AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 2nd
day of December, 1996, by and between DEVON PROPERTIES, INC., a New York
corporation ("Purchaser"), and PERIMETER 400 PARTNERS, an Illinois general
partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Forty Million Seven Hundred Thousand And No/100 Dollars
($40,700,000.00) (the "Purchase Price"), that certain property commonly known
as Perimeter ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ legally described on Exhibit A
attached hereto (the "Property"). Included in the Purchase Price is all of the
personal property set forth on Exhibit B attached hereto (the "Personal
Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of Seven Hundred Fifty
Thousand and No/100 Dollars ($750,000.00) (the "▇▇▇▇▇▇▇ Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C; and
2.2. On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 11:00 a.m Chicago time.
2.3. Purchaser and Seller agree that of the Purchase Price $50,000.00 will
be allocated to the Personal Property and the balance will be allocated to the
Property and improvements situated thereon.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by First American Title
Insurance Company (hereinafter referred to as "Title Insurer") dated July 12,
1996 as to real property located in ▇▇▇▇▇▇ County, Georgia and August 15, 1996
as to real property located in DeKalb County, Georgia for the Property (the
"Title Commitment"). For purposes of this Agreement, "Permitted Exceptions"
shall mean: (a) general real estate taxes, association assessments, special
assessments, special district taxes and related charges not yet due and payable
for any tax years of the Closing Date or thereafter; (b) matters shown on the
"Survey" (hereinafter defined); (c) matters caused by the actions of Purchaser;
and (d) the title exceptions set forth in Schedule B Part II of the Title
Commitment as Numbers 7 and 9 through 16 inclusive, to the extent that same
affect the Property. All other exceptions to title shall be referred to as
"Unpermitted Exceptions". On the Closing Date, it will be a condition of
Purchaser's obligation to close that Title Insurer shall deliver to Purchaser a
standard title policy in conformance with the previously delivered Title
Commitment, subject only to Permitted Exceptions and Unpermitted Exceptions
waived by Purchaser (the "Title Policy"). Seller and Purchaser shall each pay
for one-half of the costs of the Title Commitment and the Title Policy and
Purchaser shall pay for the cost of any endorsements to, or extended coverage
on, the Title Policy. It shall also be a condition of Purchaser's obligation
to close hereunder that the Title Company agree to issue those endorsements and
special coverage requested by Purchaser set forth on Exhibit S.
3.2. Purchaser has received a preliminary survey of the Property prepared
by ▇. ▇. ▇▇▇▇▇▇ & Co., Inc. dated as of October 29, 1996 (the "Survey").
Seller and Purchaser shall each pay for one-half of the costs of the Survey and
updating the Survey through a date not earlier than the date hereof. Purchaser
hereby acknowledges that all matters disclosed by the Survey dated as of
October 29, 1996 are deemed to be Permitted Exceptions but that any matters
shown on an update of the Survey and not disclosed on the Survey dated as of
October 29, 1996 will be Unpermitted Exceptions.
3.3. The obligation of Purchaser and Seller to pay various costs set forth
in Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement and
the "Closing" (as hereinafter defined) and the delivery of the "Deed" (as
hereinafter defined), provided, however, that in the event the transaction
contemplated hereby does not close due to a default by Seller or Seller's
inability to close or Seller's or Purchaser's election to terminate this
Agreement pursuant to the terms hereof, Purchaser shall not be obligated to pay
various costs set forth in Paragraphs 3.1 and 3.2 hereof.
4. PAYMENT OF CLOSING COSTS.
4.1. In addition to the costs set forth in Paragraphs 3.1 and 3.2,
Purchaser and Seller shall each pay for one-half of the costs of the
documentary or transfer stamps to be paid with reference to the Deed and all
other stamps, intangible, transfer, documentary, recording, sales tax and
surtax imposed by law with reference to any other sale documents delivered in
connection with the sale of the Property to Purchaser and all other charges of
the Title Insurer in connection with this transaction.
4.2. Each party shall be responsible for the payment of their own
attorneys' fees and other costs associated with this transaction except as
specified herein.
5. CONDITION OF TITLE.
5.1. If, prior to Closing, a date-down to the Title Commitment or the
Survey discloses any new Unpermitted Exception, Seller, upon notice to
Purchaser, shall have thirty (30) days from the date of the date-down to the
Title Commitment or the Survey at Seller's expense, to (i) bond over, cure
and/or have any Unpermitted Exceptions which, in the aggregate, do not exceed
$100,000.00 (a "Minor Unpermitted Exception"), removed from the Title
Commitment or to have the Title Insurer commit to insure against loss or damage
that may be occasioned by such Unpermitted Exceptions, provided that such Title
Insurer also commits to insure against such Unpermitted Exceptions for any
subsequent purchaser of the Property from Purchaser and any mortgage lender
without any additional premium, or (ii) have the right, but not the obligation,
to bond over, cure and/or have any Unpermitted Exceptions which, in the
aggregate, exceed $100,000.00, removed from the Title Commitment or to have the
Title Insurer commit to insure against loss or damage that may be occasioned by
such Unpermitted Exceptions, provided that such Title Insurer also commits to
insure against such Unpermitted Exceptions for any subsequent purchaser of the
Property from Purchaser and any mortgage lender without any additional premium.
In such event, the time of Closing shall be delayed, if necessary, to give
effect to said aforementioned time periods. If Seller fails to cure or have
said Unpermitted Exception removed or have the Title Insurer commit to insure
as specified above within said thirty (30) day period or if Seller elects not
to exercise its rights under (ii) in the preceding sentence, Purchaser may
terminate this Agreement upon notice to Seller within ten (10) days after the
expiration of said thirty (30) day period; provided, however, and
notwithstanding anything contained herein to the contrary, if the Unpermitted
Exception which gives rise to Purchaser's right to terminate was recorded
against the Property as a result of the affirmative, willful action of Seller
(and not by any unrelated third party) or as a result of the litigation set
forth on Exhibit P if such litigation becomes a lien on the Property or if
Seller is able to bond over, cure or remove a Minor Unpermitted Exception for a
cost not to exceed $100,000 or the Title Insurer is willing to insure over a
Minor Unpermitted Exception, provided that such Title Insurer also commits to
insure against such Unpermitted Exceptions for any subsequent purchaser of the
Property from Purchaser and any mortgage lender without any additional premium
for a cost not to exceed $100,000 in accordance with the terms hereof and
Seller fails to expend said funds in either case, then Purchaser shall have the
additional rights contained in Paragraph 11 herein. Absent notice from
Purchaser to Seller in accordance with the preceding sentence, Purchaser shall
be deemed to have elected to take title subject to said Unpermitted Exception.
If Purchaser terminates this Agreement in accordance with the terms of this
Paragraph 5.1, this Agreement shall become null and void without further action
of the parties and all ▇▇▇▇▇▇▇ Money theretofore deposited into the escrow by
Purchaser, together with any interest accrued thereon, shall be returned to
Purchaser, and neither party shall have any further liability to the other,
except for those obligations which survive the termination hereof.
Notwithstanding the provisions of Paragraph 5 hereof, Purchaser may at any time
accept the Title Insurance Policy in such form as the Title Insurer is willing
to issue, without reduction of the Purchase Price or any credit or allowance on
account thereof or any claims against Seller except that if on the Closing Date
there remain unremoved Involuntary Monetary and Mechanics' Liens (as defined
herein) which have neither been removed by Seller nor insured over the Title
Insurer as provided herein, and Seller has not used the entire sum of $100,000
as provided above (the "Cure Amount") in removing such liens, then Purchaser
may elect to close subject to such unremoved Involuntary Monetary and
Mechanics' Liens and receive the Cure Amount less any amounts previously paid
by Seller or deposited with the Title Insurer to remove or obtain insurance
over any Involuntary Monetary and Mechanics' Liens, Purchaser will be allowed a
credit against the Purchaser Price equal to the remaining Cure Amount.
As used herein the term "Involuntary Monetary and Mechanics Liens" shall
mean the existence of one or more (i) liens or encumbrances or (ii) mechanics'
liens created as a result of work performed at the Property which as to (i) and
(ii), are in liquidated amounts and can be removed or discharged by payment of
a sum of money.
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in Paragraph
7.1 of this Agreement, Seller shall bear all risk of loss with respect to the
Property up to the date upon which title is transferred to Purchaser in
accordance with this Agreement. Notwithstanding the foregoing, in the event of
damage to the Property by fire or other casualty prior to the Closing Date, (a)
repair of which would cost less than or equal to $400,000.00 (as determined by
a licensed engineer or architect selected by Seller and reasonably satisfactory
to Purchaser (the "Approved Engineer")) and (b) which does not directly and
proximately cause tenants in occupancy of ten (10) percent or more of the
leasable area of the Property to actually terminate their leases at the
Property or give notice of their intention to terminate their leases at the
Property in accordance with the terms thereof, Purchaser and Seller shall not
have the right to terminate their obligations under this Agreement by reason
thereof, but Seller shall assign and transfer to Purchaser on the Closing Date
all of Seller's right, title and interest in and to all insurance proceeds paid
or payable to Seller on account of such fire or casualty and Seller shall pay
to Purchaser at the Closing the amount of Seller's insurance deductible less
the cost of any repairs effected by or on behalf of Seller with Purchaser's
consent, which consent shall not be unreasonably withheld or delayed, or
without Purchaser's consent with respect to repairs of an emergency nature.
Adjustment of any insurance or condemnation claim shall be conducted jointly by
Seller and Purchaser. Seller shall notify Purchaser in writing on the earlier
of (x) the Closing Date or (y) within ten (10) days of any such fire or other
casualty. In the event of damage to the Property by fire or other casualty
prior to the Closing Date (a) repair of which would cost in excess of
$400,000.00 (as determined by the Approved Engineer), or (b) which directly and
proximately causes tenants in occupancy of ten (10) percent or more of the
leasable area of the Property to actually terminate their leases at the
Property or give notice of their intention to terminate their leases at the
Property in accordance with the terms thereof prior to the Closing, then this
Agreement may be terminated at the option of Purchaser, which option shall be
exercised, if at all, by Purchaser's written notice thereof to Seller within
ten (10) business days after (a) Purchaser receives written notice of such fire
or other casualty and the Approved Engineer's determination of the amount of
such damages, or (b) Purchaser receives written notice of cancellation of
tenant leases representing ten (10) percent of the leasable area of the
Property. Upon the exercise of Purchaser's option to terminate in the
preceding sentence, this Agreement shall become null and void, the ▇▇▇▇▇▇▇
Money deposited by Purchaser shall be returned to Purchaser together with
interest thereon, and neither party shall have any further liability or
obligations hereunder except for those provisions which expressly survive the
termination hereof. In the event that Purchaser does not exercise the option
set forth in the second preceding sentence, the Closing shall take place on the
Closing Date and Seller shall assign and transfer to Purchaser on the Closing
Date all of Seller's right, title and interest in and to all insurance proceeds
paid or payable to Seller on account of the fire or casualty and Seller shall
pay to Purchaser at the Closing the amount of Seller's insurance deductible.
6.2. If prior to the Closing Date, any condemnation or eminent domain
proceedings are threatened or initiated (a "Taking") which might result in the
taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the Taking of any part of the Property shall:
(i) materially impair access to the Property; (ii) cause any material
non-compliance with any applicable law, ordinance, rule or regulation of any
federal, state or local authority or governmental agencies having jurisdiction
over the Property or any portion thereof; or (iii) materially and adversely
impair the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
6.2.1. terminate this Agreement by written notice to Seller, in
which event the ▇▇▇▇▇▇▇ Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease
except for those provisions which expressly survive the termination hereof; or
6.2.2. proceed with the Closing, in which event Seller shall assign
to Purchaser all of Seller's right, title and interest in and to any award made
in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall notify Seller, within ten (10) business days after
Purchaser's receipt of Seller's notice, whether Purchaser elects to exercise
its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be delayed,
if necessary, until Purchaser makes such election. If Purchaser fails to make
an election within such ten (10) business day period, Purchaser shall be deemed
to have elected to exercise its rights under Paragraph 6.2.2. If prior to the
Closing Date, any condemnation or eminent domain proceedings are initiated
which do not constitute a Material Event, Purchaser shall be required to
proceed with the Closing, provided Seller has given Purchaser notice thereof
prior to the earlier of (i) ten days after Seller learns thereof or (ii) the
Closing Date, in which event Seller shall assign to Purchaser all of Seller's
right, title and interest in and to any award made in connection with such
condemnation or eminent domain proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on October 18, 1996 and ending at 5:00
p.m. Chicago time on November 20, 1996 (said period being herein referred to as
the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser may enter upon the Property, at
any reasonable time and upon reasonable prior notice to Seller, to inspect the
Property, including a review of leases and other tenant files located at the
Property, to interview tenants at the property upon reasonable notice to such
tenants and Seller (so as to allow a representative of Seller to be present at
any such interview) and without materially interfering with the business
operations of the tenants, and to conduct and prepare such studies, tests and
surveys as Purchaser may deem reasonably necessary and appropriate. In
connection with Purchaser's review of the Property, Seller agrees to deliver to
Purchaser copies of the current rent roll for the Property, the most recent tax
and insurance bills, utility account numbers, service contracts, and unaudited
year end 1993 through 1995 and year to date 1996 operating statements.
Furthermore, if the following are reasonably available to Seller, Seller shall
deliver to Purchaser plans and specifications for the Property as well as any
engineering reports related to the Property.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and
expense and Purchaser shall restore the Property to the condition existing
prior to the performance of such tests or investigations by or on behalf of
Purchaser. Purchaser shall defend, indemnify and hold Seller and any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliates of Seller") harmless from any and all liability,
cost and expense (including without limitation, reasonable attorney's fees,
court costs and costs of appeal) suffered or incurred by Seller or Affiliates
of Seller for injury to persons or property caused by Purchaser's
investigations and inspection of the Property. Purchaser shall undertake its
obligation to defend set forth in the preceding sentence using attorneys
reasonably satisfactory to Seller.
Prior to commencing any such tests, studies and investigations, Purchaser
shall furnish to Seller a certificate of insurance evidencing comprehensive
general public liability insurance insuring the person, firm or entity
performing such tests, studies and investigations and listing Seller and
Purchaser as additional insureds thereunder.
Purchaser in its sole discretion shall have the right to terminate this
Agreement by giving written notice of such termination to Seller at any time
prior to the expiration of the Inspection Period. If written notice is not
received by Seller pursuant to this Paragraph 7.1 prior to the expiration of
the Inspection Period, then the right of Purchaser to terminate this Agreement
pursuant to this Paragraph 7.1 shall be waived. If Purchaser terminates this
Agreement by written notice to Seller prior to the expiration of the Inspection
Period: (i) Purchaser shall promptly deliver to Seller copies of all studies,
reports and other investigations obtained by Purchaser in connection with its
due diligence during the Inspection Period, provided, however, that Purchaser
shall not be required to deliver to Seller copies of appraisals and financial
analyses prepared by or at the request of Purchaser during the Inspection
Period or any material prepared by Purchaser's attorneys; and (ii) the ▇▇▇▇▇▇▇
Money deposited by Purchaser shall be immediately paid to Purchaser, together
with any interest earned thereon, and neither Purchaser nor Seller shall have
any right, obligation or liability under this Agreement, except for those
obligations which specifically survive the termination hereof. Notwithstanding
anything contained herein to the contrary, the terms of this Paragraph 7.1,
shall survive the Closing and the delivery of the Deed and termination of this
Agreement. Notwithstanding anything contained herein to the contrary,
Purchaser hereby acknowledges as of the execution of this Agreement, the
Inspection Period and Purchaser's right to terminate this Agreement pursuant to
this Paragraph 7.1 have expired.
7.2. Seller's predecessor-in-interest acquired title to the Property by
foreclosure (or deed-in-lieu thereof) and, therefore, Seller can make no
representations or warranties relating to the physical condition of the
Property. Purchaser acknowledges and agrees that other than any express
representation or warranty by Seller made herein it will be purchasing the
Property and the Personal Property based solely upon its inspections and
investigations of the Property and the Personal Property, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property and the Personal Property as
of the date of this Agreement, wear and tear and loss by fire or other casualty
or condemnation excepted but subject to Purchaser's rights under Paragraph 6
hereof. Without limiting the foregoing, Purchaser acknowledges that, except as
may otherwise be specifically set forth elsewhere in this Agreement, neither
Seller nor its consultants, brokers or agents have made any representations or
warranties of any kind upon which Purchaser is relying as to any matters
concerning the Property or the Personal Property, including, but not limited
to, the condition of the land or any improvements comprising the Property, the
existence or non-existence of "Hazardous Materials" (as hereinafter defined),
economic projections or market studies concerning the Property, any development
rights, taxes, bonds, covenants, conditions and restrictions affecting the
Property, water or water rights, topography, drainage, soil, subsoil of the
Property, the utilities serving the Property or any zoning or building laws,
rules or regulations or "Environmental Laws" (hereinafter defined) affecting
the Property. Other than any express representation or warranty by Seller made
herein, Seller makes no representation or warranty that the Property complies
with Title III of the Americans with Disabilities Act or any fire code or
building code. Purchaser hereby releases Seller and the Affiliates of Seller
from any and all liability in connection with any claims which Purchaser may
have against Seller or the Affiliates of Seller, and Purchaser hereby agrees
not to assert any claims for contribution, cost recovery or otherwise, against
Seller or the Affiliates of Seller, relating directly or indirectly to the
existence of asbestos or Hazardous Materials on, or environmental conditions
of, the Property, whether known or unknown. As used herein, "Environmental
Laws" means all federal, state and local statutes, codes, regulations, rules,
ordinances, orders, standards, permits, licenses, policies and requirements
(including judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment or
worker health or safety, all as amended or reauthorized, or as hereafter
amended or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency Planning and Community
Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C. Section 11001 et seq., the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. e 1251 et seq., the Toxic
Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et seq.,
the Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq., the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the
Hazardous Materials Transportation Act (the "Transportation Act"), 49 U.S.C.
Section 1802 et seq. As used herein, "Hazardous Materials" means:
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.2 shall survive
the Closing and the delivery of the Deed and termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as set forth herein, Seller
makes no representation or warranty that such material is complete or accurate
or that Purchaser will achieve similar financial or other results with respect
to the operations of the Property, it being acknowledged by Purchaser that
Seller's operation of the Property and allocations of revenues or expenses may
be vastly different than Purchaser may be able to attain. Purchaser
acknowledges that it is a sophisticated and experienced purchaser of real
estate and further that Purchaser has relied upon its own investigation and
inquiry with respect to the operation of the Property and releases Seller and
the Affiliates of Seller from any liability with respect to such historical
information except for any representation or warranty of Purchaser expressly
contained herein. Notwithstanding anything contained herein to the contrary,
the terms of this Paragraph 7.3 shall survive the Closing and the delivery of
the Deed and termination of this Agreement.
7.4. Seller has provided to Purchaser the following existing report:
Preliminary Environmental Site Assessment prepared by Law Associates, Inc.
dated January 16, 1991 ("Existing Report"). Seller makes no representation or
warranty concerning the accuracy or completeness of the Existing Report.
Purchaser hereby releases Seller and the Affiliates of Seller from any
liability whatsoever with respect to the Existing Report, or, including,
without limitation, the matters set forth in the Existing Report, and the
accuracy and/or completeness of the Existing Report. Furthermore, Purchaser
acknowledges that it will be purchasing the Property with all faults disclosed
in the Existing Report. Notwithstanding anything contained herein to the
contrary, the terms of this Paragraph 7.4 shall survive the Closing and the
delivery of the Deeds and termination of this Agreement.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
December 19, 1996 (the "Closing Date"), at the office of Title Insurer,
Atlanta, Georgia at which ▇▇▇▇ ▇▇▇▇▇▇ shall deliver possession of the Property
to Purchaser. The Closing shall be a "New York style" closing at which the
Purchaser shall wire the Purchase Price less the ▇▇▇▇▇▇▇ Money and any
prorations and other adjustments to Title Insurer on the Closing Date and prior
to the release of the Purchase Price to Seller, Purchaser shall receive the
Title Policy or marked up commitment dated the date of the Closing Date. In
the event of a New York style closing, Seller shall deliver to Title Insurer
any customary affidavit in connection with a New York style closing.
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall execute
and deliver to one another a joint closing statement. In addition, Purchaser
shall deliver to Seller the balance of the Purchase Price, an assumption of the
documents set forth in Paragraph 9.2.3 and 9.2.4 and Purchaser shall deliver at
Closing the following items:
9.1.1. a certificate confirming the continued accuracy of the
warranties and representations made by Purchaser in this Agreement;
9.1.2. a statement from Purchaser's counsel required by
Section 6045 of the Internal Revenue Code, as amended, and Seller will execute
same at the Closing; and
9.1.3. such other, and further customary instruments and documents
as Seller's counsel may reasonably require to evidence and conclude the
transaction contemplated by this Agreement.
9.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
9.2.1. the Deed (in the form of Exhibit E attached hereto),
subject to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. a special warranty ▇▇▇▇ of sale conveying the Personal
Property (in the form of Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the form
attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and/or certified copies of, leases affecting the
Property ("Leases") which shall be delivered at the Property;
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy including documents evidencing Seller's
existence and authority to consummate the transaction contemplated by this
Agreement;
9.2.8. possession of the Property to Purchaser, subject to the terms
of Leases;
9.2.9. evidence of the termination of the management and leasing
agreements;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the Leases
and the obligation to refund the security deposits (in the form of Exhibit K);
9.2.11. an updated rent roll;
9.2.12. an affidavit pursuant to Section 48-7-128 of the Official
Code of Georgia Annotated that Seller is a resident of Georgia, that Seller is
not otherwise subject to Georgia tax withholding or stating the amount of
Seller's gain in which event Purchaser shall retain from the Purchase Price the
amount required by this statute and promptly remit same to the appropriate
governmental agency;
9.2.13. a Georgia Transfer Tax Declaration signed by Seller;
9.2.14. a certificate confirming the continued accuracy of the
warranties and representations made by Seller in this Agreement as required by
Paragraph 16.2, but subject to Paragraph 16.4;
9.2.15. Tenant Certificates and Seller Tenant Certificates in
compliance with Paragraph 26 hereof dated no earlier than 45 days prior to the
Closing Date;
9.2.16. appropriate evidence of Seller's right, power and authority
to sell the Property to Purchaser on the terms and conditions of this Agreement
as Purchaser may reasonably require;
9.2.17. a complete set of all keys and magnetic pass cards, if any,
to the improvements at the Property, appropriately tagged for identification to
the extent in Seller's or its managing agent's possession or control;
9.2.18. to the extent in Seller's or its managing agent's possession
or control, and not already delivered, (a) the maintenance records for the
Property, (b) all original licenses and permits, authorizations and approvals
which are currently in force pertaining to the Property and (c) all guarantees
and warranties which are currently in force and which Seller has received in
connection with any work or services performed or equipment installed in and to
improvements erected on the Property which will all be deemed delivered if
delivered to Purchaser at the site of the Closing or at the on-site management
office at the Property;
9.2.19. the files with respect to overage rents and charges which
will be deemed delivered if delivered to Purchaser at the site of the Closing
or at the on-site management office at the Property;
9.2.20. to the extent in Seller's or its managing agent's possession
or control, the originals of the property documents and in all other instances
copies thereof which will be deemed delivered if delivered to Purchaser at the
site of the Closing or at the on-site management office at the Property;
9.2.21. the current operating files for the Property which will be
deemed delivered if delivered to Purchaser at the site of the Closing or at the
on-site management office at the Property; and
9.2.22. such other, and further customary instruments and documents
as Purchaser's counsel may reasonably require to evidence and conclude the
transaction contemplated by this Agreement.
10. PURCHASER'S DEFAULT. ALL ▇▇▇▇▇▇▇ MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT ON OR PRIOR TO THE CLOSING DATE, THIS AGREEMENT
SHALL THEN BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO
FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY EXCEPT THAT SELLER SHALL
RETAIN ALL OF THE ▇▇▇▇▇▇▇ MONEY AND THE INTEREST THEREON AS SELLER'S SOLE RIGHT
TO DAMAGES OR ANY OTHER REMEDY AND EXCEPT FOR PURCHASER'S OBLIGATIONS TO
INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH IN PARAGRAPH 7.1 HEREOF;
THE PARTIES HERETO ACKNOWLEDGING THE DIFFICULTY OF MORE PRECISELY ASCERTAINING
THE AMOUNT OF SELLER'S DAMAGES IN SUCH EVENT, AGREEING THAT AN AMOUNT EQUAL TO
THE ▇▇▇▇▇▇▇ MONEY IS A REASONABLE FORECAST THEREOF, AND INTENDING THAT SUCH
AMOUNT BE PAID AS AGREED LIQUIDATED DAMAGES AND NOT AS A PENALTY. THEREFORE,
BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE ▇▇▇▇▇▇▇ MONEY
HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF
SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL ▇▇▇▇▇▇▇ MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT AS EXPRESSLY PROVIDED FOR
HEREIN AND EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE
THE PROPERTY AS SET FORTH MORE FULLY IN PARAGRAPH 7. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT IS (I) ITS WILLFUL
REFUSAL TO DELIVER THE CLOSING DOCUMENTS SET FORTH IN PARAGRAPH 9.2 (OTHER THAN
9.2.15 IF SELLER DOES NOT RECEIVE THE REQUIRED THIRD PARTY TENANT
CERTIFICATES), (II) ITS (AND NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE,
WILLFUL ACTION WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE
PROPERTY AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT
PURSUANT TO PARAGRAPH 5 HEREOF; OR (III) ITS FAILURE TO EXPEND UP TO $100,000
IF (A) SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED
EXCEPTION IN ACCORDANCE WITH THE TERMS HEREOF FOR A COST NOT TO EXCEED $100,000
OR (B) THE TITLE INSURER IS WILLING TO INSURE OVER A MINOR UNPERMITTED
EXCEPTION FOR A COST NOT TO EXCEED $100,000 IN ACCORDANCE WITH THE TERMS
HEREOF; (IV) SELLER'S FAILURE TO CURE ANY TITLE EXCEPTION LISTED ON THE TITLE
REPORT ATTACHED HERETO AND NOT LISTED HEREIN AS A PERMITTED TITLE EXCEPTION;
(V) SELLER'S FAILURE TO PAY OVER OR ASSIGN ANY CASUALTY INSURANCE OR
CONDEMNATION PROCEEDS AS PROVIDED FOR IN SECTION 6 HEREOF; OR (VI) SELLER FAILS
TO PERFORM ITS OBLIGATIONS UNDER THE LAST SENTENCE OF SECTION 8 HEREOF, THEN
PURCHASER WILL BE ENTITLED TO ▇▇▇ FOR SPECIFIC PERFORMANCE PLUS ANY REASONABLE
ATTORNEYS' FEES INCURRED BY PURCHASER IN SEEKING TO ENFORCE ITS RIGHTS TO
SPECIFIC PERFORMANCE. NOTWITHSTANDING THE FOREGOING, IF SELLER'S INABILITY TO
CLOSE SHALL RESULT FROM SELLER'S WILLFUL DEFAULT OR WILLFUL MATERIAL
MISREPRESENTATION OR WILLFUL AND MATERIAL BREACH OF WARRANTY, THEN AND IN ANY
SUCH EVENT PURCHASER MAY ELECT TO CANCEL THIS AGREEMENT AND THEN PURCHASER WILL
BE ENTITLED TO DEMAND THE RETURN OF ALL ▇▇▇▇▇▇▇ MONEY TOGETHER WITH ANY
INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN BECOME NULL AND VOID
AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER
AT LAW OR IN EQUITY, EXCEPT AS EXPRESSLY PROVIDED FOR HEREIN AND EXCEPT FOR
PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET
FORTH MORE FULLY IN PARAGRAPH 7 AND THOSE OBLIGATIONS WHICH EXPRESSLY SURVIVE
THE TERMINATION HEREOF AND PURCHASER'S RIGHT TO RECEIVE FROM SELLER ITS ACTUAL,
DOCUMENTED THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE
DILIGENCE HEREUNDER AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED
$250,000 IN THE AGGREGATE ("DUE DILIGENCE EXPENSES") PLUS ANY REASONABLE
ATTORNEYS' FEES INCURRED BY PURCHASER IN SEEKING TO ENFORCE ITS RIGHTS TO
RECEIVE ITS DUE DILIGENCE EXPENSES.
12. CLOSING PRORATIONS.
12.1. The items described in this Paragraph shall be prorated between
the parties on a per diem basis (on the basis of actual calendar days in the
relevant calendar year) so that credits and charges preceding or on 11:59 P.M.
on the day preceding the Closing Date shall be allocated to Seller and credits
and charges for the period after 11:59 P.M. on the day preceding the Closing
Date and all days thereafter shall be allocated to Purchaser. Each payment
received shall be attributed to the most recent period for which such a payment
is due. As of July 1, 1997, Seller and Purchaser shall jointly prepare a final
proration statement in accordance with the provisions of this Paragraph 12 and
a final adjusting payment shall then be made, as provided in Paragraph 12.3
hereof.
12.1.1. Real estate taxes (on the basis of allowable discounts for
early payments), general and special assessments and the like ("Taxes") for the
year of the Closing Date, as such Taxes may be increased or decreased after the
Closing, shall be prorated as of the Closing Date based on the most recent
ascertainable amount as part of the proration of "Maintenance Expenses"
(hereinafter defined) in Paragraph 12.1.3. The parties acknowledge that Seller
has filed an appeal with respect to Taxes affecting the Property for 1995.
Seller currently has paid $324,656.80 on account of 1995 Taxes affecting the
Property. Seller has received notice of a reduction of the 1995 Taxes,
however, such reduction is subject to appeal. Seller agrees to escrow from the
proceeds at Closing an amount equal to the difference between (said amount
being referred to as the "1995 Excess Taxes"): (a) the lower of (i) the Taxes
due and owing for 1995 based on the assessed value sought by ▇▇▇▇▇▇ County
together with all interest due and owing thereon ("Maximum 1995 Taxes") and
(ii) the Taxes due and owing for 1995 based on the assessed value awarded
Seller in connection with the appeal if said appeal becomes final and
non-appealable prior to the Closing Date together with all interest due and
owing thereon ("Reduced 1995 Taxes") and (b) $324,656.80. The aforesaid escrow
(the "Tax Escrow") shall be established with the Atlanta office of the First
American Title Insurance ("Tax Escrowee") and shall be in form and substance
reflecting the terms herein and otherwise reasonably acceptable to Purchaser
and Seller. The Tax Escrow shall provide that at such time as the 1995 Excess
Taxes become due and payable in accordance with the applicable ▇▇▇▇▇▇ County
laws and ordinances, Purchaser may deliver written notice of such to Seller and
Tax Escrowee. Within fourteen (14) days after receipt of said notice, Tax
Escrowee shall pay to the ▇▇▇▇▇▇ County tax collector the 1995 Excess Taxes
with all interest and penalties imposed thereon, if any. Notwithstanding
anything contained herein to the contrary, the Tax Escrow shall provide that if
at any time prior to the disbursement of the proceeds of the Tax Escrow, Seller
delivers to Purchaser and Tax Escrowee evidence of the final, non-appealable
nature of the 1995 appeal which reduces the 1995 Excess Taxes, Tax Escrowee
shall discharge to Seller within fourteen (14) days after receipt of said
notice an amount equal to the difference between the Maximum 1995 Taxes and the
Reduced 1995 Taxes. Furthermore, the Tax Escrow shall provide that (i)
interest earned on the proceeds shall be disbursed in the same manner as the
proceeds and (ii) and proceeds remaining in the Tax Escrow after the payment of
the 1995 Excess Taxes shall be immediately disbursed to Seller.
Notwithstanding anything contained in the Agreement to the contrary, Seller
shall be entitled to its pro rata share of any refund of Taxes for 1996 and any
such refund received by Purchaser shall be held in trust for Seller. Seller
covenants and agrees to withdraw, and agrees not to file, any appeal for Taxes
for 1996 without the prior consent of Purchaser.
12.1.2. Minimum rent (exclusive of delinquent or unpaid rents, but
including prepaid rents) paid under the Leases shall be prorated as of the
Closing Date. Percentage Rent, if any, shall be prorated in connection with
the final adjustment set forth in Paragraph 12.3 herein.
12.1.3. Certain of the Leases provide for reimbursement to landlord
of maintenance and operation charges, Taxes, insurance and other expenses
(herein collectively referred to as "Maintenance Expenses"). Some Leases
provide for a determination of the tenant's share of Maintenance Expenses on an
annual basis but provide that an estimated amount thereof (either in the
aggregate or for specified components thereof) shall be paid by tenant to
landlord monthly during the course of the year with a final adjustment to be
made after the close of the year when such costs and expenses have been finally
determined. Seller and Purchaser have agreed as follows with respect to
Maintenance Expenses:
(i) Except as hereinafter provided, Seller shall be responsible for
the payment of all Maintenance Expenses attributable to periods of time prior
to the Closing Date (without taking into account "stops" for base years in the
Leases) and Seller shall be entitled to receive and retain all reimbursements
thereof collected from tenants on account thereof with respect to the period
through the Closing Date (taking into account "stops" for base years in the
Leases); and Purchaser shall be responsible for the payment of all Maintenance
Expenses attributable to periods of time from and after the Closing Date
(without taking into account "stops" for base years in the Leases) and
Purchaser shall be entitled to receive and retain from the tenants all
reimbursements thereof collected from tenants on account thereof with respect
to the Closing Date and thereafter (taking into account "stops" for base years
in the Leases). Purchaser shall be entitled to a credit against the Purchase
Price for sums that are due (or accrued) and unpaid as of the Closing Date
under any Service Contracts which have been assigned to Purchaser, and Seller
shall be entitled to a credit to the extent that sums have been paid under any
Service Contracts which have been assigned to Purchaser for services to be
performed or goods to be delivered after the Closing Date.
(ii) As a part of the final proration referred to in Section 12.3
hereof:
Maintenance Expenses received from Tenants shall be separately
prorated under each Lease. Upon final determination of Maintenance Expense
owed by a Tenant under its Lease for the calendar year in which the Closing
occurs and 1995 with respect to Taxes, Seller and Purchaser shall adjust
between themselves amounts owed for such calendar year on account of
Maintenance Expenses, and Seller's allocable share of such Maintenance Expenses
payable by such Tenant shall be equal to an amount determined by multiplying
separately each of the Maintenance Expense received from such Tenant by the
fraction whose numerator is the number of days in such calendar year before the
Closing Date, and whose denominator is the total number of days in such
calendar year of the Closing. Purchaser shall remit to Seller its allocable
share, less interim payments previously retained by Seller, if any, less a
pro rata share of costs of collection paid to third parties, if any. If Seller
has retained amounts in excess of its allocable share, Seller, within fifteen
(15) days after notice from Purchaser of the excess owed Purchaser, shall remit
such excess to Purchaser less a pro rata share of costs of collection, if any
paid to third parties.
12.1.4. Internationally Deleted.
12.1.5. To the extent not covered by Paragraph 12.1.3, utility and
fuel charges, including, without limitation, charges for water, electricity,
gas, gasoline, steam, oil and telephones used in connection with the heating,
cooling, lighting, maintenance and operation of the Property and any personal
property included therein or used in connection therewith shall be prorated as
of the Closing Date. Seller shall obtain readings of all utility meters no
earlier than 30 days prior to the Closing Date.
12.1.6. To the extent not covered by Paragraph 12.1.3 annual fees
for permits and licenses disclosed in Exhibit 0 shall be prorated as of the
Closing Date.
12.1.7. Personal property taxes, if any, for any personal property
transferred to Purchaser shall be prorated as of the Closing Date.
12.1.8. Purchaser shall cause a reconciliation of the Maintenance
Expenses and Taxes to occur with the tenants no later than April 15, 1997
requesting payment in accordance with the terms of the Lease and shall use
reasonable, good faith efforts in collecting from the tenants any
under-payments for Maintenance Expenses for 1996 and 1995 (with respect to
Taxes for 1995) to the extent Taxes due for such year have been resolved by
such date.
12.2. The following amounts, if any (the "Adjustments"), without
duplication, shall be made:
12.2.1. All security deposits held by Seller as of the Closing Date
shall be paid to Purchaser at the Closing.
12.2.2. All other reasonable expenses normal to the operation and
maintenance of the Property which require payments either in advance or in
arrears for periods which begin prior to the Closing Date or end thereafter
shall be apportioned between Seller and Purchaser as of 11:59 P.M. on the day
preceding the Closing Date.
12.2.3. Purchaser shall receive at Closing a credit equal to the
amount of any unsatisfied obligations for "Outstanding Tenant Improvement and
Commission Obligations" of Seller set forth in Exhibit N. Purchaser agrees to
assume the payment of $51,598 for ▇▇▇▇▇▇▇ as shown on Exhibit N (without a
credit from Seller) and to the extent Seller pays any amounts toward the
$51,598 obligation prior to Closing then Seller shall receive a credit from
Purchaser therefor. Seller shall receive a credit, if any, as provided in
Paragraphs 25 and 26.
12.3. In connection with the Prorations and the Adjustments herein and
as provided, there shall be prepared the following statements, schedules and
certificate:
12.3.1. Seller shall prepare or cause to be prepared statements in
reasonable detail showing separately each item prorated or adjusted pursuant to
this Agreement and a detailed reconciliation showing separately each item
prorated or adjusted pursuant to this Agreement and a detailed reconciliation
of the Prorations and Adjustments, such statements to be delivered three (3)
business days prior to the Closing and adjusted as necessary at the Closing.
The parties shall mutually agree after review thereof by Purchaser that said
closing statement accurately reflects the method of proration set forth in this
Agreement.
12.3.2. Purchaser, in cooperation with Seller, shall prepare, not
later than July 1, 1997, a final proration statement as of the Closing Date,
presenting correctly the final Prorations and Adjustments in accordance with
the terms of this Agreement and a statement of "Post-Closing Receipts"
(hereinafter defined). Upon issuance of such final proration statement the
parties shall make a final proration payment as appropriate (including, without
limitation, a settlement of Post-Closing Receipts). For purposes of
preparation of the foregoing statements and at all reasonable times thereafter,
the parties agree to allow the other party and the other party's accountants
and representatives, to examine so much of the books and records in the
possession and control of the other party as relate to such statements and
final reconciliations with tenants on Maintenance Expenses and other charges at
the place or places where they are then regularly maintained. Seller and
Purchaser shall retain such books and records for three (3) years from the
Closing Date.
12.4. All sums paid following the Closing Date by any tenant of the
Property who is indebted to Seller for rent, additional rent or any other sum
due under its Lease for any period prior to and including the Closing Date,
after receipt by Purchaser of all then currently due amounts by said tenant and
any reasonable actual out-of-pocket collection costs of Purchaser shall be
deemed a "Post-Closing Receipt" until such time as all such indebtedness to
Seller is paid in full. Within ten (10) days following each receipt by
Purchaser of a Post-Closing Receipt (other than with respect to a Maintenance
Expense received from a Tenant which will be adjusted as provided in Paragraphs
12.1 and 12.3), Purchaser shall pay such Post-Closing Receipt to Seller.
Purchaser shall use reasonable efforts to collect all amounts which, upon
collection, would constitute Post-Closing Receipts hereunder, but Purchaser
shall not be required to institute legal action on account thereof nor to
engage attorneys or other professionals in such efforts. In any event, all
costs and expenses of Purchaser in enforcing collection of Post-Closing
receipts (including applicable legal fees, collection fees, and the like) shall
be paid by Seller as a condition to Seller's receipt of such Post-Closing
Receipts. If by July 1, 1996, Purchaser has not collected all amounts due
Seller and shall not have commenced litigation to collect such Post-Closing
Receipts, Seller, after notice to Purchaser, may, at Seller's expense, commence
litigation to collect such unpaid arrearage; provided, however, that Seller
shall have no right to commence any proceeding to evict the tenant or recover
possession of any tenant's space or interfere with the tenant's or Purchaser's
ability (other than financial impact resulting from such litigation) to conduct
business or take any action which would limit Purchaser's rights to pursue any
remedy Purchaser may have for a default under any Lease. Purchaser may, by
written notice to Seller within twenty (20) days of receipt of Seller's notice,
restrict Seller from collecting such unpaid arrearage, but only if Purchaser
first pays Seller such unpaid arrearage, in exchange for Seller's assignment to
Purchaser of all of Seller's rights and causes of action with respect thereto.
Seller shall indemnify and hold harmless Purchaser from any action taken by
Seller in violation of the provisions of this Section. Purchaser shall
cooperate fully with Seller, at no expense to Purchaser, in this regard and
shall execute such instruments, if any, as Seller may require in order for
Seller to commence and prosecute any such litigation.
12.5. Paragraph 12 of this Agreement shall survive the Closing and the
delivery and recording of the Deed.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof. Notwithstanding the
foregoing, this Agreement may be assigned by Purchaser without the consent of
Seller (a) to any entity affiliated with Purchaser, or the principals of
Purchaser, or to any entity owned (directly and indirectly) by any fund with
respect to which Purchaser acts as asset manager or advisor or (b) to any
mortgage lender of Purchaser or any permitted assignee of Purchaser provided
that Purchaser remains liable for (i) any act or omission by Purchaser
occurring prior to the effective date of such assignment for which Purchaser is
obligated to indemnify Seller pursuant to Paragraph 7 hereof and (ii) in
accordance with the terms of the last sentence of this Paragraph 14. Any
permitted assignee shall assume in writing all of the obligations of Purchaser
under this Agreement from and after the date of the assignment. If any
assignee of Purchaser under this Agreement petitions or applies for relief in
bankruptcy or said assignee is adjudicated as a bankrupt or insolvent, or said
assignee files any petition, application for relief or answer-seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any present or
future federal, state or other statute, law, code or regulation relating to
bankruptcy, insolvency, or other relief for debtors (collectively, a
"Bankruptcy Filing") on or before the Closing Date, said Bankruptcy Filing
shall be a default under this Agreement and Purchaser shall indemnify Seller
for all costs, attorney's fees and expenses of Seller resulting from Seller's
efforts to obtain the ▇▇▇▇▇▇▇ Money as liquidated damages and to clear title to
the Property from any encumbrance resulting from the Bankruptcy Filing.
15. BROKER. The parties hereto represent and warrant that they have dealt
with no broker or finder in connection with this transaction other than
Insignia Mortgage & Investment Co. Seller agrees to pay the commission to
Insignia Mortgage & Investment Co. which is only due in the event the
transaction closes. Purchaser shall indemnify, defend and hold Seller harmless
from any claim whatsoever (including, without limitation, reasonable attorney's
fees, court costs and costs of appeal) from anyone claiming by or through
Purchaser any fee, commission or compensation on account of this Agreement, its
negotiation or the sale hereby contemplated other than to Insignia Mortgage &
Investment Co. Seller shall indemnify, defend and hold Purchaser harmless from
any claim whatsoever (including, without limitation, reasonable attorneys'
fees, court costs and costs of appeal) from anyone claiming by or through
Seller any fee, commission or compensation on account of this Agreement, its
negotiation or the sale hereby contemplated, including, without limitation, any
such fee owed to Insignia Mortgage & Investment Co. The indemnifying party
shall undertake its obligations set forth in this Paragraph 15 using attorneys
selected by the indemnifying party and reasonably acceptable to the indemnified
party. The provisions of this Paragraph 15 will survive the termination of
this Agreement or the Closing and delivery of the Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, senior vice-president of The Balcor Company, or
▇▇▇ ▇▇▇▇▇▇, the asset manager of the Property since February 1991 and any
successors thereto prior to the Closing Date (the "Seller's Representatives").
Any knowledge or notice given, had or received by any of Seller's agents,
servants or employees shall not be imputed to Seller, the general partner or
limited partners of Seller, the subpartners of the general partner or limited
partners of Seller or Seller's Representatives. A copy of Paragraph 16.2 shall
be delivered to the on-site management of the Property within two (2) days
after the execution by Seller of this Agreement, with a request to advise ▇▇▇
▇▇▇▇▇▇ within five (5) business days after receipt by the on-site manager as to
the accuracy and truthfulness of the representations and warranties. If the
on-site manager indicates that any of the representations or warranties were
incorrect, Seller shall notify Purchaser as to the response of the on-site
manager by ten (10) business days after the execution by Seller. If the
on-site manager responds that any of the representations or warranties were
incorrect then the terms of Paragraph 16.4 herein shall apply. If Seller fails
to so notify Purchaser, Purchaser shall be entitled to conclude that the
on-site manager reviewed the representations and warranties and that they are
correct.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties shall, subject to Paragraph 16.4 herein, be
remade at Closing: (i) Seller has no knowledge of any pending or threatened
litigation, claim, cause of action, violation or administrative proceeding
concerning the Property other than as disclosed in Exhibit P; (ii) Seller has
the power to execute and deliver this Agreement and to consummate the
transactions contemplated herein; (iii) to Seller's knowledge, the rent roll
attached hereto as Exhibit M, which Seller will update as of the Closing Date,
is true, complete and accurate as of the date set forth thereon and to Seller's
knowledge, the description of the Leases contained in the Prepared Tenant
Certificates in Exhibit R pertaining to the identity of the tenant, the date of
the Lease and the existence of amendments is accurate; (iv) Seller owns the
personal property and intangible personal property set forth on Exhibit B free
and clear of all liens, claims and encumbrances; (v) other than the agreement
evidenced hereby, Seller has not entered into any contracts or options for the
sale of the Property; (vi) Seller has not entered into any agreements to
mortgage the Property; (vii) to Seller's knowledge, the service contracts set
forth on Exhibit H represent all of the written service contracts entered into
with respect to the Property including all management agreements and to
Seller's knowledge, no party is in material default under any of the items set
forth in Exhibit H; (viii) to Seller's knowledge, there are no environmental
reports in Seller's possession or that of any of its affiliates which are dated
more recently than the Existing Report provided to Purchaser; (ix) to Seller's
knowledge, the evidence of expenses at the Property furnished by Seller to
Purchaser are accurate in all material respects; (x) to Seller's knowledge,
Seller has not received any written governmental or fire underwriting reports
requesting repair to the Property and Seller has not been denied fire insurance
coverage with respect to the Property; (xi) to Seller's knowledge, Seller has
not received any written notification from any governmental authority regarding
pending or threatened condemnation of all of or a portion of the Property;
(xii) to Seller's knowledge, Seller has not entered into any labor agreements
respecting the Property which are not cancelable as of the Closing Date without
cost to Purchaser; (xiii) except as set forth on the schedule attached hereto
as Exhibit N and except as to new leases as set forth in Paragraph 25 herein,
there are no outstanding leasing commissions and there is no outstanding tenant
improvement work or work credit due under any Leases; (xiv) to Seller's
knowledge, a true, correct and complete list of all licenses and permits which
Seller has regarding operation of the Property is attached hereto as Exhibit O;
(xv) except as may have been set forth in the Existing Report, to Seller's
knowledge, Seller has not received any notice from any governmental authority
having jurisdiction over the Property of any uncured violation of any
Environmental Laws with respect to the Property; (xvi) neither Seller, or any
of its general partners nor the Property is in the hands of a receiver nor is
an application for a receiver pending; neither Seller nor any of its general
partners is insolvent or has made an assignment for the benefit of its
creditors, nor has Seller or any of its general partners filed, or had filed
against it, any petition in bankruptcy; (xvii) Seller is a "non-foreign person"
within the meaning of section 1445 of the United States Internal Revenue Code
of 1986, as amended, and the regulations issued thereunder; (xviii) Seller
maintains full replacement casualty insurance on the Property; (xix) except as
disclosed in Paragraph 12, Seller has not received any written notice addressed
to it from any governmental authority that there are tax abatements or
exemptions affecting the Property, nor has Seller instituted any such pending
proceedings; between the date hereof and the Closing, Seller will advise
Purchaser of any proposed real estate tax assessments and the amounts of such
assessments, and Seller and Purchaser will cooperate jointly in instituting
such proceedings on or before Closing other than for calendar year 1996 which
is addressed in Paragraph 12 hereof; (xx) there are no occupancy rights
(written or oral), leases or tenancies presently affecting the Property other
than the Leases; (xxi) to Seller's knowledge, except for any brokerage
commissions, fees or other compensation due with respect to any of the New
Leases or as disclosed on Exhibit N or any extension of the term of any of the
Leases or New Leases or expansion of space under any of the Leases or New
Leases which shall occur on or after the Closing Date disclosed in Exhibit Q
("Extension Commissions"), no brokerage commission, fee or other compensation
is payable (or will, with the passage of time or occurrence of any event or
both, be payable), with respect to any Lease pursuant to any existing agreement
which would be binding on the landlord under such Lease after the Closing Date;
(xxii) no management commission, fee or other compensation will be payable by
Purchaser from and after the Closing Date with respect to the management of the
Property prior to the Closing Date; (xxiii) to Seller's knowledge, Seller has
received no notice from any of the Tenants at the Property of any uncured
default on the part of Landlord under the Leases except with respect to any
obligation set forth in Exhibit N; (xxiv) to Seller's knowledge, no appraisal
or other process provided for in the Lease has been instituted in writing by
Seller or any Tenant to establish the rental rate payable with respect to any
pending extension or with respect to any negotiation or appraisal of rent under
any Lease; and (xxv) to Seller's knowledge, no tenant at the Property is in
default, after the expiration of all notice and cure periods, under its Lease.
At Closing, Seller shall deliver to Purchaser a certificate of the Seller
which will confirm that the warranties and representations are in all material
respects true and correct as of the date of the Closing (to Seller's knowledge,
where so specified above), subject to Paragraph 16.4 and changes for matters
beyond Seller's control and otherwise as expressly permitted or contemplated by
this Agreement.
16.3. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power and authority to execute and deliver this
Agreement and consummate the transactions contemplated herein.
16.4. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information (a "Change") which makes a
representation and warranty contained in this Agreement to become untrue in any
material respect, said party shall promptly disclose said information to the
other party hereto. Provided the party making the representation or warranty
did not take any deliberate actions or did not fail to act (in the ordinary
course of business) to cause the representation or warranty in question to
become untrue in any material respect and did not intentionally make a material
false representation or warranty, said party shall not be in default under this
Agreement and the sole remedy of the other party shall be to terminate this
Agreement, in which case Purchaser will receive a refund of the ▇▇▇▇▇▇▇ Money
with any accrued interest thereon and neither party will have any further
liability under this agreement except to the extent it specifically survives
the termination hereof. Purchaser, provided that it notifies Seller within ten
(10) days after receiving notice from Seller of a Change, may elect to close
subject to such Change and then both parties hereto will be deemed to have
waived their right to terminate this Agreement with respect to such Change.
Notwithstanding anything contained herein to the contrary, if the status of any
of the tenancies changes from the date of the rent roll attached hereto and the
date of the rent roll delivered at Closing, provided the change in status is
not caused by a breach of Seller's covenants contained in Paragraph 16.6 or
Paragraph 25 herein, then Purchaser shall not have the right to terminate this
Agreement or make any claim for a breach of a representation or warranty
hereunder involving the rent roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing. For the purpose of this
Section 16.4, Purchaser's knowledge will be limited solely to the knowledge of
any of its executive officers after review of all due diligence materials
prepared by or for Purchaser in connection with the acquisition of the Property
and will not be deemed to include any of its agents, employees or contractors.
16.5. The parties agree that the representations and warranties
contained herein shall survive Closing for a period of nine (9) months (i.e.,
the claiming party shall have no right to make any claims against the other
party for a breach of a representation or warranty after the expiration of nine
(9) months immediately following Closing).
16.6. On the Closing Date, Seller shall tender possession of the
Property to Purchaser in the same condition the Property was in on the date of
this Agreement, subject to reasonable use, wear and tear and, subject to
Paragraph 6 hereof, but Seller shall not be required to incur any capital
expenses from or after the date hereof unless failure to do so would constitute
a material breach under any of the Leases. Subject to the provisions of
Paragraph 25 hereof, Seller agrees that between the date hereof and the Closing
Date it shall continue to operate the Property in substantially the same manner
it has operated the Property prior to the date hereof, subject to reasonable
wear and tear and casualty.
16.7. Seller covenants and agrees that from and after the date of this
Agreement until the Closing Date or earlier termination of this Agreement:
16.7.1. Seller will not, without the prior written consent of
Purchaser, enter into any new employment, management, service, maintenance or
union agreements relating to the Property or renew or extend any contracts,
unless such new agreements and such contracts, as renewed or extended, will be
cancelable by Purchaser on not more than thirty (30) days prior notice without
any costs for such cancellation.
16.7.2. Seller shall continue to insure the Property against loss of
casualty with full replacement cost coverage.
16.7.3. Seller will not sell or grant any interest in the Property
or any part thereof other than pursuant to Paragraph 25 herein.
16.7.4. Seller will not initiate any action to alter or amend the
zoning classification of the Property.
16.7.5. Seller shall not solicit or encourage directly or indirectly
(including solicitation or encouragement by any broker retained by Seller),
inquiries or proposals with respect to, furnish any information relating to, or
participate in any negotiation concerning any proposal for the sale of the
Property.
Seller shall terminate as of the Closing Date the engagement of Seller's
managing and leasing agent for the Property.
From and after the Closing Date, Seller hereby agrees to indemnify and
defend (using attorneys selected by Seller and reasonably acceptable to
Purchaser) Purchaser from any liability arising from the litigation disclosed
on Exhibit P with the result that Purchaser will not be liable with respect to
such claims for any actual loss, costs or damages in connection therewith,
including litigation costs and expenses.
Seller shall comply with any written notices to Seller received by Seller
prior to Closing of violations of law or municipal ordinances, orders or
requirements issued by any governmental authority against or affecting the
Property (the "Violations"). If Seller has knowledge prior to the Closing of
an assertion by any governmental authority of any Violations, Seller shall
comply with any such assertion prior to Closing. If any Violations remain
uncured on the Closing Date, Purchaser shall receive a credit against the
Purchase Price equal to the estimated cost of curing the same, as estimated by
an architect or engineer selected by Purchaser and reasonably satisfactory to
Seller. Notwithstanding the foregoing, in the event the cost to cure the
Violation exceeds One Hundred Fifty Thousand Dollars ($150,000.00), then
Purchaser at its election, may as its sole remedy in respect thereof either
(A) terminate this Agreement, in which event the parties shall direct the
Escrow Agent to return the ▇▇▇▇▇▇▇ Money Deposit with any interest accrued
thereon to Purchaser and neither party hereto will have any further obligations
except for those which specifically survive the termination hereof or (B)
accept the Property subject to the Violation and receive a credit equal to
$150,000.
17. LIMITATION OF LIABILITY. Neither Seller's or Purchaser's partners, nor
any Affiliate of Seller or any affiliate of Purchaser, nor any of their
respective beneficiaries, shareholders, partners, officers, directors, agents
or employees, heirs, successors or assigns shall have any personal liability of
any kind or nature for or by reason of any matter or thing whatsoever under, in
connection with, arising out of or in any way related to this Agreement and the
transactions contemplated herein, and Purchaser and Seller each waive for
itself and anyone who may claim by, through or under them any and all rights to
▇▇▇ or recover on account of any such alleged personal liability.
17.1. Notwithstanding anything contained herein to the contrary but
subject to the penultimate sentence of this Section 17.1, Purchaser hereby
agrees that the maximum liability of Seller after the Closing, in connection
with, arising out of or in any way related to a breach by Seller under this
Agreement or any document or conveyance agreement in connection with the
transaction, shall be $1,750,000; provided, however, in no event shall Seller's
liability in connection with, arising out of or in any way related to a breach
by Seller of a "Non-Tenant Representation or Covenant" exceed $750,000. For
purposes herein, a "Tenant Representation" shall mean Seller's representation
and warranty contained in Paragraphs 16.2(iii), (xiii), (xx), (xxi), (xxiii),
(xxiv) and (xxv) herein and Seller's representations and warranties contained
in any "Seller Tenant Certificate" (hereinafter defined). All other
representations, warranties, indemnities or covenants which may give rise to
liability to Seller after Closing contained in this Agreement, or any document
or conveyance agreement in connection with the transaction, other than a Tenant
Representation, shall be referred to as a "Non-Tenant Representation or
Covenant." For illustrative purposes only, (a) if Purchaser establishes
liability on the part of Seller for $100,000 arising out of a breach of a
Tenant Representation and $1,000,000 arising out of a breach of a breach of
Non-Tenant Representation or Covenant, then Seller's liability would be
$850,000 and (b) if Purchaser establishes liability on the part of Seller for
$1,500,000 arising out of a breach of a Tenant Representation and $100,000
arising out of a breach of a Non-Tenant Representation or Covenant, then
Seller's liability would be $1,600,000. Notwithstanding the foregoing
limitations of this Section 17.1. there will be no limit on the liability of
Seller with respect to its obligations to indemnify and/or reimburse Purchaser
(a) with respect to the provisions of Paragraphs 12 and 15 and the penultimate
paragraph of Paragraph 16 hereof and (b) any breach of Seller with respect to
the representations, covenants and warranties contained in the following
sentence. Seller represents and warrants to Purchaser and covenants and
agrees, that Seller is (without regard to its partners or subpartners) a single
purpose entity and has no other assets and liabilities other than those
associated with the Property and that Seller agrees that it will engage in no
other business from and after the Closing Date during the longer of nine (9)
months and the period that any claim is outstanding against Seller under this
Agreement.
17.2. Seller further agrees not to distribute $1,750,000 of the
proceeds of the Purchase Price to its partners for the longer of (i) nine (9)
months after the Closing and (ii) final resolution of any claims by Purchaser
and asserted in writing against Seller prior to the expiration of the nine (9)
months after the Closing in accordance with the terms of this Agreement
("Claims"); provided, however, that if any Claims are disputed by Seller,
Seller shall have the right, by written notice to Purchaser, to require
Purchaser to file suit in a court of competent jurisdiction within thirty (30)
days after such notice to Purchaser; otherwise said notice with respect to the
Claim in question shall no longer prevent Seller from distributing the
proceeds.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission as follows:
TO SELLER: ▇/▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
and to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
TO PURCHASER: Devon Properties, Inc.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
and one copy to: ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or the same day as given if sent by facsimile transmission and
received by 5:00 p.m. Chicago time. Any such notice, demand or document not
given, delivered or made by overnight courier or by facsimile transmission as
aforesaid shall be deemed to be given, delivered or made upon receipt of the
same by the party to whom the same is to be given, delivered or made. Copies
of all notices shall be served upon the Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution, accompanied with the ▇▇▇▇▇▇▇ Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(A) ▇▇▇▇▇▇▇ Money;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Georgia.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
23. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
24. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
25. NEW LEASES. Seller agrees to deliver to Purchaser five (5) days prior to
the expiration of the Inspection Period any new leases executed by Seller.
After the expiration of the Inspection Period, Seller shall not execute any new
lease affecting the Property or modify, amend or accept the surrender
(collectively or individually a "Modification Agreement") of any of the Leases
without Purchaser's prior written consent. Upon requesting Purchaser's
consent, Seller shall deliver a complete copy of said proposed lease to
Purchaser with a copy of any brokerage commission agreement and statement as to
the cost of any tenant improvement work, contributions, and brokerage
commissions due or to become due in connection therewith (the "Disclosure
Documents"). Purchaser's consent shall be deemed given if Purchaser has not
responded to the contrary within five (5) business days after receipt of
Seller's written request and the complete copy of said lease or Modification
Agreement and other material. If approved by Purchaser, a complete copy of any
such lease or Modification Agreement shall be delivered to Purchaser within
five (5) days of the full execution thereof. With respect to all new leases or
Modification Agreement executed and delivered to Purchaser five (5) days prior
to the expiration of the Inspection Period and with respect to all other new
leases or Modification Agreement, provided Purchaser has approved the new lease
to the extent said approval is required, leasing costs and commissions, tenant
improvements and contributions, and reasonable attorneys' fees, shall be paid
by Purchaser or credited to Seller at Closing if already paid by Seller
provided such costs and expenses were specifically disclosed to Purchaser in
the Disclosure Documents.
26. TENANT CERTIFICATE CONDITION TO CLOSING.
26.1. The following terms have been defined as follows for convenience
of reference:
(i) "Tenant Certificate" means a certificate, commonly known as an
estoppel certificate, signed by a tenant with respect to its Lease, either in
the form set forth on Exhibit L hereto or on such other form as is
substantially consistent with the requirements of the tenant's lease for such
certificates but in no event dated earlier than 45 days prior to the Closing
Date.
(ii) "Seller Tenant Certificate" means a Tenant Certificate signed by
the Seller with respect to a particular Lease for which the Tenant in question
has either (i) failed to execute and deliver a Tenant Certificate, in which
case the Seller Tenant Certificate shall be in the form of Exhibit L, or (ii)
executed and delivered a Tenant Certificate in a form other than Exhibit L, or
a Tenant Certificate containing less information than required by Exhibit L, in
which case the Seller Tenant Certificate shall be limited to those matters in
Exhibit L which are not addressed in the Tenant Certificate in question.
(iii) "Qualification" means any assertion in a Tenant Certificate
or Seller Tenant Certificate (whether in the form of Exhibit L or otherwise) of
(i) a claim, counterclaim, offset or defense against the landlord, (ii) a
default on the part of the landlord, (iii) unpaid credits, allowances or other
sums due from the landlord prior to the date of the estoppel (other than
expressly disclosed on Exhibit M or Exhibit N attached hereto or pursuant to a
new lease pursuant to ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇), (▇▇) an unfulfilled construction or
other obligation on the part of the landlord prior to the date of estoppel
(other than expressly disclosed on Exhibit M or Exhibit N attached hereto or
pursuant to a new lease pursuant to Paragraph 25 herein), or (v) information
which is contrary (x) to the information contained in the rent roll attached
hereto as Exhibit M, or the Prepared Tenant Certificates attached hereto as
Exhibit R (the "Prepared Tenant Certificates") or (y) the information
pertaining to tenant allowances and concessions and leasing commissions
contained on Exhibit N;
(iv) "Unacceptable Qualification" means any Qualification other than
the following:
(a) a Qualification which is expressly disclosed on the
Prepared Tenant Certificates, on the rent roll attached hereto as Exhibit M or
the schedule attached hereto as Exhibit N or a Qualification relating to
non-payment of December, 1996 rent, provided the same is not as a result of a
default by Seller; or
(b) a Qualification expressly disclosed in this Agreement or
the Exhibits attached hereto and made a part hereof, such as litigation
disclosed on Exhibit P.
26.2. If a Qualification is not an Unacceptable Qualification, it
shall not affect Purchaser's obligations to close hereunder or give rise to any
liability from Seller to Purchaser.
26.3. Seller shall promptly request a Tenant Certificate in the form
of Exhibit L from all tenants, and shall in good faith pursue the collection of
the same. Seller shall deliver to Purchaser, upon Seller's receipt thereof,
all Tenant Certificates signed by tenants (whether in the form of Exhibit L or
otherwise).
26.4. It shall be a condition to Purchaser's obligations hereunder
(the "Estoppel Condition") that Seller deliver to Purchaser, at or prior to
5:00 p.m. Chicago time on December 16, 1996 (i) a Tenant Certificate from each
tenant of the Property occupying or leasing at least 10,000 square feet as
shown on the Rent Roll, in the aggregate, of leasable area of the Property
("Major Tenant"), and (ii) either a Tenant Certificate or Seller Tenant
Certificate for 100% of the non-Major Tenants at the Property. Notwithstanding
the foregoing to the contrary, Seller shall not have satisfied the Estoppel
Condition if any of the Tenant Certificates received by Seller or Seller Tenant
Certificates disclose Unacceptable Qualifications other than Unacceptable
Qualifications with an "Estoppel Qualification Sum" (hereinafter defined) of
less than $200,000 in the aggregate for all of the Leases. The "Estoppel
Qualification Sum" shall mean the following:
(i) if the claim asserted arises out of a defect which can be cured,
with the expenditure of money on a one time basis, such as a physical defect,
then such sum shall be calculated by a reasonable estimate of the cost to
repair or remediate said defect; and
(ii) if the claim asserted affects a continuing obligation of a
tenant under the lease, such as the payment of rent, then the claim shall be
calculated by (i) determining the amount of the claim on a per annum basis,
(ii) multiplying said amount by the number of years or partial years said claim
would affect the monetary obligations under the lease and (iii) discounting
said product on a present value basis using a discount rate of 8% per annum.
If the Unacceptable Qualifications have an Estoppel Qualification Sum of
less than $200,000 in the aggregate for all of the Leases, then Seller shall
either (i) grant Purchaser a credit at Closing for an amount equal to the
Estoppel Qualification Sum, or (ii) cure all conditions giving rise to an
Unacceptable Qualification on or before the Closing. The determination to
perform the covenant contained in subparagraphs (i) or (ii) in the preceding
sentence shall be made by Seller in its sole discretion. Provided Seller
performs its covenant in this Paragraph 26.4, the disclosure of Unacceptable
Qualifications having an Estoppel Qualification Sum of less than $200,000 in
the aggregate shall not affect Purchaser's obligations to close hereunder or
give rise to any additional liability from Seller to Purchaser.
26.5. If Seller delivers any Tenant Certificates containing no
Unacceptable Qualifications after Closing to Purchaser containing all of the
information herein required from a tenant under a Lease for whom Seller has
executed and delivered a Seller Tenant Certificate at Closing, the Seller
Tenant Certificate executed and delivered by Seller at Closing shall become
null and void and the Tenant Certificate received from the tenant shall be
substituted therefor. Seller's liability under Seller Tenant Certificates
shall be limited pursuant to Paragraph 17 herein.
26.6. If Seller has not satisfied the Estoppel Condition on or before
5:00 p.m. Chicago time on December 16, 1996, then Purchaser shall have the
right to terminate this Agreement by delivering written notice to Seller on or
before 5:00 p.m. Chicago time on December 18, 1996. If Purchaser exercises its
rights to terminate in accordance with the terms of this Paragraph 26.6, this
Agreement shall be null and void without further action of the parties and all
▇▇▇▇▇▇▇ Money theretofore deposited by Purchaser together with any interest
accrued thereon, shall be returned to Purchaser, and neither party shall have
any further liability to the other, except for those obligations which
specifically survive the terms hereof. If Purchaser does not terminate this
Agreement pursuant to the first sentence of this Paragraph 26.6, the parties
shall proceed to Closing and (i) Purchaser shall receive a credit at Closing
equal to the amount of the Estoppel Qualification Sum of the Unacceptable
Qualifications contained in the Tenant Certificates, up to an aggregate amount
of $200,000 or (ii) Seller shall cure all conditions giving rise to an
Unacceptable Qualification Sum up to an aggregate amount of $200,000. The
determination to perform the covenant contained in subparagraphs (i) or (ii) in
the preceding sentence shall be made by Seller in its sole discretion.
27. CONDITIONS TO PURCHASER'S OBLIGATIONS TO CLOSE. The obligation of
Purchaser to close under this Agreement and to pay the balance of the Purchase
Price hereunder shall be subject to the fulfillment on and as of the Closing
Date of all of the following conditions (in addition to any other conditions to
Purchaser's obligation under this Agreement which are set forth elsewhere
herein):
27.1. Seller shall have delivered to Purchaser all of the items
required to be delivered to Purchaser pursuant to the terms of this Agreement.
27.2. Seller shall have performed and observed, in all material
respects, all covenants, agreements and conditions of this Agreement to be
performed and observed by Seller as of the Closing Date. Purchaser shall have
the right, at its election, at or prior to the Closing by notice to Seller, to
waive any condition set forth in this Agreement to its obligation hereunder and
by effecting the Closing, Purchaser shall be deemed to have waived any such
condition not then fulfilled.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
DEVON PROPERTIES, INC., a New York Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------
Its: EVP
---------------------------------
[AFFIX CORPORATE SEAL HERE]
SELLER:
PERIMETER 400, PARTNERS, an Illinois
general partnership
By: Labcor VI Limited Partnership,
an Illinois limited partnership,
a general partner
By: Balcor Mortgage Advisors-VI,
an Illinois general partnership,
its general partner
By: The Balcor Company, a Delaware
corporation, its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------
Its: Authorized Representative
-----------------------------
[AFFIX CORPORATE SEAL HERE]
Perimeter ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
_________________ of Insignia Mortgage & Investment Company ("Seller's Broker")
executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it from Seller as a result of the
transaction described in this Agreement is as set forth in that certain Listing
Agreement, dated ______________________, 1996 between Seller and Seller's
Broker (the "Listing Agreement"). Seller's Broker also acknowledges that
payment of the aforesaid fee or commission is conditioned upon the Closing and
the receipt of the Purchase Price by the Seller. Seller's Broker agrees to
deliver a receipt to the Seller at the Closing for the fee or commission due
Seller's Broker and a release, in the appropriate form, stating that no other
fees or commissions are due to it from Seller or Purchaser.
By:
-----------------------------------
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - ▇▇▇▇ of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
L - Tenant Certificate
M - Rent Roll
N - Outstanding Leasing Commissions and Tenant Improvement Work
O - Permits and Licenses
P - Disclosed Litigation
Q - Extension Commission
R - Prepared Tenant Certificates
S - Endorsements