PURCHASE AND SALE AGREEMENT
between
PERA MINERAL, INC.
and
HARVARD PROPERTY TRUST, LLC,
D/B/A BEHRINGER HARVARD FUNDS
for that certain property known as
0000 XXXX XXXXXXX XXXXXX
XXXXXXXXX, XXXXXXXX
November 9, 2004
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.....................................................1
SECTION 2. XXXXXXX MONEY; AGREEMENT TO SELL AND PURCHASE...................2
X. XXXXXXX MONEY..............................................................2
B. PURCHASE AND SALE..........................................................3
C. INDEPENDENT CONTRACT CONSIDERATION.........................................3
SECTION 3. REPRESENTATIONS AND WARRANTIES BY SELLER........................3
A. DUE ORGANIZATION...........................................................3
B. POWER......................................................................4
C. NO PROCEEDINGS.............................................................4
D. SERVICE CONTRACTS..........................................................4
E. TENANT LEASES..............................................................4
F. EQUIPMENT LEASES...........................................................4
G. RESTRICTED PERSON..........................................................5
H. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES..............................5
I. DISCLAIMER.................................................................5
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.....................7
A. DUE ORGANIZATION...........................................................7
B. POWER......................................................................7
C. NO PROCEEDINGS.............................................................7
D. RESTRICTED PERSON..........................................................7
E. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES..............................7
SECTION 5. OPERATION OF THE PROJECT PRIOR TO CLOSING.......................8
SECTION 6. ACCESS TO THE PROJECT...........................................9
SECTION 7. CONDITIONS TO CLOSING..........................................11
SECTION 8. CLOSING........................................................12
A. TIME......................................................................12
B. ACTIONS...................................................................13
C. DELIVERIES................................................................13
D. PRORATIONS................................................................15
E. CLOSING COSTS.............................................................16
F. LEASING EXPENSES..........................................................17
G. TITLE.....................................................................17
SECTION 9. WAIVER; SEVERABILITY...........................................17
SECTION 10. BROKERS........................................................17
SECTION 11. SURVIVAL; FURTHER INSTRUMENTS..................................18
SECTION 12. NO THIRD PARTY BENEFITS........................................18
SECTION 13. REMEDIES.......................................................18
SECTION 14. NOTICES........................................................18
SECTION 15. ATTORNEYS' FEES................................................19
SECTION 16. CONFIDENTIALITY................................................19
SECTION 17. LIMITATION ON LIABILITY........................................20
SECTION 18. MISCELLANEOUS..................................................20
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of the
9th day of November 2004 by and between PERA MINERAL, INC., a Colorado
non-profit corporation ("SELLER"), and HARVARD PROPERTY TRUST, LLC, d/b/a
BEHRINGER HARVARD FUNDS, a Delaware limited liability company, or its permitted
assignee ("PURCHASER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller owns that certain commercial office building containing
approximately 153,048 net rentable square feet, situated on approximately 8.214
acres of land, located at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx; and
WHEREAS, Seller desires to sell its interest in such property and
Purchaser desires to purchase such interest from Seller on the terms and
conditions set forth below;
NOW THEREFORE, in consideration of the premises and the respective
undertakings of the parties hereinafter set forth, it is hereby agreed:
SECTION 1. DEFINITIONS.
Wherever used in this Agreement, the words and phrases set forth below shall
have the meanings set forth below or in an Exhibit to this Agreement to which
reference is made, unless the context clearly requires otherwise.
A. "BROKER" There are no outside real estate brokers involved in
this transaction.
B. "BUSINESS DAY" shall mean any day other than a Saturday, Sunday
or any other day on which banking institutions in the State of Colorado are
authorized by law or executive action to close.
C. "CLOSING" means the closing at which Seller conveys title to the
Project to Purchaser and Purchaser pays Seller the purchase price described in
Section 2 herein below.
D. "CLOSING DATE" means December 6, 2004, as such date may be
extended by Purchaser pursuant to Section 8A below, or as otherwise agreed upon
by the parties.
E. "DUE DILIGENCE DEADLINE" means November 19, 2004.
F. "XXXXXXX MONEY" shall have the meaning set forth in Section 2(A)
below.
G. "EQUIPMENT LEASES" shall have the meaning set forth in Section
3(F) below.
H. "IMPROVEMENTS" means all buildings, structures, fixtures and
other improvements now or hereafter located or erected on the Land (other than
any trade fixtures owned by tenants).
I. "LAND" means the real property described on EXHIBIT A, including
all adjacent roadways, rights-of-way and alleys to the extent Seller has an
interest therein, all mineral interests in respect of the Land to the extent
Seller has an interest therein, and all easements, strips and gores, and other
rights appurtenant to such real property.
J. "PERMITTED EXCEPTIONS" means non-delinquent real property taxes
on the Project and any other matters set forth on the Title Commitment and
Survey (both as defined in Section 7(A) below) which are not objected to by
Purchaser by the expiration of the Due Diligence Deadline.
K. "PURCHASE PRICE" shall have the meaning set forth in Section
2(B) below.
L. "PERSONAL PROPERTY" means all tangible and intangible personal
property now or hereafter owned by the Seller and used in connection with the
operation of the Project, including, without limitation, (i) all building and
construction materials, equipment, appliances, fixtures and machinery, (ii) all
transferable development rights and entitlement rights, permits, licenses,
certificates and approvals issued in connection with the Project, (iii) all
plans and specifications, Project-level books and records, operating manuals,
and guaranties and warranties with respect to the Project, and (iv) Seller's
rights, if any, to use the name of the Project and all other trade names,
trademarks and logos used by Seller in the operation and identification of the
Project;
M. "PROJECT" means the Land, the Improvements, the Tenant Leases
and the Personal Property.
N. "SERVICE CONTRACTS" shall have the meaning set forth in Section
3(D) below.
O. "SURVEY" shall have the meaning set forth in Section 7(A) below.
P. "TENANT LEASE" shall have the meaning set forth in Section 3(E)
below.
Q. "TITLE COMMITMENT" shall have the meaning set forth in Section
7(A) below.
R. "TITLE COMPANY" means Partners Title Company, 000 Xxxx Xxxxxx,
Xxxxx 0000X, Xxxxxxx, Xxxxx 00000-0000, Attention: Xxxx Xxxxxxxx (Telephone
Number: (000) 000-0000).
SECTION 2. XXXXXXX MONEY; AGREEMENT TO SELL AND PURCHASE.
X. Xxxxxxx Money.
Within two (2) business days after the date of execution of this
Agreement by both Seller and Purchaser (or the latest of such dates if the dates
are different) (the latest date of execution being the "Effective Date"),
Purchaser shall deposit Two Hundred Fifty Thousand and No/100 US Dollars
($250,000.00) with the Title Company (which, together with any interest earned
thereon, and additions thereto, is herein referred to as the "INITIAL XXXXXXX
MONEY"); and, if Purchaser fails to deposit the Initial Xxxxxxx Money by such
date, this Agreement shall be deemed null and void. In addition to the Initial
Xxxxxxx Money, Purchaser shall deposit with the Title Company on the date which
is one (1) business day after the expiration of the Due Diligence Deadline (if
this Agreement then remains in effect), an additional Two Hundred Fifty Thousand
and No/100 US Dollars ($250,000) (the "ADDITIONAL XXXXXXX MONEY"); and, if
Purchaser fails to deposit the Additional Xxxxxxx Money by such date, Purchaser
shall be deemed to be in default of this Agreement, this Agreement shall then
immediately terminate, and the Initial Xxxxxxx Money Deposit shall be deemed
forfeited by Purchaser and earned by and paid to Seller as liquidated damages.
The Initial Xxxxxxx Money, the Additional Xxxxxxx Money, and, if deposited, the
Second Additional Xxxxxxx Money (as hereinafter defined) (collectively the
"XXXXXXX MONEY") shall be held by the Title Company in accordance with the terms
hereof and invested in an interest bearing account reasonably acceptable to
Purchaser. If this Agreement is terminated prior to Closing due to Purchaser's
default hereunder, the Xxxxxxx Money, together with any interest earned thereon,
shall be paid to Seller as liquidated damages and as Seller's sole and exclusive
remedy except as set forth in Section 13 below. If the Closing occurs hereunder,
the Xxxxxxx Money, together with any interest earned thereon, shall be paid to
Seller and credited against the Purchase Price. If the Closing does not occur
hereunder for
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any reason other than Purchaser's default hereunder, the Xxxxxxx Money, together
with any interest earned thereon, shall be refunded to Purchaser.
In the event either party improperly and unreasonably refuses to
cooperate in good faith in the release of the Xxxxxxx Money, then the party at
fault shall be liable for and pay all of the other party's costs, expenses,
attorneys' fees, and litigation costs (including appeals) incurred to obtain the
Xxxxxxx Money, together with an amount equal to eighteen percent (18%) per annum
on the entire balance of the Xxxxxxx Money withheld from the date of such
refusal until the date the Xxxxxxx Money is available for immediate receipt by
the party entitled thereto. The obligations under the immediately preceding
sentence shall survive the termination of this Agreement.
B. Purchase and Sale.
On the Closing Date Seller shall convey the Project to Purchaser on the
terms and conditions set forth herein. On the Closing Date the Purchaser shall
accept title to the Project from Seller on the terms and conditions set forth
herein and shall pay to the Seller the purchase price ("PURCHASE PRICE") of
Nineteen Million Eight Hundred Thousand And No/100 US Dollars ($19,800,000.00),
subject to prorations as set forth below, by wire transfer of immediately
available funds.
C. Independent Contract Consideration.
In addition to the Xxxxxxx Money, Purchaser shall, concurrently with its
execution hereof, deliver to Seller a check in the amount of One Hundred And
No/100ths US Dollars ($100.00), which amount Seller and Purchaser agree has been
bargained for as consideration for Seller's execution and delivery of this
Agreement and Purchaser's right to inspect the Project pursuant hereto. Such sum
is in addition to and independent of any other consideration or payment provided
for in this Agreement and is nonrefundable in all events.
D. Termination of Agreement.
If the results of the inspections performed by or on behalf of Purchaser
pursuant to Section 6 shall be unsatisfactory to Purchaser in any respect or if
Purchaser otherwise determines in its sole and absolute discretion not to
proceed to Closing, Purchaser shall have the right to terminate this Agreement
at any time prior to the Due Diligence Deadline by the giving of written notice
thereof to Seller, in which event, the Xxxxxxx Money shall be refunded to
Purchaser. In the event that Purchaser fails to terminate this Agreement prior
to the expiration of the Due Diligence Deadline, Purchaser shall have no further
right to terminate this Agreement pursuant to this Section 2(D), and the Xxxxxxx
Money shall be non-refundable to Purchaser, except as provided in this
Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES BY SELLER.
Seller hereby represents and warrants to Purchaser as of the date hereof
as follows:
A. Due Organization.
Seller is a non-profit corporation duly organized and validly existing
under the laws of the State of Colorado; Seller has full power and authority,
and is duly authorized, to execute, enter into, deliver and perform this
Agreement and its obligations hereunder.
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B. Power.
This Agreement and all other agreements, instruments and documents
required to be executed or delivered by Seller pursuant hereto have been or (if
and when executed) will be duly executed and delivered by Seller, and are or
will be legal, valid and binding obligations of Seller, enforceable against
Seller in accordance with its terms.
C. No Proceedings.
Except as set forth in EXHIBIT B, Seller has not received, to Seller's
actual knowledge, any written notice that there is currently pending any
investigation, action, suit or proceeding, including condemnation, eminent
domain or similar proceedings, before any court or governmental agency or body
against the Seller or the Project that might have any material adverse result to
the Project. Without limiting the generality of the foregoing, (i) Seller has
received no written notice of any pending zoning changes with respect to the
Project, and Seller has not initiated any pending request or application for a
zoning change with respect to the Project or any other property adjacent to the
Project, and (ii) Seller has not received any written notices from any
governmental entities of violations or alleged violations of any laws, rules,
regulations or codes, including building codes, with respect to the Project
which have not been corrected to the satisfaction of the governmental agency
issuing such notices.
D. Service Contracts.
Attached hereto as EXHIBIT C is a list of all contracts or agreements to
which Seller is a party for the providing of services to or management of the
Project (which contracts and agreements, together with the contracts and
agreements entered into with respect to the Project after the date hereof
pursuant to Section 5 below, are herein referred to collectively as the "SERVICE
CONTRACTS"). Except as set forth on such EXHIBIT C, to Seller's actual
knowledge, all of the Service Contracts are in full force and effect and free
from material default. Complete and accurate copies of all service contracts
have been, or prior to the expiration of the Due Diligence Period will be,
provided for Purchaser's review.
E. Tenant Leases.
Attached hereto as EXHIBIT D-1 is a list of all outstanding leases or
agreements pursuant to which any person occupies, or has the right to occupy,
space in the Project (which leases, agreements and other documents, together
with the lease documents entered into with respect to the Project after the date
hereof pursuant to Section 5 below, are herein referred to collectively as the
"TENANT LEASES"). Except as shown on EXHIBIT D-1, to Seller's actual knowledge,
there are no material defaults under any of the Tenant Leases and the Tenant
Leases are in full force and effect. Attached hereto as EXHIBIT D-2 is a list of
all security deposits and any rights to refunds of rents previously paid under
the Tenant Leases except for year-end reconciliations of operating expenses and
real estate taxes. Attached hereto as EXHIBIT D-3 is a list of all brokerage
commissions or fees due now or payable in the future in connection with the
Tenant Leases. Complete and accurate copies of all Tenant Leases have been, or
prior to the expiration of the Due Diligence Period will be, provided for review
by Purchaser.
F. Equipment Leases.
Attached hereto as EXHIBIT E is a list of all equipment leases, if any,
to which Seller is a party for the leasing of equipment used at the Project
(which leases, together with any equipment leases entered into with respect to
the Project after the date hereof pursuant to Section 5 below, are herein
referred to collectively as the "EQUIPMENT LEASES"). Except as set forth on such
EXHIBIT E, to Seller's
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actual knowledge, all of the Equipment Leases are in full force and effect and
free from material default. Complete and accurate copies of all Equipment Leases
have been, or prior to the expiration of the Due Diligence Period will be,
provided for review by Purchaser.
G. Restricted Person.
Seller is not, and will not be, a person with whom Purchaser is
restricted from doing business under the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, H.R. 3162, Public Law 107-56 and Executive Order Number 13224 on Terrorism
Financing effective September 24, 2001 and the regulations promulgated
thereunder and including persons and entities named on the Office of Foreign
Asset Control Specially Designated Nations and Blocked Persons List.
H. Limitations on Representations and Warranties.
As used herein, the term "Seller's actual knowledge" means the conscious
knowledge of Xxxxxxx X. Xxxxxxxx, the Vice President of Seller, and such person
shall not have any personal liability or be obligated to perform any due
diligence investigations in connection with making any representations or
warranties herein. Except for the representations and warranties set forth in
Subsections 3(A), 3(B) and 3(G) above which shall survive the Closing
indefinitely, all representations and warranties of Seller in this Agreement
shall terminate 270 days after the Closing and Seller shall have no liability
thereafter with respect to such representations and warranties except to the
extent Purchaser has given written notice of such breach to Seller during such
270-day period and if the breach has not been cured to the satisfaction of
Purchaser, filed a lawsuit against Seller within 365-days following Closing for
breach of any representation or warranty. If Purchaser is aware at Closing that
any of the Seller's representations or warranties in this Agreement are not true
as of the Closing and Purchaser elects nonetheless to close, Purchaser shall be
deemed to have waived any claim for breach of such representation or warranty.
In addition, Seller shall be relieved of any liability for the representations
and warranties contained in Paragraph 3(E) with respect to any Tenant Lease to
the extent Purchaser has received an estoppel certificate covering the matters
set forth in Paragraph 3(E) from the party who is the tenant under such Tenant
Lease.
I. Disclaimer.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, PURCHASER ACKNOWLEDGES
AND AGREES THAT SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND
DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR
GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL
OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO
(A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE PROJECT, INCLUDING, WITHOUT
LIMITATION, THE WATER, SOIL AND GEOLOGY, (B) THE INCOME TO BE DERIVED FROM THE
PROJECT, (C) THE SUITABILITY OF THE PROJECT FOR ANY AND ALL ACTIVITIES AND USES
WHICH PURCHASER OR ANY TENANT MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY
THE PROJECT OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF
ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (E) THE HABITABILITY,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF THE PROJECT, (F) THE MANNER OR QUALITY OF THE CONSTRUCTION OR
MATERIALS, IF ANY, INCORPORATED INTO THE PROJECT, (G) THE MANNER, QUALITY, STATE
OF REPAIR OR LACK OF REPAIR OF THE PROJECT, OR (H) COMPLIANCE WITH ANY
ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS
OR REQUIREMENTS, INCLUDING THE EXISTENCE IN OR ON THE PROJECT OF HAZARDOUS
MATERIALS OR (I) ANY OTHER MATTER WITH RESPECT TO THE PROJECT; AND EXCEPT AS
EXPRESSLY SET FORTH IN THIS
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AGREEMENT PURCHASER HEREBY WAIVES ANY RIGHT TO MAKE ANY CLAIM BASED ON ANY OF
THE FOREGOING, INCLUDING, WITHOUT LIMITATION, ANY RIGHT TO MAKE ANY CLAIM
AGAINST SELLER BASED ON THE VIOLATION OF ANY ENVIRONMENTAL LAWS. ADDITIONALLY,
AND EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT NO PERSON ACTING ON BEHALF
OF SELLER IS AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF OF PURCHASER
ACKNOWLEDGES THAT NO PERSON HAS MADE, ANY REPRESENTATION, AGREEMENT, STATEMENT,
WARRANTY, GUARANTY OR PROMISE REGARDING THE PROJECT OR THE TRANSACTION
CONTEMPLATED HEREIN; AND NO SUCH REPRESENTATION, WARRANTY, AGREEMENT, GUARANTY,
STATEMENT OR PROMISE IF ANY, MADE BY ANY PERSON ACTING ON BEHALF OF SELLER SHALL
BE VALID OR BINDING UPON SELLER UNLESS EXPRESSLY SET FORTH HEREIN. PURCHASER
FURTHER ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO
INSPECT THE PROJECT, PURCHASER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE
PROJECT AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, AND AGREES TO ACCEPT THE PROJECT AT
THE CLOSING AND WAIVE ALL OBJECTIONS OR CLAIMS AGAINST SELLER (INCLUDING, BUT
NOT LIMITED TO, ANY RIGHT OR CLAIM OF CONTRIBUTION) ARISING FROM OR RELATED TO
THE PROJECT OR TO ANY HAZARDOUS MATERIALS ON THE PROJECT EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY
INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROJECT WAS OBTAINED
FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS
AS TO THE ACCURACY, TRUTHFULNESS OR COMPLETENESS OF SUCH INFORMATION EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT. SELLER IS NOT LIABLE OR BOUND IN ANY
MANNER BY ANY VERBAL OR WRITTEN STATEMENT, REPRESENTATION OR INFORMATION
PERTAINING TO THE PROJECT, OR THE OPERATION THEREOF, FURNISHED BY ANY REAL
ESTATE BROKER, CONTRACTOR, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, PURCHASER FURTHER ACKNOWLEDGES AND AGREES
THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROJECT AS PROVIDED
FOR HEREIN IS MADE ON AN "AS IS" CONDITION AND BASIS WITH ALL FAULTS. IT IS
UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR
NEGOTIATION TO REFLECT THAT ALL OF THE PROJECT IS SOLD BY SELLER AND PURCHASED
BY PURCHASER SUBJECT TO THE FOREGOING. THE PROVISIONS OF THIS SUBSECTION SHALL
SURVIVE THE CLOSING OR ANY TERMINATION HEREOF.
Purchaser, for itself and its agents, affiliates, successors and
assigns, hereby releases and forever discharges Seller, its agents, affiliates,
successors, assigns, Seller's investment manager, managers, members, partners,
shareholders, officers, and directors, from any and all rights, claims and
demands at law or in equity, whether direct or indirect, foreseen or unforeseen,
or known or unknown at the time of this Agreement, which Purchaser has or may
have in the future, arising out of, or in any way connected with, the physical,
environmental, economic or legal condition of the Project, or any law or
regulation applicable thereto except as expressly set forth herein.
Purchaser hereby specifically waives the provisions of any law of any
state, territory or jurisdiction that provides that a general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor. Purchaser hereby
specifically acknowledges that Purchaser has carefully reviewed this Subsection
3(I) and discussed its import with legal counsel and that the provisions of this
Section 3(I) are a material part of this Agreement. The disclaimer and release
contained in this Section 3(I) shall not merge with the transfer of title and
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shall survive recordation of the Deed. Notwithstanding the foregoing, nothing
herein shall be deemed to limit Purchaser's rights for a breach of a
representation or warranty as provided in Subsection 3(I) or with respect to a
claim for any amounts payable by Seller under Sections 8(D) and 8(E).
HARVARD PROPERTY TRUST, LLC,
d/b/a BEHRINGER HARVARD FUNDS
By:_________________________________
Name:_______________________________
Title:______________________________
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to Seller as of the date hereof
as follows:
A. Due Organization.
Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. Purchaser
has full power and authority, and is duly authorized, to execute, enter into,
deliver and perform this Agreement and its obligations hereunder.
B. Power.
This Agreement and all other agreements, instruments and documents
required to be executed or delivered by Purchaser pursuant hereto have been or
(if and when executed) will be duly executed and delivered by Purchaser, and are
or will be legal, valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with its terms.
C. No Proceedings.
Purchaser has not received any written notice that there is currently
pending any proceedings, legal, equitable or otherwise, against Purchaser which
would affect its ability to perform its obligations hereunder.
D. Restricted Person.
Purchaser is not, and will not be, a person with whom Seller is
restricted from doing business under the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, H.R. 3162, Public Law 107-56 and Executive Order Number 13224 on Terrorism
Financing effective September 24, 2001 and the regulations promulgated
thereunder and including persons and entities named on the Office of Foreign
Asset Control Specially Designated Nations and Blocked Persons List. 1
E. Limitations on Representations and Warranties.
All representations and warranties of Purchaser in this Agreement shall
survive the Closing indefinitely.
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SECTION 5. OPERATION OF THE PROJECT PRIOR TO CLOSING.
The Seller shall do all of the following, from and after the date hereof
and prior to the Closing:
(A) Operate and maintain the Project in the same manner as
it is currently being operated and shall, subject to damage, destruction
or loss to the Project in which event Purchaser shall have the rights
set forth in Section 7(D), cause the Project to be, on the Closing Date,
in the same condition as exists as of the date of this Agreement (normal
wear and tear and damage by permitted casualty excepted).
(B) Maintain, or cause to be maintained, all existing
insurance carried by Seller on the Improvements.
(C) Without the prior written consent of Purchaser (except
in the case of emergencies and except for tenant improvements required
or permitted under the Tenant Leases), not make, or obligate itself to
make, any material alterations or modifications to the Project.
(D) Without the prior written consent of Purchaser, not
enter into any new agreements affecting the Project after the Due
Diligence Deadline which would survive the Closing, including any leases
or service contracts, and not make any modifications or amendments to
any agreements affecting the Project after the Due Diligence Deadline
which would survive the Closing; provided, however, Seller shall not be
obligated to obtain Purchaser's consent for any agreements or
modifications which can be terminated on not more than 60 days' notice
without the payment of any premium or penalty. Purchaser shall not
unreasonably withhold its consent to any such agreements, modifications
or amendments; and Purchaser shall be deemed to have given its consent
thereto if Purchaser does not notify Seller of its disapproval within
five (5) days after receipt of a term sheet setting forth the material
terms of the proposed agreement, modification or amendment.
(E) Terminate, or provide written notice of termination for,
any Service Contracts prior to Closing which Purchaser has requested
Seller in writing to terminate provided (i) such Service Contracts are
terminable prior to or after Closing, (ii) Purchaser gives Seller
written notice requesting such termination at least five (5) days prior
to Closing, and (iii) Purchaser pays any fees or penalties which are
necessary to terminate such Service Contracts. The foregoing
notwithstanding, Seller shall terminate any and all property management
contracts and leasing agreements with respect to the Project as of the
Closing Date, with Seller having fully paid and discharged any and all
obligations thereunder.
(F) Deliver to Purchaser, or make available to Purchaser at
the Project, within five (5) business days from the date hereof, copies
of the due diligence items described in EXHIBIT F, to the extent they
are in the possession of Seller or its agents and to the extent they
have not been previously delivered to Purchaser or its agents. All such
information shall be kept confidential in accordance with the terms of
Section 6(F) below.
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SECTION 6. ACCESS TO THE PROJECT.
Subject to the rights of existing tenants of the Project, Seller hereby
grants to Purchaser the right to enter onto the Project solely for the purpose
of inspecting the Project at Purchaser's sole cost and expense on the following
terms and conditions:
(A) During the period beginning upon the Effective Date and
for so long as this Agreement remains in effect, Purchaser shall have
the right (a) to review (and Seller shall make available to Purchaser)
the books, records, agreements, and other documents in the possession of
Seller concerning the Project (the "DUE DILIGENCE DOCUMENTS"), described
on EXHIBIT F attached hereto (but excluding materials not directly
related to the leasing, operation, maintenance and/or management of the
Project such as, without limitation, Seller's internal financial
projections, appraisals, and income tax records (the "CONFIDENTIAL
DOCUMENTS"), and (b) upon two (2) business days prior notice to Seller,
to make a physical inspection of the Project. Purchaser has advised
Seller that Purchaser must cause to be prepared up to three (3) years of
audited financial statements in respect of the Project in compliance
with the policies of Purchaser and certain laws and regulations,
including, without limitation, Securities and Exchange Commission
Regulation S-X, Rule 3-14. Seller agrees to provide to Purchaser, as a
part of the Due Diligence Documents, copies of Seller's books and
records for the Project for the three (3) year period preceding the
Effective Date of this Agreement. Seller agrees to use reasonable
efforts to cooperate with Purchaser's auditors in the preparation of
such audited financial statements (it being understood and agreed that
the foregoing covenant shall survive Closing), provided that Seller
shall not be required to incur any out-of-pocket expense with respect to
such cooperation. Without limiting the generality of the preceding
sentence (i) Seller will, promptly upon request of Purchaser, provide to
Purchaser's auditors a management representation letter, reasonably
satisfactory to Purchaser's auditors, addressed to Purchaser's auditors;
(ii) Seller will make available for interview by Purchaser and
Purchaser's auditors the manager of the Project or other agents or
representatives of Seller responsible for the day-to-day operation of
the Project and the keeping of the books and records in respect of the
operation of the Project; and (iii) if Seller has audited financial
statements with respect to the Project, Seller shall promptly provide
Purchaser'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 prior to Closing that was
not completed at the time of Closing, then Seller shall promptly provide
Purchaser with a copy of such audited financial statement, and the
foregoing covenant shall survive Closing. At least two (2) business days
prior to any entry and inspection, Purchaser shall: (1) deliver to
Seller written notice of its intention to enter the Project to conduct
such inspection and the proposed time of such entry (Seller shall have
the right to reasonably approve such timing and shall have the right to
have one or more of its agents or representatives accompany Purchaser
and Purchaser's representatives at all times while Purchaser or
Purchaser's representatives are on the Project); (2) provide Seller with
a copy of a work plan for any physical testing of the Project for
Seller's prior written approval, which work plan Seller may modify,
limit or disapprove in its reasonable discretion; and (3) provide Seller
with a certificate of insurance from Purchaser and Purchaser's
contractor or consultant (from an insurance carrier reasonably
acceptable to Seller) evidencing the existence of (I) commercial general
liability insurance, in an amount not less than $2,000,000 combined
limits for any injuries, deaths or property damage sustained as a result
of any one accident or occurrence, (y) worker's compensation insurance
at statutory limits, and (II) employer's liability insurance in an
amount not less than $2,000,000 for each accident, disease per employee
and disease policy limit. Purchaser will deliver to Seller an XXXXX 25
insurance certificate verifying such coverage on behalf of Purchaser and
naming Seller as an additional insured. Any third party contractor or
consultant engaged by Purchaser which conducts Phase II environmental
inspections of the Project or any invasive testing (including testing
for asbestos containing materials) shall also provide evidence of
9
environmental liability insurance of not less than $1,000,000. In
addition, Purchaser and Purchaser's representatives waive any claims
against Seller and Seller's employees and agents for any injury to
persons or damage to property arising out of any inspections or physical
testing of the Project not caused by the negligence or willful
misconduct of Seller or Seller's employees or agents, including any
damage to the tools and equipment of Purchaser and Purchaser's
representatives, all of which shall be brought on the Project at the
sole risk and responsibility of Purchaser and Purchaser's
representatives. Purchaser shall, at its sole cost and expense, comply
with all applicable federal, state and local laws, statutes, rules,
regulations, ordinances, or policies in conducting any inspection or
physical testing of the Project.
(B) Purchaser agrees to keep the Project free from any liens
arising out of any work performed, materials furnished or obligations
incurred by or on behalf of Purchaser or Purchaser's representatives
with respect to any inspection or physical testing of the Project. If
any such lien shall at any time be filed, Purchaser shall cause the same
to be discharged of record within twenty (20) days thereafter by
satisfying the same or, if Purchaser in its discretion and in good faith
determines that such lien should be contested, by recording a bond or
having such lien insured over in an amount and by a bonding or title
insurance company reasonably satisfactory to Seller. If Purchaser fails
to discharge, bond or insure over such lien, Seller may discharge the
same at Purchaser's expense or may terminate this Agreement or both.
(C) Purchaser hereby agrees to hold harmless, protect,
defend and indemnify, and hereby releases, Seller and its trustees,
officers, directors, employees, contractors, agents, subsidiaries and
affiliates, and its and their respective successors and assigns and the
Project from and against any and all claims, demands, causes of action,
losses, liabilities, liens, encumbrances, costs or expenses (including
without limitation reasonable attorneys' fees and litigation costs)
arising out of, connected with or incidental to: (a) any injuries to
persons (including death), (b) any damage to property (real or
personal), or (c) any mechanics', workers' or other liens on the
Project, by reason of or relating to the work or activities conducted on
the Project by Purchaser or Purchaser's representatives.
(D) Except as approved by Seller in connection with any
physical testing of the Project, in no event shall Purchaser or
Purchaser's representatives have the right to place any materials or
equipment on the Project (including, without limitation, signs or other
advertising material) until after the Closing has occurred. In no event
shall Purchaser materially interfere with the use of the Project. It is
expressly agreed that Purchaser shall have the right to conduct
interviews with tenants of the Project, subject to Seller providing
advance notice of any scheduled meetings or telephone conferences and
the right of Seller or its representatives to be present at such
interviews or be a party to any telephone conferences. Purchaser shall,
at its sole cost and expense, clean up and repair the Project, in
whatever manner necessary, after Purchaser's or Purchaser's
representatives' entry thereon so that the Project shall be returned to
the same condition that existed prior to Purchaser's or Purchaser's
representatives entry thereon.
(E) Seller shall promptly be provided with a copy of any and
all information, materials, reports and data that Purchaser and/or
Purchaser's representatives discover, obtain or generate in connection
with or resulting from their inspection and physical testing of the
Project. Subject to the provisions of Section 6(F) below, all such
information, materials, reports and data shall be deemed confidential,
and without the prior written consent of Seller, which consent may be
withheld in Seller's sole and absolute discretion, Purchaser will: (a)
keep such information confidential, unless the information is in the
public domain, and not use such information other than in connection
with Purchaser's investigation and evaluation of the Project; (b) use
its best efforts to safeguard such information from unauthorized
disclosure; and (c) not disclose to any person (i) that such information
has been made available to Purchaser, (ii) that Purchaser has inspected
any portion of such information, (iii)
10
that discussions with respect to the sale of the Project are taking
place, or (iv) any other facts with respect to such discussions,
including the status thereof.
(F) Notwithstanding anything contained in this Agreement to
the contrary, Purchaser, without the consent of Seller, may (a) disclose
information concerning the Project to employees, consultants,
accountants, attorneys and prospective investors and lenders of
Purchaser provided that such persons agree to treat such information as
confidential in accordance with Subsection 6(E), and (b) make without
condition such disclosures as may be recommended by Purchaser's legal
counsel in order to comply with all financial reporting, securities laws
and other legal requirements applicable to Purchaser. Furthermore,
nothing contained in this Agreement shall prohibit Purchaser from
disclosing any information that is rightfully a matter of public record
or within the public domain.
SECTION 7. CONDITIONS TO CLOSING.
In addition to the conditions provided in other provisions of this
Agreement, the parties' obligations to perform their undertakings provided in
this Agreement, are each conditioned on the fulfillment of each of the following
which is a condition to such party's obligation to perform hereunder (subject to
such party's waiver in strict accordance with Section 9 below):
(A) As soon as reasonably possible, but in no event later
than five (5) business days after the Effective Date, Seller shall cause
to be delivered to Purchaser each of the following: (i) a current ALTA
survey of the Project certified to Seller, Purchaser and the Title
Company (the "SURVEY") subject to the parties' agreements with respect
to the cost therefor pursuant to Section 8E of this Agreement, (ii) a
title insurance commitment for the Project issued on behalf of the Title
Company (the "TITLE COMMITMENT"), and (iii) copies of all title
exceptions described therein. Purchaser shall have until the Due
Diligence Deadline to disapprove any matters shown on the Survey or
Title Commitment; and any matters shown on the Survey or Title
Commitment which are not objected to by Purchaser by such date shall be
deemed "PERMITTED EXCEPTIONS". If Purchaser disapproves any such matters
as set forth above, Seller shall have five (5) business days in which to
elect in its sole discretion to correct or cause to be insured over on
or prior to Closing any matters which the Purchaser has disapproved;
provided, however, except as otherwise provided in Section 8(E) relating
to the assumption of the existing loan from Nationwide Life Insurance
Company, Seller shall cause any mechanic's and materialman's liens,
mortgages, deeds of trust or other instrument creating a lien for
borrowed money against all or part of the Project to be discharged and
released on or prior to the Closing. Seller may extend the Closing Date
for up to thirty (30) days in order to cure any title exceptions which
Seller has elected or is obligated to cure hereunder. If Seller does not
elect to correct or have insured over any matters disapproved by
Purchaser as set forth above, Purchaser shall have five (5) business
days after receipt of written Seller's election in which to elect either
to waive its objection to such matters, in which case such matters shall
be deemed Permitted Exceptions, or to terminate this Agreement and
obtain a refund of the Xxxxxxx Money; and Purchaser shall be deemed to
have elected to terminate this Agreement if Purchaser does not notify
Seller of its election within such five (5) business day period. Whether
or not Purchaser shall have furnished to Seller any notice of title
objections pursuant to the foregoing provisions of this Agreement,
Purchaser may, at or prior to Closing, notify Seller in writing of any
objections to title first raised by the Title Company between (1) the
Due Diligence Deadline, and (2) the date on which the transaction
contemplated herein is scheduled to close. With respect to any
objections to title set forth in such notice, Seller shall have the same
option to cure and Purchaser shall have the same option to accept title
subject to such matters or to terminate this Agreement as those which
apply to any notice of objections made by Purchaser before the Due
Diligence Deadline. If Seller elects to attempt to cure any such
matters, the date for Closing shall be automatically extended by a
reasonable additional time to effect such a cure, but in no event shall
the extension exceed thirty (30) days after the date for Closing set
forth in Section 1(D) hereof.
11
(B) As a condition of Purchaser's obligation to proceed with
Closing (and not as a default), Purchaser shall be satisfied in its sole
and absolute discretion with all aspects of the Project; provided,
however, if Purchaser does not notify Seller by the Due Diligence
Deadline that it is not so satisfied, this condition shall be deemed
waived by Purchaser. In the event Purchaser notifies Seller by the
expiration of the Due Diligence Deadline that it is not satisfied with
the Project, this Agreement shall terminate and the Xxxxxxx Money will
be returned to Purchaser.
(C) As a condition to each party's obligation to perform
hereunder, the due performance by the other of all undertakings and
agreements to be performed by the other hereunder and the truth in all
material respects of each representation and warranty as set forth
herein made pursuant to this Agreement by the other at the Closing Date
except for such changes as are permitted under the terms of this
Agreement; provided, however, if either party cannot remake any of its
representations and warranties in all material respects as of Closing
through no fault of its own, the other party's sole remedies shall
either be to terminate this Agreement or waive the condition that such
representation or warranty be remade as of Closing.
(D) As a condition to Purchaser's obligation to perform
hereunder (and not as a default), that there shall not have occurred
between the date hereof and the Closing Date, inclusive, destruction of
or damage or loss to the Project (whether or not covered by insurance
proceeds) from any cause whatsoever the cost of which to repair exceeds
ten percent (10%) of the Purchase Price. Seller shall promptly notify
Purchaser of such damage, and Purchaser shall have five (5) business
days after receipt of such notice in which to elect to terminate this
Agreement and receive a refund of the Xxxxxxx Money. If Purchaser does
not elect to terminate this Agreement within such period or if the cost
of repairing the damage to the Project is less than ten percent (10%) of
the Purchase Price, the parties shall proceed with the Closing in which
case Seller shall assign to Purchaser any claims for proceeds from the
insurance policies covering such destruction or damage and for any loss
of rents, there shall be no adjustment in the Purchase Price (except
that Purchaser shall be credited for the amount of any deductible under
such casualty insurance policies) and Seller shall have no obligation to
repair such damage.
(E) As a condition to Purchaser's obligation to perform
hereunder (and not as a default), there shall not have occurred at any
time or times on or before the Closing Date any taking or threatened
taking of the Project or any material part thereof by condemnation,
eminent domain or similar proceedings; provided, however, Purchaser may
elect to waive such condition in which case Seller shall assign to
Purchaser at Closing all of Seller's right, title and interest in and to
any proceeds resulting from any such proceeding. If Purchaser does not
elect to waive such condition, then this Agreement shall terminate and
the Xxxxxxx Money shall be returned to Purchaser.
SECTION 8. CLOSING.
A. Time.
The Closing hereunder shall occur at 2:00 p.m., Mountain Standard Time,
on the Closing Date at the offices of the Title Company. The foregoing
notwithstanding, Purchaser may elect to extend the Closing Date to and including
January 6, 2005, by providing Seller with written notice by December 1, 2004, of
Purchaser's election to extend the Closing Date, and by depositing directly with
Seller at the time that Purchaser delivers such notice additional Xxxxxxx Money
(the "SECOND ADDITIONAL XXXXXXX MONEY") in the amount of Two Hundred Fifty
Thousand and No/100 US
12
Dollars ($250,000.00), which Second Additional Xxxxxxx Money shall be applied to
the Purchase Price at Closing, but which Second Additional Xxxxxxx Money shall
be non-refundable to Purchaser, except as otherwise provided in this Agreement.
B. Actions.
At the Closing, Seller shall convey the Project to Purchaser; and
Purchaser shall pay to Seller the Purchase Price, plus or minus prorations as
set forth herein. The Closing shall occur through an escrow, the cost of which
shall be shared equally between Purchaser and Seller. Seller shall convey, and
Purchaser shall receive, full possession of the Project at Closing, subject only
to (i) the Tenant Lease, (ii) Permitted Exceptions, (iii) real estate and
personal property taxes not yet due and payable, and (iv) all federal, state and
local laws, ordinances and regulations.
C. Deliveries.
(1) At the Closing, Purchaser shall receive each of the
following, in form and substance reasonably satisfactory to Purchaser
(it being agreed by Purchaser that the documents attached hereto as
exhibits are satisfactory in form to Purchaser), all of which shall have
been deposited by Seller in escrow with the Title Company at least one
(1) business day prior to the Closing Date except in the case of the
Tenant Estoppel Certificate (as hereinafter defined) which must be
deposited at least ten (10) days prior to the Closing Date:
(a) a deed in the form attached hereto as EXHIBIT G
executed by the Seller;
(b) a xxxx of sale and assignment for the Personal
Property in the form of EXHIBIT H, executed by Seller;
(c) an assignment of the Service Contracts, in the
form of EXHIBIT I attached hereto (the "ASSIGNMENT OF SERVICE
CONTRACTS"), executed by Seller, assigning to Purchaser all of
the Service Contracts except for those Service Contracts which
have been terminated in accordance with the terms hereof;
(d) an assignment of the Tenant Lease, in the form
of EXHIBIT J hereto (the "ASSIGNMENT OF TENANT LEASES"),
executed by Seller;
(e) an assignment of the Equipment Leases, if any in
the form of EXHIBIT K hereto (the "ASSIGNMENT OF EQUIPMENT
LEASES"), executed by Seller;
(f) written acknowledgments (the "TENANT ESTOPPEL
CERTIFICATE") from the tenant leasing the Project, without
material deviation from either the form of EXHIBIT L hereto or
the form required under the tenant lease, dated as of a date not
more than forty-five (45) days prior to Closing; provided,
however, if Seller is unable to obtain the Tenant Estoppel
Certificate required herein, Purchaser shall have the option as
its sole and exclusive remedies of (i) terminating this
Agreement and obtaining a refund of the Xxxxxxx Money or (ii)
proceeding with the Closing and waiving the requirement that it
receive the Tenant Estoppel Certificate, as the case may be,
without material deviation; provided that in such event Seller
shall provide a Certificate to Purchaser certifying, to Seller's
actual knowledge, all of the matters in the Tenant Estoppel
Certificate attached as Exhibit L (or if a Tenant Estoppel
Certificate was received but omits one or more provisions from
the form of Tenant Estoppel Certificate, such omitted
provisions).
13
(g) notices to each of the tenants under the Tenant
Leases, notifying them of the sale of the Project and directing
them to pay all future rent as Purchaser may direct;
(h) a closing statement setting forth all prorations
and credits required hereunder;
(i) an affidavit from Seller that it is not a
"foreign person" or subject to withholding requirements under
the Foreign Investment in Real Property Tax Act of 1980, as
amended;
(j) the original of all Tenant Leases, Service
Agreements, Equipment Leases and Personal Property; provided,
however, Seller shall have access to such items after Closing to
the extent reasonably necessary for Seller to resolve any legal
matters with respect to the Project relating to the period prior
to the Closing;
(k) all keys and combinations to locks located at
the Project;
(l) a termination of the existing management
agreement for the Project;
(m) such evidence as Purchaser or the Title Company
may reasonably require as to the due, authorization, execution
and delivery by Seller of this Agreement and the documents
required to be executed by Seller hereunder; and
(n) a certificate executed by Seller reaffirming
that Seller's representations and warranties set forth in this
Agreement are true and correct in all material respects as of
the Closing except as may be set forth in such certificate,
provided such certificate shall be subject to the qualifications
and limitations on Seller's liabilities set forth in this
Agreement.
(2) At the Closing Seller shall have received each of the
following, in form and substance reasonably satisfactory to Seller (it being
agreed by Seller that the documents attached hereto as exhibits are satisfactory
in form to the Seller), all of which shall have been deposited by Purchaser in
escrow with the Title Company at least one (1) business day prior to the Closing
Date:
(a) payment of the Purchase Price, plus or minus
prorations;
(b) copies of the Assignment of Service Contracts,
the Assignment of Tenant Leases and the Assignment of Equipment
Leases, executed by Purchaser;
(c) such evidence as Seller or the Title Company may
reasonably require as to the due, authorization, execution and
delivery by Purchaser of this Agreement and the documents
required to be executed by Purchaser hereunder; and
(d) a certificate executed by Purchaser reaffirming
that Purchaser's representations and warranties set forth in
this Agreement are true and correct in all material respects as
of the Closing except as may be set forth in such certificate,
provided such certificate shall be subject to the qualifications
and limitations on Purchaser's liabilities set forth in this
Agreement.
14
D. Prorations.
The Purchase Price for the Project shall be subject to prorations and
credits as follows to be determined as of 12:01 a.m. Mountain Time on the
Closing Date, the Closing Date being a day of income and expense to Purchaser,
with all prorations being based on the actual number of days in the year;
provided, however, if Seller's bank does not receive the Purchase Price by 2:00
p.m. Mountain Time on the Closing Date, the prorations shall be determined as of
12:01 a.m. on the first business day following the Closing Date:
1. Purchaser shall receive a credit at Closing for all
rents, including estimated payments for operating expenses and real
estate taxes, collected by Seller prior to the Closing and allocable to
the period after Closing. No credit shall be given the Seller for
accrued and unpaid rent or any other non-current sums due from tenants
until said sums are paid, and Seller shall retain the right to collect
any such rent provided Seller does not xxx to evict any tenants or
terminate any Tenant Leases. Purchaser shall use reasonable efforts
after Closing to collect any rent under the Tenant Leases which has
accrued as of the Closing; provided, however, Purchaser shall not be
obligated to xxx any tenants or exercise any legal remedies under the
Tenant Leases. Any portion of any rents collected subsequent to the
Closing Date by Purchaser and properly allocable to periods prior to the
Closing Date shall be paid, promptly after receipt, to the Seller, but
subject to all of the provisions of this Section hereof; and any portion
thereof collected subsequent to the Closing Date by Seller and properly
allocable to periods on or subsequent to the Closing Date shall be
promptly paid to Purchaser. All payments collected from tenants after
Closing shall first be applied to any costs or expenses of collection of
Purchaser, then any operating expenses for the month in which the
Closing occurs, then to any rent due to Purchaser for the period after
Closing and finally to any rent due to Seller for the period prior to
Closing; provided, however, notwithstanding the foregoing, if Seller
collects any payments from tenants after Closing through its own
collection efforts, Seller may first apply such payments to rent due the
Seller for the period prior to Closing, Any cash security deposits held
by Seller at Closing shall be credited to Purchaser on the Closing Date,
and any non-cash security deposits held by Seller at Closing, including
letters of credit, shall be assigned and delivered to Purchaser at
Closing. If any security deposits are in the form of letters of credit,
Seller shall arrange for them to be transferred or reissued in favor of
Purchaser or (if necessary) to be held for benefit of Purchaser and
Seller shall cooperate with Purchaser to draw upon such letter of credit
in accordance with the applicable Tenant Leases; such transfer or
reissuance may be completed after Closing if not practically capable of
being completed on or before Closing. Any letter of credit, transfer or
reissue fees charged by the issuing banks shall be paid by Purchaser, to
the extent not required to be paid by the respective tenant.
2. The adjustment rent or escalation payments payable under
the Tenant Leases for taxes and operating expenses shall be reprorated
after their final determination based on Seller's and Purchaser's
respective share of such taxes and operating expenses. As soon as
reasonably possible after the end of the year in which the Closing
occurs, Purchaser shall make a final calculation of the real estate
taxes and operating expenses for the Project for such year as well as
the adjustment rent or escalation payments payable under the Tenant
Leases in connection therewith. Purchaser shall also calculate
Purchaser's and Seller's share thereof as set forth in the preceding
sentence, which calculation shall be submitted to Seller for its
reasonable approval. If Seller has collected more in estimated payments
from the tenants for operating expenses and taxes than it is entitled to
retain after the final reconciliations are completed, Seller shall pay
such excess to Purchaser for refund to the tenants; and, if Seller has
collected less in estimated payments than it is entitled to receive
after the final reconciliations are completed, Purchaser shall xxxx the
tenants for such amount and shall remit such amounts to Seller upon
receipt.
15
3. Except to the extent they are directly paid by the
tenants, real estate and personal property taxes due and payable with
respect to the Project in the year in which the Closing occurs
(regardless of when such taxes accrue) shall be prorated based on the
portion of the year which has elapsed prior to the Closing Date. If the
amount of any such taxes have not been determined as of Closing, such
credit shall be based on the most recent ascertainable taxes and shall
be reprorated upon issuance of the final tax xxxx. If the taxes can be
paid on a discounted basis, the proration shall be done on the basis of
the discounted amount payable at the time of Closing. Seller shall also
give Purchaser a credit for any special assessments against the Project
which are due and payable for the periods prior to Closing and Purchaser
shall be responsible for all special assessments due and payable on or
for periods after the Closing.
4. If, after the Closing, Purchaser or Seller receives (in
the form of a refund, credit, or otherwise) any amounts as a result of a
real property tax contest, appeal, or protest (a "Protest"), such
amounts will be applied as follows: first, to reimburse Purchaser or
Seller, as applicable, for all costs incurred in connection with the
Protest; second, to Purchaser for payment of refunds payable to past,
present, or future tenants of the Project, in accordance with the terms
of any Tenant Leases; and third, to Seller to the extent that such
Protest covers the period prior to the Closing Date and to Purchaser to
the extent that such Protest covers the period from and after the
Closing Date. Seller will not initiate any new Protest without the prior
reasonable approval of Purchaser, and Seller will not unreasonably
refuse to initiate a Protest prior to the Closing Date if Purchaser so
requests in writing.
5. Utilities and fuel payable by the owner of the Project,
including, without limitation, steam, water, electricity, gas and oil,
which are not directly paid by tenants, shall be prorated as of the
Closing. The Seller shall use reasonable efforts to cause the meters, if
any, for utilities to be read the day on which the Closing Date occurs
and to pay the bills rendered on the basis of such readings. If any such
meter reading for any utility is not available, then adjustment therefor
shall be made on the basis of the most recently issued bills therefor
which are based on meter readings no earlier than thirty (30) days prior
to the Closing Date; and such adjustment shall be reprorated when the
next utility bills are received. Purchaser shall give Seller a credit at
Closing for all freely assignable deposits with utility companies
serving the Project in which case Seller shall assign its rights to such
deposits to Purchaser at the Closing; or, at Seller's option, Seller
shall be entitled to receive a refund of such deposits from the utility
companies, and Purchaser shall post its own deposits.
6. Charges payable under the Service Contracts assigned to
Purchaser pursuant to this Agreement.
7. Interest paid (or payable) on Seller's existing loan on
the Project to the extent that Purchaser elects to assume such loan as
set forth in Section 8E below.
At least three (3) days prior to Closing, Seller shall deliver to
Purchaser a draft closing statement setting forth the prorations required
hereunder. Within sixty (60) days after the Closing Date, Purchaser and Seller
shall agree on a revised closing statement to the extent additional information
is received after Closing with respect to the prorations described above;
provided, however, Seller shall in any event be entitled to recover its share of
any tax refunds as set forth herein paid after such final prorations. The party
owing money to the other party based on any revisions to the prorations shall
make such payment within ten (10) business days after agreement on such
revisions.
E. Closing Costs.
Purchaser shall pay (1) the cost of any endorsements to the Title Policy
(defined below) requested by Purchaser, (2) the cost of any title policy
required by any lender (including but not
16
limited to any date down endorsement or title policy required by Seller's Lender
in the event that Purchaser elects to assume Seller's loan on the Project), (3)
the cost of the survey of the Project in excess of $2,500.00, (4) one-half of
any escrow or closing charge by the Title Company, (5) any transfer taxes, deed
stamps, recording expenses or other governmental charges legally or customarily
payable in connection with the recording of deeds in the jurisdiction where the
Project is located, (6) any sales or similar taxes payable on the transfer of
the Personal Property, and (7) its own due diligence and legal expenses. Seller
shall pay (1) the cost of the Title Policy (defined below), (2) the cost of the
survey of the Project up to $2,500.00, (3) one-half of any escrow or closing
charge by the Title Company, and (4) its own legal expenses.
In addition to the foregoing, Purchaser shall be responsible, at its
sole cost and expense, for: (1) all costs associated with Purchaser's assumption
of Seller's existing loan on the Project from Nationwide Life Insurance Company
("SELLER'S LENDER"), which loan is secured by a deed of trust on the Project,
including but not limited to the 75/100 percent (0.75%) assumption fee payable
to Seller's Lender; or (2) in the event that Purchaser elects not to assume
Seller's existing loan on the Project, Purchaser shall be responsible for the
payment of the two percent (2.0%) prepayment fee to Seller's Lender, regardless
of how such fee is characterized by Seller's Lender.
F. Leasing Expenses.
[Intentionally Deleted]
G. Title.
At the Closing, the Title Company shall issue or have fully committed
itself to issue to Purchaser an ALTA Policy of Title Insurance or the form of
title insurance policy prescribed by State law (the "Title Policy") with
Purchaser named as insured, dated as of the Closing Date, with a liability limit
equal to the Purchase Price, insuring that title to the Land and the
Improvements is vested in Purchaser, subject only to the Permitted Exceptions
and Tenant Lease. If the Title Policy discloses any liens or encumbrances which
are not Permitted Exceptions and which the Seller voluntarily created, Purchaser
may remove such liens at Closing by paying so much of the Purchase Price to the
holders of the liens as is necessary to do so. If the Title Policy discloses any
other liens or encumbrances which are not Permitted Exceptions, Purchaser may
elect either to waive its objection to such liens or encumbrances in which case
they shall be deemed to be Permitted Exceptions or terminate this Agreement and
receive a refund of the Xxxxxxx Money.
SECTION 9. WAIVER; SEVERABILITY.
Each party hereto may, at any time or times, at its election, waive any
of the conditions to its obligations hereunder by a written waiver expressly
detailing the extent of such waiver (and no other waiver or alleged waiver by
such party shall be effective for any purpose). No such waiver shall reduce the
rights or remedies of such party by reason of any breach by the other party or
parties of any of its or their obligations hereunder. If any term, covenant,
condition or provision of this Agreement, or the application thereof to any
person or circumstance, shall to any extent be held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
covenants, conditions or provisions of this Agreement, or the application
thereof to any person or circumstance, shall remain in full force and effect and
shall in no way be affected, impaired or invalidated thereby.
SECTION 10. BROKERS.
Each party represents and warrants to the other that it has not engaged
or dealt with any brokers or finders in connection with the transactions set
forth herein, and each party shall indemnify
17
and hold the other party harmless from any claim, liability, loss or damage
resulting from the indemnifying party's breach of the foregoing representation
and warranty.
SECTION 11. SURVIVAL; FURTHER INSTRUMENTS.
Except as expressly set forth herein, none of the terms and provisions
herein shall survive the Closing. Each party will, whenever and as often as it
shall be requested so to do by the other, cause to be executed, acknowledged or
delivered any and all such further instruments and documents as may be necessary
or proper, in the reasonable opinion of the requesting party, in order to carry
out the intent and purpose of this Agreement and as is consistent with this
Agreement.
SECTION 12. NO THIRD PARTY BENEFITS.
This Agreement is made for the sole benefit of Purchaser and Seller and
their respective successors and assigns (subject to the limitation on assignment
set forth below), and no other person or persons shall have any right or remedy
or other legal interest of any kind under or by reason of this Agreement.
Whether or not either party hereto elects to employ any or all the rights,
powers or remedies available to it hereunder, such party shall have no
obligation or liability of any kind to any third party by reason of this
Agreement or by reason of any of such party's actions or omissions pursuant
hereto or otherwise in connection with this Agreement or the transactions
contemplated hereby.
SECTION 13. REMEDIES.
If Purchaser defaults hereunder prior to Closing, Seller's sole remedy
shall be to retain the Xxxxxxx Money as liquidated damages; provided, however,
the Xxxxxxx Money shall not be deemed liquidated damages or a limit as to
Purchaser's liability under Section 6 of this Agreement, and Purchaser shall be
liable for the full amount of any obligations it has under Section 6 without
regard to the amount of the Xxxxxxx Money. The parties agree that Seller's
damages in the event of a default by Purchaser prior to Closing will be
difficult to determine and that the Xxxxxxx Money is a fair estimate of those
damages. If Seller shall default hereunder prior to Closing, Purchaser shall be
entitled as its sole remedies to terminate this Agreement and obtain a refund of
the Xxxxxxx Money or to xxx for specific performance of this Agreement; and
Purchaser waives any other rights or remedies at law or equity. Seller shall
have no liability after Closing for the breach of any representations,
warranties or covenants set forth in this Agreement except to the extent the
loss suffered by Purchaser as a result of such breaches exceeds Fifty Thousand
and No/100 Dollars ($50,000.00) in the aggregate (at which point, subject to the
following clause, Seller shall be liable for all losses relating back to the
first dollar of loss), and in no event shall Seller's liability under this
Agreement after Closing as a result of such breaches exceed Five Hundred
Thousand and No/100 Dollars ($500,000.00) in the aggregate.
SECTION 14. NOTICES.
All notices and other communications which either party is required or
desires to send to the other shall be in writing and shall be sent by (i)
facsimile provided a copy thereof is also sent by one of the following means,
(ii) hand delivery, (iii) registered or certified mail, postage prepaid, return
receipt requested, or (iv) nationally-recognized overnight courier service .
Notices and other communications shall be deemed to have been given on actual
receipt. Notices shall be addressed as follows:
(a) To Seller:
18
c/o LaSalle Investment Management, Inc.
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Will Xxxx
Telephone Number (000) 000-0000
Facsimile Number: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxx, Esq.
Xxxxxx Xxxxxxxxxx Xxxxx & Xxxxxxxxx, P.C.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
(b) To Purchaser:
Behringer Harvard Funds
00000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxx
Telephone Number (000) 000-0000
Facsimile Number: (000) 000-0000
with copy to:
Xxxxxx & Xxxxxxx, L.L.P.
0000 Xxxxx Xxxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
or to such other person and/or address as shall be specified by either party in
a notice given to the other pursuant to the provisions of this Paragraph.
SECTION 15. ATTORNEYS' FEES.
In the event either party institutes legal proceedings to enforce its
rights hereunder, the prevailing party in such litigation shall be paid all
reasonable expenses of the litigation by the losing party, including its
attorneys' fees.
SECTION 16. CONFIDENTIALITY.
Subject to Section 6(F), Seller and Purchaser agree to keep this
Agreement confidential and not disclose or make any public announcements with
respect to the subject matter hereof without the consent of the other party
(which consent shall not be unreasonably withheld or delayed).
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SECTION 17. LIMITATION ON LIABILITY.
Any obligation or liability of either of the parties hereunder shall be
enforceable only against, and payable only out of, the property of such party,
and in no event shall any officer, director, shareholder, partner, beneficiary,
agent, advisor or employee of either party be held to any personal liability
whatsoever or be liable for any of the obligations of the parties hereunder.
SECTION 18. MISCELLANEOUS.
A. This Agreement (including all Exhibits hereto which are hereby
incorporated by reference) contains the entire agreement between
the parties respecting the matters herein set forth and
supersedes all prior agreements between the parties hereto
respecting such matters.
B. This Agreement shall be construed and enforced in accordance
with the laws of the State of Colorado, without regard to its
rules regarding conflicts of laws.
C. Seller may not assign, prior to Closing, all or any part of its
rights under this Agreement without the prior written consent of
Purchaser. Purchaser may not assign its rights under this
Agreement without the prior written consent of Seller, with the
express exception that Purchaser may assign its rights under
this Agreement to an Affiliate (as hereinafter defined) without
the consent of Seller; any assignee shall be deemed to have
assumed all of the assignor's obligations hereunder. Upon any
assignment by Purchaser of this Agreement and assumption hereof
by an assignee, the assignee shall be substituted for the
initial Purchaser for all purposes, and the assignor shall
remain liable hereunder. Purchaser shall notify Seller at least
two (2) days prior to the Closing of any assignment of this
Agreement. Subject to the foregoing, this Agreement shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. For purposes
of this Section 18 (C), the term "Affiliate" shall mean: (a) an
entity that controls, is controlled by, or is under common
control with Purchaser; (b) any partnership in which Purchaser
or Purchaser's controlling member is the general partner; (c)
any fund or entity sponsored by Purchaser; or (d) any entity
that retains Purchaser or a company affiliated with Purchaser to
manage the Property.
D. Time is of the essence of this Agreement and each provision
hereof.
E. The provisions of this Agreement may not be amended, changed or
modified orally, but only by an agreement in writing signed by
both parties.
F. Purchaser shall not record this Agreement, any memorandum of
this Agreement, any assignment of this Agreement or any other
document which would cause a cloud on the title to the Project
prior to Closing.
G. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original and all of which shall be
deemed to be one and the same instrument.
H. The section headings appearing in this Agreement are for
convenience of reference only and are not intended, to any
extent and for any purpose, to limit or define the text of any
section or any subsection hereof.
I. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either
party to be an offer to enter into a legally binding contract
with respect to the purchase and sale of the Project. The
parties shall be legally
20
bound with respect to the purchase and sale of the Project
pursuant to the terms of this Agreement only if and when the
parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of
the parties in their respective sole discretion, including,
without limitation, all of the Exhibits and Schedules hereto,
and both Seller and Purchaser have fully executed and delivered
to each other a counterpart of this Agreement, including,
without limitation, all Exhibits and Schedules hereto. If Seller
shall not receive three (3) counterparts of this Agreement
executed by Purchaser by 5:00 p.m. Mountain Standard Time on
November 8, 2004, the negotiation of this transaction shall
terminate, and neither party shall have any obligation to engage
in further negotiations for purchase and sale of the Project. If
Purchaser does not receive a counterpart signed by Seller on
November 10, 2004, Purchaser shall have no obligation whatsoever
hereunder and any offer made by Purchaser shall be deemed
revoked.
J. The parties acknowledge that the parties and their counsel have
reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any exhibits or amendments
hereto.
K. Within ten (10) days after the Effective Date, Seller and
Purchaser shall exchange such information as the other party
requests in order to enable such parties to determine whether
the transaction that is the subject of this Agreement will
result in a sale to a party-in-interest or otherwise subject
either Seller or Purchaser to any liability under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or
related provisions of the Internal Revenue Code of 1986, as
amended (the "CODE"). If either Seller or Purchaser, in its
reasonable judgment, concludes that this transaction is a sale
to a party-in-interest or otherwise will result in liability
under ERISA or related provisions of the Code, then either
Seller or Purchaser may terminate this Agreement and the Xxxxxxx
Money shall be returned to Purchaser.
L. All Exhibits hereto are incorporated herein by reference.
[Remainder of Page Intentionally Blank, Next Page Signature Page]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
SELLER
PERA MINERAL, INC.
a Colorado non-profit corporation
By:
--------------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President
PURCHASER
HARVARD PROPERTY TRUST, LLC,
d/b/a BEHRINGER HARVARD FUNDS
a Delaware limited liability company
By:
-------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
22
JOINDER
The undersigned acknowledges receipt of a copy of the foregoing
Agreement and agrees to hold the Xxxxxxx Money in accordance with the terms of
the Agreement and the following additional terms:
1. Escrow Agent shall invest the Xxxxxxx Money in a money market
account at ________________________ Bank. All interest earned on the Xxxxxxx
Money shall be added to the Xxxxxxx Money and be deemed a part of the Xxxxxxx
Money for purposes hereof.
2. For purposes of complying with Internal Revenue Service
regulations (and not to indicate in any way ownership of the Xxxxxxx Money or a
right to withdraw or encumber the Xxxxxxx Money), interest earned on the Xxxxxxx
Money shall be reported to the Internal Revenue Service as earned by Purchaser.
Purchaser's Federal Tax ID number is __________________.
3. Upon the Closing, Escrow Agent shall disburse the Xxxxxxx Money
to Seller and credit it against the Purchase Price.
4. If the Closing does not occur or in the event of any doubt or
uncertainty by Escrow Agent as to the propriety of disbursing the Xxxxxxx Money,
the Escrow Agent shall retain the Xxxxxxx Money, without penalty or liability
until the parties provide written instructions for the disbursement of the
Xxxxxxx Money or until a final adjudication is made as to its proper
disposition. In this regard, Escrow Agent shall be entitled to rely absolutely
on the advice of its counsel.
5. Escrow Agent shall receive no compensation for holding the
Xxxxxxx Money or acting as escrow agent hereunder.
6. Escrow Agent herein is acting solely as a stakeholder for the
purpose of accommodating the Purchaser and Seller. It has no interest whatsoever
in the Xxxxxxx Money.
7. Purchaser and Seller agree to jointly and severally indemnify
and hold Escrow Agent harmless from any loss or damage, including reasonable
attorney's fees, which Escrow Agent may suffer or incur, as a result of its
activities in holding the Xxxxxxx Money; provided, however, that nothing herein
shall be deemed to relieve Escrow Agent from acts of gross negligence or willful
misconduct.
IN WITNESS WHEREOF, the Escrow Agent has executed this Joinder as of the
date of the Agreement.
---------------------------------------
By:
----------------------------------
Title:
-------------------------------
COLORADO RIDER
SPECIAL TAXING DISTRICTS. The following disclosure is included in accordance
with Section 38-35.7-101, C.R.S.:
SPECIAL TAXING DISTRICTS MAY BE SUBJECT TO GENERAL OBLIGATION
INDEBTEDNESS THAT IS PAID BY REVENUES PRODUCED FROM ANNUAL TAX
LEVIES ON THE TAXABLE PROPERTY WITHIN SUCH DISTRICTS. PROPERTY
OWNERS IN SUCH DISTRICTS MAY BE PLACED AT RISK FOR INCREASED
MILL LEVIES AND EXCESSIVE TAX BURDENS TO SUPPORT THE SERVICING
OF SUCH DEBT WHERE CIRCUMSTANCES ARISE RESULTING IN THE
INABILITY OF SUCH A DISTRICT TO DISCHARGE SUCH INDEBTEDNESS
WITHOUT SUCH AN INCREASE IN MILL LEVIES. PURCHASERS SHOULD
INVESTIGATE THE DEBT FINANCING REQUIREMENTS OF THE AUTHORIZED
GENERAL OBLIGATION INDEBTEDNESS OF SUCH DISTRICTS, EXISTING MILL
LEVIES OF SUCH DISTRICT SERVICING SUCH INDEBTEDNESS, AND THE
POTENTIAL FOR AN INCREASE IN SUCH MILL LEVIES.
Initials of Purchaser: Initials of Seller:
------------------------ --------------------------
