EXHIBIT 10.11
PURCHASE AND SALE AGREEMENT
BETWEEN THE IX-X-XI-REIT JOINT VENTURE
AND
SCI DEVELOPMENT SERVICES INCORPORATED
PURCHASE AND SALE AGREEMENT
▇▇▇▇▇ Distribution Center (Iomega Building)
ARTICLE 1: PROPERTY/PURCHASE PRICE
1.1 Certain Basic Terms.
(a) Purchaser and Notice Address:
▇▇▇▇▇ DEVELOPMENT CORPORATION, a Georgia
corporation
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 770-840-7224
With a copy to: ▇'▇▇▇▇▇▇▇▇▇ & Stumm, LLP
Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 404/▇▇▇-▇▇▇▇
Facsimile: 404/522-3080
(b) Seller and Notice Address:
SCI Development Services Incorporated, a
Delaware corporation
Attn: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 303/▇▇▇-▇▇▇▇
Facsimile: 303/576-2602
With a copy to: ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 505/▇▇▇-▇▇▇▇
Facsimile: 505/820-7334
(c) Date of this The date of execution by Seller or Purchaser, as
Agreement: indicated on the signature page.
(d) Purchase Price: $5,025,000
(e) ▇▇▇▇▇▇▇ Money: $50,000, including interest thereon.
(f) Due Diligence The period ending 45 days after the date of this
Period: Agreement.
(g) Closing Date: The later of April 1, 1998 and the date which is 3
days after the end of the Due Diligence Period.
(h) Title Company: Chicago Title Insurance Company Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Telephone: 213/▇▇▇-▇▇▇▇
Facsimile: 213/891-0834
(i) Escrow Agent: Founders Title
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
Telephone: 801/▇▇▇-▇▇▇▇
Facsimile: 801/546-0635
(j) Broker: The Royston Group
1.2 Property. Subject to the terms of this Purchase and Sale Agreement
(the "Agreement"), Seller agrees to sell to Purchaser, and Purchaser agrees to
purchase from Seller, the following property (the "Property"):
(a) The real property described in Exhibit A, together with the buildings
and improvements thereon (the "Improvements"), and all appurtenances of the
above-described real property, including easements or rights-of-way relating
thereto, and, without warranty, all right, title, and interest, if any, of
Seller in and to the land lying within any street or roadway adjoining the real
property described above or any vacated or hereafter vacated street or alley
adjoining said real property.
(b) All of Seller's right, title and interest, in and to all fixtures,
furniture, equipment, and other tangible personal property, if any, owned by
Seller (the "Personal Property") presently located on such property, but
specifically excluding any items of personal property owned by tenants.
(c) All of Seller's interest, as landlord, in the "Lease," being all
leases of the Improvements, and all leases which may be made by Seller after the
date hereof and before Closing as permitted by this Agreement, including all
amendments thereto.
(d) All of Seller's right, title and interest, if any, in and to all of
the following items, to the extent assignable and without warranty (the
"Intangible Personal Property"): (A) licenses, and permits relating to the
operation of the Property, (B) the right to use the name of the property (if
any) in connection with the Property, but specifically excluding any trademarks,
service marks and trade names of Seller and with reservation by Seller to use
such name in connection with other property owned by Seller in the vicinity of
the Property, and (C) if still in effect, guaranties and warranties received by
Seller from any contractor, manufacturer or other person in connection with the
construction or operation of the Property.
1.3 ▇▇▇▇▇▇▇ Money. The ▇▇▇▇▇▇▇ Money, in immediately available federal
funds, evidencing Purchaser's good faith to perform Purchaser's obligations
under this Agreement, shall be deposited by Purchaser with the Escrow Agent not
later than the second business day after the execution of this Agreement. In the
event that Purchaser fails to timely deposit the ▇▇▇▇▇▇▇ Money with the Escrow
Agent, this Agreement shall be of no force and effect. The Escrow Agent shall
pay the ▇▇▇▇▇▇▇ Money to Seller at and upon the Closing, or otherwise, to the
party entitled to receive the ▇▇▇▇▇▇▇ Money in accordance Article 9.
ARTICLE 2: INSPECTIONS
2.1 Property Information. Seller shall provide copies to Purchaser, within
5 days after the date of this Agreement, to the extent in Seller's possession,
the following ("Property Information"):
2
(a) the Lease including all amendments;
(b) 1996, 1997 and year to date operating statements (the "Operating
Statements");
(c) a list and copies of any management, service or maintenance
agreements, if any, relating to the Property ("Service Contracts");
(d) any existing title reports, tax bills and land title survey of the
Property; and
(e) any environmental, architectural and engineering reports prepared for
Seller and, to Seller's knowledge, in its possession in connection with Seller's
purchase, ownership or management of the Property.
Except as otherwise expressly provided herein, Seller makes no
representations or warranties as to the accuracy or completeness of the Property
Information.
2.2 Tenant Estoppel. Seller shall endeavor to secure and deliver to
Purchaser by the Closing Date an estoppel certificate for the Lease
substantially in the form attached hereto as Exhibit B. Purchaser may terminate
this Agreement if by the Closing Date Seller has not delivered such estoppel;
provided, however, Purchaser may not terminate this Agreement on the basis that
paragraphs (j), (k) and/or (l) as set ▇▇▇▇ in Exhibit B are deleted from the
estoppel certificate delivered to Seller.
2.3 Confidentiality. The Property Information and all other information,
other than matters of public record, furnished to, or obtained through
inspection of the Property by, Purchaser, its affiliates, lenders, employees or
agents relating to the Property, will be treated by Purchaser, its affiliates,
lenders, employees and agents as confidential, and will not be disclosed other
than on a need-to-know basis to Purchaser's consultants who agree to maintain
the confidentiality of such information, and will be returned to Seller by
Purchaser if the Closing does not occur.
2.4 Inspections in General. During the Due Diligence Period, Purchaser,
its agents, and employees shall have the right to enter upon the Property for
the purpose of making non-invasive inspections at Purchaser's sole risk, cost
and expense. Before any such entry, Purchaser shall provide Seller with a
certificate of insurance reasonably satisfactory to Seller. All of such entries
upon the Property shall be at reasonable times during normal business hours and
after at least 24 hours prior notice to Seller or Seller's agent, and Seller or
Seller's agent shall have the right to accompany Purchaser during any activities
performed by Purchaser on the Property. Purchaser shall not disturb the tenants
on the Property, and Purchaser's inspection shall be subject to the rights of
tenants under their Lease. At Seller's request, Purchaser shall provide Seller
with a copy of the results of any tests and inspections made by Purchaser,
excluding only market and economic feasibility studies. If any inspection or
test disturbs the Property, Purchaser will restore the Property to the same
condition as existed before the inspection or test. Purchaser shall defend,
indemnify Seller and hold Seller, Seller's trustees, officers, tenants, agents,
contractors and employees and the Property harmless from and against any and all
losses, costs, damages, claims, or liabilities, including but not limited to,
mechanic's and materialmen's liens and Seller's attorneys' fees, arising out of
or in connection with Purchaser's inspection of the Property as allowed herein.
2.5 Environmental Inspections. The inspections under Paragraph 2.4 may
include a non-invasive Phase I environmental inspection of the Property, but no
Phase II environmental inspection or other invasive inspection or sampling of
soil or materials, including without limitation construction materials, either
as part of the Phase I inspection or any other inspection, shall be performed
without the prior written consent of Seller, which may be withheld in its sole
and absolute discretion, and if consented to by Seller, the proposed scope of
work and the party who will perform the work shall be subject to Seller's review
and approval. Purchaser shall deliver to Seller copies of any Phase II or other
environmental report to which Seller consents as provided above.
2.6 Termination During Due Diligence Period. If Purchaser determines, in
its sole discretion, before the expiration of the Due Diligence Period that the
Property is unacceptable for Purchaser's purposes, Purchaser
3
shall have the right to terminate this Agreement by giving to Seller notice of
termination before the expiration of the Due Diligence Period, returning the
Property Information to Seller, and delivering to Seller a certified statement
that all work which could give rise to a claim against the Property has been
paid in full. Upon such deliveries, and provided Purchaser is not in default
hereunder, Seller shall authorize the Escrow Agent to refund the ▇▇▇▇▇▇▇ Money
to Purchaser, and neither party shall have any further rights or liabilities
hereunder except for those provisions which survive the termination of this
Agreement. Return of the Property Information and repair of any damage to the
Property caused by Seller, its agents, contractors or employees shall be a
condition precedent to the return of the ▇▇▇▇▇▇▇ Money pursuant to any provision
of this Agreement providing for a return of the ▇▇▇▇▇▇▇ Money.
2.7 Purchaser's Reliance on its Investigations. To the maximum extent
permitted by applicable law and except for Seller's representations and
warranties in Paragraph 6.5 and 7.1 and the warranties of title in the Deed and
Assignment of Lease and Contracts and ▇▇▇▇ of Sale delivered at the Closing
("Seller's Warranties"), this sale is made and will be made without
representation, covenant, or warranty of any kind (whether express, implied, or,
to the maximum extent permitted by applicable law, statutory) by Seller. As a
material part of the consideration for this Agreement, PURCHASER AGREES TO
ACCEPT THE PROPERTY ON AN "AS IS" AND "WHERE IS" BASIS, WITH ALL FAULTS, AND
WITHOUT ANY REPRESENTATION OR WARRANTY, ALL OF WHICH SELLER HEREBY DISCLAIMS,
EXCEPT FOR THE SELLER'S WARRANTIES. EXCEPT FOR SELLER'S WARRANTIES, NO WARRANTY
OR REPRESENTATION IS MADE BY SELLER AS TO (A) FITNESS FOR ANY PARTICULAR
PURPOSE, (B) MERCHANTABILITY, (C) DESIGN, (D) QUALITY, (E) CONDITION, (F)
OPERATION OR INCOME, (G) COMPLIANCE WITH DRAWINGS OR SPECIFICATIONS, (H) ABSENCE
OF DEFECTS, (I) ABSENCE OF HAZARDOUS OR TOXIC SUBSTANCES, (J) ABSENCE OF FAULTS,
(K) FLOODING, OR (L) COMPLIANCE WITH LAWS AND REGULATIONS INCLUDING, WITHOUT
LIMITATION, THOSE RELATING TO HEALTH, SAFETY, AND THE ENVIRONMENT. Purchaser
acknowledges that Purchaser has entered into this Agreement with the intention
of making and relying upon its own investigation of the physical, environmental,
economic use, compliance, and legal condition of the Property and that except
for Seller's warranties Purchaser is not now relying, and will not later rely,
upon any representations and warranties made by Seller or anyone acting or
claiming to act, by, through or under or on Seller's behalf concerning the
Property. The provisions of this Paragraph 2.7 shall survive indefinitely any
Closing or termination of this Agreement and shall not be merged into the
Closing documents.
ARTICLE 3: TITLE AND SURVEY REVIEW
3.1 Delivery of Title Report. Within 15 days of the date hereof, Seller
shall cause to be delivered to Purchaser a preliminary report or title
commitment issued by the Title Company (the "Title Report"), covering the
Property, together with copies of all documents referenced in the Title Report.
Purchaser, at its option and expense, may obtain a survey (the "Survey") of the
Property.
3.2 Title Review and Cure. Purchaser shall notify Seller in writing of any
title objections no later than 30 days after the date of this Agreement. Failure
timely to provide such a notice of objections shall constitute an approval by
Purchaser of all matters disclosed in the Title Report and any matters that
would have been disclosed by an accurate survey of the Property. Seller shall
have no obligation to cure any title objections except financings created by
Seller and/or mechanics' liens created under contracts with Seller, which liens
Seller shall cause to be released at the Closing. Seller may, but shall not be
obligated to, attempt to cure by the Closing Date any title objections noted by
Purchaser. If Seller elects not to cure any title objection, or fails to cure
any title objection by the Closing Date, then Purchaser shall either (i)
terminate this Agreement by written notice to Seller given on or before 10 days
after receipt of any notice by Seller that it elects not to cure or cannot cure
any title objections, or, if earlier, the Closing Date, and the ▇▇▇▇▇▇▇ Money
shall be refunded to Purchaser, or (ii) waive such title objections, in which
event the Closing shall occur and Purchaser shall accept title to the Property
subject to such title condition, subject to Seller's foregoing obligation to
cause its financing and mechanics' liens to be released. Failure to so terminate
shall constitute waiver of title objections other than the aforesaid financing
and mechanics liens.
4
3.3 Title Policy. At Closing, as a condition to Purchaser's obligation to
close, the Title Company shall deliver to Purchaser an Owner's Policy of Title
Insurance (the "Title Policy"), issued by the Title Company, dated the date and
time of recording of the Deed in the amount of the Purchase Price, insuring
Purchaser as owner of fee simple title to the Property, in such form as
permitted by, and subject to such exceptions as set forth in, the most current
Title Report as of the expiration of the Due Diligence Period and without
exception for any Seller financings or mechanics' liens. The Title Policy may be
delivered after Closing if that is customary in the locality and the Title
Company has provided a pro-forma policy or marked its commitment in accordance
with the above requirements.
ARTICLE 4: OPERATIONS AND RISK OF LOSS
4.1 Ongoing Operations. During the pendency of this Agreement, Seller
shall carry on its business and activities relating to the Property
substantially in the same manner as it did before the date of this Agreement.
4.2 Performance under Lease and Service Contracts. During the pendency of
this Agreement, Seller will perform its material obligations under the Lease and
Service Contracts and other agreements that may affect the Property.
4.3 New Contracts. During the pendency of this Agreement, Seller will not
enter into any contract that will be an obligation affecting the Property
subsequent to the Closing, except contracts entered into in the ordinary course
of business that are terminable without cause on 30-days' notice, without the
prior consent of the Purchaser, which shall not be unreasonably withheld or
delayed.
4.4 Damage or Condemnation. Risk of loss resulting from any condemnation
or eminent domain proceeding which is commenced or has been threatened before
the Closing, and risk of loss to the Property due to fire, flood or any other
cause before the Closing, shall remain with Seller. If before the Closing the
Property or any portion thereof shall be materially damaged, or if the Property
or any portion thereof shall be subjected to a bona fide threat of condemnation
or shall become the subject of any proceedings, judicial, administrative or
otherwise, with respect to the taking by eminent domain or condemnation, then
Purchaser may terminate this Agreement by written notice to Seller given within
5 days after Purchaser learns of the damage or taking, in which event the
▇▇▇▇▇▇▇ Money shall be returned to Purchaser. If the Closing Date is within the
aforesaid 5-day period, then Closing shall be extended to the next business day
following the end of said 5-day period. If no such election is made, and in any
event if the damage is not material, this Agreement shall remain in full force
and effect and the purchase contemplated herein, less any interest taken by
eminent domain or condemnation, shall be effected with no further adjustment,
and upon the Closing of this purchase, Seller shall assign, transfer and set
over to Purchaser all of the right, title and interest of Seller in and to any
awards that have been or that may thereafter be made for such taking, and Seller
shall assign, transfer and set over to Purchaser any insurance proceeds that may
thereafter be made for such damage or destruction giving Purchaser a credit at
Closing for any deductible under such policies. For the purposes of this
paragraph, the phrases "Material damage" and "Materially damaged" means damage
reasonably exceeding 10 percent of the Purchase Price to repair.
ARTICLE 5: CLOSING
5.1 Closing. The consummation of the transaction contemplated herein
("Closing") shall occur on the Closing Date at the offices of the Escrow Agent.
5.2 Conditions to the Parties' Obligations to Close. The obligation of
Seller, on the one hand, and Purchaser, on the other hand, to consummate the
transaction contemplated hereunder is contingent upon the following:
5
(a) The other party's representations and warranties contained herein
shall be true and correct in all material respects as of the date of this
Agreement and the Closing Date, subject to any Seller modifications hereafter
made to a Property Representation (as defined and provided for in Paragraph
7.1);
(b) As of the Closing Date, the other party shall have performed its
obligations hereunder and all deliveries to be made at Closing have been
tendered;
(c) There shall exist no actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, pending or threatened against
the other party that would materially and adversely affect the other party's
ability to perform its obligations under this Agreement; and
(d) There shall exist no pending or threatened action, suit or proceeding
with respect to the other party before or by any court or administrative agency
which seeks to restrain or prohibit, or to obtain damages or a discovery order
with respect to, this Agreement or the consummation of the transaction
contemplated hereby.
So long as a party is not in default hereunder, if any condition to such
party's obligation to proceed with the Closing hereunder has not been satisfied
as of the Closing Date, such party may, in its sole discretion, terminate this
Agreement by delivering written notice to the other party on or before the
Closing Date, or elect to close, notwithstanding the non-satisfaction of such
condition, in which event such party shall be deemed to have waived any such
condition. If such party elects to close, notwithstanding the nonsatisfaction of
such condition, there shall be no liability on the part of the other party for
breaches of representations and warranties of which the party electing to close
had knowledge as of the Closing.
5.3 Seller's Deliveries in Escrow. On or before the Closing Date, Seller
shall deliver in escrow to the Escrow Agent the following:
(a) Deed. A special or limited warranty deed (warranting title for acts
by, through or under Seller) (the "Deed") in the form provided for under the law
of the state where the Property is located, or otherwise in conformity with the
custom in such jurisdiction and satisfactory to Seller, executed and
acknowledged by Seller, conveying, to Purchaser Seller's title to the Property,
subject only to: all zoning and building laws, ordinances, maps, resolutions,
and regulations of all governmental authorities having jurisdiction which affect
the Property and the use and improvement thereof; the Lease(s); all matters of
record; and, any state of facts which an accurate survey made of the Property at
the time of Closing would show. Any discrepancy between the description of the
Property in the deed from Seller's immediate grantor and in the Deed shall be
quitclaimed by Seller;
(b) Assignment of Lease and Contracts and ▇▇▇▇ of Sale. An Assignment of
Lease and Service Contracts and ▇▇▇▇ of Sale in the form of Exhibit C attached
hereto, executed by Seller;
(c) State Law Disclosures. Such disclosures and reports as are required by
applicable state and local law in connection with the conveyance of real
property;
(d) FIRPTA. A Foreign Investment in Real Property Tax Act affidavit
executed by Seller;
(e) Additional Documents. Any additional documents that Escrow Agent or
the Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement.
5.4 Purchaser's Deliveries in Escrow. On or before the Closing Date,
Purchaser shall deliver in escrow to the Escrow Agent the following:
(a) Purchase Price. The Purchase Price, less the ▇▇▇▇▇▇▇ Money that is
applied to the Purchase Price, plus or minus applicable prorations, deposited by
Purchaser with the Escrow Agent in immediate, same-day federal funds wired for
credit into the Escrow Agent's escrow account.
6
(b) Assignment of Lease and Contracts and ▇▇▇▇ of Sale. An Assignment of
Lease and Contracts and ▇▇▇▇ of Sale in form of Exhibit C attached hereto,
executed by Purchaser;
(c) State Law Disclosures. Such disclosures and reports as are required by
applicable state and local law in connection with the conveyance of real
property; and
(d) Additional Documents. Any additional documents that Escrow Agent or
the Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement.
5.5 Closing Statements/Escrow Fees. At the Closing, Seller and Purchaser
shall deposit with the Escrow Agent executed closing statements consistent with
this Agreement in the form required by the Escrow Agent.
5.6 Title Policy. The Title Policy shall be delivered at Closing as
provided in Paragraph 3.3.
5.7 Possession. Seller shall deliver possession of the Property to
Purchaser at the Closing.
5.8 Post-Closing Deliveries. Immediately after the Closing, Seller shall
deliver to the offices of Purchaser's property manager: the original Lease(s);
copies or originals of all contracts, receipts for deposits, and unpaid bills;
all keys, if any, used in the operation of the Property; and, if in Seller's
possession or control, any certificates of occupancy or "as-built" plans and
specifications of the Improvements.
5.9 Notice to Tenants. Seller and Purchaser shall execute at Closing, and
deliver to each tenant immediately after the Closing, notices regarding the sale
in substantially in the form of Exhibit D attached hereto, or such other form as
may be required by applicable state law.
5.10 Closing Costs. Each party shall pay the following closing costs:
(a) Title Policy:
(i) Basic premium - Seller
(ii) Extended coverage - Purchaser
(iii) Endorsements - Purchaser
(b) Survey - Purchaser
(c) Recording charges:
(i) Instruments to remove encumbrances that Seller is
obligated or agrees to remove - Seller
(ii) All other instruments, including the Deed - Purchaser
(e) Other - Each party shall pay one-half of the Escrow Agent's
escrow fee and its own attorneys' fees. Purchaser shall pay
any escrow cancellation fee in the event Purchaser disapproves
the Property and elects to cancel the Escrow. If the Escrow is
cancelled in connection with a default by any party, the
defaulting party shall pay the Escrow cancellation fee. All
other costs shall be borne according to local custom.
5.11 Close of Escrow. Upon satisfaction or completion of the foregoing
conditions and deliveries, the parties shall direct the Escrow Agent to
immediately record and deliver the documents described above to the appropriate
parties and make disbursements according to the closing statements executed by
Seller and Purchaser.
ARTICLE 6: PRORATIONS
6.1 Prorations. If the Purchase Price is received by Escrow Agent by noon
on the Closing Date, the day of Closing shall belong to Purchaser and all
prorations hereinafter provided to be made as of the Closing shall each be made
as of the end of the day before the Closing Date. If the cash portion of the
Purchase Price is not so received by Escrow Agent on the Closing Date, then the
day of Closing shall belong to Seller and such proration
7
shall be made as of the end of the day that is the Closing Date. In each such
proration set forth below, the portion thereof applicable to periods beginning
as of Closing shall be credited to Purchaser or charged to Purchaser as
applicable and the portion thereof applicable to periods ending as of Closing
shall be credited to Seller or charged to Seller as applicable.
(a) Collected Rent. All collected rent (excluding tenant reimbursements
for Operating Costs, which are prorated pursuant to (b) below) and other
collected income (and any applicable state or local tax on rent) under the
Lease(s) in effect on the Closing Date shall be prorated as of the Closing.
Seller shall be charged with any rent and other income collected by Seller
before Closing but applicable to any period of time after Closing. Uncollected
rent and other income shall not be prorated. Purchaser shall apply rent and
other income from tenants that are collected after the Closing first to the
obligations then owing to Purchaser for its period of ownership and to costs of
collection, remitting the balance, if any, to Seller. Any prepaid rents for the
period following the Closing Date shall be paid over by Seller to Purchaser.
Purchaser will make reasonable efforts, without suit, to collect any rents
applicable to the period before Closing. Seller may pursue collection as to any
rent not collected by Purchaser within 6 months following the Closing Date,
provided that Seller shall have no right to terminate any Lease or any tenant's
occupancy under any Lease in connection therewith.
(b) Operating Costs. Seller, as landlord under the Lease, is currently
collecting from the tenant under the Lease additional rent to cover taxes,
insurance, utilities (to the extent not paid directly by tenants), common area
maintenance and other operating costs and expenses (collectively, "Operating
Costs") in connection with the ownership, operation, maintenance and management
of the Property. Seller and Purchaser shall each receive a debit or credit, as
the case may be, for the difference between the tenant's current account
balances for Operating Costs and amount of Operating Costs reimbursable to
Seller. Operating Costs for Seller's period of ownership shall be reasonably
estimated by the parties if final bills are not available. Operating Costs that
are not payable by the tenant either directly or reimbursable under the Lease
shall be prorated between Seller and Purchaser.
(c) Taxes and Assessments. Real estate taxes and assessments imposed by
governmental authority that are not yet due and payable and that are not
reimbursable by tenants under the Lease as Operating Costs shall be prorated as
of the Closing based upon the most recent ascertainable assessed values and tax
rates. Seller shall receive a credit for any taxes and assessments paid by
Seller and applicable to any period after the Closing.
(d) Final Adjustment After Closing. If final prorations cannot be made at
Closing for any item being prorated under this Paragraph 6.1, then Purchaser and
Seller agree to allocate such items on a fair and equitable basis as soon as
invoices or bills are available and applicable reconciliation with tenants have
been completed, with final adjustment to be made as soon as reasonably possible
after the Closing, to the effect that income and expenses are received and paid
by the parties on an accrual basis with respect to their period of ownership.
Payments in connection with the final adjustment shall be due within 30 days of
written notice. Seller shall have reasonable access to, and the right to inspect
and audit, Purchaser's books to confirm the final prorations. Seller shall not,
however, be charged for any increase in Operating Costs due to increased costs
incurred by Purchaser in respect of such subsequent to the Closing.
6.2 Service Contracts. Purchaser will assume the obligations arising from
and after the Closing Date under those Service Contracts that are not terminable
as of the Closing Date without notice, expense, or liability to Seller.
6.3 Tenant Deposit. The tenant security deposits actually received by
Seller (and interest thereon if required by law or contract to be earned
thereon) and not theretofore applied to tenant obligations under the Lease(s)
shall be transferred or credited to Purchaser at Closing or placed in escrow if
required by law. As of the Closing, Purchaser shall assume Seller's obligations
related to tenant security deposits. Purchaser will indemnify, defend, and hold
Seller harmless from and against all demands and claims made by tenants arising
out of the transfer or disposition of any security deposits and will reimburse
Seller for all attorneys' fees incurred or that may be incurred as a result of
any such claims or demands as well as for all loss, expenses, verdicts,
judgments, settlements,
8
interest, costs and other expenses incurred or that may be incurred by Seller as
a result of any such claims or demands by tenants.
6.4 Utility Deposits. Purchaser shall be responsible for making any
deposits required with utility companies.
6.5 Sale Commissions. Seller and Purchaser represent and warrant each to
the other that they have not dealt with any real estate broker, sales person or
finder in connection with this transaction other than Broker. If this
transaction is closed, Seller shall pay Broker in accordance with their separate
agreement. Broker is an independent contractor and is not authorized to make any
agreement or representation on behalf of either party. Except as expressly set
forth above, if any claim is made for broker's or finder's fees or commissions
in connection with the negotiation, execution or consummation of this Agreement
or the transactions contemplated hereby, each party shall defend, indemnify and
hold harmless the other party from and against any such claim based upon any
statement, representation or agreement of such party.
ARTICLE 7: REPRESENTATIONS AND WARRANTIES
7.1 Seller's Representations and Warranties. As a material inducement to
Purchaser to execute this Agreement and consummate this transaction, Seller
represents and warrants to Purchaser that:
(a) Organization and Authority. Seller has been duly organized and is
validly existing as a Delaware corporation, in good standing in the State of
Delaware and is qualified to do business in the state in which the Property is
located. Seller has the full right and authority and has obtained any and all
consents required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Seller at the Closing will be,
authorized and properly executed and constitutes, or will constitute, as
appropriate, the valid and binding obligation of Seller, enforceable in
accordance with their terms.
(b) Conflicts and Pending Action. There is no agreement to which Seller is
a party or to Seller's knowledge binding on Seller which is in conflict with
this Agreement. There is no action or proceeding pending or, to Seller's
knowledge, threatened against Seller of the Property, including condemnation
proceedings, which challenges or impairs Seller's ability to execute or perform
its obligations under this Agreement.
(c) Lease. With respect to the Lease, the copy of such Lease provided to
Purchaser pursuant to Paragraph 2.1 is true, correct and complete. Seller's
representation in this Paragraph 7.1(c) shall be void and no claim shall be
actionable or enforceable with respect to any Lease for which a tenant estoppel
complying with the requirements of Paragraph 2.2 is obtained in connection with
this transaction.
(d) Service Contracts. The list of Service Contracts delivered to
Purchaser pursuant to this Agreement is true, correct, and complete as of the
date of its delivery. Neither Seller nor, to Seller's knowledge, any other party
is in material default under any Service Contract.
(e) Leasing Commissions. To Seller's knowledge, no leasing commissions are
due with respect to the Lease or any expansion or renewal of the Lease.
(f) Compliance with Law. To Seller's knowledge, Seller is not in actual
receipt of and has not received any written notice, addressed specifically to
Seller and sent by any governmental authority or agency having jurisdiction over
the Property, that the Property or its use is in material violation of any law,
ordinance, or regulation.
(g) Violation of Environmental Laws. To Seller's knowledge, Seller has not
received any notice that the Property is in violation of any Environmental Laws.
The term "Environmental Laws" means the Resource
9
Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act and equivalent state laws.
"Seller's knowledge," as used in this Agreement means the current actual
knowledge of ▇▇▇▇ ▇. ▇▇▇▇▇▇ and any Asset Manager for the Property of Seller,
without any duty of inquiry or investigation.
Seller's representations and warranties in subparagraphs (c), (d), (e),
(f) and (g) ("Property Representations") are qualified by any knowledge obtained
by Purchaser by the expiration of the Due Diligence Period. Seller may further
qualify the Property Representations by notice, specifying with reasonable
particularity the facts and circumstances known to Seller that make the
applicable Property Representation false, misleading or inaccurate, delivered to
Purchaser before the Closing Date. If Seller delivers a Property Representation
notice within less than 3 business days before the Closing, then the Purchaser
may by notice to Seller extend the Closing Date to that day which is 3 business
days after the date of receipt of the Property Representation notice. If any
Property Representation notice delivered after the Due Diligence Period effects
a material adverse change in the matter covered by the applicable Property
Representation, then Purchaser, as its sole remedy, may terminate this Agreement
within 3 business days after receipt of such notice and receive a refund of the
▇▇▇▇▇▇▇ Money.
7.2 Purchaser's Representations and Warranties. As a material inducement
to Seller to execute this Agreement and consummate this transaction, Purchaser
represents and warrants to Seller that:
(a) Organization and Authority. Purchaser has been duly organized and is
validly existing as a corporation, in good standing in the State of Georgia and
is qualified to do business in the state in which the Property is located.
Purchaser has the full right and authority and has obtained any and all consents
required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Purchaser at the Closing will be,
authorized and properly executed and constitutes, or will constitute, as
appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.
(b) Conflicts and Pending Action. There is no agreement to which Purchaser
is a party or to Purchaser's knowledge binding on Purchaser which is in conflict
with this Agreement. There is no action or proceeding pending or, to Purchaser's
knowledge, threatened against Purchaser which challenges or impairs Purchaser's
ability to execute or perform its obligations under this Agreement.
ARTICLE 8: DEFAULT AND DAMAGES
8.1 Default by Purchaser. If Purchaser shall default in its obligation to
purchase the Property pursuant to this Agreement, Purchaser agrees that Seller
shall have the right to have the Escrow Agent deliver the ▇▇▇▇▇▇▇ Money to
Seller as liquidated damages to recompense Seller for time spent, labor and
services performed, and the loss of its bargain. Purchaser and Seller agree that
it would be impracticable or extremely difficult to affix damages if Purchaser
so defaults and that the ▇▇▇▇▇▇▇ Money, together with the interest thereon,
represents a reasonable estimate of Seller's damages. Seller agrees to accept
the ▇▇▇▇▇▇▇ Money as Seller's total damages and relief hereunder if Purchaser
defaults in its obligation to close hereunder. If Purchaser does so default,
this Agreement shall be terminated and Purchaser shall have no further right,
title, or interest in or to the Property.
8.2 Default by Seller. If Seller defaults in its obligation to sell and
convey the Property to Purchaser pursuant to this Agreement, Purchaser's sole
remedy shall be to elect one of the following: (a) to terminate this Agreement,
in which event Purchaser shall be entitled to the return by the Title Company to
Purchaser of the ▇▇▇▇▇▇▇ Money, or (b) to bring a suit for specific performance
provided that any suit for specific performance must be brought within 90 days
of Seller's default, to the extent permitted by law, Purchaser waiving the right
to bring suit at any later date. This Agreement confers no present right, title
or interest in the Property to Purchaser and Purchaser agrees not to file a lis
pendens or other similar notice against the Property except in connection with,
and after, the proper filing of a suit for specific performance.
10
ARTICLE 9: ▇▇▇▇▇▇▇ MONEY PROVISIONS
9.1 Investment and Use of Funds. The Escrow Agent shall invest the ▇▇▇▇▇▇▇
Money in government insured interest-bearing accounts satisfactory to both
Purchaser and Seller, shall not commingle the ▇▇▇▇▇▇▇ Money with any funds of
the Escrow Agent or others, and shall promptly provide Purchaser and Seller with
confirmation of the investments made. If the Closing under this Agreement
occurs, the Escrow Agent shall deliver the ▇▇▇▇▇▇▇ Money to, or upon the
instructions of, Purchaser on the Closing Date.
9.2 Termination by Seller or Purchaser.
(a) Upon not less than 7 business days prior written notice executed by
Seller and delivered to both Purchaser and Escrow Agent in accordance with
Section 7, asserting that (i) Purchaser has breached or otherwise defaulted and
failed to perform its obligations under the Purchase Agreement, and (ii) Seller
is entitled to retain the ▇▇▇▇▇▇▇ Money on account thereof, as provided in the
Purchase Agreement, Escrow Agent shall deliver the ▇▇▇▇▇▇▇ Money to Seller;
provided, however, that if Purchaser shall, within said 7 day period, deliver to
Seller and Escrow Agent a written notice that it disputes Seller's claim to the
▇▇▇▇▇▇▇ Money, Escrow Agent shall retain the ▇▇▇▇▇▇▇ Money until it receives
written instructions executed by both Seller and Purchaser as to the disposition
and disbursement of the ▇▇▇▇▇▇▇ Money, or until ordered by final court order,
decree or judgment, which has not been appealed, to deliver the ▇▇▇▇▇▇▇ Money to
a particular party, in which event the ▇▇▇▇▇▇▇ Money shall be delivered in
accordance with such notice, instruction, order, decree or judgment.
(b) Upon not less than 7 business days' prior written notice executed by
Purchaser and delivered to Seller and Escrow Agent in accordance with Section 7,
asserting that Purchaser is entitled to the return of the ▇▇▇▇▇▇▇ Money under
the Purchase Agreement, Escrow Agent shall deliver the ▇▇▇▇▇▇▇ Money to
Purchaser; provided, however, that if Seller shall, within said 7 day period,
deliver to Purchaser and Escrow Agent a written notice that it disputes
Purchaser's claim or right to receive back the ▇▇▇▇▇▇▇ Money, Escrow Agent shall
retain the ▇▇▇▇▇▇▇ Money until it receives written instructions executed by both
Seller and Purchaser as to the disposition and disbursement of the ▇▇▇▇▇▇▇
Money, or until ordered by final court order, decree or judgment, which has not
been appealed, to deliver the ▇▇▇▇▇▇▇ Money to a particular party, in which
event the ▇▇▇▇▇▇▇ Money shall be delivered in accordance with such notice
instruction, order, decree, or judgment.
In the event either (a) or (b) of this Section shall occur, Purchaser's or
Seller's notice to Escrow Agent shall include a statement on which Escrow Agent
may rely, that Purchaser or Seller has notified the other party that the
requesting party is entitled to the ▇▇▇▇▇▇▇ Money. However, upon receipt by
Escrow Agent of a notice from Seller or Purchaser, as the case may be, claiming
the ▇▇▇▇▇▇▇ Money, Escrow Agent shall immediately forward a copy of such notice
to the other party.
9.3 Interpleader. Seller and Purchaser mutually agree that in the event of
any controversy regarding the ▇▇▇▇▇▇▇ Money, unless mutual written instructions
are received by the Escrow Agent directing the ▇▇▇▇▇▇▇ Money's disposition, the
Escrow Agent shall not take any action, but instead shall await the disposition
of any proceeding relating to the ▇▇▇▇▇▇▇ Money or, at the Escrow Agent's
option, the Escrow Agent may interplead all parties and deposit the ▇▇▇▇▇▇▇
Money with a court of competent jurisdiction in which event the Escrow Agent may
recover all of its court costs and reasonable attorneys' fees. Seller or
Purchaser, whichever loses in any such interpleader action, shall be solely
obligated to pay such costs and fees of the Escrow Agent, as well as the
reasonable attorneys' fees of the prevailing party in accordance with the other
provisions of this Agreement.
9.4 Liability of Escrow Agent. The parties acknowledge that the Escrow
Agent is acting solely as a stakeholder at their request and for their
convenience, that the Escrow Agent shall not be deemed to be the agent of either
of the parties, and that the Escrow Agent shall not be liable to either of the
parties for any action or omission on its part taken or made in good faith, and
not in disregard of this Agreement, but shall be liable for its negligent acts
and for any loss, cost or expense incurred by Seller or Purchaser resulting from
the Escrow Agent's
11
mistake of law respecting the Escrow Agent's scope or nature of its duties.
Seller and Purchaser shall jointly and severally indemnify and hold the Escrow
Agent harmless from and against all costs, claims and expenses, including
reasonable attorneys' fees, incurred in connection with the performance of the
Escrow Agent's duties hereunder, except with respect to actions or omissions
taken or made by the Escrow Agent in bad faith, in disregard of this Agreement
or involving negligence on the part of the Escrow Agent.
ARTICLE 10: MISCELLANEOUS
10.1 Parties Bound. Neither party may assign this Agreement without the
prior written consent of the other, and any such prohibited assignment shall be
void; provided that Purchaser may assign this Agreement without Seller's consent
to an Affiliate. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the respective legal representatives, successors,
assigns, heirs, and devisees of the parties. For the purposes of this paragraph,
the term "Affiliate" means (a) an entity that directly or indirectly controls,
is controlled by or is under common control with the Purchaser or (b) an entity
at least a majority of whose economic interest is owned by Purchaser; and the
term "control" means the power to direct the management of such entity through
voting rights, ownership or contractual obligations. No such assignment will,
however, relieve Purchaser from any liabilities or obligations under this
Agreement.
10.2 Confidentiality. Purchaser shall make no public announcement or
disclosure of this Agreement or any information related to this Agreement,
before or for a period of one year after the Closing, without the prior written
consent of Seller. Purchaser shall not record this Agreement or any memorandum
of this Agreement. The confidentiality provisions of this Paragraph 10.2 shall
not apply to (i) public disclosure made by Purchaser as required by law or (ii)
disclosures made to persons involved in the sale or purchase of an interest in
Purchaser or its Affiliates as long as Seller's identity remains confidential.
10.3 Headings. The article and paragraph headings of this Agreement are
for convenience only and in no way limit or enlarge the scope or meaning of the
language hereof.
10.4 Invalidity and Waiver. If any portion of this Agreement is held
invalid or inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and effect shall be given
to the intent manifested by the portion held invalid or inoperative. The failure
by either party to enforce against the other any term or provision of this
Agreement shall not be deemed to be a waiver of such party's right to enforce
against the other party the same or any other such term or provision in the
future.
10.5 Governing Law. This Agreement shall, in all respects, be governed,
construed, applied, and enforced in accordance with the law of the state in
which the Property is located.
10.6 Survival. Unless otherwise expressly stated in this Agreement, each
of the covenants, obligations, representations, and agreements contained in this
Agreement, including Paragraphs 7.1 (c) through (g),shall survive the Closing
and the execution and delivery of the Deed required hereunder only for a period
of 12 months immediately following the Closing Date; provided, however the
indemnification provisions of Paragraph 2.4, 6.3 and 6.5, and the provisions of
Paragraph 6.1(d) shall survive the termination of this Agreement or the Closing,
whichever occurs, and shall not be merged, until the applicable statute of
limitations with respect to any claim, cause of action, suit or other action
relating thereto shall have fully and finally expired. Any claim based upon a
misrepresentation or a breach of a warranty contained in Article 7 of this
Agreement shall be actionable or enforceable if and only if: (i) notice of such
claim is given to the party which allegedly made such misrepresentation or
breached such covenant, obligation, warranty or agreement within 12 months after
the Closing Date; and (ii) the amount of damages or losses as a result of such
claim suffered or sustained by the party making such claim exceeds $25,000.
10.7 No Third Party Beneficiary. This Agreement is not intended to give or
confer any benefits, rights, privileges, claims, actions, or remedies to any
person or entity as a third party beneficiary, decree, or otherwise.
12
10.8 Entirety and Amendments. This Agreement embodies the entire agreement
between the parties and supersedes all prior agreements and understandings
relating to the Property except for any confidentiality agreement binding on
Purchaser, which shall not be superseded by this Agreement. This Agreement may
be amended or supplemented only by an instrument in writing executed by the
party against whom enforcement is sought.
10.9 Time. Time is of the essence in the performance of this Agreement.
10.10 Attorneys' Fees. Should either party employ attorneys to enforce any
of the provisions hereof, the party against whom any final judgment is entered
agrees to pay the prevailing party all reasonable costs, charges, and expenses,
including attorneys' fees, expended or incurred in connection therewith.
10.11 Notices. All notices required or permitted hereunder shall be in
writing and shall be served on the parties at the addresses set forth in
Paragraph 1.1. Any such notices shall be either (a) sent by overnight delivery
using a nationally recognized overnight courier, in which case notice shall be
deemed delivered one business day after deposit with such courier, (b) sent by
facsimile, with written confirmation by overnight or first class mail, in which
case notice shall be deemed delivered upon receipt of confirmation of
transmission of such facsimile notice, or (c) sent by personal delivery, in
which case notice shall be deemed delivered upon receipt. Any notice sent by
facsimile or personal delivery and delivered after 5:00 Denver, Colorado time
shall be deemed received on the next business day. A party's address may be
changed by written notice to the other party; provided, however, that no notice
of a change of address shall be effective until actual receipt of such notice.
Copies of notices are for informational purposes only, and a failure to give or
receive copies of any notice shall not be deemed a failure to give notice.
10.12 Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement, and agree that the normal rule
of construction - to the effect that any ambiguities are to be resolved against
the drafting party - shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.
10.13 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event after
which the designated period of time begins to run is not to be included and the
last day of the period so computed is to be included at, unless such last day is
a Saturday, Sunday or legal holiday for national banks in Colorado, Georgia or
Utah, in which event the period shall run until the end of the next day which is
neither a Saturday, Sunday, or legal holiday. The last day of any period of time
described herein shall be deemed to end at 5:00 p.m. Denver, Colorado time.
10.14 Procedure for Indemnity. The following provisions govern actions for
indemnity under this Agreement. Promptly after receipt by an indemnitee of
notice of any claim, such indemnitee will, if a claim in respect thereof is to
be made against the indemnitor, deliver to the indemnitor written notice thereof
and the indemnitor shall have the right to participate in and, if the indemnitor
agrees in writing that it will be responsible for any costs, expenses,
judgments, damages, and losses incurred by the indemnitee with respect to such
claim, to assume the defense thereof, with counsel mutually satisfactory to the
parties; provided, however, that an indemnitee shall have the right to retain
its own counsel, with the fees and expenses to be paid by the indemnitor, if the
indemnitee reasonably believes that representation of such indemnitee by the
counsel retained by the indemnitor would be inappropriate due to actual or
potential differing interests between such indemnitee and any other party
represented by such counsel in such proceeding. The failure of indemnitee to
deliver written notice to the indemnitor within a reasonable time after
indemnitee receives notice of any such claim shall relieve such indemnitor of
any liability to the indemnitee under this indemnity only if and to the extent
that such failure is prejudicial to its ability to defend such action, and the
omission so to deliver written notice to the indemnitor will not relieve it of
any liability that it may have to any indemnitee other than under this
indemnity. If an indemnitee settles a claim without the prior written consent of
the indemnitor, then the indemnitor shall be released from liability with
respect to such claim unless the indemnitor has unreasonably withheld such
consent.
13
10.15 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of such counterparts shall constitute one Agreement. To facilitate execution of
this Agreement, the parties may execute and exchange by telephone facsimile
counterparts of the signature pages.
10.16 Waiver of Jury Trial. To the extent permitted by applicable law, the
parties hereby waive any right to trial by jury in any legal proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby.
14
SIGNATURE PAGE TO
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
SCI DEVELOPMENT SERVICES INCORPORATED
AND
▇▇▇▇▇ DEVELOPMENT CORPORATION
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year written below.
SCI DEVELOPMENT SERVICES INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Date: 2/4/98 Title: Vice President
"Seller"
▇▇▇▇▇ DEVELOPMENT CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇, III
Date: 2/3/98 Title: President
"Purchaser"
Escrow Agent has executed this Agreement in order to confirm that the Escrow
Agent has received and shall hold the ▇▇▇▇▇▇▇ Money in escrow, and shall
disburse the ▇▇▇▇▇▇▇ Money pursuant to the provisions of Article 9.
FOUNDER'S TITLE
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Date: 2/6/98 Title: V.P.
15