EXHIBIT 10.11
PURCHASE AND SALE CONTRACT
BETWEEN
UNITED INVESTORS INCOME PROPERTIES II
AS SELLER
AND
DEG OF VIRGINIA, LLC
AS PURCHASER
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINED TERMS 1
ARTICLE 2 PURCHASE AND SALE OF PROPERTY 3
ARTICLE 3 PURCHASE PRICE & DEPOSIT 4
ARTICLE 5 FEASBILITY PERIOD 5
ARTICLE 6 TITLE 7
ARTICLE 7 CLOSING 10
ARTICLE 8 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER
15
ARTICLE 9 CONDITIONS PRECEDENT TO CLOSING 19
ARTICLE 10 BROKERAGE 20
ARTICLE 11 POSSESSION 20
ARTICLE 12 DEFAULTS AND REMEDIES 20
ARTICLE 13 RISK OF LOSS OR CASUALTY 21
ARTICLE 14 RATIFICATION 22
ARTICLE 15 EMINENT DOMAIN 22
ARTICLE 16 MISCELLANEOUS 22
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT ("Purchase Contract") is entered into as of the
____ day of _______, 1999 (the "Effective Date") by and among United Investors
Income Properties II, a Missouri limited partnership, having a principal address
at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Seller")
and DEG of Virginia, LLC, a Virginia limited liability company, having a
principal address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Purchaser").
NOW, THEREFORE WITNESSETH: That for and in consideration of mutual
covenants and agreements herein after set forth, Seller and Purchaser hereby
agree as follows:
RECITALS
R-1. Seller holds legal title to a parcel of real estate more particularly
described in Exhibit A attached hereto and made a part hereof located in the
City of Chesapeake, Virginia on each of which improvements have been
constructed.
R-2. Purchaser desires to purchase and Seller has agreed to sell such land,
improvements and certain associated property, defined below as the "Property" on
the terms and conditions set forth below, (which terms and conditions shall
control in the event of any conflict with these Recitals), such that on the
Closing Date as defined in this Purchase Contract the Property will be conveyed
by special warranty or equivalent deed to DEG of Virginia, LLC;
R-3. Purchaser has agreed to pay to Seller the Purchase Price for the Property,
and Seller has agreed to sell the Property to Purchaser on the terms and
conditions set forth below.
R-4. Purchaser, subject to the conditions, representations, warranties and
covenants set forth in this Purchase Contract and does hereby agree to
consummate the transactions contemplated by this Purchase Contract as set forth
below.
ARTICLE 1
DEFINED TERMS
1.1 Terms with initial capital letters in this Purchase Contract shall have the
meanings set forth in this Article 1 below.
1.1.1 "BUSINESS DAY" means any day other than a Saturday or Sunday or
Federal holiday or legal holiday in the State of Virginia.
1.1.2 "CLOSING" means the consummation of the purchase and sale and related
transactions contemplated by this Purchase Contract in accordance with the
terms and conditions of this Purchase Contract.
1.1.3 "CLOSING DATE" means the date on which date the Closing of the
conveyance of the Property is required to be held under the terms and
conditions of this Purchase Contract and on which date full payment of the
Purchase Price for the Property shall have been paid to and received by
Seller in immediately available U.S. funds.
1.1.4 "COMMERCIAL LEASE(S)" means the interest of Seller in and to all
leases, more particularly described on Exhibit 1.1.4 attached hereto.
1.1.5 "PURCHASE CONTRACT" means this Purchase and Sale Purchase Contract by
and between Seller and Purchaser.
1.1.6 "EXCLUDED PERMITS" means those Permits which, under applicable law,
are nontransferable and designated as Excluded Permits on Exhibit 1.1.6, if
any, attached hereto.
1.1.7 "FIXTURES AND TANGIBLE PERSONAL PROPERTY" means all fixtures,
furniture, furnishings, fittings, equipment, machinery, apparatus,
appliances and other articles of personal property now located on the Land
or in the Improvements as of the date of this Purchase Contract and used or
usable in connection with any present or future occupation or operation of
all or any part of the Property. The term "Fixtures and Tangible Personal
Property" does not include property owned or leased by Tenants under the
Commercial Leases and the property and equipment, if any, expressly
identified in Exhibit 1.1.7.
1.1.8 "LAND" means all of that certain tract of land located in the City of
Chesapeake, Virginia, commonly known as Keebler Distribution Building, 1242
Executive Boulevard, Chesapeake, Virginia, more particularly described in
Exhibit 1.1.8 attached hereto and made a part hereof and all rights,
privileges and appurtenances pertaining thereto.
1.1.9 "PROPERTY" means the Land and Improvements described in the Recitals
and all rights of Seller relating to the Land and the Improvements,
including without limitation, any rights, title and interest of Seller, if
any, in and to (i) any strips and gores adjacent to the Land and any land
lying in the bed of any street, road, or avenue opened or proposed, in
front of or adjoining the Land, to the center line thereof; (ii) any unpaid
award for any taking by condemnation or any damage to the Property by
reason of a change of grade of any street or highway; (iii) all of the
easements, rights, privileges, and appurtenances belonging or in any way
appertaining to the Property; together with all Fixtures and Tangible
Personal Property, the right, if any and only to the extent transferable,
of Seller in and to Property Contracts and Commercial Leases, Permits other
than Excluded Permits, and the Miscellaneous Property Assets owned by
Seller which are located on the Property and used in its operation.
1.1.10 "PROPERTY CONTRACTS" means all purchase orders, maintenance, service,
or utility contracts and similar contracts more particular described on
Exhibit 1.1.11 attached hereto.
1.1.11 "IMPROVEMENTS" means all buildings and improvements, located on the
Land.
1.1.12 "MISCELLANEOUS PROPERTY ASSETS" means all contract rights, leases,
concessions, warranties, plans, drawings and other items of intangible
personal property relating to the ownership or operation of the Property
and owned by Seller, excluding, however, (i) receivables, (ii) cash or
other funds, whether in ▇▇▇▇▇ cash or house "banks," or on deposit in bank
accounts or in transit for deposit, (iii) refunds, rebates or other claims,
or any interest thereon, for periods or events occurring prior to the
Closing Date, (iv) utility and similar deposits, (v) insurance or other
prepaid items or (vi) books and records, except to the extent that Seller
receives a credit on the Closing Statement for any such item.
1.1.13 "PERMITS" means all licenses and permits granted by governmental
authorities having jurisdiction over the Property in respect of the matter
to which the applicable license or permit applies and owned by Seller or
used in or relating to the ownership, occupancy or operation of the
Property or any part thereof.
1.1.14 "PERMITTED EXCEPTIONS" means those exceptions or conditions approved
in writing by Purchaser and permitted to encumber the title to the Property
in accordance with the provisions of Section 5.2.
1.1.15 "PURCHASE PRICE" means the total consideration to be paid by Purchaser
to Seller for the purchase of the Property.
1.1.16 "SURVEY" shall have the meaning ascribed thereto in Section 5.9.
1.1.17 "TENANT" means the Tenant identified in the Commercial Lease.
1.1.18 "TITLE COMMITMENT" or "Title Commitments" shall have the meaning
ascribed thereto in Section 5.1.
1.1.19 "TITLE INSURER" shall have the meaning set forth in Section 5.1.
ARTICLE 2
PURCHASE AND SALE OF PROPERTY
2.1 Seller agrees to sell and convey the Property to Purchaser and Purchaser
agrees to purchase the Property from Seller, in accordance with the terms
and conditions set forth in this Purchase Contract.
ARTICLE 3
PURCHASE PRICE & DEPOSIT
3.1 The total purchase price ("Purchase Price") for the Property shall be One
Million Five Hundred Fifty Thousand Dollars ($1,550,000.00), which shall be
paid by Purchaser, as follows:
3.1.1 On the date hereof, Purchaser shall deliver to Fidelity National Title
Insurance Company ("Escrow Agent" or the "Title Company") a deposit in the
sum of Twenty-Five Thousand Dollars ($25,000.00) in cash, which sum shall
be increased at the time of expiration of the Feasibility Period (defined
below) at which time Purchaser shall tender an additional sum of Twenty-
Five Thousand Dollars ($25,000.00) in cash, such that the total deposit at
the time of expiration of the Feasibility Period shall equal Fifty Thousand
Dollars ($ 50,000.00) (such sums being hereinafter collectively referred to
and held as the "Deposit"). Purchaser shall also deliver a quitclaim deed
to the Escrow Agent in the form attached as Exhibit 3.1.1. Purchaser and
Seller each approve the form of Escrow Agreement attached as Exhibit B.
3.1.2 The Escrow Agent shall hold the Deposit and make delivery of the
Deposit to the party entitled thereto under the terms hereof. Escrow Agent
shall invest the Deposit in such short-term, high-grade securities,
interest-bearing bank accounts, money market funds or accounts, bank
certificates of deposit or bank repurchase agreements as Escrow Agent, in
its discretion, deems suitable, (provided that Escrow Agent shall invest
the Deposit as jointly directed by Seller and Purchaser should Seller and
Purchaser each in their respective sole discretion determine to issue such
joint investment instructions to the Escrow Agent) and all interest and
income thereon shall become part of the Deposit and shall be remitted to
the party entitled to the Deposit, as set forth below.
3.1.3 If the sale of the Property is closed by the date fixed therefor (or
any extension date provided for by the mutual written consent of the
parties hereto, given or withheld in their respective sole discretion),
monies held as the Deposit shall be applied (and paid over to the Seller)
on the Date of Closing. If the sale of the Property is not closed by the
date fixed therefor (or any such extension date) owing to failure of
satisfaction of a condition precedent to Purchaser's obligations, the
Deposit shall be returned and refunded to Purchaser, and neither party
shall have any further liability hereunder, subject to and except for
Purchaser's liability under Section 4.3.
3.1.4. If the sale of the Property is not closed by the date fixed therefor
(or any such extension date) owing to failure of performance by Seller,
Purchaser shall be entitled to the remedies set forth in ARTICLE 11 hereof.
If the sale of the Property is not closed by the date fixed therefor (or
any such extension date) owing to failure of performance by Purchaser, the
Deposit shall be forfeited by Purchaser and the sum thereof shall go to
Seller forthwith as liquidated damages for the lost opportunity costs and
transaction expenses incurred by Seller, as more fully set forth in ARTICLE
11 below.
ARTICLE 4
FEASBILITY PERIOD
4.1 The "Feasibility Period" shall consist of Thirty-Six (36) calendar days
following the Effective Date. Subject to the terms of section 4.3 below,
for Twenty-One (21) calendar days following the Effective Date Purchaser,
and its agents, contractors, engineers, surveyors, attorneys, and employees
("Consultants") shall have the right from time to time to enter onto the
Property:
4.1.1 To conduct and make any and all customary studies, tests, examinations
and inspections, or investigations of or concerning the Property (including
without limitation, engineering and feasibility studies, evaluation of
drainage and flood plain, soil tests for bearing capacity and percolation
and surveys, including topographical surveys).
4.1.2 To confirm any and all matters which Purchaser may reasonably desire
to confirm with respect to the Property.
4.1.3 To ascertain and confirm the suitability of the property for
Purchaser's intended use of the Property.
4.1.4 In addition to the Twenty-One (21) calendar days provided above,
Purchaser shall have an additional Fifteen (15) calendar days to complete
an environmental inspection and evaluation of the Property, and to obtain
the Title Commitment (as hereinafter defined) and the survey (as
hereinafter defined), all of which shall be in a form and substance
acceptable to Purchaser.
4.2 Should Purchaser elect not to proceed with this transaction by reason of
the above inspections, or for no reason whatsoever, then Purchaser shall,
in its sole discretion, have the right to terminate this Purchase Contract
by giving written Notice to that effect to Seller and Escrow Agent on or
before 5:00 p.m. EST on the date of expiration of the Feasibility Period.
If Purchaser exercises such right to terminate, this Purchase Contract
shall terminate and be of no further force and effect, subject to and
except for Purchaser's liability under Section 4.3, and Escrow Agent shall
forthwith deliver the Quitclaim Deed of all of Purchaser's right and
interest in the Property to Seller, and then promptly return the Deposit to
Purchaser. If Purchaser fails to provide Seller with written Notice of
cancellation prior to the end of the Feasibility Period in strict
accordance with the Notice provisions of this Purchase Contract, this
Purchase Contract shall remain in full force and effect, the Deposit shall
be non-refundable subject to the provisions of section 12.2 hereof and
Purchaser's obligation to purchase the Property shall be non-contingent and
unconditional except only for satisfaction of the conditions expressly
stated in this ARTICLE 4 and in ARTICLE 8.
4.3 Purchaser shall indemnify and hold Seller harmless for any actions taken by
Purchaser and its Consultants on the Property. Purchaser shall indemnify,
defend (with attorneys selected by Seller) and hold Seller harmless from
any and all claims, damages, costs and liability which may arise due to
such entries, surveys, tests, investigations and the like. Seller shall
have the right, without limitation, to disapprove any and all entries,
surveys, tests, investigations and the like that in their reasonable
judgment could result in any injury to the Property or breach of any
agreement, or expose Seller to any liability, costs, liens or violations of
applicable law, or otherwise adversely affect the Property or Seller's
interest therein. No consent by the Seller to any such activity shall be
deemed to constitute a waiver by Seller or assumption of liability or risk
by Seller. Purchaser hereby agrees to restore the Property to the same
condition existing immediately prior to Purchaser's exercise of its rights
pursuant to this ARTICLE 4 at Purchaser's sole cost and expense. Purchaser
shall maintain casualty insurance and comprehensive public liability
insurance with broad form contractual and personal injury liability
endorsements with respect to the Property and Purchaser's activities
carried on therein, in amounts (including deductible amounts) and with such
insurance carriers as shall be approved by Seller and naming Seller and its
affiliates as Loss Payees or Additional Insureds (at the option of Seller).
Such liability insurance shall provide coverages of not less than
$1,000,000.00 for injury or death to any one person and $3,000,000.00 for
injury or death to more than one person and $500,000.00 with respect to
property damage, by water or otherwise). The provisions of this Section
shall survive the Closing or termination of this Purchase Contract.
4.4 Purchaser shall not permit any mechanic's or materialman's liens or any
other liens to attach to the Property by reason of the performance of any
work or the purchase of any materials by Purchaser or any other party in
connection with any studies or tests conducted by or for Purchaser.
Purchaser shall give notice to Seller a reasonable time prior to entry onto
the Property and shall permit Seller to have a representative present
during all investigations and inspections conducted with respect to the
Property. Purchaser shall take all reasonable actions and implement all
protections necessary to ensure that all actions taken in connection with
the investigations and inspections of the Property, and all equipment,
materials and substances generated, used or brought onto the Property pose
no material threat to the safety of persons or the environment and cause no
damage to the Property or other property of Seller or other persons. All
information made available by Seller to Purchaser in accordance with this
Purchase Contract or obtained by Purchaser in the course of its
investigations shall be treated as confidential information by Purchaser,
and, prior to the purchase of the Property by Purchaser, Purchaser shall
use its best efforts to prevent its agents and employees from divulging
such information to any unrelated third parties except as reasonably
necessary to third parties engaged by Purchaser for the limited purpose of
analyzing and investigating such information for the purpose of
consummating the transaction contemplated by this Purchase Contract,
including Purchaser's attorneys and representatives, prospective lenders
and engineers.
4.5 The following instruments and items of information, to the extent in
Seller's or its agents' possession, shall be delivered by Seller to
Purchaser within seven (7) days after the Effective Date hereof: (i) copy
of the Commercial Lease, together with all modifications, amendments or
supplements thereto, (ii) copies of all as-built plans and specifications
for the Improvements, (iii) all reports covering underground soil and water
conditions at the Property, (iv) copies of all Permits, (v) copies of all
Property Contracts, (vi) copies of the most recent real estate and personal
property tax bills as to the Property, (vii) an inventory of all Fixtures
and Tangible Personal Property located upon or within the Property, and
(viii) income statements for the most recent fiscal year of the Property
and an income statement for the period beginning at the end of the most
recent fiscal year and ending March 31, 1999.
4.5.1 Seller covenants and agrees that it shall give Purchaser and to
Purchaser's counsel, accountants and other representatives full access
during normal business hours to the Property and allow Purchaser to may
make an appointment to review the books and records of Seller with
respect to the property, located in Greenville, South Carolina, and
shall furnish to Purchaser all information concerning the Property in the
possession of Seller or its agents that Purchaser may reasonably request.
ARTICLE 5
TITLE
5.1 Purchaser shall promptly secure a commitment for title insurance for the
Property in an amount equal to the Purchase Price ("Title Commitment,")
issued by a title insurance company which is licensed to do business in the
jurisdiction in which the Property is located ("Title Insurer") for an
owner's title insurance policy on the most recent standard American Land
Title Association ("ALTA") Policy form, together with legible copies of all
instruments identified as exceptions therein. Purchaser agrees that it
shall be solely responsible for payment of all costs relating to
procurement of the Title Commitment and any Owner's or Lender's title
policies.
5.2 Purchaser agrees to accept title to the Land and Improvements, so long as
the same is insurable at ordinary rates and any conveyance by special
warranty or equivalent deed pursuant to this Purchase Contract shall be
subject to the following, acceptable to Purchaser in its sole discretion,
all of which shall be deemed "Permitted Exceptions" and Purchaser agrees to
accept the deed and title subject thereto:
5.2.1 All exceptions, acceptable to Purchaser, shown in the Title
Commitment; and
5.2.2 All Commercial Leases; and
5.2.3 All Property Contracts and any other existing contracts created in the
ordinary course of business by Seller, which are approved by Purchaser; and
5.2.4 Real estate and property taxes to the extent not due and payable; and
5.3 The existence of other mortgages, liens, or encumbrances affecting the
title shall not be objections to title, provided that properly executed
instruments in recordable form necessary to satisfy and remove the same of
record are delivered to the Purchaser at Closing or, in the alternative,
with respect to any mortgage or deed of trust liens, that payoff letters
from the holder of the mortgage or deed of trust liens shall have been
delivered to and accepted by the Title Insurer (sufficient to remove the
same from the policy issued at Closing), together in either case, with
recording and/or filing fees.
5.4 Unpaid liens for taxes, charges, and assessments shall not be objections to
title, but the amount thereof plus interest and penalties thereon shall be
deducted from the Purchase Price to be paid for the applicable Property
hereunder and allowed to Purchaser, subject to the provisions for
apportionment of taxes and charges contained herein.
5.5 If, within the Feasibility Period, the state of title or any exception
thereto, or any matter disclosed by the Survey is unacceptable to
Purchaser, in its sole discretion, Purchaser shall provide Seller with
written Notice thereof prior to the expiration of the Feasibility Period,
or such title objection or unfulfilled condition shall be deemed waived by
Purchaser in which case Purchaser and Seller shall proceed to consummate
the Closing on the Closing Date. If Purchaser timely gives Seller such
Notice, Seller at its sole option and within Seven (7) calendar days
following receipt of such Notice may elect to cure such objection. Should
Seller be able to cure such title objection or condition by the Closing
Date, or should Purchaser waive such objection or condition within such
period for cure, then the Closing shall take place by the Closing Date as
set forth in Section 6.1.1 hereof.
5.6 If during the period of cure Seller is unable or unwilling, in its sole
discretion or opinion, to eliminate such title objection or cause a title
insurance company to insure over such matter or satisfy such unfulfilled
condition, Seller shall give Purchaser written Notice thereof, and if
Purchaser does not waive such objection by written Notice delivered to
Seller and the title company issuing the Title Commitment on or before
Seven (7) calendar days following the date Seller gives such Notice, then
this Purchase Contract shall automatically terminate, in which event
Purchaser shall release and quitclaim all of Purchaser's right and interest
in such Property to Seller, and the parties hereto shall have no further
obligations to each other.
5.7 Seller covenants that it will not voluntarily create or cause any lien or
encumbrance (other than Commercial Leases and Property Contracts made in
the ordinary course of business), and with the prior written consent of
Purchaser, to attach to the Property between the date of this Purchase
Contract and the Closing Date; any such monetary lien or encumbrance so
attaching by voluntary act of Seller shall be discharged by the Seller at
or prior to Closing on the Closing Date or any postponed Closing Date.
Except as expressly provided above, Seller shall not be required to
undertake efforts to remove any other lien, encumbrance, security interest,
exception, objection or other matter, to make any expenditure of money or
institute litigation or any other judicial or administrative proceeding and
Seller may elect not to discharge the same.
5.8 Anything to the contrary notwithstanding, Purchaser shall not have any
right to terminate this Purchase Contract or object to any lien,
encumbrance, exception or other matter that is a Permitted Exception, that
has been waived or deemed to have been waived by Purchaser. If, on or
prior to the expiration of the Feasibility Period, Purchaser has not
exercised its right to cancel this Purchase Contract, then Purchaser shall
be deemed to have accepted the title to the Property and shall have no
further right to cancel this Purchase Contract unless new exceptions to or
defects in title shall appear thereafter and on or prior to the Closing
Date.
5.9 Purchaser at Purchaser's sole cost and expense, promptly shall cause to be
prepared a survey for the Property ("Survey") to be delivered to Purchaser
and Seller within the Feasibility Period. The Survey (i) shall be prepared
in accordance with and shall comply with the minimum requirements of the
ALTA; (ii) shall be in a form, and shall be certified as of a date
satisfactory to Title Insurer to enable Title Insurer to delete standard
survey exceptions from the title insurance policy to be issued pursuant to
the Title Commitments, except for any Permitted Exceptions; (iii) shall
specifically show all improvements, recorded easements to the extent
locatable, set back lines, and such other matters shown as exceptions by
the Title Commitments; (iv) shall specifically show the right of way for
all adjacent public streets; (v) shall specifically disclose whether (and,
if so, what part of) any of the Property is in an area designated as
requiring flood insurance under applicable federal laws regulating lenders;
(vi) shall contain a perimeter legal description of the Property which may
be used in the special warranty deed; (vii) shall be certified to
Purchaser, Purchaser's lender, and Title Insurer as being true and correct;
and (viii) shall certify that the legal description set forth therein
describes the same, and comprises all of, the real estate comprising the
Property to be purchased by Purchaser pursuant to the terms of this
Purchase Contract. In the event the perimeter legal description of the
Property contained in the Survey differs from that contained in the deed or
deeds by which Seller took title to the Property, the latter description
shall be used in the special warranty deed delivered to Purchaser at
Closing, and the Survey legal shall be used in a quitclaim deed to the
Property which also shall be delivered to Purchaser at Closing.
5.9.1 Should such Survey disclose conditions that are unacceptable to
Purchaser, in its sole discretion, Purchaser shall have the right to object
thereto within the Feasibility Period in accordance with the procedures set
forth in ARTICLE 4 above.
5.9.2 Purchaser agrees to make payment in full of all costs of obtaining
Surveys required by this Purchase Contract on or before Closing or
termination of this Purchase Contract.
ARTICLE 6
CLOSING
6.1 DATES, PLACES OF CLOSING, PRORATIONS, AND DELINQUENT RENT.
6.1.1 The Closing shall take place on or before fifteen (15) calendar days
following the termination of the Feasibility Period in the offices of
Purchaser's lender, if in the jurisdiction of the Land, or at such other
place as the parties shall mutually agree upon at a time mutually agreed
upon on the Closing Date. If requested by Seller, Purchaser shall agree to
conduct closing through a pre-closing, an escrow or other arrangement
reasonably requested by Seller, whereby the Seller and its attorneys need
not be physically present at the Closing and may deliver documents by
overnight air courier or other means.
6.1.2. All normal and customarily proratable items, including, without
limitation, Rents (as defined below), operating expenses, personal property
taxes, other operating expenses and fees, shall be prorated as of the
Closing Date, Seller being charged and credited for all of same
attributable to the period up to the Closing Date (and credited for any
amounts paid by Seller attributable to the period on or after the Closing
Date) and Purchaser being responsible for, and credited or charged, as the
case may be, for all of same attributable to the period on and after the
Closing Date. All unapplied deposits under Tenant leases, if any, shall be
transferred by Seller to Purchaser at the Closing. Any real estate ad
valorem or similar taxes for the Property, or any installment of
assessments payable in installments which installment is payable in the
year of Closing, shall be prorated to the date of Closing, based upon
actual days involved. The proration of real property taxes or installments
of assessments shall be based upon the assessed valuation and tax rate
figures for the year in which the Closing occurs to the extent the same are
available; provided, that in the event that actual figures (whether for the
assessed value of the Property or for the tax rate) for the year of Closing
are not available at the Closing Date, the proration shall be made using
figures from the preceding year. The proration shall be final and
unadjustable except as provided in the following paragraph. For purposes
of this Section 6.1.2. and Section 6.1.3. and 6.1.4. the terms "Rent" and
"Rents" shall include, without limitation, base rents, additional rents,
percentage rents and common area maintenance charges. The provisions of
this Section 6.1.2. shall apply during the Proration Period (as defined
below).
6.1.3. If any of the items subject to proration hereunder cannot be prorated
at the Closing because the information necessary to compute such proration
is unavailable, or if any errors or omissions in computing prorations at
the Closing are discovered subsequent to the Closing, then such item shall
be reapportioned and such errors and omissions corrected as soon as
practicable after the Closing Date and the proper party reimbursed, which
obligation shall survive the Closing for a period (the "Proration Period")
from the Closing Date until one (1) year after the Closing Date. Neither
party hereto shall have the right to require a recomputation of a Closing
proration or a correction of an error or omission in a Closing proration
unless within the Proration Period one of the parties hereto (i) has
obtained the previously unavailable information or has discovered the error
or omission, and (ii) has given Notice thereof to the other party together
with a copy of its good faith recomputation of the proration and copies of
all substantiating information used in such recomputation. The failure of
a party to obtain any previously unavailable information or discover an
error or omission with respect to an item subject to proration hereunder
and to give Notice thereof as provided above within the Proration Period
shall be deemed a waiver of its right to cause a recomputation or a
correction of an error or omission with respect to such item after the
Closing Date. Any Rents that have accrued, but have not yet been paid
shall be prorated in accordance with estimates based upon the prior years'
information (or reasonable estimates of Seller if no such prior years'
information is available), and shall be subsequently readjusted and
reapportioned upon receipt. Purchaser and Seller shall adjust at Closing
all rents that have accrued, but are not yet due and payable, at Closing.
Seller shall pay Purchaser Rents attributable to the period of time after
Closing, if received by Seller. Seller shall pay for its own legal fees
and the grantor's tax in connection with the recordation of the Deed.
Purchaser shall pay for the Survey, the Title Commitment and the Title
Insurance Policies, for its own legal fees and for all recording taxes and
fees (other than the grantor's tax) in connection with the recordation of
the Deed and any deed of trust.
6.1.4. If on the Closing Date any Tenant is in arrears in any Rent payment
under any Tenant lease (the "Delinquent Rent"), any Delinquent Rent
received by Purchaser and/or Seller from such Tenant after the Closing
shall be applied to amounts due and payable by such Tenant during the
following periods in the following order of priority: (i) first, to the
period of time before the Closing Date, and (ii) second, to the period of
time after the Closing Date. Purchaser shall have no obligation to enforce
the collection of Delinquent Rents that are due and payable for the period
prior to Closing. If Delinquent Rent or any portion thereof received by
Seller or Purchaser after the Closing are due and payable to the other
party by reason of this allocation, the appropriate sum, less a
proportionate share of any reasonable attorneys' fees and costs and
expenses expended in connection with the collection thereof, shall be
promptly paid to the other party. After the Closing, Seller shall continue
to have the right, but not the obligation, in its own name, to demand
payment of and to collect Delinquent Rent owed to Seller by any Tenant,
which right shall include, without limitation, the right to continue or
commence legal actions or proceedings against any Tenant (provided, that
Seller shall not commence any legal actions or proceedings against any
Tenant which continues as a Tenant at the Property after Closing without
the prior consent of Purchaser, which will not be unreasonably withheld or
delayed), and the delivery of the Assignment as defined in Section 6.2.1.3
shall not constitute a waiver by Seller of such right. Purchaser agrees to
cooperate with Seller at no cost or liability to Purchaser in connection
with all efforts by Seller to collect such Delinquent Rent and to take all
steps, whether before or after the Closing Date, as may be necessary to
carry out the intention of the foregoing; provided, however, that
Purchaser's obligation to cooperate with Seller pursuant to this sentence
shall not obligate Purchaser to terminate any Tenant lease with an existing
Tenant or evict any existing Tenant from the Property. The provisions of
this Section 6.1.4. shall apply during the Proration Period.
6.2 ITEMS TO BE DELIVERED PRIOR TO OR AT CLOSING.
6.2.1 SELLER. At Closing, Seller shall deliver to Purchaser, each of the
following items, as applicable:
6.2.1.1Special warranty or equivalent deed in the form attached as Exhibit
6.2.1.1 to DEG of Virginia, LLC. The acceptance of the deed at Closing,
shall be deemed to be full performance of, and discharge of, every
agreement and obligation on Seller's part to be performed under this
Purchase Contract, except for those that this Purchase Contract
specifically provides shall survive Closing.
6.2.1.2A ▇▇▇▇ of Sale with special warranty in the form attached as Exhibit
6.2.1.2 covering Fixtures and Tangible Personal Property required to be
transferred to Purchaser with respect to such Property. Purchaser shall
countersign the same so as to effect an assumption by Purchaser,
including, without limitation, of Seller's obligations thereunder. The
▇▇▇▇ of Sale shall provide, among other things, that Seller is the
lawful owner of the Fixtures and Tangible Personal Property, that such
property is free from all encumbrances, and that Seller has good right
to sell and transfer the same to Purchaser.
6.2.1.3An Assignment (to the extent assignable and in force and effect) in the
form attached as Exhibit 6.2.1.3 of all of Seller's right, title and
interest in and to all Property Contracts, Commercial Leases, Permits
(other than Excluded Permits) and the Miscellaneous Property Assets,
subject to any required consents. Purchaser shall countersign the same
so as to effect an assumption by Purchaser, including, without
limitation, of Seller's obligations thereunder. The Assignment shall
include, among other things, an indemnification by Purchaser to Seller
covering any claims attributable to the assigned rights and interests
that arise after Closing and relate to the period of time after the
Closing, and an indemnification from Seller to Purchaser covering any
claims attributable to the assigned rights and interests that arise
after Closing and relate to the period of time prior to Closing.
6.2.1.4A closing statement executed by Seller.
6.2.1.5A vendor's affidavit or at Seller's option an indemnity, as applicable,
in the customary form reasonably acceptable to Seller to enable Title
Insurer to delete the standard exceptions, (other than matters
constituting any Permitted Exceptions to the title insurance policy set
forth in this Purchase Contract and matters which are to be completed or
performed post-Closing) to be issued pursuant to the Title Commitments;
provided that such affidavit does not subject Seller to any greater
liability, or impose any additional obligations, other than as set forth
in this Purchase Contract; and
6.2.1.6A certification of Seller's non-foreign status pursuant to Section 1445
of the Internal Revenue Code of 1986, as amended.
6.2.1.7Except for the items expressly listed above to be delivered at Closing,
delivery of any other required items shall be deemed made by Seller to
Purchaser, if Seller leaves such documents at the Property in their
customary place of storage or in the custody of Purchaser's
representatives.
6.2.1.8The original of the Commercial Lease.
6.2.1.9The original of all Property Contracts.
6.2.1.10 True, correct and complete copies of all warranties, if any, in
Seller's possession, of manufacturers, suppliers and installers related
to the Improvement and the Fixtures and Tangible Personal Property, or
any part hereof.
6.2.1.11 A tenant estoppel certificate for the Commercial Lease executed by
Tenant in the form attached as Exhibit 6.2.1.11.
6.2.1.12 Proof of legal existence and good standing of Seller in the State of
its formation; resolutions or other authorizations or approvals as may
be required to authorize the transactions contemplated hereby and the
execution and delivery of the documents necessary to effectuate the
Closing by the persons executing such documents, and such other evidence
as the Title Company shall reasonably require in order to issue the
owner's policy of title insurance pursuant to the Title Commitment.
6.2.1.13 Keys to all locks on the Property (to the extent in Seller's
possession).
6.2.1.14 Certificate that Seller's representations and warranties set forth in
Section 7.1 of this Purchase Contract are true and correct as of the
Closing Date.
6.2.1.15 A form 1099B to be prepared by the Title Company.
6.2.1.16 A form Virginia R-5 or R-5E.
6.2.1.17 Tenant notification letter dated as of the Closing Date notifying the
Tenant that the Property has been sold to Purchaser and directing the
Tenant to pay the rentals to Purchaser (or Purchaser's designated
agent).
6.2.1.18 Certificate of insurance required to be furnished by the Tenant under
the Commercial Lease to the extent furnished by such Tenant.
6.2.1.19 If obtained by Seller, a signed acknowledgment from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Commercial Real Estate and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ stating that they
have delivered a broker lien waiver to Escrow Agent that will be
released after Seller's payment of the commission due them upon Closing.
Seller shall have until the twenty-first (21st) day of the Feasibility
Period (or next preceding Business Day if such 21st day is not a
Business day) by which to obtain and provide the Purchaser a copy of the
broker release delivered into escrow. Seller's failure to obtain such
release shall not constitute a default of Seller hereunder.
6.2.2 PURCHASER. At Closing, Purchaser shall deliver to Seller the
following items with respect to each Property being conveyed or transferred
by merger at such Closing:
6.2.2.1The full Purchase Price as required by ARTICLE 3 hereof plus or minus
the adjustments or prorations required by this Purchase Contract. If at
Closing there are any liens or encumbrances on the Property that Seller
is obligated or elects to pay and discharge, Seller may use any portion
of the Purchase Price for the Property(s) to satisfy the same, provided
that Seller shall have delivered to Purchaser, or to Purchaser's
designee, on such Closing instruments in recordable form sufficient to
satisfy such liens and encumbrances of record (or, as to any mortgages
or deeds of trust, appropriate payoff letters, acceptable to the Title
Insurer), together with the cost of recording or filing such
instruments. Purchaser, if request is made within a reasonable time
prior to Closing, agrees to provide at Closing separate certified or
cashier's checks as requested, aggregating not more than the amount of
the balance of the portion of Purchase Price, to facilitate the
satisfaction of any such liens or encumbrances. The existence of any
such liens or encumbrances shall not be deemed objections to title if
Seller shall comply with the foregoing requirements.
6.2.2.2A closing statement executed by Purchaser.
6.2.2.3A countersigned counterpart of the ▇▇▇▇ of Sale in the form attached as
Exhibit 6.2.1.2.
6.2.1.2. A form Virginia R-5 or R5E.
6.2.2.4A countersigned counterpart of the Assignment in the form attached as
Exhibit 6.2.1.3.
6.2.2.5Such other instruments, documents or certificates as are required to be
delivered by Purchaser to Seller in accordance with any of the other
provisions of this Purchase Contract.
ARTICLE 7
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER
7.1 REPRESENTATIONS AND WARRANTIES OF SELLER.
7.1.1 For the purpose of inducing Purchaser to enter into this Purchase
Contract and to consummate the sale and purchase of the Property in
accordance herewith, Seller represents and warrants to Purchaser the
following as of the Effective Date and as of the Closing Date:
7.1.1.1Seller identified in the Recitals is lawfully and duly organized, and in
good standing under the laws of the state of its formation set forth in
the initial paragraph of this Purchase Contract; and has or at Closing
shall have the power and authority to sell and convey the Property and
to execute the documents to be executed by Seller and prior to Closing
will have taken as applicable, all corporate, partnership, limited
liability company or equivalent entity actions required for the
execution and delivery of this Purchase Contract, and the consummation
of the transactions contemplated by this Purchase Contract. The
compliance with or fulfillment of the terms and conditions hereof will
not conflict with, or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, any Purchase Contract to
which Seller is a party or by which Seller or any Subsidiary Owner is
otherwise bound. Seller has not made any other Purchase Contract for
the sale of, or given any other person the right to purchase, all or any
part of any of the Property applicable to the foregoing representation;
7.1.1.2Seller owns insurable, fee title to the Property, including all real
property contained therein required to be sold to Purchaser, subject
only to the Permitted Exceptions;
7.1.1.3There are no adverse or other parties in possession of the Property,
except for occupants, guests and tenants under the Commercial Leases or
otherwise as set forth in Exhibit 7.1.1.3 .
7.1.1.4The joinder of no person or entity other than Seller is necessary to
convey the Property, fully and completely to Purchaser at Closing, or to
fulfill Seller's obligations and Seller has all necessary right and
authority to convey and assign to Purchaser all contract rights and
warranties required to be conveyed and assigned to Purchaser hereunder;
7.1.1.5Purchaser has no duty to collect withholding taxes for Seller pursuant
to the Foreign Investors Real Property Tax Act of 1980, as amended;
7.1.1.6To Seller's knowledge, there are no actions, proceedings, litigation or
governmental investigations or condemnation actions either pending or
threatened against the Property, as applicable;
7.1.1.7Seller has no knowledge of any claims for labor performed, materials
furnished or services rendered in connection with constructing,
improving or repairing any of the Property, as applicable, caused by
Seller and which remain unpaid beyond the date for which payment was due
and in respect of which liens may or could be filed against any of the
Property, as applicable;
7.1.1.8Seller holds all rights as Landlord under the Commercial Lease and has
not assigned any interest in the rents generated thereby to any person
(except conditional or collateral assignment, if any, which shall have
been terminated at or before Closing); there have been no defaults by
the Tenant under the Commercial Lease or Seller, as landlord, as if the
Closing Date; the Commercial Lease is in full force and effect as of the
Closing Date; the Tenant under the Commercial Lease is making payments
of rent without any deductions or offsets; there are no other agreements
with the Tenant for offsets that have not been disclosed to Purchaser as
of the Closing Date; there are no leasing or other commissions due, nor
will they become due, in connection with the Commercial Lease, any
renewal or extension thereof; and Seller has paid, or will pay at or
prior to Closing, all Tenant improvement allowances or other amounts
owed to the Tenant under the Commercial Lease.
7.1.1.9 Seller has good title to the Fixtures and Tangible Personal Property.
7.1.2 Except for the representations and warranties expressly set forth
above in Subsection 7.1.2, the Property is expressly purchased and sold "AS
IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase Price and the terms
and conditions set forth herein are the result of arm's-length bargaining
between entities familiar with transactions of this kind, and said price,
terms and conditions reflect the fact that Purchaser shall have the benefit
of, and is relying upon, no statements, representations or warranties,
express or implied, made by or enforceable directly against Seller, except
as otherwise expressly set forth above, including, without limitation, any
relating to the value of the Property, the physical or environmental
condition of the Property, the state, federal, county or local law,
ordinance, order, permit or suitability, compliance or lack of compliance
of the Property with any regulation, or any other attribute or matter of or
relating to the Property (other than any covenants of title contained in
the deeds conveying the Property and the representations set forth above).
Purchaser represents and warrants that as of the date hereof and as of the
Closing Date, it has and shall have reviewed and conducted such independent
analyses, studies, reports, investigations and inspections as it deems
appropriate in connection with the Property. If Seller provides or has
provided any documents, opinions or work product of consultants, surveyors,
architects, engineers, title companies, governmental authorities or any
other person or entity with respect to the Property, Purchaser and Seller
agree that Seller has done so or shall do so only for the convenience of
both parties, Purchaser shall not rely thereon and the reliance by
Purchaser upon any such documents, opinions or work product shall not
create or give rise to any liability of or against Seller, any Subsidiary
Owner, Seller's partners or affiliates or any of their respective partners,
officers, directors, participants, employees, contractors, attorneys,
consultants, representatives, agents, successors, assigns or
predecessors-in-interest. Purchaser shall rely only upon any title
insurance obtained by Purchaser with respect to title to the Property.
Prior to Closing, Seller shall have the right, but not the obligation, to
enforce its rights against any and all Property occupants, guests or
tenants.
7.1.3 Seller and Purchaser agree that those representations contained in
Section 7.1 shall survive Closing for a period of One (1) year (that is,
any proceeding based on the breach of a representation contained in Section
7.1 that survives Closing must be commenced within One (1) year subsequent
to the date of such representation).
7.1.4 Representations and warranties above made to the knowledge of Seller
shall not be deemed to imply any duty of inquiry.
7.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER
7.2.1 For the purpose of inducing Seller to enter into this Purchase
Contract and to consummate the sale and purchase of the Property in
accordance herewith, Purchaser represents and warrants to Seller the
following as of the Effective Date and as of the Closing Date:
7.2.2 With respect to Purchaser and its business, Purchaser represents and
warrants, in particular, that:
7.2.2.1DEG of Virginia, LLC is a limited liability company duly organized,
validly existing and in good standing under the laws of Virginia.
7.2.2.2Purchaser, acting through any of its or their duly empowered and
authorized officers or members, has all necessary power and authority to
own and use its properties and to transact the business in which it is
engaged, and has full power and authority to enter into this Purchase
Contract, to execute and deliver the documents and instruments required
of Purchaser herein, and to perform its obligations hereunder; and no
consent of any of Purchaser's officers or members are required to so
empower or authorize Purchaser.
7.2.2.3No pending or, to the knowledge of Purchaser, threatened litigation
exists which if determined adversely would restrain the consummation of
the transactions contemplated by this Purchase Contract or would declare
illegal, invalid or non-binding any of Purchaser's obligations or
covenants to Seller.
7.2.2.4Purchaser is duly authorized to execute and deliver, acting through its
duly empowered and authorized officers and members, respectively, and
perform this Purchase Contract and all documents and instruments and
transactions contemplated hereby or incidental hereto, and such
execution, delivery and performance by Purchaser does not (i) violate
any of the provisions of their respective certificates of incorporation
or bylaws, (ii) violate any provision of any law, governmental rule or
regulation currently in effect, (iii) violate any judgment, decree,
writ, injunction, award, determination or order currently in effect that
names or is specifically directed at Purchaser or its property, and (iv)
require the consent, approval, order or authorization of, or any filing
with or notice to, any court or other governmental authority.
7.2.2.5The joinder of no person or entity other than Purchaser is necessary to
consummate the transactions to be performed by Purchaser and Purchaser
has all necessary right and authority to perform such acts as are
required and contemplated by this Purchase Contract.
7.2.3 Except for the Broker (as defined in Section 9.1 hereof), Purchaser
has not dealt with any other broker, finder or any other person, in
connection with the purchase of or the negotiation of the purchase of the
Property that might give rise to any claim for commission against Seller or
lien or claim against the Property.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1 Without limiting any rights of Purchaser elsewhere provided in this
Purchase Contract, Purchaser's obligation to close under this Purchase
Contract, shall be subject to and conditioned upon the fulfillment of each
and all of the following conditions precedent:
8.1.1 All of the documents required to be delivered by Seller to Purchaser
at each Closing pursuant to the terms and conditions hereof shall have been
delivered and shall be in form and substance reasonably satisfactory to
Purchaser;
8.1.2 Each of the representations and warranties of Seller contained herein
shall be true in all material respects as of the Closing Date;
8.1.3 Seller shall have complied with, fulfilled and performed in all
material respects each of the covenants, terms and conditions to be
complied with, fulfilled or performed by Seller hereunder;
8.1.4 Notwithstanding anything to the contrary, there are no other
conditions on Purchaser's obligation to Close except as expressly set forth
above;
8.1.5 This Purchase Contract shall not have been terminated in accordance
with any of its terms;
8.1.6 The condition of the Improvements shall not have changed from the
condition thereof as of the Effective Date of this Purchase Contract,
normal wear and tear accepted; and
8.1.7 Title of the Property will be as required by Section 5.2 hereof.
8.1.8 On or before the twenty-first (21st) day of the Feasibility Period,
the broker release shall have been deposited into escrow and a copy thereof
provided to Purchaser.
8.2 Without limiting any of the rights of Seller elsewhere provided for in this
Purchase Contract, Seller's obligation to close under this Purchase
Contract shall be subject to and conditioned upon the fulfillment of each
and all of the following conditions precedent:
8.2.1 Purchaser's representations and warranties set forth in this Purchase
Contract shall have been true and correct in all material respects when
made, and shall be true and correct in all material respects on the Closing
Date and as of the Effective Date as though such representations and
warranties were made at and as of such date and time.
8.2.2 Purchaser shall have fully performed and complied with all covenants,
conditions, and other obligations in this Purchase Contract to be performed
or complied with by it at or prior to Closing including, without
limitation, payment in full of the Purchase Price.
8.2.3 There shall not be pending or, to the knowledge of either Purchaser or
Seller, any litigation or threatened litigation which, if determined
adversely, would restrain the consummation of any of the transactions
contemplated by this Purchase Contract or declare illegal, invalid or
nonbinding any of the covenants or obligations of the Purchaser.
8.2.4 Seller shall have received from Creative Office Environment an
unconditional waiver of its right of first refusal to purchase the
Property.
ARTICLE 9
BROKERAGE
9.0 Seller represents and warrants to Purchaser that it has dealt only with
Pinnacle Realty ("Broker") in connection with this Purchase Contract.
Seller and Purchaser each represents and warrants to the other that other
than Pinnacle Realty, it has not dealt with or utilized the services of any
other real estate broker, sales person or finder in connection with this
Purchase Contract, and each party agrees to indemnify the other party from
and against all claims for brokerage commissions and finder's fees arising
from or attributable to the acts of omissions of the indemnifying party.
9.1 Seller agrees to pay Broker a commission according to the terms of a
separate agreement. Broker shall not be deemed a party or third party
beneficiary of this Purchase Contract. Seller also agrees to pay ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Commercial Real Estate and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ a
commission, not to exceed four percent (4%) of the Purchase Price, in
exchange for a broker lien waiver according to the terms of a separate
agreement.
9.2 Broker assumes no responsibility for the condition of the Property or
representation for the performance of this Purchase Contract by the Seller
or Purchaser.
ARTICLE 10
POSSESSION
10.1 Possession of the Property subject to the Permitted Exceptions shall be
delivered to Purchaser at the Closing, subject to Purchaser's right of
entry for inspection as set forth in ARTICLE 4.
ARTICLE 11
DEFAULTS AND REMEDIES
11.1 In the Event Purchaser terminates this Purchase Contract following the
Feasibility Period for any reason other than Seller's inability to convey
title as required by this Purchase Contract, or due to Seller's failure to
comply with Seller's obligations under this Purchase Contract, or if
Purchaser defaults hereunder prior to the Closing Date and consummation of
the Closing does not occur by reason of such termination or default by
Purchaser, Seller and Purchaser agree that it would be impractical and
extremely difficult to estimate the damages which Seller may suffer.
Therefore, Seller and Purchaser hereby agree that, except for the
Purchaser's obligations to Seller under Section 4.3, the reasonable
estimate of the total net detriment that Seller would suffer in the event
that Purchaser terminates this Purchase Contract or defaults hereunder
prior to the Closing Date is and shall be, as Seller's sole remedy (whether
at law or in equity), the right to receive from the Escrow Agent and retain
the full amount of the Deposit. The payment and performance of the above
as liquidated damages is not intended as a forfeiture or penalty within the
meaning of applicable law and is intended to settle all issues and
questions about the amount of damages suffered by Seller in the applicable
event, except only for damages under Section 4.3 above, irrespective of the
time when the inquiry about such damages may take place. Upon any such
failure by Purchaser hereunder, this Purchase Contract shall be terminated,
and neither party shall have any further rights or obligations hereunder,
each to the other, except for the Purchaser's obligations to Seller under
Section 4.3 above, and the right of Seller to collect such liquidated
damages to the extent not theretofore paid by Purchaser.
11.2 Provided that Purchaser has not terminated this Purchase Contract and is
not otherwise in default hereunder, if the Closing does not occur as a
result of Seller's default hereunder, Purchaser's sole remedy shall be to
elect to terminate this Purchase Contract and receive reimbursement of the
Deposit (or so much thereof as has been received by Escrow Agent) or to
seek specific performance of this Purchase Contract. If Purchaser elects
to terminate this Purchase Contract as a result of Seller's default
hereunder, in addition to the Deposit, Seller shall be required to
reimburse Purchaser for all documented out-of-pocket expenses incurred by
Purchaser in connection with the tests and studies performed by Purchaser,
its agents and contractors during the Feasibility Period.
11.3 Provided that Purchaser has not terminated this Purchase Contract and is
not otherwise in default hereunder, if the Closing does not occur as a
result of Seller's inability to have the broker release deposited into
escrow, as required by Section 8.1.8, Purchaser's sole remedy shall be to
elect to terminate this Purchase Contract and receive reimbursement of the
Deposit, and Seller shall not be required to reimburse Purchaser for any
out-of-pocket expenses.
ARTICLE 12
RISK OF LOSS OR CASUALTY
12.1 The risk of loss or damage to the Property by fire or other casualty until
the deed of conveyance is recorded is assumed by the Seller. Purchaser
shall have the right to terminate the Purchase Contract if a casualty
occurs and Purchaser is not satisfied that the insurance proceeds are
sufficient to effect restoration and repairs of the Property after closing,
or the Commercial Lease is or will be terminated due to a fire or other
casualty. If Purchaser elects to close, Seller shall assign all loss
proceeds to Purchaser without a deduction in the Purchase Price except as
may otherwise be agreed to by the parties.
ARTICLE 13
RATIFICATION
13.1 This Purchase Contract shall be null and void unless fully ratified by
Purchaser and Seller on or before _____ day of ______, 1999.
ARTICLE 14
EMINENT DOMAIN
14.1 In the event that at the time of Closing all or any part of the Property is
(or has previously been) acquired, or is about to be acquired, by authority
of any governmental agency in purchase in lieu thereof (or in the event
that at such time there is any notice of any such acquisition by any such
governmental agency), Purchaser shall have the right, at Purchaser's
option, to terminate this Purchase Contract by giving written Notice within
Fifteen (15) days of the occurrence of such event and recover the Deposit
hereunder, or to settle in accordance with the terms of this Purchase
Contract for the full Purchase Price and receive the full benefit or any
condemnation award. It is expressly agreed between the parties hereto that
this paragraph shall in no way apply to customary dedications for public
purposes which may be necessary for the development of the Property.
ARTICLE 15
MISCELLANEOUS
15.1 EXHIBITS AND SCHEDULES
All Exhibits and Schedules annexed hereto are a part of this Purchase
Contract for all purposes.
15.2 ASSIGNABILITY
This Purchase Contract is not assignable without first obtaining the prior
written approval of the non-assigning party.
15.3 BINDING EFFECT
This Purchase Contract shall be binding upon and inure to the benefit of
Seller and Purchaser, and their respective successors, heirs and permitted
assigns.
15.4 CAPTIONS
The captions, headings, and arrangements used in this Purchase Contract are
for convenience only and do not in any way affect, limit, amplify, or
modify the terms and provisions hereof.
15.5 NUMBER AND GENDER OF WORDS
Whenever herein the singular number is used, the same shall include the
plural where appropriate, and words of any gender shall include each other
gender where appropriate.
15.6 NOTICES
All Notices, demands, requests and other communications required pursuant
to the provisions of this Purchase Contract ("Notice") shall be in writing
and shall be deemed to have been properly given or served for all purposes
(i) if sent by Federal Express or the nationally recognized overnight
carrier for next business day delivery, on the first business day following
deposit of such Notice with such carrier, or (ii) if personally delivered,
on the actual date of delivery or (iii) if sent by certified mail, return
receipt requested postage prepaid, on the Fifth (5th) business day
following the date of mailing addressed as follows:
If to Seller: If to Purchaser:
AIMCO ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Vice President
17th Floor BKM Enterprises, Inc.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and and
Argent Real Estate
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to: with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ LLP ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ &
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Any of the parties may designate a change of address by Notice in writing
to the other parties. Whenever in this Purchase Contract the giving of
Notice by mail or otherwise is required, the giving of such Notice may be
waived in writing by the person or persons entitled to receive such Notice.
15.7 GOVERNING LAW AND VENUE
The laws of the State of Virginia shall govern the validity, construction,
enforcement, and interpretation of this Purchase Contract, unless otherwise
specified herein except for the conflict of laws provisions thereof. All
claims, disputes and other matters in question arising out of or relating
to this Purchase Contract, or the breach thereof, shall be decided by
proceedings instituted and litigated in the United States District Court
for the district in which the Property is situated, and the parties hereto
expressly consent to the venue and jurisdiction of such court.
15.8 ENTIRETY AND AMENDMENTS
This Purchase Contract embodies the entire Purchase Contract between the
parties and supersedes all prior Purchase Contracts and understandings, if
any, relating to the Property, and may be amended or supplemented only by
an instrument in writing executed by the party against whom enforcement is
sought.
15.9 SEVERABILITY
If any of the provisions of this Purchase Contract is held to be illegal,
invalid, or unenforceable under present or future laws, such provision
shall be fully severable. The Purchase Contract shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Purchase Contract; and the remaining provisions of
this Purchase Contract shall remain in full force and effect and shall not
be affected by the illegal, invalid, or unenforceable provision or by its
severance from this Purchase Contract. In lieu of such illegal, invalid,
or unenforceable provision, there shall be added automatically as a part of
this Purchase Contract a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible to make such
provision legal, valid, and enforceable.
15.10 MULTIPLE COUNTERPARTS
This Purchase Contract may be executed in a number of identical
counterparts. If so executed, each of such counterparts is to be deemed an
original for all purposes and all such counterparts shall, collectively,
constitute one Purchase Contract. In making proof of this Purchase
Contract, it shall not be necessary to produce or account for more than one
such counterparts.
15.11 FURTHER ACTS
In addition to the acts and deeds recited herein and contemplated and
performed, executed and/or delivered by Seller and Purchaser, Seller and
Purchaser agree to perform, execute and/or deliver or cause to be
performed, executed and/or delivered any and all such further acts, deeds,
and assurances as may be necessary to consummate the transactions
contemplated hereby.
15.12 CONSTRUCTION
No provision of this Purchase Contract shall be construed in favor of, or
against, any particular party by reason of any presumption with respect to
the drafting of this Purchase Contract; both parties, being represented by
counsel, having fully participated in the negotiation of this instrument.
15.13 CONFIDENTIALITY
Purchaser shall not disclose the terms and conditions contained in this
Purchase Contract, shall keep the same confidential, provided that
Purchaser may disclose the terms and conditions of this Purchase Contract
(i) as required by law, (ii) to consummate the terms of this Purchase
Contract, or any financing relating thereto, or (iii) to Purchaser's or
Seller's lenders, attorneys and accountants,. Any information provided by
Seller to Purchaser under the terms of this Purchase Contract is for
informational purposes only. In providing such information to Purchaser,
Seller makes no representation or warranty, express, written, oral,
statutory, or implied, and all such representations and warranties are
hereby expressly excluded. Purchaser shall not in any way be entitled to
rely upon the accuracy of such information. Such information is also
confidential and Purchaser shall be prohibited from making such information
public to any other person or entity other than its agents and legal
representatives, without Seller's prior written authorization, which may be
granted or denied in Seller's sole discretion.
15.14 TIME OF THE ESSENCE
It is expressly agreed by the parties hereto that time is of the essence
with respect to this Purchase Contract.
15.15 CUMULATIVE REMEDIES AND WAIVER
Except as otherwise provided herein, no remedy herein conferred or reserved
is intended to be exclusive of any other available remedy or remedies, but
each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Purchase Contract or now or hereafter
existing at law or in equity. No delay or omission to exercise any right
or power accruing upon any default, omission, or failure of performance
hereunder shall impair any right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to
time and as often as may be deemed expedient. No waiver, amendment,
release, or modification of this Purchase Contract shall be established by
conduct, custom, or course of dealing.
15.16 LITIGATION EXPENSES
In the event either party hereto commences litigation against the other to
enforce its rights hereunder, the prevailing party in such litigation shall
be entitled to recover from the other party its reasonable attorneys' fees
and expenses incidental to such litigation.
15.17 TIME PERIODS
Should the last day of a time period fall on a weekend or legal holiday,
the next Business Day thereafter shall be considered the end of the time
period.
15.18 EXCHANGE
At Seller's sole cost and expense, Seller may structure the sale of the Property
to Purchaser as a Like Kind Exchange under Internal Revenue Code Section 1031
whereby Seller will acquire certain property (the "Like Kind Exchange Property")
in conjunction with the sale of the Property (the "Like Kind Exchange").
Purchaser shall cooperate fully and promptly with Seller's conduct of the Like
Kind Exchange, provided that all costs and expenses generated in connection with
the Like Kind Exchange shall be borne solely by Seller, and Purchaser shall not
be required to take title to or contract for the purchase of any other property.
If Seller uses a qualified intermediary to effectuate the exchange, any
assignment of the rights or obligations of Seller hereunder shall not relieve,
release or absolve Seller of its obligations to Purchaser. In no event shall
the Closing Date be delayed by the Like Kind Exchange. Seller shall indemnify
and hold harmless Purchaser from and against any and all liability arising from
and out of the Like Kind Exchange.
NOW WHEREFORE, the parties hereto have executed this Purchase Contract as of the
date first set forth above.
Seller: United Investors Income Properties II, a Missouri limited partnership
By: United Investors Real Estate, Inc., a Delaware corporation
Its: General Partner
By: [SEAL]
Printed:
Title:
Purchaser: DEG of Virginia, LLC, a Virginia limited liability corporation
By: [SEAL]
Printed:
Title: