EXHIBIT 10(mm)
AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY
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THIS AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY (the "Agreement"), is
made and entered into as of the ____ day of February, 1997, by and between ORIX
PRIME WEST BROOMFIELD II VENTURE, a Colorado general partnership (hereinafter
referred to as "Seller"), and FUND VIII AND FUND IX ASSOCIATES, a Georgia
general partnership (hereinafter referred to as "Purchaser").
W I T N E S S E T H:
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WHEREAS, Seller desires to sell and Purchaser desires to purchase the
Property (as hereinafter defined) subject to the terms and conditions
hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises, the mutual
agreements contained herein, the sum of Ten and No/100 Dollars ($10.00) in hand
paid by Purchaser to Seller at and before the sealing and delivery of these
presents and for other good and valuable consideration, the receipt, adequacy,
and sufficiency of which are hereby expressly acknowledged by the parties
hereto, the parties hereto do hereby covenant and agree as follows:
1. Definitions and Meanings. In addition to any other terms whose
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definitions are fixed and defined by this Agreement, each of the following
defined terms, when used in this Agreement, with an initial capital letter or
letters, shall have the meaning ascribed thereto in this Paragraph 1:
"Agreement" means this Agreement for the Purchase and Sale of Property,
together with all exhibits attached hereto and made a part hereof.
"Architect" means the architectural firm of Intergroup, Inc.
"Architect's Agreement" means the agreement between the Seller and the
Architect under which the Architect has been engaged to prepare architectural
designs, plans, drawings and specifications for the Project and to render other
services in connection with the design and construction of the Project, a
description of said Architect's Agreement being attached hereto as Exhibit "O"
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and by reference made a part hereof.
"Building" means the first-class, single tenant two-story office building,
containing approximately 49,460 rentable square feet which the Seller is
currently developing and constructing upon the Land.
"Closing" means the consummation of the purchase and sale contemplated by
this Agreement by the deliveries required under Paragraph 11 hereof.
"Committee" means the Architectural Control Committee established under the
Declaration.
"Completion Date" means the first day on which all of the following have
occurred: (i) the construction and equipping of the Project, including all
Punch List Items, have been completed in accordance with the Plans and
Specifications (inclusive of landscaping plans), as evidenced by a certificate
to such effect from the Architect, (ii) the Tenant Improvements for the space in
the Building to be occupied by Tenant have been completed in accordance with the
working drawings and specifications for such space, as evidenced by a
certificate to such effect from the Architect, and any Punch List Items have
been completed to the satisfaction of Tenant, (iii) permanent certificates of
occupancy or their equivalent have been issued by the appropriate Governmental
Authority with respect to the base building and with respect to the space in the
Building to be occupied by Tenant, (iv) the Commencement Date under the Lease
has occurred, the amount of Base Rent payable by Tenant under the Lease
(following any adjustment thereto as provided in the Lease) has been determined,
and Tenant has commenced to pay monthly Base Rent and Additional Rent under the
Lease coming due after the application of the prepaid rent for which provision
is made in Section 32.1 of the Lease, (v) Tenant has executed and delivered to
the "Landlord" under the Lease the estoppel certificate required in the
definition of "Substantial Completion Date" set forth below, (vi) Tenant has
executed and delivered to the Landlord under the Lease the Supplemental
Agreement in the form attached to the Lease as Exhibit I thereto, completed with
the appropriate information, (vii) Purchaser has received the originals of
substantially all Warranties with respect to the Project required to be issued
with respect to the Project pursuant to the Plans and Specifications (and in any
event all of the Warranties of a significant or material nature), a final
Contractor's Affidavit and Lien Waiver from all Contractors and all major
subcontractors performing work or supplying labor or materials with respect to
the Project, a lien waiver from all non-major subcontractors who have filed a
lien with respect to the Project (or the discharge of such lien by the filing of
a statutory bond relating thereto), and an endorsement to the Purchaser's
owner's title insurance policy deleting the "pending improvements" clause
therefrom and providing special coverage against any filed or unfiled mechanic's
or materialmen's liens as of a date after the Substantial Completion Date,
(viii) Purchaser has received both the preliminary certificate of compliance and
the final certificate of compliance from the Committee as required by the
Declaration, and (ix) Purchaser shall have received a receipt and, if brokers
are afforded lien rights under Colorado law, a final lien waiver from Leasing
Agents acknowledging payment in full of all commissions payable to Leasing
Agents under the commission agreement between Seller and Leasing Agents dated
January 31, 1994, and, if brokers are afforded lien rights under Colorado law,
waiving any lien or claim or right to lien with respect to the Property. For
purpose hereof, a major subcontractor shall be deemed to be a subcontractor or
materialman who either has a contract providing for a contract sum in excess of
$25,000 or has filed a an extension of lien rights or "notice of commencement"
or "preliminary notice of lien rights" with respect to the Project.
"Construction Agreements" means, collectively, the construction contracts
between the Seller and the Contractors with respect to the Project, a complete
list of which is attached hereto as Exhibit "P" and by reference made a part
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hereof.
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"Contractors" means, collectively, DSP Builders, Inc. and all other firms
employed by Seller as a general contractor or as a special purpose contractor
with respect to the Project; and singly any such general or special purpose
contractor.
"Declaration" means the Amended and Restated Master Declaration of
Covenants, Conditions and Restrictions for Interlocken dated January 23, 1990,
recorded January 24, 1990 under Reception No. 1025034, as amended.
"Development Budget" means the budget, a copy of which is attached hereto
and made a part hereof as Exhibit "C", which sets forth in reasonable detail all
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expenses to be incurred with respect to the acquisition of the Land, the leasing
of the Building to Tenant, and the planning, design, development, construction
and completion of the Project (including the Tenant Improvements), and which
sets forth with respect to each line item of expense the "previous
applications", the "work in place", the "total completed to date", the "balance
to finish" and the "retainage held".
"Development Functions" means those functions of the Seller set forth in
Paragraph 16 of this Agreement.
"▇▇▇▇▇▇▇ Money" means the amounts deposited by the Purchaser with the
Escrow Agent as ▇▇▇▇▇▇▇ Money as provided in Paragraph 3 hereof, together with
all interest earned thereon.
"Effective Date" means the date on which this Agreement is duly executed by
both Seller and Purchaser, and said date shall be inserted in the first
paragraph on page 1 hereof.
"Environmental Laws" means the following, as the same may have been amended
through the date of Closing: the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. (S) 9601, et seq.; the
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Resource Conservation Act of 1976, 42 U.S.C. (S) 6921, et seq.; the Toxic
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Substances Control Act, 15 U.S.C. (S) 2601, et seq.; the Federal Insecticide,
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Fungicide and Rodenticide Act, 7 U.S.C. (S) 136; the Federal Water Pollution
Control Act, 33 U.S.C. (S) 1251, et seq.; the Hazardous Materials Transportation
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Act, 49 U.S.C. (S) 1801, et seq.; the Federal Solid Waste Disposal Act, 42
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U.S.C. (S) 6901, et seq.; the Clean Air Act, 42 U.S.C. (S) 7401, et seq.; and
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any other legislation or ordinance of any Governmental Authority identified by
its terms as pertaining to hazardous substances or waste.
"Environmental Report" means the Phase I Environmental Audit prepared for
Prime West by ▇▇▇▇▇, ▇▇▇ & Associates, Inc. dated September, 1995.
"Escrow Agent" means Security Title Guaranty Company.
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"Existing Deed of Trust" means the Deed of Trust, Assignment of Rents and
Leases, Security Agreement and Fixture Filing dated June 10, 1996, and recorded
on Film 2133 at Reception No. 01616568 as same may be modified or amended.
"Good and Marketable Title" means fee simple title to the Land and the
Improvements insurable by the Title Company at its standard rates on American
Land Title Association (ALTA) Owner's Policy Form 1992 without exception, except
for the Permitted Exceptions and standard exceptions (which standard exceptions,
other than an exception for unfiled mechanic's or materialmen's liens, shall be
deleted at Closing based upon the Seller's affidavit, the Survey and such other
affidavits and lien waivers as shall be requested by the Title Company).
"Governmental Authority" means any federal, state, or municipal government,
branch, authority, district, agency, court, tribunal, department, officer,
official, board, commission or other instrumentality.
"Hazardous Substances" means petroleum, including crude oil or any fraction
thereof, asbestos, polychlorinated biphenyls, and any other substance identified
in the Environmental Laws.
"Improvements" means the approximately 49,460 rentable square foot office
building and related buildings, structures, and other improvements located on
the Land.
"Inspection Period" means the period from the Effective Date through the
date which is ten (10) business days after the Effective Date.
"Intangible Personal Property" means all intangible personal property owned
by Seller and now, or hereafter, located upon the Land or used in connection
with the Property, including, without limitation, all (i) tradenames, (ii)
logos, (iii) warranties and guaranties given in connection with the construction
and repair of the Improvements or the purchase of any Personal Property, and
(iv) certificates of occupancy (or the local equivalents), permits, licenses,
approvals and authorizations issued by any Governmental Authority.
"Land" means that certain tract or parcel of land containing approximately
4.26 acres and being described in Exhibit "A" attached hereto and by reference
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made a part hereof.
"Lease" means that certain Lease between Prime West and Cirrus Logic, Inc.
dated July 5, 1995, as assigned by Prime West to Seller, and as amended by
Amendment to Lease dated October 4, 1996, and as further amended by the
agreements listed on Exhibit "Q" attached hereto and by reference made a part
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hereof.
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"Lease Amendment and Estoppel Certificate" means the amendment and
certificate to be executed by Tenant with respect to the Lease, as provided in
Paragraph 10(d) hereof, such amendment and certificate to be in the form
attached hereto as Exhibit "D" and incorporated herein by this reference.
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"Leasing Agents" means The Colorado Group, Inc. and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of
Colorado, Inc..
"Monthly Report" means the report to be prepared by the Seller and
submitted to the Purchaser on a monthly basis as provided in Paragraph 16
hereof.
"Option Agreement" means the Option Agreement between Interlocken, Ltd. and
Prime West, executed on August 4, 1995, as to Prime West, and August 10, 1995,
as to Interlocken, Ltd., as amended by First Amendment to Option Agreement dated
March 15, 1996, and as assigned by Prime West to Seller.
"Permitted Exceptions" means the exceptions listed on Exhibit "E" attached
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hereto and by this reference made a part hereof and any Title Objections to
which Purchaser fails to object or which Purchaser waives pursuant to Paragraph
8 hereof.
"Personal Property" means all tangible personal property owned by Seller
and now, or hereafter, located upon the Land or used in connection with the
ownership, operation, management or maintenance of the Property, including,
without limitation, all machinery, apparatus, equipment, engines, motors,
appliances, office equipment, furniture, coverings, blinds, curtains, vehicles,
accessories, and the property described on Exhibit "F" attached hereto and by
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reference made a part hereof.
"Plans and Specifications" means those certain working drawings, plans and
specification described on Exhibit "G" attached hereto and by reference made a
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part hereof.
"Prime West" means Prime West Development, Inc., a Colorado corporation.
"Project" means the Building, the Tenant Improvements and the Site
Improvements, collectively.
"Project Costs" means the costs and expenses of completing the
construction, installation and equipping of the Project and of causing the
Completion Date to occur with respect to the Project, excluding the portion of
such costs and expenses paid or reimbursed by Tenant. Project Costs shall
include, without limitation, commission obligations with respect to the Lease,
the cost of the Tenant Work borne by the Landlord under Exhibit J to the Lease,
including up to the full "Additional Landlord Contribution" required in
connection therewith, and other costs of the nature described in the Development
Budget.
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"Property" means, collectively, the Real Estate, the Personal Property, and
the Intangible Property.
"Punch List Items" means the details of construction, decoration and
mechanical adjustment which remain to be performed or completed after
substantial completion of the Project in accordance with the Plans and
Specifications and which, in the aggregate, are minor in character and do not
and will not interfere with Tenant's use or enjoyment of the Project, as
determined by the Architect.
"Purchase Price" means the amount which Purchaser shall pay to consummate
the purchase and sale of the Property as provided in Paragraph 4 of this
Agreement.
"Real Estate" means (i) the Land, (ii) the Improvements, and (iii) all
rights, members, rights-of-way, easements, mineral rights, privileges, options,
leases, licenses, and appurtenances in any manner belonging to, or pertaining
to, the Land and the Improvements.
"REA" means the Reciprocal Easement Agreement between Seller and
Interlocken, Ltd., recorded June 12, 1996, on Film 2133 under Reception No.
01616561, as amended by First Amendment to Reciprocal Easement Agreement dated
June 10, 1996.
"Service Contracts" means the contracts entered into by or on behalf of
Seller for the maintenance and operation of the Property, as listed on Exhibit
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"H" attached hereto and by reference made a part hereof.
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"Site Improvements" means the surface level parking facilities, sufficient
to accommodate approximately 200 automobiles, any and all on and off-site road
improvements, walkways, complete utilities and drainage systems, landscaping
work, exterior lighting, ground-mounted signs and other site improvements to be
constructed and installed and upon the Land pursuant to the Plan and
Specifications, the Lease and the Permitted Exceptions.
"Substantial Completion Date" means the first day on which all of the
following have occurred: (i) the construction and equipping of the Project have
been substantially completed in accordance with the Plans and Specifications
(inclusive of landscaping plans, to the extent that landscaping can feasibly be
installed due to the season), as evidenced by a certificate of substantial
completion to such effect from the Architect on AIA Document G 704, subject only
to Punch List Items and the completion of the top coat and striping with respect
to the paved areas, (ii) the Tenant Improvements for the space in the Building
to be occupied by Tenant have been substantially completed in accordance with
the working drawings and specifications for such space, as evidenced by a
certificate to such effect from the Architect on AIA Document G 704, subject
only to Punch List Items, (iii) temporary certificates of occupancy or their
equivalent have been issued by the appropriate Governmental Authority with
respect to the base building and with respect to the space in the Building to be
occupied by Tenant, (iv) the Commencement Date under the Lease has occurred and
either Tenant has commenced to pay monthly Base Rent under the Lease or
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Tenant has prepaid the first month's Base Rent and Additional Rent as provided
in Section 32.1 of the Lease and the Landlord under the Lease has the right to
apply same to the first month's Base Rent and Additional Rent under the Lease,
and (v) Tenant has executed and delivered to the "Landlord" under the Lease an
estoppel certificate substantially in the form attached to the Lease as Exhibit
E thereto, completed with the appropriate information and reflecting that,
except for items in the nature of Punch List Items, landscaping not installed
due to the season, and the top coat and striping of paved areas, Tenant has
accepted the leased premises and the work and improvements performed by Landlord
and that there exist no defaults and no offsets against rent.
"Tenant" means Cirrus Logic, Inc., a California corporation.
"Tenant Improvements" means all improvements constructed on or within the
Building for use or operation by the Tenant under or pursuant to the Lease,
including without limitation the "Tenant's Work" (as defined in the Lease) for
Tenant and other tenant improvements required to be installed or constructed by
the "Landlord" under the Lease.
"Title Commitment" means a title insurance commitment issued by the Title
Company for issuance to Purchaser, at regular rates, of an owner's policy of
title insurance in accordance with American Land Title Association (ALTA)
Owner's Policy Form 1992 pursuant to which Purchaser's Good and Marketable Title
to the Real Estate shall be insured upon the Closing.
"Title Company" means First American Title Insurance Company.
"Title Objection" and "Title Objections" mean any mortgages, deeds of
trust, deeds to secure debt, liens, financing statements, security interests,
easements, leases, restrictive covenants, agreements, options, claims, clouds,
encroachments, rights, taxes, assessments, mechanics' or materialmen's liens
(inchoate or perfected), liens for federal or state estate or inheritance taxes
and other encumbrances of any nature whatsoever, whether existing of record or
otherwise, together with any and all matters of any kind or description,
including, without limitation, matters of survey and any litigation or other
proceedings affecting Seller and which affect title to the Real Estate or the
right, power and authority of the Seller to convey Good and Marketable Title to
the Real Estate to Purchaser in accordance with the terms of this Agreement,
other than the exceptions listed on Exhibit "E" attached hereto.
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"Warranties" means all warranties and guaranties relating to the
construction, operation, maintenance, repair, and use of the Improvements and
Personal Property.
2. Purchase and Sale of Property. Subject to and in accordance with the
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terms and provisions of this Agreement, Seller hereby agrees to sell the
Property to Purchaser and Purchaser hereby agrees to purchase the Property from
Seller.
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3. ▇▇▇▇▇▇▇ Money. Within two (2) business days after the full execution
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of this Agreement, Purchaser shall deliver to Escrow Agent, whose offices are at
Orchard Place 1, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Purchaser's check, payable to Escrow Agent, in the amount
of Fifty Thousand and No/100 Dollars ($50,000.00) (the "▇▇▇▇▇▇▇ Money"), which
▇▇▇▇▇▇▇ Money shall be held and disbursed by Escrow Agent pursuant to a written
Escrow Agreement and Escrow Instructions, copies of which are attached hereto as
Exhibit "B" and by this reference made a part hereof. The ▇▇▇▇▇▇▇ Money shall
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be paid by Escrow Agent to Seller at Closing (as hereinafter defined) and shall
be applied as a credit to the Purchase Price (as hereinafter defined). All
interest and other income from time to time earned on the ▇▇▇▇▇▇▇ Money shall be
deemed a part of the ▇▇▇▇▇▇▇ Money for all purposes of this Agreement.
4. Purchase Price. Subject to adjustment and credits as otherwise
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specified in this Agreement, the purchase price (the "Purchase Price") to be
paid by Purchaser to Seller for the Property shall be Six Million Seven Hundred
Seventy-Nine Thousand and No/100 Dollars ($6,779,000.00). The amount of the
Purchase Price has been determined by Seller and Purchaser based upon the
assumptions (A) that Seller shall cause the Substantial Completion Date and the
Commencement Date under the Lease to occur on or before April 1, 1997 and (B)
that the annual Base Rent (as defined in the Lease) payable by the Tenant under
the Lease for the first five (5) Lease Years (as defined in the Lease) shall be
in an amount not less than $644,000.00. In the event the Substantial Completion
Date and the Commencement Date under the Lease do not occur on or before April
1, 1997, for any reason whatsoever other than construction delays caused by
Purchaser, the Purchase Price shall be reduced on a per day basis for each day
that such events are delayed beyond April 1, 1997, by an amount equal to the
difference between $1,764.00 and the actual per diem interest earned on the
portion of the Purchase Price which is still in escrow on such day as
hereinafter provided. In the event the annual Base Rent payable by the Tenant
under the Lease for the first five (5) Lease Years shall be less than
$644,000.00, the Purchase Price shall be reduced to an amount calculated by
dividing the amount of annual Base Rent payable by the Tenant under the Lease by
0.095. In the event the annual Base Rent payable by Tenant under the Lease for
the first five (5) Lease Years shall be more than $644,000.00, the Purchase
Price shall be increased to an amount calculated by dividing the amount of
annual Base Rent payable by the Tenant under the Lease by 0.095; provided,
however, in no event shall the Purchase Price increase by more than $250,000.00.
An example to illustrating the application of the foregoing adjustment
provisions is set forth on Exhibit "T" and by this reference made a part hereof.
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At the Closing, Purchaser will pay to Seller by cashier's check or by wire
transfer of immediately available federal funds, an amount which, when combined
with the ▇▇▇▇▇▇▇ Money to be disbursed by Escrow Agent to Seller at Closing,
will be equal to the lesser of (a) the principal and all accrued interest
secured by the Existing Deed of Trust as of the date of Closing, or (b) the
Purchase Price (as estimated by Seller and Purchaser) less an amount equal to
the sum of (i) the Project Costs theretofore incurred in connection with the
construction and completion of the Project for work performed and materials
incorporated into the Project, but not yet paid (including retainage), plus (ii)
one hundred twenty percent (120%) of the cost and expenses reasonably expected
to be incurred
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in order to fully complete and equip the Project, including completion of Punch
List Items, and to cause the Completion Date to occur with respect to the
Project. Seller shall represent and warrant to Purchaser at Closing that the
portion of the estimated Purchase Price paid into escrow shall be an amount
equal to or greater than the sum of (i) and (ii) set forth in the preceding
sentence. In the event the amount of the estimated Purchase Price to be paid by
Purchaser to Seller at Closing is less than the principal and all accrued
interest secured by the Existing Deed of Trust or any other monetary liens or
encumbrances, Seller shall be responsible from its own funds to cause the
Existing Deed of Trust and all other monetary liens or encumbrances affecting
the Property or any portion thereof to be fully released and cancelled at
Closing. The entire balance of the estimated Purchase Price not paid to Seller
at Closing shall be deposited by Purchaser at Closing into escrow with Escrow
Agent pursuant to an escrow agreement among Purchaser, Seller and Escrow Agent
in the form attached hereto as Exhibit "U" and by this reference made a part
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hereof. The portion of the estimated Purchase Price paid into escrow shall be
disbursed by Escrow Agent in accordance with the procedures for disbursements
set forth in such escrow agreement, and all such disbursements from escrow shall
be deemed to be payment of the Purchase Price hereunder. The amount so paid into
escrow shall be invested by the Escrow Agent in an interest bearing money market
fund with a national banking association approved by Seller and Purchaser, and
all interest earned on the amount paid into escrow shall be the sole property of
Purchaser and may be withdrawn by Purchaser at any time or from time to time.
5. Purchaser's Inspection and Review Rights. Commencing on the Effective
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Date of this Agreement, Purchaser and its agents, engineers, or representatives,
with Seller's cooperation, shall have the privilege of going upon the Property
as needed to inspect, examine, test, and survey the Property at all reasonable
times and from time to time. Such privilege shall include the right to make
borings and other tests to obtain information necessary to determine surface and
subsurface conditions, provided that such activities do not materially interfere
with the ongoing construction operations on the Property. Purchaser hereby
agrees to hold Seller harmless from any liens, claims, liabilities, and damages
incurred through the exercise of such privilege (but excluding any liability
arising out of the existing environmental condition of the Property and
excluding any claims arising out of a release of existing or in-place Hazardous
Substances on or under the Property), and Purchaser further agrees to repair any
damage to the Property caused by the exercise of such privilege (excluding any
damage arising out of a release of existing or in-place Hazardous Substances on
or under the Property). The indemnification and agreement by Purchaser set forth
in the preceding sentence shall survive any termination of this Agreement.
Purchaser shall give Seller reasonable prior verbal notice of Purchaser's
intention to conduct any inspections, examinations, tests and surveys of the
Property so that Seller shall have an opportunity to have a representative
present during any such activities. Purchaser agrees that Purchaser shall carry
not less than $1,000,000 commercial general liability insurance covering all
activities of Purchaser and its representatives while exercising the right of
access on the Property. Seller shall be named as an additional insured on such
commercial general liability insurance policy. A certificate of such insurance
shall be provided to Seller prior to Purchaser exercising such right of access
on the Property. Within three (3) days after the
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Effective Date of this Agreement, to the extent not already provided to
Purchaser, Seller shall provide to Purchaser complete copies of all Service
Contracts, if any, the Architect's Agreement, the Construction Agreements,
copies of all existing environmental reports (including the Environmental
Report), soil reports and other reports from any tests and studies obtained by
Seller, and a written inventory and listing of the Personal Property. In
addition, at all reasonable times prior to the Closing, Seller shall make
available to Purchaser, or Purchaser's agents and representatives, at Seller's
office in Englewood, Colorado, and for copying at Purchaser's expense, all
books, records, and files relating to the acquisition, leasing and development
of the Property, including, without limitation, title matters, tenant files,
commission agreements, tax bills, construction contracts, contracts with
architects, engineers and consultants, warranties and guaranties in effect with
respect to the Improvements and Personal Property, plans and specifications,
environmental reports, engineering reports, reports of insurance carriers
insuring the Property, and other contracts, books, records, budgets, and other
information relating to the Property. Seller further agrees to in good faith
assist and cooperate with Purchaser in coming to a thorough understanding of the
books, records, and files relating to the Property. Except as otherwise provided
herein, and except for data and information expressly prepared by Seller for the
benefit of Purchaser, Seller makes no representations or warranties as to the
truth or accuracy of any material, data or other information supplied to
Purchaser in connection with Purchaser's inspection of the Property. In the
event the purchase and sale contemplated herein fails to close for any reason
other than the default of Seller, Purchaser agrees to return to Seller all
documents, records, files and reports provided by Seller to Purchaser, and
Purchaser agrees to provide Seller with copies of any reports or studies
prepared for Purchaser by third parties relating to the Property (other than
reports or studies which have previously been sent to Seller or which are the
subject to attorney-client privilege), which agreements shall survive the
termination of this Agreement. Purchaser shall in no event be responsible or
liable for the contents of or the accuracy or completeness of any such reports
or studies prepared by third parties.
6. Special Condition to Closing. Purchaser shall have the right during
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the Inspection Period, on the basis of its investigations, examinations,
inspections, market studies, feasibility studies, lease reviews, and tests
relating to the Property and the operation thereof, to determine, in Purchaser's
sole opinion and discretion, the suitability of the Property for acquisition by
Purchaser. Purchaser shall have the right to terminate this Agreement at any
time prior to the expiration of the Inspection Period by giving written notice
to Seller of such election to terminate. In the event Purchaser so elects to
terminate this Agreement, Escrow Agent shall pay to Seller from the ▇▇▇▇▇▇▇
Money the sum of Twenty-Five Dollars ($25.00) and the balance of the ▇▇▇▇▇▇▇
Money shall be refunded by Escrow Agent to Purchaser, whereupon, except as
expressly provided to the contrary in this Agreement, no party hereto shall have
any other or further rights or obligations under this Agreement. Seller
acknowledges that the sum of $25.00 is good and adequate consideration for the
termination rights granted to Purchaser hereunder.
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7. General Conditions Precedent to Purchaser's Obligations Regarding the
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Closing. In addition to the conditions to Purchaser's obligations set forth in
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Paragraph 6 above, the obligations and liabilities of Purchaser hereunder shall
in all respects be conditioned upon the satisfaction of each of the following
conditions prior to or simultaneously with the Closing, any of which may be
waived by written notice from Purchaser to Seller:
(a) Seller has complied with and otherwise performed each of the covenants
and obligations of Seller set forth in this Agreement required to be
complied with and/or performed as of the date of Closing.
(b) All representations and warranties of Seller as set forth in this
Agreement shall be in all material respects true and correct as of the date
of Closing as determined by Purchaser in its reasonable discretion.
(c) There has been no adverse change to the title to the Property which has
not been cured and the Title Company has issued an owner's title insurance
commitment on the Real Estate and is prepared to issue to Purchaser upon
the Closing a fee simple ALTA owner's title insurance policy on the Real
Estate in accordance with the requirements of this Agreement.
(d) The Tenant shall not be in default (without regard to the expiration of
any applicable cure period provided in the Lease with such Tenant) under
the terms of such Tenant's Lease as of the date of Closing, and Tenant
shall have theretofore deposited with Seller the entire portion of the
"Excess TI Amount" (as defined in the Lease) required to be deposited by
Tenant.
(e) Seller shall have obtained an executed Lease Amendment and Estoppel
Certificate from the Tenant in the form attached hereto as Exhibit "D" and
-----------
by this reference made a part hereof.
(f) Seller shall not be in material default or breach of the obligations of
Seller under the Architect's Agreement or any of the Construction
Agreements, and no uncured material default or event of default shall exist
under the Architect's Agreement or the Construction Agreements.
(g) The status of construction of the Project shall be such that it is
reasonable to expect that Seller shall cause the Substantial Completion
Date to occur on or before March 31, 1997.
8. Title to the Property. Good and Marketable Title to the Real Estate
---------------------
shall be conveyed by Seller to Purchaser by Special Warranty Deed, free and
clear of all liens, easements, restrictions, and encumbrances whatsoever,
excepting only the Permitted Exceptions. Seller at its sole cost and expense,
has heretofore caused Title Company or its
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agent to deliver to Purchaser a copy of its Commitment No. GO69739A96-2
(hereinafter referred to as the "Title Commitment"), together with, copies of
all documents and instruments referred to therein. Purchaser, shall have until
the expiration of the Inspection Period during which to examine the Title
Commitment and such title documents after which Purchaser shall notify Seller of
any objections with respect to the form of the Title Commitment or any defects
or objections affecting the record marketability of the title to the Property,
other than the Permitted Exceptions. If Purchaser fails to give such notice of
defects or objections as to any matters disclosed by such Title Commitment, such
matters shall be deemed to be additional Permitted Exceptions. Seller shall then
have ten (10) days after receipt of such notice of title defects or objections
from Purchaser to advise Purchaser in writing which of such title defects or
objections Seller does not intend to satisfy or cure; provided, however, Seller
hereby agrees that Seller shall satisfy or cure any such defects or objections
consisting of taxes, mortgages, deeds of trust, mechanic's or materialmen's
liens or other such monetary encumbrances. In the event Seller fails to give
such written advice to Purchaser within such ten (10) day period, Seller shall
be deemed to have agreed to satisfy or cure all such defects or objections set
forth in Purchaser's notice. If Seller shall advise Purchaser in writing that
Seller does not intend to satisfy or cure any specific non-monetary
encumbrances, Purchaser may elect either (a) to terminate this Agreement by
written notice to Seller, in which event the ▇▇▇▇▇▇▇ Money shall be immediately
refunded to Purchaser and this Agreement shall be of no further force or effect
and Purchaser and Seller shall have no further rights, obligations or
liabilities hereunder, except as expressly provided herein, or (b) to accept
title subject to such specific non-monetary encumbrances. Seller shall have
until Closing to satisfy or cure all such defects and objections which Seller
agreed (or is deemed to have agreed) to satisfy or cure as provided above. In
the event Seller fails or refuses to cure any defects and objections which are
required herein to be satisfied or cured by Seller prior to the Closing, then,
at the option of Purchaser, (i) Purchaser may terminate this Agreement by
written notice to Seller and Escrow Agent, in which event the ▇▇▇▇▇▇▇ Money
shall be immediately refunded to Purchaser, and this Agreement shall be deemed
null and void and of no force and effect and Purchaser and Seller shall have no
further rights, obligations or liabilities hereunder, except as expressly
provided herein, (ii) if any such defect or objection is one that Seller agreed
(or is deemed to have agreed) to satisfy or cure as provided above, Purchaser
may cure such defect or objection, in which event the Purchase Price payable
pursuant to Paragraph 4 hereof shall be reduced by an amount equal to the actual
cost and expense incurred by Purchaser in connection with the curing of such
defect or objection, (iii) Purchaser may accept title to the Property subject to
such defects and objections, or (iv) any combination of items (ii) and (iii). In
the event Purchaser elects to cure any such defects and objections pursuant to
item (ii) hereof, Purchaser at its option, upon giving notice to Seller, may
extend the date of Closing until the curing of such defects or objections or
thirty (30) days from and after the previously scheduled date of Closing,
whichever shall first occur. If any defect or objection shall not have been
cured within such period, Purchaser may exercise its option under either item
(i) or (iii) hereof.
9. Representations and Warranties of Seller. Seller hereby makes the
----------------------------------------
following representations and warranties to Purchaser:
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(a) Lease. Seller has delivered to Purchaser a complete and accurate copy
-----
of the Lease. The Lease has not been further supplemented or modified or
amended, and there are no agreements or commitments between Seller and the
Tenant relating to the Property other than as expressly set forth in the
Lease. Seller is the "Landlord" under the Lease and owns legal and
beneficial title to the Lease and the rents and other income thereunder
subject only to the Existing Deed of Trust.
(b) Lease - Assignment. To the best of Seller's knowledge, the Tenant has
------------------
not assigned its interest in its Lease or sublet any portion of the
premises leased to such Tenant under its Lease.
(c) Lease - Default. (i) Seller has not received any notice of termination
---------------
or default under the Lease, (ii) there are no existing or uncured material
defaults by Seller or by the Tenant under the Lease, except that Tenant is
currently obligated to pay to Seller certain costs incurred by Seller as
provided in the Lease, (iii) to the best of Seller's knowledge, there are
no events which with passage of time or notice, or both, would constitute a
material default by Seller or by the Tenant, except that Tenant is
currently obligated to pay to Seller certain costs incurred by Seller as
provided in the Lease, and Seller has complied with each and every
undertaking, covenant, and obligation of Seller under the Lease, and (iv)
the Tenant has not asserted any defense, set-off, or counterclaim with
respect to its tenancy or its obligation to pay rent, additional rent, or
other charges pursuant to its Lease. Further, Tenant has not indicated to
Seller either orally or in writing its request or its intent to terminate
its Lease prior to the expiration of the term of the Lease or to reduce the
size of the premises leased by the Tenant.
(d) Lease - Rents and Special Consideration. Except as expressly set forth
---------------------------------------
in the Lease, the Tenant: (i) has not prepaid any rent under the Lease,
(ii) is not entitled to receive any rent concession in connection with its
tenancy under its Lease, and (iii) does not have any option or other
evidence of any right or interest in or to the Property.
(e) Lease - Commissions. No rental, lease, or other commissions with
-------------------
respect to the Lease is payable to Seller, any party affiliated with or
related to Seller. The only commission obligation of Seller with respect
to the Lease is set forth in the commission agreement between Seller and
Leasing Agents dated January 31, 1994, a true and complete copy of which
has been provided to Purchaser. Seller has heretofore paid to Leasing
Agents $117,576.31 of the commission payable to Leasing Agents under the
aforesaid commission agreement and the remaining balance of such commission
($120,143.69) shall be due and payable to Leasing Agents as provided in the
aforesaid commission agreement. Except for the remaining $120,143.69 of
the total commission in the amount of $237,720.00 payable to Leasing Agents
as provided in the aforesaid commission agreement, no commissions shall be
due or payable by Purchaser, Seller or any successor to the "Landlord"
under the Lease as a
-13-
result of the Lease or as a result of the exercise by the Tenant thereunder
of any right or option in the Lease to extend the term of such Lease or to
expand the space leased thereunder (unless such expansion shall occur as a
result of the exercise of the expansion under Section 33.5 of the Lease and
the commission is includable in the costs which are utilized in determining
the amount of Base Rent to be paid by the Tenant for the Expansion Space
under the Lease). Seller shall and does hereby indemnify and hold harmless
Purchaser from and against any claim, whether or not meritorius, for any
real estate commission, finder's fee, or like compensation in connection
with the Lease or in connection with the exercise by Tenant thereunder of
any right or option in the Lease to extend the term of such Lease or to
expand the space leased thereunder, including any such claim by Leasing
Agents, but excluding any such claim by Leasing Agents attributable to an
expansion of the space leased by Tenant under the Lease as a result of the
exercise of the expansion option set forth in Section 33.5 of the Lease,
and only if the entire commission payable to Leasing Agents under such
circumstances is includable in the costs which are utilized in determining
the amount of Base Rent to be paid by the Tenant for the "Expansion
Premises" under the Lease.
(f) Architect's Agreement and Construction Agreements. Complete and
-------------------------------------------------
accurate copies of the Architect's Agreement and Construction Agreements
will be delivered by Seller to Purchaser as provided in Paragraph 5 hereof.
To the best of Seller's knowledge, the Architect's Agreement and
Construction Agreements are in full force and effect in accordance with
their respective provisions, all payments now due and payable by Seller or
the "Owner" thereunder have been paid in full, except for the current
monthly draw requests thereunder and less applicable retainage amounts, and
to the best of Seller's knowledge, there is no default, or claim of
default, or any event which with the passage of time or notice, or both,
would constitute a default on the part of any party to the Architect's
Agreement and Construction Agreements.
(g) Service Contracts. Complete and accurate copies of all of the Service
-----------------
Contracts, if any, will be delivered by Seller to Purchaser as provided in
Paragraph 5 hereof. To the best of Seller's knowledge, all such Service
Contracts are in full force and effect in accordance with their respective
provisions, all payments required to be made by Seller or the "Owner"
thereunder have been paid in full, and there is no default, or claim of
default, or any event which with the passage of time or notice, or both,
would constitute a default on the part of any party to any of such Service
Contracts. All such Service Contracts are terminable without penalty or
obligation to pay any severance or similar compensation on no more than
thirty (30) days' notice. Seller agrees to cancel, effective no later than
the Closing, any of the Service Contracts specified by Purchaser in a
written notice to Seller given at least thirty (30) days prior to the
Closing. To the best of Seller's knowledge, all Service Contracts are
assignable by Seller to Purchaser and no Service Contract prohibits such
assignment or provides for any right, claim, or cause of action against
Purchaser or
-14-
the Property upon such assignment. Seller has cancelled or will cancel,
effective as of the Closing, any agreement in the nature of a management
agreement or service contract between Seller and any partner of Seller or
any party affiliated with or related to Seller or any partner of Seller.
(h) Warranties and Guaranties. Within three (3) days after the Effective
-------------------------
Date of this Agreement, Seller shall provide Purchaser with complete and
accurate copies of all such warranties and guaranties which are written,
which are known by Seller to relate to the Property and which are in the
possession or control of Seller.
(i) No Other Agreements. Other than the Lease, the Architect's Agreement,
-------------------
the Construction Agreements, the Service Contracts, and the Permitted
Exceptions, there are no leases, contracts, service contracts, management
agreements, or other agreements or instruments in force and effect, oral or
written, that grant to any person whomsoever or any entity whatsoever any
right, title, interest or benefit in or to all or any part of the Property,
any rights to acquire all or any part of the Property or any rights
relating to the development, use, operation, management, maintenance, or
repair of all or any part of the Property.
(j) No Litigation. There are no actions, suits, or proceedings pending, or
-------------
to the best of Seller's knowledge threatened by any organization, person,
individual, or governmental agency against Seller with respect to the
Property or against the Property, nor does Seller know of any basis for
such action. Seller also has no knowledge of any pending or threatened
application for changes in the zoning applicable to the Property or any
portion thereof.
(k) Condemnation. No condemnation or other taking by eminent domain of the
------------
Property or any portion thereof has occurred and, to the best of Seller's
knowledge, there are no pending or threatened condemnation or eminent
domain proceedings (or proceedings in the nature or in lieu thereof)
affecting the Property.
(l) Proceedings Affecting Access. To the best of Seller's knowledge, there
----------------------------
are no pending or threatened proceedings that could have the effect of
impairing or restricting access between the Property and adjacent public
roads.
(m) No Roll-Back Taxes. The Property has not been classified under any
------------------
designation authorized by law to obtain a special low ad valorem tax rate
or to receive a reduction, abatement or deferment of ad valorem taxes
which, in such case, will result in additional, catch-up or roll-back ad
valorem taxes in the future in order to recover the amounts previously
reduced, abated or deferred.
(n) No Assessments. To the best of Seller's knowledge, except for annual
--------------
assessments and special assessments for which provision is made under the
Declaration, no special assessments have been made against the Property,
whether or
-15-
not they have become liens, and except for the water tap-on fee which has
not yet been paid by Seller, all impact fees, permit fees, storm drainage
area fees, sewer connection fees, exactions or similar charges or sums
payable as result of the construction of the Improvements have been paid in
full.
(o) Permits. To the best of Seller's knowledge, Seller has obtained all
-------
licenses, permits and approvals required to be obtained from Governmental
Authorities in order to construct and install the Property, and to the best
of Seller's knowledge, the Project is being constructed in compliance with
all such licenses, permits and approvals.
(p) Conditions of Improvements. Seller is not aware of any structural or
--------------------------
other defects, latent or otherwise, in the Improvements. The electrical,
plumbing, water, elevator (if installed), roofing, storm drainage and
sanitary sewer systems at or servicing the Land and Improvements are, to
the best of Seller's knowledge, in good condition and working order and
Seller is not aware of any defects or deficiencies, latent or otherwise,
therein. To the best of Seller's knowledge, the Improvements heretofore
constructed and installed have been constructed and installed in accordance
with the requirements and conditions of all governmental permits applicable
thereto and any private restrictive covenants affecting the Property.
(q) Compliance With Governmental Requirements. To the best of Seller's
-----------------------------------------
knowledge, there are no violations of law, municipal or county ordinances,
or other legal requirements with respect to the Property, and the
Improvements thereon, when construction thereof is completed in accordance
with the Plans and Specifications, will comply with (i) all applicable
legal requirements with respect to the use, occupancy, and construction
thereof, including, without limitation, the Americans with Disabilities
Act., and (ii) the Permitted Exceptions. To the best of Seller's
knowledge, the Property is currently zoned in a classification such as will
permit the operation of the Property for the uses thereof permitted in the
Lease, and the conditions, if any, to the granting of the zoning of the
Property have been satisfied. To the best of Seller's knowledge, the
Property is not located in a wetland area or in a designated or recognized
flood plain, flood plain district, flood hazard area or area of similar
characterization.
(r) Declaration. Seller has obtained a determination by the Committee that
-----------
the intended use of the Property by Tenant is permitted under Section 4.1
of the Declaration and that such intended use is in keeping with the
purposes referred to in Article III of the Declaration. Seller has
obtained the written approval of the Plans and Specifications by the
Committee, and no other approvals are required to be obtained under the
Declaration in connection with development and construction of the Project.
To the best of Seller's knowledge, the Plans and Specifications comply with
all requirements of the Declaration, including without limitation,
requirements relating to design, setbacks, landscaping, floor area ratios,
building heights, signs,
-16-
sewer systems, water drainage, and irrigation. Seller has not received any
notice, and Seller is not aware, of any default by Seller or with respect
to the Property or any event, or occurrence which, with the giving of
notice or lapse of time, or both, would result in a default of Seller or
with respect to the Property under the Declaration. Seller has paid all
annual assessments due and payable with respect to the Property under the
Declaration for the period through December 31, 1996, and no special
assessments are currently due and payable with respect to the Property
under the Declaration.
(s) Utilities. All utilities necessary for the use of the Property by the
---------
Tenant, including water, sanitary sewer, storm sewer, natural gas,
electricity, and telephone, are or shall be installed and such utilities
either enter the Property through adjoining public streets, or, if they
pass through adjoining private land, do so in accordance with valid public
easements or private easements which inure to the benefit of the Property.
(t) Existing Surveys. Seller has heretofore delivered to Purchaser the
----------------
most current boundary survey of the Land in the possession or control of
Seller.
(u) Initial Utility Charges. All installation and connection charges for
-----------------------
utilities serving the Property have been paid in full, except for the water
tap-on fee which has not yet been paid by Seller.
(v) Employees. There are no employment, collective bargaining, or similar
---------
agreements or arrangements between Seller and any of its employees or
others which will be binding on Purchaser or any of Purchaser's successors
in title.
(w) Authorization. Seller is a duly organized and validly existing general
-------------
partnership under the laws of the State of Colorado. This Agreement has
been duly authorized and executed on behalf of Seller, all necessary action
on the part of Seller to authorize the transactions herein contemplated has
been taken, and no further action is necessary for such purpose, and this
Agreement constitutes the valid and binding agreement of Seller,
enforceable in accordance with its terms, subject to bankruptcy, insolvency
and similar laws affecting generally the enforcement of creditor's rights.
Neither the execution and delivery of this Agreement nor the consummation
of the transaction contemplated hereby will (i) be in violation of Seller's
partnership agreement, (ii) conflict with or result in the breach or
violation of any law, regulation, writ, injunction or decree of any court
or governmental instrumentality applicable to Seller, or (iii) constitute a
breach of any evidence of indebtedness or agreement of which Seller is a
party or by which Seller is bound.
(x) Seller Not a Foreign Person. Seller is not a "foreign person" which
---------------------------
would subject Purchaser to the withholding tax provisions of Section 1445
of the Internal Revenue Code of 1986, as amended.
-17-
(y) Option Agreement. Seller has delivered to Purchaser a complete and
----------------
accurate copy of the Option Agreement. The Option Agreement has not been
further supplemented or modified or amended. Seller has not received any
notice of termination or default under the Option Agreement, and to the
best of Seller's knowledge, there are no existing or uncured defaults by
Seller or by Interlocken, Ltd. under the Option Agreement, and there are no
events which with the passage of time or notice, or both, would constitute
a default Seller or by Interlocken, Ltd. under the Option Agreement.
(z) REA. Seller has delivered to Purchaser a complete and accurate copy of
---
the REA and the REA has not been modified or amended and remains in full
force and effect. To the best of Seller's knowledge, there is no default,
or claim of default, or any event which with the passage of time or notice,
or both, would constitute a default on the part of either party to the REA.
At Closing, Seller shall reaffirm to Purchaser that all such representations and
warranties of Seller in this Agreement remain true and correct as of the date of
the Closing, except for any changes in any such representations or warranties
that occur and are disclosed by Seller to Purchaser expressly and in writing at
any time and from time to time prior to Closing upon their occurrence, which
disclosures shall thereafter be updated by Seller to the date of Closing. If
there is any change in any representations or warranties and Seller does not
cure or correct such changes prior to Closing, then Purchaser may, at
Purchaser's option, (i) close and consummate the transaction contemplated by
this Agreement, except that after such closing and consummation Purchaser shall
have the right to seek monetary damages from Seller for any such changes
willfully caused by Seller or any such representations or warranties willfully
breached by Seller, or (ii) terminate this Agreement by written notice to
Seller, whereupon the ▇▇▇▇▇▇▇ Money shall be immediately returned to Purchaser,
and thereafter the parties hereto shall have no further rights or obligations
hereunder, except only (1) for such rights or obligations that, by the express
terms hereof, survive any termination of this Agreement and (2) that Purchaser
shall have the right to seek monetary damages from Seller for any changes in
such representations and warranties willfully caused by Seller or any such
representations and warranties willfully breached by Seller.
10. Seller's Additional Covenants. Seller does hereby further covenant
-----------------------------
and agree as follows:
(a) Operation of Property. Seller hereby covenants that, from the
---------------------
Effective Date of this Agreement up to and including the date of Closing,
Seller shall: (i) not negotiate with any third party respecting the sale
of the Property or any interest therein, (ii) except for the Lease
Amendment and Estoppel Certificate, not modify, amend, or terminate the
Lease without the prior written consent of Purchaser, (iii) not enter into
any new service contract or other agreement respecting the Property without
the prior written consent of Purchaser, which consent shall not be
unreasonably withheld or delayed, (iv) not waive any rights of Seller under
the Lease
-18-
or any Service Contract, (v) not grant or otherwise create or consent to
the creation of any easement, restriction, lien, assessment, or encumbrance
respecting the Property, without the prior written consent of Purchaser,
which consent shall not be unreasonably withheld or delayed with respect to
easements for utilities to serve the Property, and (vi) neither transfer
nor remove any personal property or fixtures from the Property except for
purposes of replacement thereof, in which case such replacements shall be
properly installed and shall be comparable in quality to the items being
replaced. Seller has advised Purchaser that Seller is currently negotiating
a contract for the acquisition of irrigation water from Interlocken, Ltd.
Seller agrees that such contract shall be subject to the approval of
Purchaser, which approval shall not be unreasonably withheld or delayed.
(b) Continuation of Construction. Seller shall, from and after the
----------------------------
Effective Date of this Agreement to the date of Closing, (i) continue to
prosecute the construction and development of the Project in accordance
with the Plans and Specifications and the Permitted Exceptions with
diligence and without interruption, unless such interruption is due to an
event or occurrence beyond Seller's reasonable control (it being agreed,
however, that lack of funds and contractor defaults are not events or
occurrences beyond Seller's reasonable control), (ii) except for change
orders which would not require Purchaser's prior consent if effectuated
after Closing as provided in Paragraph 16(d) hereof, not modify, amend, or
terminate the Architect's Agreement or the Construction Agreements without
the prior written consent of Purchaser, which consent shall not be
unreasonably withheld or delayed, (iii) not waive any rights of Seller
under the Architect's Agreement or Construction Contracts, and (iv) perform
and discharge all of the duties and obligations and comply with every
covenant and agreement of the Seller or the "Owner" under the Architect's
Agreement and Construction Agreements, in the manner and within the time
limits required thereunder. Furthermore, Seller shall, for the same period
of time, use diligent and good faith efforts to cause the Architect and the
Contractors to perform all of their respective duties and obligations and
otherwise comply with each and every one of their respective covenants and
agreements under the Architect's Agreement and Construction Agreements.
(c) Preservation of Lease. Seller shall, from and after the Effective Date
---------------------
of this Agreement to the date of Closing, use diligent and good faith
efforts to perform and discharge all of the duties and obligations and
shall otherwise comply with every covenant and agreement of the landlord
under the Lease, at Seller's expense, in the manner and within the time
limits required thereunder. Furthermore, Seller shall, for the same period
of time, use diligent and good faith efforts to cause the Tenant under the
Lease to perform all of its duties and obligations and otherwise comply
with each and every one of its covenants and agreements under the Lease.
(d) Lease Amendment and Estoppel Certificate. Prior to Closing, Seller
----------------------------------------
shall obtain and deliver to Purchaser a fully completed Lease Amendment and
-19-
Estoppel Certificate with respect to the Lease in the form attached hereto
as Exhibit "D" and by this reference made a part hereof, duly executed by
-----------
the Tenant thereunder. In the event Seller is unable to obtain the Lease
Amendment and Estoppel Certificate with respect to the Lease, and if
Purchaser elects to waive the condition set forth in Paragraph 7(e) hereof
and proceed to Closing, Seller shall make a written representation and
warranty to Purchaser at Closing with respect to the factual matters set
forth in the form of such Lease Amendment and Estoppel Certificate.
(e) As-Built Survey. Seller agrees to obtain at Seller's cost and deliver
---------------
to Purchaser within twenty (20) days after the Substantial Completion Date,
an as-built survey of the Real Estate prepared for and certified to
Purchaser and the Title Company by ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ of Accurate
Consultants, Inc. or such other registered land surveyor approved by
Purchaser, which approval shall not be unreasonably withheld. The as-built
survey shall comply with the minimum detail requirements for land title
surveys as adopted by the American Land Title Association and American
Congress on Surveying and Mapping, adopted in 1992, shall be dated not
earlier than the Substantial Completion Date, and shall show the following
items, whether covered by the foregoing minimum detail requirements or not:
(i) The political subdivision, county, and such other notations as will
accurately describe the property surveyed.
(ii) All courses and distances of the boundaries of the Land.
(iii) The location of all Improvements (including measured dimensions) on
the Land with the dimensions in relation to lot and building lines. If any
applicable restrictions, recorded plats, or zoning ordinances require a
building to be set back specified distances from streets or property lines,
the as-built survey must show measured distances from said building to said
streets or lines.
(iv) The location of all rights-of-way, water courses, drains, sewers,
utility easements, driveways, or roads which serve the Real Estate or to
which the Real Estate is subject.
(v) The names and widths of streets with the distance from the nearest
corner to the beginning point of Land surveyed.
(vi) The total acreage or square foot area of the Land and the location and
number of paved parking spaces.
(vii) The names of adjoining owners on all sides of the Land.
-20-
(viii) If the surveyor prepared the subdivision plat of the Land,
certification by the surveyor that the real property, as shown and
described in the as-built survey, does not constitute an illegal
subdivision of land under applicable county or city ordinances.
(ix) Certification as to whether or not the Land lies within a flood zone
as determined by the United States Department of Housing and Urban
Development. If the Land lies within a flood zone, the certification
should reflect the flood zone classification.
Seller also agrees to obtain at Seller's cost and deliver to Purchaser
within ten (10) days after the Effective Date of this Agreement, the
reissuance of the existing "ALTA/ACSM Land Title Survey" prepared by
Accurate Consultants, Inc., dated December 10, 1996, revised so as to be
certified to Purchaser, Escrow Agent and Title Company and containing
thereon the signature and seal of ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the registered
land surveyor.
(f) Declaration Estoppel Certificate. Prior to Closing, Seller shall
--------------------------------
obtain from the Owner's Association under the Declaration a written
certificate stating the amount of Assessments for which Seller is liable
and whether such Assessments have been paid in full as provided in Section
13.9 of the Declaration.
(g) Contractors' and Architect's Consents. Prior to Closing, Seller shall
-------------------------------------
obtain from each of the Contractors with respect to its construction
agreement, a Contractor's Certification and Agreement to Continue Work in
the form attached hereto as Exhibit "R" and by reference made a part
-----------
hereof, and Seller shall obtain from the Architect with respect to the
Architect's Agreement, a Architect's Certification and Agreement to
Continue Work in the form attached hereto as Exhibit "S" and by reference
-----------
made a part hereof.
(h) Option Agreement. Prior to Closing, Seller shall obtain and deliver to
----------------
Purchaser the written consent of Interlocken, Ltd. to the transfer and
assignment by Seller to Purchaser of the Option Agreement.
11. Closing. Provided that all of the conditions set forth in this
-------
Agreement are theretofore fully satisfied or performed, it being fully
understood and agreed, however, that Purchaser may waive expressly and in
writing, at or prior to Closing, any conditions that are unsatisfied or
unperformed at such time, the consummation of the sale by Seller and purchase by
Purchaser of the Property (herein referred to as the "Closing") shall be held on
or before the date which is fifteen (15) business days after the Effective Date
of this Agreement, at an office in Greenwood Village or Broomfield, Colorado, at
such specific office, and at such specific time and date as shall be designated
by Purchaser in a written notice to Seller not less than five (5) business days
prior to Closing. In the event Purchaser fails to give such notice of the time,
date and place of Closing, the Closing shall occur at 1:30 p.m. on the last
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date for such Closing as provided above, at the office of the Escrow Agent at
Orchard Place 1, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
12. Seller's Closing Documents. For and in consideration of, and as a
--------------------------
condition precedent to Purchaser's delivery to Seller of the Purchase Price
described in Paragraph 4 hereof, Seller shall obtain or execute, at Seller's
expense, and deliver to Purchaser at Closing the following documents (all of
which shall be duly executed, acknowledged, and notarized where required):
(a) Deed. A Special Warranty Deed conveying to Purchaser marketable fee
----
simple title to the Real Estate, together with all rights, members,
easements, and appurtenances thereof, subject only to the Permitted
Exceptions. The legal description set forth in the Special Warranty Deed
shall be identical to Exhibit "A" attached hereto;
-----------
(b) ▇▇▇▇ of Sale. A ▇▇▇▇ of Sale conveying to Purchaser marketable title
------------
to the Personal Property in the form and substance of Exhibit "I" attached
-----------
hereto and by this reference made a part hereof;
(c) Blanket Transfer. A Blanket Transfer and Assignment in the form and
----------------
substance of Exhibit "J" attached hereto and by this reference made a part
-----------
hereof;
(d) Assignment and Assumption of Lease. An Assignment and Assumption of
----------------------------------
Lease in the form and substance of Exhibit "K" attached hereto and by this
-----------
reference made a part hereof, assigning to Purchaser all of Seller's
right, title, and interest in and to the Lease and the rents thereunder;
(e) Assignment and Assumption of Construction Agreements. An Assignment
----------------------------------------------------
and Assumption of Construction Documents in the form and substance of
Exhibit "L" attached hereto and by the reference made a part hereof,
-----------
assigning to Purchaser all of Seller's right, title and interest in and to
the Architect's Agreement and the Construction Agreements;
(f) Assignment and Assumption of Option Agreement. An Assignment and
---------------------------------------------
Assumption of Option Agreement in the form and substance of Exhibit "M"
----------
attached hereto and by reference made a part hereof, assigning to
Purchaser all of Seller's right, title and interest in and to the Option
Agreement;
(g) Seller's Certificate. A certificate evidencing the reaffirmation of
--------------------
the truth and accuracy of Seller's representations, warranties, and
agreements set forth in Paragraphs 9 and 21 hereof;
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(h) FIRPTA Certificate. An executed affidavit that Seller is not a foreign
------------------
entity in accordance with the provisions of Section 1445 of the Internal
Revenue Code of 1986, as amended;
(i) Surveys and Plans. Such surveys, site plans, plans and specifications,
-----------------
and other matters relating to the Property as are described in subparagraph
(a) of the Blanket Transfer and Assignment and are in the possession or
control of Seller;
(j) Lease. An original executed counterpart of the Lease;
-----
(k) Service Contracts. An original executed counterpart of each Service
-----------------
Contract;
(l) Estoppel Certificate. The Lease Amendment and Estoppel Certificate (or
--------------------
representation from Seller) referred to in Paragraph 10(d) hereof;
(m) Construction Expense Statements. Statements, certified to be complete
-------------------------------
and accurate by Seller, (i) of the updated Development Budget, and (ii)
copies of all draw requests relating to the Project through the date of
Closing;
(n) Corporate Resolution. A copy of a resolution of the Board of Directors
--------------------
each corporate general partner of Seller, certified by the Secretary,
Assistant Secretary of such corporate general partner of Seller to be in
force and unmodified as of the date and time of Closing, authorizing the
execution and delivery of documents required hereunder, and a certificate
of incumbency designating the signatures of the officers or members of each
such corporate general partner of Seller who are to execute and deliver all
such documents on behalf of such corporate general partner of Seller;
(o) Keys and Records. Any keys to any doors or locks on the Property in
----------------
the possession or control of Seller and the original tenant files and other
books and records relating to the Property in Seller's possession or
control;
(p) Tenant Notices. Notice from Seller to the Tenant of the sale of the
--------------
Property to Purchaser in such form as Purchaser and Seller shall reasonably
approve;
(q) Settlement Statement. A settlement statement setting forth the amounts
--------------------
paid by or on behalf of and/or credited to each of Purchaser and Seller
pursuant to this Agreement;
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(r) Escrow Agreement. The escrow agreement referred to in Paragraph 4
----------------
hereof;
(s) Construction Plans. Seller's construction plans, including but not
------------------
limited to the Plans and Specifications and any and all other surveys, plans and
specifications for engineering, architectural, landscaping, electrical, civil,
sewage, storm water, drainage or elevations, or any combination thereof with
respect to the Land or Improvements thereon or both Land and Improvements;
(t) Builder's Risk Policy. An assignment of the current all-risk,
---------------------
builder's risk policy in effect with respect to the Project, together with an
endorsement to such policy issued by the insurer reflecting the change in
ownership, it being understood, however, that Seller shall be named an
additional insured with respect to such policy following the Closing and for so
long as Seller is performing the Development Functions; and
(u) Other Documents. Such other documents as are customarily and
---------------
reasonably required by the Title Company, including an owner's affidavit.
13. Purchaser's Closing Documents. Purchaser shall obtain or execute, at
-----------------------------
Purchaser's expense, and deliver to Seller at Closing the following documents,
all of which shall be duly executed and acknowledged where required:
(a) Assignment and Assumption of Lease. The Assignment and Assumption
----------------------------------
of Lease in the form and substance of Exhibit "K" attached hereto;
-----------
(b) Blanket Transfer. A Blanket Transfer and Assignment in the form
----------------
and substance of Exhibit "J" attached hereto;
-----------
(c) Assignment and Assumption of Construction Documents. An Assignment
---------------------------------------------------
and Assumption of Construction Documents in the form of Exhibit "L" attached
-----------
hereto;
(d) Assignment and Assumption of Option Agreement. An Assignment and
---------------------------------------------
Assumption of Option Agreement in the form of Exhibit "M" attached hereto.
-----------
(e) Settlement Statement. A settlement statement setting forth the
--------------------
amounts paid by or on behalf of and/or credited to each of Purchaser and Seller
pursuant to this Agreement;
(f) Escrow Agreement. The escrow agreement referred to in Paragraph 4
----------------
hereof; and
(g) Other Documents. Such other documents as shall be reasonably
---------------
required by the Title Company.
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14. Closing Costs. Seller shall pay the cost of the Title Commitment,
-------------
including the cost of the examination of title to the Property made in
connection therewith, the premium for the owner's policy of title insurance
issued pursuant thereto (excluding the premium for any special endorsements),
the cost of the as-built survey obtained by Seller as provided in Paragraph
10(e) hereof, the cost of any transfer or documentary tax imposed by the State
of Colorado or any county or municipality upon the conveyance of the Property
pursuant hereto, the attorneys' fees of Seller, and all other costs and expenses
incurred by Seller in closing and consummating the purchase and sale of the
Property pursuant hereto. Purchaser shall pay the recording fees on the Special
Warranty Deed (and quitclaim deed if required pursuant to Paragraph 12[a]
hereof) of the Property from Seller to Purchaser to be recorded in connection
with this transaction, the premium for any special endorsements to Purchaser's
owner's policy of title insurance, the attorneys' fees of Purchaser, and all
other costs and expenses incurred by Purchaser in closing and consummating the
purchase and sale of the Property pursuant hereto. Seller and Purchaser shall
share equally the costs of the escrow established under Paragraph 4 hereof,
including the fees of Escrow Agent.
15. Prorations. The following items shall be prorated and/or credited
----------
between Seller and Purchaser as follows:
(a) Rents. If applicable, rent, additional rent, operating costs, and
-----
other income of the Property (other than security deposits) collected by
Seller from the Tenant for the month of Closing shall be prorated as of
Midnight preceding the date of Closing. Purchaser shall also receive a
credit against the Purchase Price payable by Purchaser to Seller at Closing
for any rent or other sums (not including security deposits) prepaid by the
Tenant for any period following the month of Closing, or otherwise.
Purchaser shall receive a credit against the Purchase Price payable by
Purchaser to Seller at Closing for the total sum of all security deposits
paid by the Tenant under the Lease and not theretofore applied to
delinquent rent and other charges payable by the Tenant. Seller hereby
acknowledges that Purchaser shall not be legally responsible to Seller for
the collection of any uncollected rent or other income under the Lease that
is past due or otherwise due and payable as of the date of Closing.
Purchaser agrees that if (i) the Tenant is in arrears on the date of
Closing in the payment of rent or other charges under such Tenant's Lease,
and (ii) upon Purchaser's receipt of any rental or other payment from such
Tenant, such Tenant is, or after application of a portion of such payment
will be, current under the Lease in the payment of all accrued rental and
other charges that become due and payable on the date of Closing or
thereafter and in the payment of any other obligations of the Tenant to
Purchaser, then Purchaser shall refund to Seller, out of and to the extent
of the portion of such payment remaining after Purchaser deducts therefrom
any and all sums due and owning it from such Tenant from and after the date
of Closing, an amount up to the full amount of any arrearage existing on
the date of Closing.
(b) Property Taxes. Seller and Purchaser acknowledge that city,
--------------
state, county, and school district ad valorem taxes which shall accrue
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during the period from the commencement of construction of the Project
through the date preceding the Commencement Date under the Lease are
Project Costs and shall not be prorated between Seller and Purchaser at
Closing. Seller is responsible for the payment of all such taxes for 1996
and prior years (which obligation of Seller shall be satisfied with the
proceeds from the escrow established as provided in Paragraph 4 hereof as
contemplated in the Development Budget), and Purchaser shall be responsible
for the payment of all such taxes for 1997 (which obligation of Purchaser
shall be satisfied in part with the proceeds to be paid to Purchaser from
escrow as provided below). Promptly after the execution and delivery of
the Supplemental Agreement under the Lease, the amount of city, state,
county, and school district ad valorem taxes for the period attributable to
the period from January 1, 1997 through the date preceding the Commencement
Date under the Lease shall be paid to Purchaser from the portion of the
Purchase Price deposited into escrow with Escrow Agent at Closing pursuant
to Paragraph 4 hereof, and Seller and Purchaser agree that they shall each
promptly authorize and direct Escrow Agent in writing to make payment of
such amount to Purchaser from the escrow funds in connection with the next
regular disbursement of escrow funds by the Escrow Agent. The proration of
such taxes for 1997 shall be based on the ad valorem tax bills for the
Property, if then available, or if not, then on the basis of the latest
available tax figures and information. Should such proration be based on
such latest available tax figures and information and prove to be
inaccurate on receipt of the ad valorem tax bills for the Property for the
year of Closing, and if the Base Rent under the Lease shall be adjusted on
the basis of such actual tax figures, either Seller or Purchaser, as the
case may be, may demand at any time after the execution and delivery of the
Supplemental Agreement under the Lease a payment from the other correcting
such malapportionment. In addition, if after Closing there is an
adjustment or reassessment by any governmental authority with respect to,
or affecting, any ad valorem taxes for the Property for any year prior to
Closing, any additional tax payment for the Property required to be paid
with respect to any year prior to the year of Closing shall be paid by
Seller (which obligation of Seller shall be satisfied with the proceeds
from escrow established as provided in Paragraph 4 hereof, to the extent
proceeds in escrow are available for such purpose). This agreement shall
expressly survive the Closing.
(c) Utility Charges. Seller and Purchaser acknowledge that costs of
---------------
utilities incurred during construction of the Project are Project Costs and
shall not be prorated between Seller and Purchaser.
(d) Service Contracts. Charges under the Service Contracts, if any,
-----------------
shall be prorated as of Midnight preceding the date of Closing.
(e) Other Tenant Charges. Where the Lease contains the Tenant's
--------------------
obligations for taxes, common area expenses, operating expenses or additional
charges of any nature, and where Seller shall have collected on an estimated
basis any portion thereof in excess of amounts owed by Seller for such items for
-26-
the period prior to the date of Closing, then there shall be an adjustment and
credit given to Purchaser on the date of Closing for such excess amounts
collected. Purchaser shall apply all such excess amounts to the charges owed by
Purchaser for such items for the period after the date of Closing, and if
required by the Lease, shall rebate or credit the Tenant with any remainder. If
it is determined subsequent to the Closing that the amount collected during
Seller's ownership period exceeded expenses incurred during the same period by
more than the amount previously credited to Purchaser at Closing, then Seller
shall promptly pay to Purchaser the deficiency. If it is determined subsequent
to Closing that the amount collected during Seller's ownership period exceeded
expenses incurred during the same period by less than the amount previously
credited to Purchaser at Closing, then Purchaser shall promptly pay to Seller
the overpayment.
(f) Assessments Under Declaration. Seller and Purchaser acknowledge
-----------------------------
that the annual assessments under the Declaration which shall accrue during the
period following commencement of construction of the Project through the date
preceding the Commencement Date under the Lease are Project Costs and shall not
be prorated between Seller and Purchaser at Closing. Seller is responsible for
the payment of such assessments for 1996 and prior years, and Purchaser shall be
responsible for the payment of such assessments for 1997 (which obligation of
Purchaser shall be satisfied in part with the proceeds to be paid to Purchaser
from escrow as provided below). Promptly after the occurrence of the
Commencement Date under the Lease, the amount of such assessments attributable
to the period from January 1, 1997 through the date preceding the Commencement
Date under the Lease shall be paid to Purchaser from the portion of the Purchase
Price deposited into escrow with Escrow Agent at Closing pursuant to Paragraph 4
hereof, and Seller and Purchaser agree that they shall each promptly authorize
and direct Escrow Agent in writing to make payment of such amount to Purchaser
from the escrow funds in connection with the next regular disbursement of escrow
funds by the Escrow Agent.
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16. Completion of Project.
---------------------
(a) Seller's Responsibilities. Following the Closing, Seller shall be
-------------------------
responsible to continue to administer, coordinate and manage the construction
and completion of the Project, all in accordance with the terms and provisions
set forth herein, and all without compensation or reimbursement to Seller
whatsoever other than the payment of the Purchase Price as provided in this
Agreement (it being acknowledged, however, that the Project Costs to which the
Purchase Price shall be applied include a development fee to Seller or an
affiliate of Seller). Seller agrees to diligently perform its duties and the
Development Functions hereunder, which performance in all respects and at all
times shall be carried out to the same extent and with the same degree of care
and quality as Seller would exercise in the conduct of its own affairs if Seller
were the owner of the Project. Seller agrees to apply prudent and reasonable
business practices in the performance of its duties hereunder. Seller shall
have a license to enter the Real Estate following the Closing for the purpose of
performing the Development Functions.
With respect to Purchaser, Seller shall at all times be an independent
contractor. No provision of this Paragraph 16 shall be construed to constitute
the Seller or any of its officers or employees as an employee or employees of
the Purchaser nor shall any provision of this Agreement be construed as creating
a partnership or joint venture between Seller and Purchaser. Neither Purchaser
nor Seller shall have the power to bind the other party except pursuant to the
terms of this Agreement. Seller acknowledges and agrees that following the
Closing, Seller shall act as a fiduciary hereunder with respect to the Purchaser
and that, with respect to all of the services to be rendered by the Seller to
the Purchaser pursuant to this Agreement following the Closing, Seller shall
have the duty to act at all times in the best interests of Purchaser.
Seller's general responsibility hereunder as Purchaser's development
manager shall be to manage, to administer, to monitor, and to coordinate the
construction and installation of the Project and the completion thereof free and
clear of all liens and claims or rights to liens (subject to the funding by
Purchaser of the Purchase Price). In discharging its general responsibility
hereunder, Seller shall perform and discharge the following specific
responsibilities with respect to the Project (herein collectively referred to as
the "Development Functions"):
(1) Seller, in the name of, and on behalf of, Purchaser, shall
maintain and continue the engagement of Architect and Contractors, for the
compensation and on the terms provided for in the Architect's Agreement and
the Construction Agreements.
(2) Seller shall implement the Development Budget as provided herein.
(3) In implementing the Development Budget and in otherwise discharging
its duties and responsibilities hereunder, Seller shall negotiate with, and
-28-
submit to Purchaser contracts (for execution by Purchaser) with, coordinate
and administer the performance of, and review and approve or disapprove
applications for payment of the fees, charges, and expenses of, such
architects, engineers, planners, designers, consultants, general
contractors, subcontractors, vendors, and other design and construction
professionals, consultants, and suppliers as Seller deems necessary or
appropriate to develop the Project in accordance with and subject to the
limitations of the Development Budget. Such fees, charges and expenses shall
be borne by Purchaser as contemplated in the Development Budget. Subject to
the provisions of Paragraph 16(e) hereof, the employment, coordination and
payment of such additional architects, engineers, planners, designers,
consultants, general contractors, subcontractors, vendors, and other design
and construction professionals, consultants, and suppliers on terms not
consistent with or within the limitations of the Development Budget shall be
only at the direction of Purchaser.
(4) Seller shall administer and review the selection by the Contractors
of subcontractors and others as appropriate for construction of the Project
(to the extent not yet selected) and review bids for acceptability from
subcontractors.
(5) Seller shall endeavor to cause the Contractors to keep in full force
and effect all necessary governmental approvals and permits, and shall
endeavor to perform such acts as shall be reasonably necessary to effect
compliance by Purchaser with all laws, rules, ordinances, statutes, and
regulations of any Governmental Authority applicable to the Project.
(6) Seller shall endeavor to perform such acts as shall be reasonably
necessary to effect compliance by Purchaser with all applicable private
restrictions, covenants and easement agreements concerning the development,
use and operation of the Project or any portion thereof.
(7) Seller shall negotiate and submit to the Purchaser for the
Purchaser's approval all contracts for, or otherwise arrange for the
delivery of all utilities required for the development, construction, and
operation of the Project, including, without limitation, water, electricity,
telephone, storm sewer, and sanitary sewer services. Purchaser agrees that
its approval of such contracts shall not be unreasonably withheld or
delayed.
(8) Seller shall assist Purchaser so that the Purchaser shall obtain and
keep in force, such policies of insurance, including, but not limited to,
public liability, all-risk, and builder's risk, in such amounts and with
such carriers as shall be required to be maintained by Purchaser under the
Architect's Agreement and the Construction Agreements.
(9) Seller shall maintain complete and accurate records reflecting the
progress of the Seller's implementation, both before and after Closing, of
-29-
the Development Budget, which records shall include all contracts, purchase
orders, disbursement requests, bids, and proposals of contractors,
suppliers, and vendors, and such other records, plans and information as
Seller shall deem appropriate to maintain in discharging its duties and
responsibilities hereunder.
(10) Seller shall inspect the Project at regular intervals so as to be
kept informed as to the stage of development and the condition of the
Project.
(11) Seller shall examine the contents of all applications for payments
submitted under the Architect's Agreement or any Construction Agreement,
verify the contents of such applications and prepare, execute and deliver,
or cause to be prepared, executed and delivered such certificates and other
documents as may be required by such Agreements and shall review and approve
all disbursements made by or on behalf of Purchaser under the Architect's
Agreement and under any Construction Agreement, all in accordance with the
Development Budget as it may from time to time be revised pursuant to
Paragraph 16(e) hereof. Seller shall process all such applications for
payments and any other invoices and charges as expeditiously as possible to
avoid all penalties and any excess interest and to use reasonable efforts,
to the extent possible and when desirable, to take advantage of vendor
discounts. Seller shall also make recommendations to Purchaser with respect
to modifications, clarifications and change orders necessary or desirable
under any Construction Agreement; and Seller shall also review and recommend
for approval or disapproval by Purchaser, as appropriate, change orders
under any Construction Agreement, all in accordance with the Development
Budget as it may from time to time be revised pursuant to Paragraph 16(e)
hereof.
(12) Seller shall coordinate, administer and manage the work, activities
and performance of the Architect under the Architect's Agreement and of the
Contractors under the Construction Agreements. Such activities by Seller
shall include, without limitation, reviewing, monitoring and coordinating
all construction scheduling to ensure the orderly process of construction
and completion thereof in the manner and within the time periods required by
the Lease and this Agreement, and reviewing and verifying all payment
requests from the Architect and the Contractors. Seller shall serve as the
Purchaser's representative in all discussions, negotiations, and dealings
with the Architect and the Contractors. Seller shall periodically (but no
less often than every ten [10] days prior to the Substantial Completion Date
and no less often than biweekly after the Substantial Completion Date)
advise Purchaser of the status of the Project and of their respective duties
and obligations with respect to the Project and shall provide copies to
Purchaser of the weekly meeting notes and field reports for such week (but
no other formal written reports). Seller shall also assist and advise
Purchaser with respect to the performance and enforcement by Purchaser of
its duties and rights under the Architect's Agreement and the Construction
Agreements. Seller shall coordinate with the Architect and the Contractor an
orderly and expeditious transition from the construction stage of the
-30-
Project to the operating stage of the Project and, in connection therewith,
Seller shall expedite and supervise the completion of any remedial work that
may be required to be performed by the Contractors following the completion
of the Project.
(13) Seller shall cooperate with Purchaser's inspecting engineer, if
any, engaged for the purpose of reviewing the status of the work.
(14) Seller shall purchase, to the extent the same are not provided
under the Construction Agreement, all supplies, materials, and equipment
required in connection with the development of the Project, and the cost of
same shall be borne by Purchaser as contemplated in the Development Budget.
(15) Seller shall coordinate, review, administer and manage the work and
activities relating to, and the performance of, the Tenant Improvements to
be constructed and installed by the "Landlord" under the Lease.
(16) Upon substantial completion of the Project, Seller shall cause the
Project to be inspected by the Committee and shall obtain the Preliminary
Certificate of Compliance from the Committee as required by the Declaration.
Thereafter, Seller shall cause the as-built site drawings to be prepared and
submitted to the Committee as required by the Declaration and shall obtain
the final Certificate of Compliance from the Committee as contemplated in
the Declaration.
(17) Seller shall deliver to Purchaser the originals of all permits,
licenses, guaranties, warranties, bills of sale and other contracts,
agreements, change orders or commitments obtained or received by Seller for
the account or benefit of Purchaser, it being understood that Purchaser,
upon Purchaser's approval thereof, which approval shall not be unreasonably
withheld or delayed, will execute all such contracts, agreements, change
orders and documents, and that Seller will not, under any circumstances,
execute contracts, agreements, change orders (other than as permitted under
Paragraph 16[d] hereof) or documents on behalf of Purchaser except as
specifically provided otherwise in this Agreement (including Paragraph 16[d]
hereof) or as otherwise expressly authorized in writing by Purchaser.
(18) Seller will prepare the final accounting of all costs for the
purpose of establishing the Base Rental Rate as contemplated in Exhibit J to
---------
the Lease, and Seller and Purchaser shall each cooperate and participate
fully in establishing the Base Rental Rate under the Lease.
(19) In connection with the initial conversion of the Project from the
development stage to the operational stage, Seller shall make
recommendations to Purchaser regarding the selection of independent
contractors to provide services with respect to the Property (janitorial,
security, sweeping, landscape maintenance, etc.).
-31-
(b) Completion and Guarantee. Seller hereby agrees to devote sufficient
------------------------
time and personnel to cause the development of the Project to be completed in
compliance with the time parameters established therefor under the Lease and
this Agreement, and in accordance with the Development Budget as it may from
time to time be revised pursuant to Paragraph 16(e) hereof. Seller does hereby
guarantee to Purchaser that the sum of the following shall in no event exceed
the Purchase Price: (i) the portion of the Purchase Price paid by the Purchaser
to Seller at Closing, (ii) the ▇▇▇▇▇▇▇ Money paid by Escrow Agent to Seller at
Closing, and (iii) the costs and expenses incurred by Purchaser for the
completion of the Project and the satisfaction of all of the conditions required
for the Completion Date to have occurred with respect to the Project. Seller
shall be responsible for and shall pay to Purchaser the amount by which the sum
of the foregoing shall exceed the Purchase Price, which amount(s) shall be paid
within five (5) days after receipt by Seller of a statement therefor accompanied
by such back-up information as may be reasonably required to substantiate the
amount due and payable. Any such amounts payable by Seller to Purchaser
hereunder shall bear interest at the rate of twelve percent (12%) per annum from
the due date thereof until paid.
(c) Employees. Seller shall have in its employ at all times a sufficient
---------
number of capable employees to enable Seller to perform its duties hereunder.
All persons, other than independent contractors, employed by Seller in the
performance of its responsibilities hereunder shall be exclusively controlled by
and shall be the employees of Seller and not of Purchaser, and Purchaser shall
have no liability, responsibility or authority with respect thereto.
(d) Implementation of Development Budget. Seller is hereby authorized
------------------------------------
and directed to implement the Development Budget pursuant to this Agreement.
Seller may, without the need for any further approval whatsoever by Purchaser,
(i) allocate contingency amounts set forth in the Development Budget to other
categories or line items of expense set forth in the Development Budget, (ii)
make reallocations of amounts for any line items of expense in the Development
Budget relating to the "shell and core" of the Improvements to other line items
of expense relating to the "shell and core" of the Improvements, provided that
such reallocation is prudent and shall not result in a diminution in the value
or quality of the Improvements, (iii) make reallocations of amounts for any line
items of expense in the Development Budget relating to Tenant Improvements,
provided that any consent required of the Tenant for the change, addition or
deletion causing such reallocation has been obtained in writing, (iv) approve
and effectuate change orders in the Construction Agreements, provided that (A)
no single change order with respect to the "shell and core" of the Improvements
shall increase the Project Costs by more than Five Thousand Dollars ($5,000.00),
(B) the change orders with respect to the "shell and core" of the Improvements
not expressly approved by Purchaser in writing shall not increase the Project
Costs by more than Twenty Thousand Dollars ($20,000.00) in the aggregate, (C)
the change orders relating to the "shell and core" of the Improvements shall not
result in a diminution in the value or quality of the Improvements, and (D) the
change orders relating to the Tenant Improvements shall not result in a
diminution in the value or quality of the Tenant Improvements unless Tenant's
-32-
consent to such change orders has been obtained in writing. Seller shall have
the right to sign for an on behalf of Purchaser any change orders which Seller
is entitled to approve and effectuate under clause (iv) above if Seller
determines in its reasonable discretion that a delay which would be caused by
submitting such change order to Purchaser for signature by Purchaser would
adversely affect the schedule or cost of the Project. Seller shall give
Purchaser prompt written notice of any reallocations of line items of expense as
set forth in the Development Budget effectuated by Seller without Purchaser's
approval as provided above and of any change orders entered into, approved and
effectuated by Seller without Purchaser's consent as provided above. Seller
shall use prudence and diligence and shall employ commercially reasonable
efforts to ensure that the actual costs incurred for each category or line item
of expense as set forth in the Development Budget (as revised as provided
herein) shall not exceed such category or line item in the Development Budget.
Seller shall advise Purchaser promptly if it appears that costs in any category
or line item specified in the Development Budget will exceed the amount budgeted
therefor. All expenses shall be charged to the proper category or line item in
the Development Budget, and except as herein provided, no expenses may be
classified or reclassified for the purpose of avoiding an excess in the budgeted
amount of a category or line item without Purchaser's prior written approval.
(e) Revision of Development Budget. If Seller at any time determines
------------------------------
that the Development Budget is not compatible with the then-prevailing status of
the Project and does not adequately provide for the completion of the Project,
Seller shall promptly prepare and submit to Purchaser an appropriate revision of
the Development Budget. Any such revision shall require the approval of
Purchaser, except as expressly provided in Paragraph 16(d) above. Purchaser
agrees that Purchaser shall not unreasonably withhold its approval of increases
in any line item of expense in the Development Budget if such lien item of
expense (including the increase thereof) shall be a cost which is included for
purposes of calculating the Base Rent under the Lease, but no such consent by
Purchaser shall imply any agreement to increase the Purchase Price except as
expressly provided in Paragraph 4 hereof.
(f) Books of Account. Seller shall maintain or cause to be maintained
----------------
true and accurate books of account reflecting the planning, design,
construction, and completion of the Project. All entries to such books of
account shall be supported by sufficient documentation to permit Purchaser and
its auditors to ascertain that said entries are properly and accurately
recorded. Such books of account shall be located at Seller's principal
metropolitan Englewood, Colorado office and shall be maintained in accordance
with Seller's present cash method of accounting. Seller shall ensure such
control over accounting and financial transactions as is reasonably required to
protect against theft, error or fraudulent activity on the part of Seller,
Seller's employees or agents.
(g) Monthly Reports. Within fifteen (15) days following the end of each
---------------
calendar month, Seller shall prepare a report with respect to the Project
(hereinafter referred to as the "Monthly Report") and shall cause the same to be
delivered to Purchaser and the Purchaser's inspecting engineer, if any. Each
Monthly Report shall be in the form attached hereto as Exhibit "V" and by
-----------
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reference made a part hereof and shall be accompanied by the following
information respecting the Project:
(1) A copy of the draw request for the month covered by the Monthly
Report, including:
(A) each draw request letter;
(B) each certificate of the Architect; and
(C) each application and certificate for payment of the
Contractor.
(2) The costs incurred under the Construction Contract as of the date
of the Monthly Report, if not included in the application and certificate
for payment referred to in item (1)(C) above.
(3) A comparison of the amount of actual costs incurred as of the date
of the Monthly Report to the budgeted costs as of such date, shown on a
line-item basis using the same categories or line items set forth in the
Development Budget.
(4) Photographs of the Project depicting the current status of
construction.
(5) A report with respect to the progress of construction, including
information as to whether the commencement, milestone and completion dates
in the Lease are being achieved. Seller shall identify in such report
potential variances between the completion dates required in the Lease and
the probable completion dates and shall make recommendations as to
adjustments necessary to meet the required completion dates.
(h) Examination of Books and Records. Purchaser, at its expense, shall
--------------------------------
have the right at all reasonable times during normal business hours and upon at
least twenty-four (24) hours advance notice, to audit, to examine, and to make
copies of or extracts from the books of account and records maintained by Seller
with respect to the Project. If Purchaser shall notify Seller of either
weaknesses in internal control (and provided Purchaser's determination regarding
weaknesses in internal control is reasonable) or errors in record keeping,
Seller shall correct such weaknesses and errors as soon as possible after they
are disclosed to Seller. Seller shall notify Purchaser in writing of the
actions taken to correct such weaknesses and errors.
(i) Indemnity of Purchaser. Seller hereby agrees to indemnify, defend
----------------------
and hold harmless Purchaser and its partners and their respective officers,
directors and employees, from and against any and all claims, demands, losses,
liabilities, actions, lawsuits and other proceedings, judgments and awards, and
costs and expenses (including without limitation reasonable attorneys' fees and
court costs incurred in connection with the enforcement of this indemnity or
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otherwise), arising out of the negligence, fraud or any willful act or omission
of Seller, or any of its officers, directors, agents or employees, in connection
with the obligations of Seller under Paragraph 16 or Seller's services or work
hereunder, whether within or beyond the scope of its duties or authority
hereunder.
(j) Ownership of Information and Materials. Purchaser shall have the
--------------------------------------
right to use, without further compensation to the Seller, all written data and
information generated by or for Seller in connection with the Project or
supplied to Seller by Purchaser or the Purchaser's contractors or agents, and
all drawings, plans, books, records, contracts, agreements and all other
documents and writings in its possession relating to its services or the
Project. Such data and information shall at all times be the property of
Purchaser, subject to any proprietary restrictions in the Architect's Agreement
and Construction Agreements.
(k) Insurance Requirements. Until the Completion Date, insurance with
----------------------
respect to the Project shall be carried and maintained in force in accordance
with the provisions contained in Exhibit "N" attached hereto and incorporated
-----------
herein by this reference, with the premiums and other costs and expenses for
such required insurance to be borne as provided in Exhibit "N".
-----------
(l) Purchaser's Insurance Primary Coverage. As between any insurance
--------------------------------------
carried by Purchaser pursuant to this Paragraph 16 and any insurance carried by
Seller, Purchaser's insurance shall for all purposes be considered the primary
coverage, and no claim shall be made under or with respect to any insurance
maintained by Seller except in the event that Purchaser's entire insurance is
exhausted (without regard to whether the actual amount of Purchaser's insurance
exceeds the amounts specified in this Paragraph 16).
(m) Waiver of Subrogation. Each casualty insurance policy maintained by
---------------------
Purchaser or by Seller with respect to the Project shall contain a waiver of
subrogation clause, so that no insurer shall have any claim over or against
Purchaser or Seller, as the case may be, by way of subrogation or otherwise,
with respect to any claims which are insured under any such policy.
17. Purchaser's Default. In the event of default by Purchaser under the
-------------------
terms of this Agreement occurring prior to Closing, Seller's sole and exclusive
remedy shall be to receive the ▇▇▇▇▇▇▇ Money as liquidated damages and
thereafter the parties hereto shall have no further rights or obligations
hereunder whatsoever, except for obligations hereunder which expressly survive
the termination of this Agreement. It is hereby agreed that Seller's damages
will be difficult to ascertain and that the ▇▇▇▇▇▇▇ Money constitutes a
reasonable liquidation thereof and is intended not as a penalty, but as fully
liquidated damages. Seller agrees that in the event of a default by Purchaser
prior to Closing, Seller shall not initiate any proceeding to recover damages
from Purchaser, but shall limit its recovery to the receipt and retention of the
▇▇▇▇▇▇▇ Money. The limitations on Purchaser's liability under this Paragraph 17
shall be inapplicable to the liability of Purchaser for payments, if any, due by
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Purchaser to Seller under Paragraph 5 hereof. In the event of any default by
Purchaser occurring after Closing under any of the terms of this Agreement which
survive Closing, Seller may pursue any remedy granted to Seller at law or in
equity, except that Seller waives any right to recover consequential damages
and/or punitive damages arising from any such default by Purchaser occurring
after Closing.
18. Seller's Default. In the event of default by Seller under the terms
----------------
of this Agreement occurring prior to Closing, except as otherwise specifically
set forth herein, at Purchaser's option: (i) Purchaser may terminate this
Agreement by written notice to Seller, whereupon the ▇▇▇▇▇▇▇ Money shall be
immediately returned by Escrow Agent to Purchaser, and the parties hereto shall
have no further rights or obligations hereunder except for rights and
obligations which expressly survive any termination of this Agreement, or (ii)
Purchaser shall be entitled to an immediate refund of all but $25.00 of the
▇▇▇▇▇▇▇ Money and to pursue against Seller any remedy granted to Purchaser at
law or in equity, including, without limitation, specific performance, but
Purchaser waives any right to recover consequential damages and/or punitive
damages arising from any such default by Seller under this Agreement. In the
event of any default by Seller occurring after Closing under any of the terms of
this Agreement which survive Closing, Purchaser may pursue any remedy granted to
Purchaser at law or in equity, except that Purchaser waives any right to recover
consequential damages and/or punitive damages arising from any such default by
Seller occurring after Closing.
19. Condemnation. If, prior to the Closing, all or any part of the
------------
Property which Purchaser reasonably determines will interfere with the operation
of the Property is subjected to a bona fide threat of condemnation by a body
having the power of eminent domain or is taken by eminent domain or condemnation
(or sale in lieu thereof), or if Seller has received notice that any
condemnation action or proceeding with respect to the Property is contemplated
by a body having the power of eminent domain, Seller shall give Purchaser
immediate written notice of such threatened or contemplated condemnation or of
such taking or sale, and Purchaser may by written notice to Seller given within
thirty (30) days of the receipt of such notice from Seller, elect to cancel this
Agreement. If Purchaser chooses to cancel this Agreement in accordance with
this Paragraph 19, then the ▇▇▇▇▇▇▇ Money shall be returned immediately to
Purchaser by Escrow Agent and the rights, duties, obligations, and liabilities
of the parties hereunder shall immediately terminate and be of no further force
and effect. If Purchaser does not elect to cancel this Agreement in accordance
herewith, this Agreement shall remain in full force and effect and the sale of
the Property contemplated by this Agreement, less any interest taken by eminent
domain or condemnation, or sale in lieu thereof, shall be effected with no
further adjustment and without reduction of the Purchase Price, and at the
Closing, Seller shall assign, transfer, and set over to Purchaser all of the
right, title, and interest of Seller in and to any awards that have been or that
may thereafter be made for such taking. At such time as all or a part of the
Property is subjected to a bona fide threat of condemnation and Purchaser shall
not have elected to terminate this Agreement as hereinabove provided, Purchaser
shall be permitted to participate in the proceedings as if Purchaser were a
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party to the action. Seller shall not settle or agree to any award or payment
pursuant to condemnation, eminent domain, or sale in lieu thereof without
obtaining Purchaser's prior written consent thereto in each case.
20. Damage or Destruction. If any of the Improvements shall be destroyed
---------------------
or damaged prior to the Closing, and if either the estimated cost of repair or
replacement exceeds One Hundred Fifty Thousand Dollars ($150,000.00) or the
damage could result in the termination of the Lease, Purchaser may, by written
notice given to Seller within twenty (20) days after receipt of written notice
from Seller of such damage or destruction, elect to terminate this Agreement, in
which event the ▇▇▇▇▇▇▇ Money shall immediately be returned by Escrow Agent to
Purchaser and the rights, duties, obligations, and liabilities of all parties
hereunder shall immediately terminate and be of no further force or effect. If
Purchaser does not elect to terminate this Agreement pursuant to this Paragraph
20, or has no right to terminate this Agreement (because the damage or
destruction does not exceed $150,000.00 and could not result in the termination
of the Lease), and the sale of the Property is consummated, Purchaser shall be
entitled to receive all insurance proceeds paid or payable to Seller by reason
of such destruction or damage under the insurance required to be maintained by
the Tenant pursuant to the Lease (less amounts of insurance theretofore received
and applied by Seller to costs actually incurred for restoration). Seller shall
not settle or release any damage or destruction claims without obtaining
Purchaser's prior written consent in each case. All said insurance proceeds
received by Seller by the date of Closing shall be paid by Seller to Purchaser
at Closing. In addition, at Closing, Seller shall pay over to Purchaser, and
assign to Purchaser, all proceeds of any rent loss insurance for the period of
time commencing on the date of Closing. If the amount of said casualty or rent
loss insurance proceeds is not settled by the date of Closing, Seller shall
execute at Closing all proofs of loss, assignments of claim, and other similar
instruments in order that Purchaser receive all of Seller's right, title, and
interest in and under said insurance proceeds.
21. Hazardous Substances. Seller represents and warrants to Purchaser
--------------------
that, to the best of Seller's knowledge, except as disclosed in the
Environmental Report, (i) no Hazardous Substances, nor any other pollutants,
toxic materials, or contaminants have been or shall prior to Closing be
discharged, disbursed, released, stored, treated, generated, disposed of, or
allowed to escape on the Property, (ii) no asbestos or asbestos containing
materials have been installed, used, incorporated into, or disposed of on the
Property, (iii) no polychlorinated biphenyls are located on or in the Property,
in the form of electrical transformers, fluorescent light fixtures with
ballasts, cooling oils, or any other device or form, (iv) no underground storage
tanks are located on the Property or were located on the Property and
subsequently removed or filled, (v) no investigation, administrative order,
consent order and agreement, litigation, or settlement with respect to Hazardous
Substances is proposed, threatened, anticipated or in existence with respect to
the Property, and (vi) the Land has not previously been used as a landfill,
cemetery, or as a dump for garbage or refuse. Seller hereby indemnifies
Purchaser and agrees to holds Purchaser harmless from and against any lost,
cost, damage, liability or expense due to or arising out of the breach of any
representation or warranty contained in this Paragraph 21. The representations
and warranties set forth in this Paragraph 21 and the indemnification given
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herein shall expressly survive the execution and delivery of the Special
Warranty Deed conveying the Real Estate from Seller to Purchaser.
22. Assignment. This Agreement and Purchaser's rights, duties, and
----------
obligations hereunder may not be delegated, transferred, or assigned by
Purchaser without the prior written consent of Seller, and any assignee or
transferee proposed by Purchaser shall expressly assume all of Purchaser's
duties, liabilities and obligations under this Agreement by written instrument
delivered to Seller. Notwithstanding the foregoing to the contrary, this
Agreement, and Purchaser's rights and duties hereunder, may be freely assigned
and transferred to any partnership having ▇▇▇▇▇ Capital, Inc. or ▇▇▇ ▇. ▇▇▇▇▇,
III as a direct or indirect general partner thereof or to The Bank of New York,
as agent for Purchaser or for any other partnership having ▇▇▇▇▇ Capital, Inc.
or ▇▇▇ ▇. ▇▇▇▇▇, III as a direct or indirect general partner thereof.
23. Broker's Commission. Seller has agreed to pay to Galesi Realty
-------------------
Corporation ("Broker") a real estate sales commission in accordance with a
separate agreement between Seller and Broker. Seller shall and does hereby
indemnify and hold harmless Purchaser from and against any claim, whether or not
meritorious, for any real estate sales commission, finder's fees, or like
compensation in connection with the sale contemplated hereby and arising out of
any act or agreement of Seller, including any claim asserted by Broker.
Likewise, Purchaser shall and does hereby indemnify and hold harmless Seller
from and against any claim, whether or not meritorious, for any real estate
sales commission, finder's fees, or like compensation in connection with the
sale contemplated hereby and arising out of any act or agreement of Purchaser,
except any such claim asserted by Broker.
24. Notices. Wherever any notice or other communication is required or
-------
permitted hereunder, such notice or other communication shall be in writing and
shall be delivered by overnight courier, by hand, or sent by U.S. registered or
certified mail, return receipt requested, postage prepaid, to the addresses set
out below or at such other addresses as are specified by written notice
delivered in accordance herewith:
PURCHASER: Fund VIII and Fund IX Associates
c/▇ ▇▇▇▇▇ Capital, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
NationsBank Plaza, Suite 5200
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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SELLER: ORIX Prime West Broomfield II Venture
c/o Prime West Development, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇ ▇▇▇▇▇▇
with a copy to: ORIX Real Estate Equities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a further copy to: ▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Suite 1800
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Any notice or other communication mailed as hereinabove provided shall be deemed
effectively given or received on the date of delivery, if delivered by hand or
by overnight courier, or otherwise on the third (3rd) business day following the
postmark date of such notice or other communication.
25. Possession. Possession of the Property shall be granted by Seller to
----------
Purchaser on the date of Closing, subject only to the Lease and the Permitted
Exceptions.
26. Time Periods. If the time period by which any right, option, or
------------
election provided under this Agreement must be exercised, or by which any act
required hereunder must be performed, or by which the Closing must be held,
expires on a Saturday, Sunday, or holiday, then such time period shall be
automatically extended through the close of business on the next regularly
scheduled business day.
27. Access to Records Following Closing. Seller acknowledges that
-----------------------------------
Purchaser may be required by the Securities and Exchange Commission to file
audited financial statements for one (1) to three (3) years with regard to the
Property. Seller shall (i) cooperate with Purchaser, its counsel, accountants,
agents and representatives, provide them with access to Seller's books and
records with respect to the acquisition, leasing, development, maintenance and
operation of the Property for the period prior to Closing, and permit them to
copy the same, (ii) execute a form of "rep" letter and such other documents as
are reasonably required by Purchaser or Purchaser's accountants in connection
with such audit, and (iii) furnish Purchaser with such additional information
concerning the same as Purchaser shall reasonably request. Purchaser will pay
the costs associated with any such audit.
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28. Survival of Provisions. All covenants, warranties, and agreements
----------------------
set forth in this Agreement shall survive the execution or delivery of any and
all deeds and other documents at any time executed or delivered under, pursuant
to, or by reason of this Agreement, and shall survive the payment of all monies
made under, pursuant to, or by reason of this Agreement; provided, however, that
the representations and warranties contained in Paragraphs 9, 21 and 30 hereof
shall automatically expire on the dates which are one (1) year, three (3) years
and one (1) year, respectively, after the date of Substantial Completion, except
to the extent that a notice of breach of any representation or warranty has been
given prior to such expiration, and except that the representations and
warranties contained in Paragraph 9(e) hereof shall not be subject to any time
limitation.
29. Severability. This Agreement is intended to be performed in
------------
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules, and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby but rather shall be enforced to the greatest extent permitted
by law.
30. Purchaser's Authorization. Purchaser represents to Seller that this
-------------------------
Agreement has been duly authorized and executed on behalf of Purchaser and that
this Agreement constitutes the valid and binding agreement of Purchaser,
enforceful in accordance with these terms, subject to bankruptcy, insolvency,
and similar laws affecting generally the enforcement of creditor's rights.
31. General Provisions. No failure of either party to exercise any power
------------------
given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms hereof,
shall constitute a waiver of either party's right to demand exact compliance
with the terms hereof. This Agreement contains the entire agreement of the
parties hereto, and no representations, inducements, promises, or agreements,
oral or otherwise, between the parties not embodied herein shall be of any force
or effect. Any amendment to this Agreement shall not be binding upon the parties
hereto unless such amendment is in writing and executed by all parties hereto.
The provisions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Time is of the essence of this Agreement. This
Agreement may be executed in multiple counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one and
the same agreement. The headings inserted at the beginning of each paragraph are
for convenience only, and do not add to or subtract from the meaning of the
contents of each paragraph. This Agreement shall be construed and interpreted
under the laws of the State of Colorado. Except as otherwise provided herein,
all rights, powers, and privileges conferred hereunder upon the parties shall be
cumulative but not restrictive to those given by law. All personal pronouns used
in this Agreement, whether used in the masculine, feminine, or neuter gender
shall include all genders, and all references herein to the singular shall
include the plural and vice versa.
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32. Confidentiality. Each of Seller and Purchaser agrees to keep the
---------------
terms of this Agreement and any related discussions with the other party hereto
confidential prior to the date of Closing; provided, that each party may
disclose this Agreement to its attorneys, accountants, lenders, prospective
lenders, and financial advisors and otherwise as required by law.
33. Enlargement. Seller and Purchaser acknowledge that in accordance
-----------
with the provisions of Section 33.5 of the Lease, the Tenant has been granted
the right, exercisable no later than December 10, 1999, to request the
"Landlord" under the Lease to acquire the property described in the Option
Agreement and to construction the Expansion Building (as defined in the Lease).
Purchaser agrees that if Tenant exercises its option for the Expansion Premises
(as defined in the Lease) pursuant to Section 33.5 of the Lease and Purchaser,
as the "Landlord" under the Lease, elects to exercise the option under the
Option Agreement and to cause the construction of the Expansion Premises in
accordance with Section 33.5 of the Lease, Purchaser shall employ Seller or an
affiliate of Seller reasonably approved by Purchaser as the development manager
with respect to the Expansion Premises, and Seller or such affiliate shall
receive as its fee for acting as the development manager a development fee in
the amount of the aggregate of (i) $3.00 per square foot of usable area of the
Expansion Premises and (ii) ten percent (10%) of the costs which are actually
included in determining the Base Rent to be paid by Tenant for the Expansion
Premises. Purchaser shall advise Seller in writing of Tenant's exercise of its
option and of Purchaser's election to construct the Expansion Premises. If
Purchaser elects to construct the Expansion Premises, Purchaser and Seller shall
proceed in good faith to enter into a development agreement containing such
customary terms and provisions for the development of similar type properties
and providing for the payment of the fees set forth in this Paragraph 33. If
Tenant shall fail to exercise its option under Section 33.5 of the Lease on or
before December 10, 1999, or if Tenant does exercise such option but Purchaser
does not elect to purchase and construct the Expansion Premises, then this
Paragraph 33 shall terminate and be of no further force or effect, and Seller
shall have no claim or right against Purchaser under this Paragraph 33.
Likewise, this Paragraph 33 shall be inapplicable in the event Tenant elects to
construct the Expansion Premises itself or through its designee as contemplated
in Section 33.5 of the Lease. Nothing contained in this Paragraph 33 shall
obligate Purchaser to construct the Expansion Premises if Tenant exercises its
option, which decision shall be made by Purchaser at its sole discretion and if
Purchaser elects to not construct the Expansion Premises, Seller shall have no
claim or right against Purchaser under this Paragraph 33. The terms and
provisions of this Paragraph 33 shall be binding upon and inure to the benefit
of the successors and assigns of the parties hereto (except that Seller shall
have no right to transfer or assign its rights under this Paragraph 33 except to
an affiliate of Seller reasonably approved by Purchaser), and at the Closing,
Purchaser and Seller shall enter into a mutually acceptable Memorandum setting
forth the terms and provisions of this Paragraph 33, which shall be recorded in
the public records of Boulder County.
34. Interference with Occupancy by Tenant. By its execution of this
-------------------------------------
Agreement as a general partner of Seller, Prime West Boulder Venture II, Inc.
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("PWBV") acknowledges that a material inducement for the acquisition of the
Property by Purchaser is the Lease with Tenant and the expectation that Tenant
or an affiliate of Tenant will actually occupy the Building throughout the
initial term of the Lease. PWBV covenants and agrees that after the Closing,
neither PWBV nor any affiliate, officer or director of PWBV shall take any
action which would cause or facilitate any reduction in the occupancy of the
Building by Tenant or the relocation of Tenant's business from the Building
during the initial term of the Lease, and in furtherance thereof, PWBV hereby
covenants and agrees that during the initial term of the Lease, neither PWBV nor
any affiliate, officer or director of PWBV shall lease any space to Tenant or an
affiliate of Tenant in any other building within a five (5) mile radius of the
Property or construct any building within a five (5) mile radius of the Property
to be occupied by Tenant or any affiliate of Tenant if the result of such lease
or construction of any other building shall be the reduction in the occupancy of
the Building by Tenant or the relocation of Tenant's business from the Building
during the initial term of the Lease. The obligations of PWBV under this
Paragraph 34 shall survive the Closing. Prime West shall join in this Agreement
solely for the purpose of guarantying the obligations of PWBV under this
Paragraph 34.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective seals to be affixed hereunto as of the day,
month and year first above written.
"SELLER":
------
ORIX PRIME WEST BROOMFIELD II VENTURE,
a Colorado general partnership
By: Prime West Boulder Venture II, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(CORPORATE SEAL)
By: ORIX Broomfield II, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Executive Vice President
(CORPORATE SEAL)
[Signatures continued on following page]
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[Signatures continued from previous page]
"PURCHASER":
---------
FUND VIII AND FUND IX ASSOCIATES,
a Georgia general partnership
By: ▇▇▇▇▇ Real Estate Fund VIII, L.P.,
a Georgia limited partnership
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇, III (SEAL)
----------------------
▇▇▇ ▇. ▇▇▇▇▇, III,
General Partner
By: ▇▇▇▇▇ Partners, L.P.,
a Georgia limited partnership,
General Partner
By: ▇▇▇▇▇ Capital, Inc.,
a Georgia corporation,
General Partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇, III
-------------------------
▇▇▇ ▇. ▇▇▇▇▇, III,
President
(CORPORATE SEAL)
[Signatures continued on following page]
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[Signatures continued from previous page]
By: ▇▇▇▇▇ Real Estate Fund IX, L.P.,
a Georgia limited partnership
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇, III (SEAL)
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▇▇▇ ▇. ▇▇▇▇▇, III,
General Partner
By: ▇▇▇▇▇ Partners, L.P.,
a Georgia limited partnership,
General Partner
By: ▇▇▇▇▇ Capital, Inc.,
a Georgia corporation,
General Partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇, III
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▇▇▇ ▇. ▇▇▇▇▇, III,
President
(CORPORATE SEAL)
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The undersigned Prime West does hereby guaranty to Purchaser the
performance of the obligations of PWBV under Paragraph 34 of this Agreement and
joins in this Agreement solely for the purpose of confirming such guaranty.
"PRIME WEST":
Prime West Development, Inc.,
a Colorado corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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Schedule of Exhibits
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Exhibit "A" Description of Land
Exhibit "B" Escrow Agreement Form and Escrow Instructions
Exhibit "C" Development Budget
Exhibit "D" Lease Amendment and Estoppel Certificate Form
Exhibit "E" Permitted Exceptions
Exhibit "F" List of Personal Property
Exhibit "G" Plans and Specifications
Exhibit "H" Service Contracts
Exhibit "I" ▇▇▇▇ of Sale Form
Exhibit "J" Blanket Transfer and Assignment Form
Exhibit "K" Assignment and Assumption of Lease Form
Exhibit "L" Assignment and Assumption of Construction Documents Form
Exhibit "M" Assignment and Assumption of Option Agreement Form
Exhibit "N" Insurance Requirements
Exhibit "O" Description of Architect's Agreement
Exhibit "P" List and Description of Construction Agreements
Exhibit "Q" List and Description of Lease and All Amendments Thereto
Exhibit "R" Contractor's Certification and Agreement to Continue Work Form
Exhibit "S" Architect's Certification and Agreement to Continue Work Form
Exhibit "T" Purchase Price Adjustment Example
Exhibit "U" Escrow Agreement Form
Exhibit "V" Monthly Report Form
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