Buyer as a result of any condemnation
proceedings; and
(iii) Sellers shall reasonably cooperate with Buyer in any
condemnation proceedings.
Page 27
ARTICLE 9
MISCELLANEOUS
Section 9.1 NOTICES.
All notices, requests, approvals, consents, and other communications required or
permitted under this Contract ("NOTICES") must be in writing and are effective:
(a) on the business day sent if (i) sent by fax prior to 5:00 p.m.
Houston, Texas time, (ii) the sending fax generates a written
confirmation of sending, and (iii) a confirming copy is sent on
the same business day by one of the other methods specified
below;
(b) on the next business day after delivery, on a business day, to a
nationally recognized overnight courier service for prepaid
overnight delivery;
(c) 3 business days after being deposited on a business day in the
United States mail, certified, return receipt requested, postage
prepaid, or
(d) upon receipt if delivered by any method other than the methods
specified above;
in each instance addressed to Buyer or a Seller, as the case may be, at the
following addresses, or to any other address either party may designate by ten
(10) days' prior notice to the other party:
Seller: Ryanco Partners Ltd. No. X
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
Telephone: (000)000-0000
Fax: (000)000-0000
E-Mail: xxxxxxxxx@xxxxxxxx.xxx
With a copy to:
Nordman, Cormany, Hair & Compton
0000 Xxxx Xxxxxx Xxxxx, Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx Esq.
Telephone: (000)000-0000
Fax: (000)000-0000
E-Mail: xxxxxxx@xxxx.xxx
Buyer: Behringer Harvard Operating Partnership I LP
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, III, Executive Vice President
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxxxxx@xxxxxxx.xxx
Page 28
With a copy to:
Xxxxxx & Xxxxxxx, L.L.P.
0000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxxxx@xxxxxx.xxx
With a copy to:
Xxxxxx, Xxxxxxx & Xxxxxx, LLP
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxxxxxx@xxxxxx.xxx
Each party shall use commercially reasonable efforts to send a copy of any
notice of termination under this Contract to the Title Company on the same date
and by the same method(s) as it is sent to the other party. The failure to send
a copy of any termination notice to the Title Company does not invalidate an
otherwise valid termination notice. E-mail addresses are included in this
SECTION 9.1 for convenience only: e-mail is not an acceptable form for Notices
under this Contract.
Section 9.2 PERFORMANCE.
Time is of the essence in the performance of this Contract.
Section 9.3 BINDING EFFECT.
This Contract is binding upon and inures to the benefit of the successors and
assigns of the parties.
Section 9.4 ENTIRE AGREEMENT.
This Contract, the Exhibits to this Contract and any agreements called for by
this Contract supersede the existing letter of intent between the parties dated
February 11, 2005, embody the complete agreement between the parties and cannot
be varied except by written agreement of each Seller and Buyer. No delay or
omission in the exercise of any right or remedy accruing to Seller or Buyer upon
any breach under this Contract shall impair such right or remedy or be construed
as a waiver of any such breach theretofore or thereafter occurring. The waiver
by Seller or Buyer of any breach of any term, covenant, or condition herein
stated shall not be deemed to be a waiver of any other breach, or of a
subsequent breach of the same or any other term, covenant, or condition herein
contained.
Page 29
Section 9.5 ASSIGNMENT.
(a) This Contract may not be assigned by a party without the prior
written consent of the other party except that Buyer may assign
its rights and obligations to a Subsidiary (defined below). Any
assignee of assignor's interest in this Contract is bound by all
approvals and waivers, actual and deemed, by assignor prior to
the assignment, and must assume in writing all of assignor's
obligations under this Contract. Assignor is not released from
the obligations created under this Contract as a result of any
permitted assignment. Upon Buyer's written request received by
Seller at least ten (10) days prior to the Closing Date, Seller
will cause the Property to be conveyed at Closing to the
Subsidiary of Buyer set forth in Buyer's request.
(b) Prior to the effectiveness of any assignment of this Contract,
assignor shall promptly deliver to the other party, together
with a request for the written consent of the other party, a
fully executed original of the assignment of this Contract and
the assumption by the assignee of assignor's obligations under
this Contract, which assignment must include the federal tax
identification number of the assignee. The requested assignment
shall not be effective unless and until the party receiving the
request serves written notice of consent on the party requesting
consent.
(c) No consent given by a party to any transfer or assignment of
assignor's rights or obligations under this Contract may be
construed as a consent to any other transfer or assignment of
assignor's rights or obligations. No transfer or assignment in
violation of this SECTION 9.5 is valid or enforceable.
(d) A SUBSIDIARY of Buyer shall mean any present or future entity of
which Buyer owns, directly or indirectly, one hundred percent
(100%) of the equity securities of the entity.
Section 9.6 COMMISSIONS.
Each party hereby warrants to the other party that except for Xxxxx Xxxx
LaSalle, Xxx Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx ("SELLER'S
BROKER"), which shall be paid a commission for its services in negotiating this
Contract pursuant to a separate agreement between Seller and Seller's Broker, it
has not dealt with any real estate broker or salesman in the negotiation of this
Contract. Each party shall indemnify, defend, and hold harmless the other party
against any real estate commissions, finder's fees or similar compensation due
by virtue of the execution or Closing of this Contract, the obligation or
asserted claim for which arises from actions taken or claimed to be taken by or
through the indemnifying party. The provisions of this SECTION 9.6 survive the
Closing or any earlier termination of this Contract.
Section 9.7 HEADINGS.
Section headings or captions are used in this Contract for convenience only and
do not limit or otherwise affect the meaning of any provision of this Contract.
Page 30
Section 9.8 HOLIDAYS, ETC.
Whenever any time limit or date provided herein falls on a Saturday, Sunday, or
legal holiday under the laws of the State of Texas or the State where the Real
Property is located or on a day when federal banks are closed, then that date is
extended to the next day that is not a Saturday, Sunday, or legal holiday or a
day when federal banks are closed. The term BUSINESS DAY as used in this
Contract means any day that is not a Saturday, Sunday, or legal holiday under
the laws of the State of Texas or the State where the Real Property is located
or a day when federal banks are closed.
Section 9.9 LEGAL FEES.
If there is litigation, arbitration, or mediation concerning the interpretation
or enforcement of this Contract or any portion of this Contract, or for damages
or other remedies for breach of this Contract, the prevailing party, when a
final non-appealable judgment has been entered in a court of competent
jurisdiction, is entitled to recover from the losing party its reasonable legal
fees and paraprofessional fees, expert fees, court costs, and expenses. The
provisions of this SECTION 9.9 survive the Closing or any earlier termination of
this Contract.
Section 9.10 GOVERNING LAW.
The laws of the State where the Real Property is located govern this Contract.
Section 9.11 SEVERABILITY.
If any provision in this Contract is unenforceable in any respect, the remainder
of this Contract remains enforceable and, in lieu of the unenforceable
provision, there will be added to this Contract upon the agreement of Buyer and
Seller, a provision as similar in terms to the unenforceable clause as may be
possible and be enforceable.
Section 9.12 DISCLAIMERS, WAIVERS, AND RELEASES.
Buyer acknowledges and agrees that:
(a) EXCEPT AS MAY BE SPECIFICALLY STATED IN THE DEED, OTHER CLOSING
DOCUMENTS, OR IN SECTION 4.1, SELLER SPECIFICALLY DISCLAIMS, AND
BUYER EXPRESSLY WAIVES, ANY WARRANTY, GUARANTY, OR
REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE, OF,
AS, TO, OR CONCERNING: (I) THE NATURE AND CONDITION OF THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL, AND
GEOLOGY, AND THE SUITABILITY OF THE REAL PROPERTY AND
IMPROVEMENTS FOR ANY AND ALL ACTIVITIES AND USES THAT BUYER MAY
ELECT TO CONDUCT THEREON; (II) MATTERS OF TITLE; (III) THE
NATURE, ENFORCEABILITY, AND EXTENT OF ANY RIGHT-OF-WAY, LEASE,
LIEN, ENCUMBRANCE, LICENSE, RESERVATION, CONDITION, OR OTHERWISE
RELATING TO THE REAL PROPERTY AND IMPROVEMENTS; (IV) THE
COMPLIANCE OF THE REAL PROPERTY AND IMPROVEMENTS OR THE
OPERATION THEREOF WITH ANY LAWS, RULES, ORDINANCES, OR
REGULATIONS OF ANY GOVERNMENTAL AUTHORITY OR OTHER BODY,
INCLUDING, WITHOUT LIMITATION, THE AMERICANS WITH DISABILITIES
ACT OR THE FAIR HOUSING ACT, AS AMENDED FROM TIME TO TIME; (V)
WHETHER THE IMPROVEMENTS ARE BUILT IN A GOOD AND WORKMANLIKE
MANNER; (VI) ZONING TO WHICH THE REAL PROPERTY AND IMPROVEMENTS
OR ANY PORTION THEREOF MAY BE SUBJECT; (VII) THE AVAILABILITY
Page 31
OF ANY UTILITIES TO THE REAL PROPERTY AND IMPROVEMENTS OR ANY
PORTION THEREOF, INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE,
GAS, ELECTRIC, PHONE, AND CABLE; (VIII) USAGES OF ADJOINING
PROPERTY; (IX) ACCESS TO THE REAL PROPERTY AND IMPROVEMENTS OR
ANY PORTION THEREOF; (X) THE VALUE, COMPLIANCE WITH ANY PLANS
AND SPECIFICATIONS PROVIDED BY SELLER, SIZE, LOCATION, AGE, USE,
DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL INTEGRITY,
OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE
REAL PROPERTY AND IMPROVEMENTS OR ANY PORTION THEREOF, OR ANY
INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS, OR
CLAIMS ON OR AFFECTING OR PERTAINING TO THE REAL PROPERTY AND
IMPROVEMENTS OR ANY PART THEREOF; (XI) THE EXISTENCE OR
NON-EXISTENCE OF UNDERGROUND STORAGE TANKS; (XII) ANY OTHER
MATTER AFFECTING THE STABILITY OR INTEGRITY OF THE REAL PROPERTY
AND IMPROVEMENTS; (XIII) THE POTENTIAL FOR FURTHER DEVELOPMENT
OF THE REAL PROPERTY AND IMPROVEMENTS; (XIV) THE EXISTENCE OF
VESTED LAND USE, ZONING, OR BUILDING ENTITLEMENTS AFFECTING THE
REAL PROPERTY AND IMPROVEMENTS; (XV) TAX CONSEQUENCES
(INCLUDING, BUT NOT LIMITED TO, THE AMOUNT OF, USE OF, OR
PROVISIONS RELATING TO ANY TAX CREDITS); (XVI) WARRANTIES
(EXPRESS OR IMPLIED) OF CONDITION REGARDING THE FITNESS OF THE
REAL PROPERTY AND IMPROVEMENTS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY, TENANTABILITY, HABITABILITY, OR SUITABILITY FOR
ANY INTENDED USE; (XVII) ANY ENVIRONMENTAL CONDITIONS THAT MAY
EXIST ON THE REAL PROPERTY AND IMPROVEMENTS, INCLUDING, WITHOUT
LIMITATION, THE EXISTENCE OR NON-EXISTENCE OF PETROLEUM
PRODUCTS, PETROLEUM RELATED PRODUCTS, FUNGI OF ALL FORMS AND
TYPES, "HAZARDOUS SUBSTANCES," "HAZARDOUS MATERIALS," "TOXIC
SUBSTANCES," OR "SOLID WASTES" AS THOSE TERMS (WHICH ARE
COLLECTIVELY REFERRED TO IN THIS CONTRACT AS "HAZARDOUS
MATERIALS") ARE DEFINED IN THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED BY
SUPERFUND AMENDMENTS AND REAUTHORIZATION ACT OF 1986, THE
RESOURCE CONSERVATION AND RECOVERY ACT OF 1976 ("RCRA"), AND THE
HAZARDOUS MATERIALS TRANSPORTATION ACT, AND STATE ENVIRONMENTAL
LAWS, AND IN THE REGULATIONS PROMULGATED PURSUANT TO THOSE LAWS,
ALL AS AMENDED (COLLECTIVELY, THE "HAZARDOUS WASTE LAWS") AND
BUYER RELEASES AND WAIVES ANY CLAIMS OR CAUSES OF ACTION AGAINST
SELLER AND SELLER'S AFFILIATES BASED IN WHOLE OR IN PART ON ANY
VIOLATION OF, OR ARISING WITH RESPECT TO, ANY FEDERAL, STATE, OR
LOCAL STATUTE, ORDINANCE, RULE, OR REGULATION RELATING THERETO;
AND (XVIII) THE FINANCIAL EARNING CAPACITY OR HISTORY OR EXPENSE
HISTORY OF THE OPERATION OF THE REAL PROPERTY AND IMPROVEMENTS.
(b) BUYER SHALL PERFORM ALL INVESTIGATIONS OF THE PROPERTY IT DEEMS
NECESSARY DURING THE DUE DILIGENCE PERIOD AND WILL RELY ON ITS
OWN INVESTIGATIONS.
(c) NO REPRESENTATIONS HAVE BEEN MADE BY SELLER, ANY AFFILIATE OF
SELLER, OR ANY OF THEIR RESPECTIVE AGENTS, BROKERS, OR
EMPLOYEES, AND BUYER HAS NOT RELIED ON ANY INFORMATION SUPPLIED
BY SELLER IN ENTERING INTO, CONTINUING THE EFFECTIVENESS OF, OR
CLOSING UNDER THIS CONTRACT OTHER THAN SELLERS' REPRESENTATIONS
AND WARRANTIES SPECIFIED IN SECTION 4.1 AND SECTION 9.6.
(d) EXCEPT AS SET FORTH IN THE CLOSING DOCUMENTS OR SECTION 4.1,
BUYER IS PURCHASING THE PROPERTY AS IS, WHERE IS, AND WITH ALL
FAULTS.
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EXCEPT AS SET FORTH IN THE CLOSING DOCUMENTS OR SECTION 4.1,
BUYER RELEASES SELLER AND ALL AFFILIATES OF SELLER AND THEIR
RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, REPRESENTATIVES, AND
AGENTS FROM ANY COST, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND,
ACTION, OR CAUSE OF ACTION ARISING FROM OR RELATED TO ALL
CONDITIONS OF OR RELATING TO THE PROPERTY, INCLUDING, WITHOUT
LIMITATION, ALL THOSE ENUMERATED IN SECTION 9.12(A) AND ALL
CONSTRUCTION OR DESIGN DEFECTS, ERRORS, OMISSIONS, OR OTHER
CONDITIONS AFFECTING THE PROPERTY, KNOWN OR UNKNOWN. THIS
RELEASE WILL BE GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF
ITS EXPRESS TERMS AND PROVISIONS, INCLUDING, WITHOUT LIMITATION,
THOSE RELATING TO UNKNOWN CLAIMS, DAMAGES, AND CAUSES OF ACTION.
THIS COVENANT RELEASING EACH SELLER AND ALL AFFILIATES OF SELLER
IS A COVENANT RUNNING WITH THE PROPERTY AND IS BINDING UPON
BUYER, ITS SUCCESSORS AND ASSIGNS.
THE PROVISIONS OF THIS SECTION 9.12 SURVIVE THE CLOSING OR ANY EARLIER
TERMINATION OF THIS CONTRACT.
Section 9.13 RULE OF CONSTRUCTION.
Each party and its counsel have reviewed and revised this Contract. The normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party may not be employed in the interpretation of this
Contract or any amendments, schedules, or exhibits to this Contract.
Section 9.14 EFFECTIVE DATE.
The date the Title Company receives a fully executed counterpart of this
Contract, as evidenced by the Title Company's notation in the space set forth
below, shall be the "EFFECTIVE DATE" of this Contract.
Section 9.15 COUNTERPARTS AND FACSIMILE SIGNATURES.
This Contract may be executed in one or more counterparts. Each counterpart is
an original and proof of this Contract may be made without more than one
counterpart. Facsimile signatures are binding on the party providing the
facsimile signatures.
Section 9.16 NO RECORDING.
Buyer covenants that neither it nor any successor or assign will record in any
public real property records this Contract or any memorandum or affidavit
relating to this Contract or otherwise cloud title to the Property. If Buyer
breaches this SECTION 9.16, Buyer will record a release of any such memorandum
or affidavit no later than five (5) days after request by Seller. This Section
9.16 survives the Closing or earlier termination of this Contract and Seller may
enforce specific performance of Buyer's obligations under this SECTION 9.16.
Section 9.17 FURTHER ACTS.
In addition to the acts, instruments and agreements recited herein and
contemplated to be performed, executed and delivered by Buyer and Seller, Buyer
and Seller shall perform, execute, and deliver or cause to be performed,
executed, and delivered at the Closing or after the Closing, any and all further
acts, instruments, and agreements and provide such further
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assurances as the one party may reasonably require to consummate the transaction
contemplated hereunder as long as such performance, execution or delivery is
reasonably acceptable to the other party.
Section 9.18 CONDITIONS PRECEDENT OF BUYER.
In addition to all other conditions set forth in this Agreement, Buyer's
obligation to consummate the Closing is subject to the satisfaction of each and
every one of the conditions precedent set forth in this SECTION 9.18 (all of
which are for the sole benefit of Buyer):
(a) Prior to or on the Closing Date, Buyer shall have received an
Estoppel Certificate (the "ESTOPPEL CERTIFICATE") in the form of
EXHIBIT N attached hereto, dated no earlier than five (5) days
before the Closing Date, executed by Tenant. Seller shall use
reasonable efforts to obtain such executed Estoppel Certificate
in such form from Tenant prior to Closing. Seller shall deliver
such Estoppel Certificate (whether or not in compliance
herewith) to Buyer promptly following Seller's receipt thereof.
If Seller does not timely obtain the required Estoppel
Certificate, then Buyer may elect, in lieu of terminating this
Contract as provided below, to extend the Closing Date up to
twenty (20) days in order to allow more time to obtain such
Estoppel Certificate, but if the Estoppel Certificate is not
received by Buyer by the end of the twenty (20) day extension
period, then Buyer must exercise one of its options under
SECTION 9.18(C).
(b) As of the Closing Date, Tenant shall not be in default under the
Lease or the subject of any bankruptcy or other insolvency
proceeding.
(c) Upon the failure of any of the foregoing conditions precedent,
Buyer shall have the option to (a) waive such condition
precedent and proceed to Closing, or (b) terminate this Contract
by sending written notice to Seller on or before the date of
Closing, in which event the Xxxxxxx Money shall be returned to
Buyer.
Section 9.19 CONFIDENTIALITY.
Seller acknowledges that the matters relating to the REIT, this Contract, and
this transaction (collectively, the "INFORMATION") are confidential in nature
and Seller covenants and agrees to keep the Information confidential.
Notwithstanding any other express or implied agreement to the contrary, the
parties agree and acknowledge that each of them and each of their employees,
representatives, and other agents may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transaction
and all materials of any kind (including opinions or other tax analyses) that
are provided to any of them relating to such tax treatment and tax structure,
except to the extent that confidentiality is reasonably necessary to comply with
U.S. federal or state securities laws. For purposes of this paragraph, the terms
"TAX TREATMENT" and "TAX STRUCTURE" have the meanings specified in Treasury
Regulation section 1.6011-4(c). Buyer agrees that if the transaction
contemplated by this Contract is not consummated for any reason, then Buyer will
(i) return to Seller all documents and information obtained from Seller promptly
upon request and (ii) keep the Information confidential and will not (except as
required by applicable law, regulation or legal process including applicable
securities laws), without the Seller's prior written consent, disclose any
Information, the content or results of Buyer's investigations and the
information contained in the materials delivered by Seller to Buyer, in any
manner whatsoever or use the information gathered by Buyer or sent by Seller to
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Buyer in a manner which will (a) harm or tend to harm Seller, or (b) provide
Buyer with an advantage in dealing with third parties in competition with Seller
or any Affiliate of Seller.
Seller acknowledges that it is aware that the REIT is a public company and that
the securities laws of the United States make it illegal for any person (i) to
purchase, sell or otherwise engage in transactions in securities of or
derivative securities related to securities of a public company while in
possession of material, nonpublic information about that company, or (ii) to
communicate such information to another person who may purchase, sell or
otherwise engage in transactions in securities of or derivative securities
related to securities of that public company. Seller agrees not to violate those
laws.
Section 9.20 OPTION TO GUARANTEE DEBT ON PROPERTY.
Any Designated Owner who receives Units in Buyer pursuant to the provisions of
SECTION 1.2(B)(II) shall be permitted, if Buyer obtains a new loan encumbering
the Property, pursuant to Existing Loan guaranty agreement or a guaranty
agreement (which shall be renewable no less often than annually) acceptable in
form and content to such Designated Owner and such lender, to guarantee a
portion of the mortgage indebtedness on the Property. The portion of mortgage
indebtedness which the Designated Owners have the option to guarantee shall be
determined by Buyer and Seller during the Due Diligence Period, but is currently
contemplated to be the "bottom" $7,000,000 of the mortgage indebtedness on the
Property.
Section 9.21 BUYER'S INDEMNIFICATION.
Buyer will indemnify and hold harmless Seller and its respective officers,
partners, members, managers, employees, agents, representatives, stockholders,
controlling persons, and affiliates (collectively, the "Seller Indemnified
Persons") for, and will pay to the Seller Indemnified Persons the amount of, any
loss, liability, claim, damage, expense (including costs of investigation and
defense and reasonable attorney's fees) or diminution of value, whether or not
involving a third party claim, arising, directly or indirectly, from or in
connection with:
(a) any breach or inaccuracy of any representation or warranty made
by Buyer in this Agreement, or any certificate or document
delivered by Buyer pursuant to this Agreement; and
(b) any breach or failure by Buyer or the General Partner of Buyer
to perform or comply with any covenant or obligation of Buyer or
its General Partner in this Agreement.
Section 9.22 SELLER'S INDEMNIFICATION.
Seller will indemnify and hold harmless Buyer and its respective officers,
partners, members, managers, employees, agents, representatives, stockholders,
controlling persons, and affiliates (collectively, the "Buyer Indemnified
Persons") for, and will pay to the Buyer Indemnified Persons the amount of, any
loss, liability, claim, damage, expense (including costs of investigation and
defense and reasonable attorney's fees) or diminution of value, whether or not
involving a third party claim, arising, directly or indirectly, from or in
connection with:
(a) any breach or inaccuracy of any representation or warranty made
by Seller in this Agreement, or any certificate or document
delivered by Seller pursuant to this Agreement; and
(b) any breach or failure by Seller to perform or comply with any
covenant or obligation of Seller in this Agreement.
Page 35
Section 9.23 WAIVER OF CALL RIGHT.
Notwithstanding anything to the contrary contained in the Partnership Agreement,
the REIT, in its capacity as the general partner of the Partnership, agrees that
it will not exercise the "Call Right" set forth in Section 8.06 of the
Partnership Agreement with respect to the Units held by Seller or the Designated
Owners at any time prior to the seventh anniversary of the Closing, PROVIDED,
HOWEVER, that the REIT may exercise the Call Right at any time after the
expiration of the Holding Period (as defined in the Partnership Agreement) if
such exercise is (a) in connection with a public listing or quotation of REIT
shares on a national securities exchange or the Nasdaq Stock Market and the lead
underwriter to the REIT in connection with such public listing provides an
opinion to the REIT that it is reasonably necessary to exercise the Call Right
in connection with such public listing or (b) in connection with the merger or
consolidation of the REIT with another entity (including an exercise of the Call
Right to enable the REIT to obtain the requisite approval to such merger or
consolidation). Each Designated Owner whose Partnership Units are the subject of
a Call Notice may elect to receive the Cash Amount, or a combination of Cash
Amount and REIT Shares Amount in a proportion specified by the Designated Owner,
in exchange for the Partnership Units subject to the Call Notice. Each of the
Designated Owners is an intended third party beneficiary of this SECTION 9.23
and is entitled to enforce the provisions of this SECTION 9.23 against the REIT.
Behringer Harvard REIT I, Inc. ("GENERAL PARTNER") joins in this Agreement
solely to evidence its agreement to the provisions of this SECTION 9.23.
[signature pages follow]
Page 36
EXECUTED by Seller on _____________, 2005.
SELLER
RYANCO PARTNERS LTD. NO. X,
a California limited partnership
By: Buena Vista Plaza, Inc.,
a California corporation
its General Partner
By:
-------------------------------------
Xxxx X. Xxxx, President
By:
-------------------------------------
Xxxx X. XxXxxxxxx, Secretary
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EXECUTED by Buyer on ______________, 2005.
BUYER
BEHRINGER HARVARD OPERATING
PARTNERSHIP I LP, a Texas limited partnership
By: Behringer Harvard REIT I, Inc.,
Its General Partner
By:_____________________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Executive Vice President
Buyer's Tax ID No. 14 1838660
General Partner is executing this Agreement solely to evidence its agreement to
the provisions of SECTION 9.23
GENERAL PARTNER
Behringer Harvard REIT I, Inc.,
a Maryland Corporation
By:_____________________________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Executive Vice President
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The undersigned hereby acknowledges receipt of the Initial Xxxxxxx Money and a
fully executed counterpart of this Contract and agrees to hold and disburse all
Xxxxxxx Money in accordance with this Contract.
PARTNERS TITLE COMPANY
By:_____________________________________________
Name:________________________________________
Title:_______________________________________
Date:________________________________________
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