AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 6th
day of December, 1996 (the "Agreement Date"), by and between LINCOLN PROPERTY
COMPANY N.C., INC., a Texas corporation ("Purchaser"), and BGT LIMITED
PARTNERSHIP, an Illinois limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of SEVEN MILLION TWO HUNDRED THOUSAND AND 00/100 DOLLARS
($7,200,000.00) ("Purchase Price") subject to the prorations described below,
and on the terms and conditions hereinafter set forth, the property commonly
known as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, consisting of the
following:
1.1 All of Seller's right, title and interest in the real property
("Land") and all buildings and other improvements ("Improvements") situated on
the Land, as more particularly described on Exhibit A attached hereto and made
a part hereof (the Land and the Improvements are sometimes referred to herein
together as the "Property"), together with all easements and appurtenances
thereunto belonging and all of Seller's right, title and interest in and to all
streets, alleys and public ways adjacent thereto, if any, and together with all
of Seller's right, title and interest in and to all strips and gores located on
or adjacent to the Property or located between any parcels constituting the
Land, if any;
1.2 The personal property set forth on Exhibit B attached hereto
("Personal Property"), but shall in all events exclude the personal property
described on Exhibit B under the heading "Excluded Personal Property";
1.3 The tenant leases described in the rent roll set forth on Exhibit C
attached hereto and made a part hereof together with such other tenant leases
of the Property as may be made prior to Closing (as hereinafter defined) in
accordance with the terms of this Agreement ("Leases");
1.4 If and to the extent assignable and to the extent of Seller's
interest therein, if any: (a) all guarantees, warranties and indemnifications,
if any, received from suppliers, contractors, materialmen or subcontractors
arising out of, or in connection with, the installation, construction or
maintenance of the Property including, without limitation, the right to ▇▇▇ any
obligor for any breach of any covenant, agreement, representation, warranty or
guarantee contained therein (collectively, the "Warranties"); (b) all licenses,
permits, certificates of occupancy and franchises issued by any federal, state,
county or municipal authority relating to the use, maintenance or operation of
the Property running to or in favor of Seller or pertaining to the Property
(collectively, the "Permits"); (c) all trade styles, and trade names,
including, without limitation, the name "International Teleport Plaza", and all
contract rights, brochures, manuals, lists of prospective tenants, advertising
material, books and records, utility contracts and telephone numbers
(collectively, the "Trade Documents"; (d) the plans and specifications for the
Improvements and all unexpired claims and sureties, if any, received in
connection with the construction, improvement or equipment of the Improvements
(collectively, the "Plans"); and (e) the service and maintenance contracts set
forth in Exhibit D (collectively, the "Service Contracts"). The Warranties,
Permits, Trade Documents and Plans are collectively referred to as the
"Intangibles."
1.5 Notwithstanding anything contained in this Agreement to the contrary,
Seller is not conveying or assigning to Purchaser the items described in
Paragraph 15.3 hereof.
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1 Within two (2) business days after the execution of this Agreement,
the sum of TWO HUNDRED THOUSAND AND 00/100 DOLLARS ($200,000.00) ("▇▇▇▇▇▇▇
Money"), by check payable to the escrow agent, to be held in escrow by and in
accordance with the provisions of the Escrow Agreement ("Escrow Agreement"),
attached hereto as Exhibit E; and
2.2 On the Closing Date (as hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 2:00 p.m. Chicago time. Any
provisions herein providing for the delivery of the ▇▇▇▇▇▇▇ Money to either
party hereof are intended to mean the ▇▇▇▇▇▇▇ Money plus any interest earned
thereon and less all escrow and investment fees.
3. TITLE COMMITMENT AND SURVEY.
3.1 Attached hereto as Exhibit F is a copy of a title commitment for an
owner's standard title insurance policy issued by Charter Title Company, as
agent for Lawyers Title Insurance Corporation, dated September 3, 1996 for the
Property ("Title Commitment"). Subject to the provisions of Paragraph 3.4
below, for purposes of this Agreement, "Permitted Exceptions" shall mean: (a)
general ad valorem real estate taxes for the tax fiscal year 1996-1997 and
subsequent years not yet due and payable; (b) association assessments, special
district taxes and related charges not yet due and payable; (c) matters shown
on the Survey (as hereinafter defined); (d) matters caused by the action or
inaction of Purchaser or its agents; (g) the title exceptions set forth in
Schedule B of the Title Commitment as Numbers 1, 2, 3, 4, 5, 6, 7, 8, 9, 10,
11, 12, 13, 14, 27 and 28; (h) the rights of tenants under leases; and
(i) liens or encumbrances of a definite or ascertainable amount which may be
removed or, in the case of such monetary liens, insured over by the payment of
money or other security at the Closing Date, and which Seller removes or causes
to be insured over at the Closing Date in accordance with Paragraph 5 hereof.
All other exceptions to title shall be referred to as "Unpermitted Exceptions".
On the Closing Date, Fidelity National Title Insurance Company ("Title
Insurer") shall deliver to Purchaser a standard title policy in conformance
with the previously delivered Title Commitment, subject only to Permitted
Exceptions (excluding, however, the Permitted Exceptions described in subclause
(i) above) and Unpermitted Exceptions waived in writing by Purchaser ("Title
Policy"). The Title Policy shall be conclusive evidence of good title as
therein shown as to all matters to be insured by the Title Policy, subject only
to the exceptions and requirements therein stated. In accordance with Alameda
County, California custom, Purchaser shall pay for the costs of the Title
Policy and Purchaser shall pay for the cost of any endorsements (other than
curative endorsements for matters for which Seller has agreed to remove) to, or
extended coverage on, the Title Policy as requested by Purchaser or Purchaser's
lender.
3.2 Purchaser has received a survey of the Property prepared by ▇▇▇▇ &
▇▇▇▇▇▇ under Job Number 96598 dated October 29, 1996 ("Survey"). Seller shall
pay the cost of the most recent update to the Survey, and Purchaser shall pay
for the cost of any revisions to the Survey as requested by Purchaser or
Purchaser's lender. Subject to Paragraph 3.4 below, Purchaser hereby
acknowledges that all matters disclosed by the Survey are acceptable to
Purchaser and are Permitted Exceptions for purposes of Paragraph 3.1 above.
3.3 The obligations of Purchaser and Seller to pay various costs set
forth in Paragraphs 3.1 and 3.2 shall survive the termination of this
Agreement.
3.4 Notwithstanding the terms of this Paragraph 3 or anything to the
contrary contained herein or in the Escrow Agreement, if prior to the end of
the Inspection Period, Purchaser conducts a review of the Title Commitment or
Survey and finds any of the title exceptions or survey exceptions referred to
therein unacceptable, Purchaser shall be entitled to exercise its right to
terminate this Agreement in accordance with the provisions of Paragraph 7.1
below.
4. PAYMENT OF CLOSING COSTS.
4.1 In addition to the costs set forth in Paragraphs 3.1 and 3.2,
Purchaser and Seller shall divide the costs of the city transfer taxes to be
paid with reference to the Deed (as hereinafter defined) and all other
recording, sales tax and surtax imposed by law with reference to any other sale
documents delivered in connection with the sale of the Property to Purchaser,
all in accordance with the local custom in Alameda, California. Seller shall
pay 100% of the costs of any county documentary transfer taxes. All other
closing costs shall also be paid by the parties in accordance with county
custom.
5. CONDITION OF TITLE.
5.1 If, prior to Closing (as hereinafter defined), a date-down to the
Title Commitment discloses any new Unpermitted Exceptions which, in the
aggregate, do not exceed $25,000 (each, a "Minor Unpermitted Exception"),
Seller shall, at Seller's expense, bond over, cure and/or have such Minor
Unpermitted Exceptions removed from the Title Commitment or have the Title
Insurer commit to insure against loss or damage that may be occasioned by such
Minor Unpermitted Exceptions. Notwithstanding the foregoing, if such date down
to the Title Commitment discloses any new Unpermitted Exceptions which, in the
aggregate, equal or exceed $25,000, Seller shall have the right, but not the
obligation, to bond over, cure and/or have such exceptions removed from the
Title Commitment or to have the Title Insurer commit to insure against loss or
damage that may be occasioned by such Unpermitted Exceptions. If Seller fails
to bond over, cure or have any Unpermitted Exception removed or have the Title
Insurer commit to insure as specified above within five (5) business days from
the date of the date down to the Title Commitment, Purchaser may terminate this
Agreement upon written notice to Seller within three (3) days after the
expiration of such five (5) business day period; provided, however, and
notwithstanding anything contained herein to the contrary, if the Unpermitted
Exception which gives rise to Purchaser's right to terminate was recorded
against the Property as a result of the affirmative action of Seller (and not
by any unrelated third party) or if Seller is able to bond over, cure or remove
a Minor Unpermitted Exception for a cost not to exceed $25,000 or the Title
Insurer is willing to insure over a Minor Unpermitted Exception for a cost not
to exceed $25,000 in accordance with the terms hereof and Seller fails to
expend such funds in either case, then Purchaser shall have the additional
rights contained in Paragraph 14 herein. Absent notice from Purchaser to Seller
in accordance with the preceding sentence, Purchaser shall be deemed to have
elected to take title subject to said Unpermitted Exception, without any
reduction in or setoff against the Purchase Price as a result thereof. If
Purchaser terminates this Agreement in accordance with the terms of this
Paragraph 5.1, this Agreement shall terminate without further action of the
parties and all ▇▇▇▇▇▇▇ Money theretofore deposited into the escrow by
Purchaser, together with any interest accrued thereon, shall be returned to
Purchaser, and neither party shall have any further liability to the other,
except for those covenants and obligations that specifically survive
termination of this Agreement.
5.2 Seller agrees to convey fee simple title to the Property to Purchaser
by standard form grant deed ("Deed") (substantially in the form attached hereto
as Exhibit G) in recordable form subject only to the Permitted Exceptions and
any Unpermitted Exceptions not objected to by Purchaser in accordance with
Paragraph 5.1 above.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1 Except as provided in the indemnity provisions contained in Paragraph
7.1 of this Agreement, Seller shall bear all risk of loss with respect to the
Property through the Closing. Seller agrees to maintain its existing "all risk"
replacement cost casualty insurance and rent loss insurance in place until the
Closing Date. Notwithstanding the foregoing, in the event of damage to the
Property by fire or other casualty prior to the Closing Date, repair of which
would cost less than or equal to $100,000 (as determined by Seller and
Purchaser in good faith), Purchaser shall not have the right to terminate its
obligations under this Agreement by reason thereof, but Seller shall have the
right to elect to either repair and restore the Property if such repair or
restoration may be completed prior to the Closing Date or to assign and
transfer to Purchaser on the Closing Date all of Seller's right, title and
interest in and to all insurance proceeds paid or payable to Seller on account
of such fire or casualty plus the amount of Seller's insurance deductible.
Seller shall promptly notify Purchaser in writing of any such fire or other
casualty and Seller's estimate of the cost to repair the damage caused thereby.
In the event of damage to the Property by fire or other casualty prior to the
Closing Date, repair of which would cost in excess of $100,000 (as determined
by Seller and Purchaser in good faith), then this Agreement may be terminated
at the option of Purchaser, which option shall be exercised, if at all, by
Purchaser's written notice thereof to Seller within ten (10) business days
after Purchaser receives written notice of such fire or other casualty from
Seller and Seller and Purchaser agree upon the amount of such damages, and upon
the exercise of such option by Purchaser this Agreement shall terminate without
further action by the parties, the ▇▇▇▇▇▇▇ Money deposited by Purchaser shall
be returned to Purchaser together with interest thereon, and neither party
shall have any further liability or obligations hereunder, except for those
covenants and obligations which expressly survive termination of this
Agreement. In the event that Purchaser does not exercise the option to
terminate in accordance with this Paragraph 6.1, the Closing shall take place
on the Closing Date and Seller shall assign and transfer to Purchaser on the
Closing Date all of Seller's right, title and interest in and to all insurance
proceeds paid or payable to Seller on account of the fire or casualty and shall
pay to Purchaser the amount of Seller's insurance deductible. Notwithstanding
anything contained herein to the contrary, Seller's obligation to transfer all
insurance proceeds paid to Seller as set forth more fully in this Paragraph 6.1
shall survive the Closing and the recording of the Deed.
6.2 If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall: (i)
impair access to the Property; (ii) cause any non-compliance with any
applicable law, ordinance, rule or regulation of any federal, state or local
authority or governmental agencies having jurisdiction over the Property or any
portion thereof; or (iii) adversely impair the use of the Property as it is
currently being operated (hereinafter collectively referred to as a "Material
Event"), Purchaser may:
6.2.1 terminate this Agreement by written notice to Seller, in
which event the ▇▇▇▇▇▇▇ Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease,
except for those covenants and obligations hereunder which expressly survive
termination of this Agreement; or
6.2.2 proceed with the Closing, in which event Seller shall
assign to Purchaser all of Seller's right, title and interest in and to any
award made or to be made in connection with such condemnation or eminent domain
proceedings. Notwithstanding anything contained herein to the contrary,
Seller's obligation to transfer Seller's interest in such award as set forth
more fully in this Paragraph 6.2.2 shall survive the Closing and the recording
of the Deed.
Purchaser shall then notify Seller, within five (5) business days after
Purchaser's receipt of Seller's notice, whether Purchaser elects to exercise
its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be delayed,
if necessary, until Purchaser makes such election. If Purchaser fails to make
an election within such five (5) business day period, Purchaser shall be deemed
to have elected to terminate this Agreement in accordance with Paragraph 6.2.1.
If between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1 During the period commencing on the date hereof and ending at 5:00
p.m. California time on December 12, 1996 (said period being herein referred to
as the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser may enter upon the Property to
inspect the Property and to conduct and prepare such studies, tests and surveys
as Purchaser may deem reasonably necessary and appropriate, including, without
limitation, a review of the Leases. In connection with Purchaser's review of
the Property, Seller has delivered to Purchaser, or will deliver to Purchaser
within two (2) days after execution of this Agreement, copies of the current
rent roll for the Property, the most recent tax and insurance bills, copies of
the Leases, the Intangibles, utility account numbers, a personal property
inventory, the Service Contracts, all applicable insurance certificates, a list
of any insurance claims over $1,000 made in connection with the Property since
January 1, 1995, unaudited annual operating statements for 1994 and 1995, and
monthly unaudited operating statements for 1996.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be subject to the following:
(i) Such tests, inspections and investigations shall take place
during normal business hours upon reasonable notice to Seller or its designated
agents;
(ii) Except as may be required by Purchaser to complete its due
diligence during the Inspection Period or to obtain financing in order to close
this transaction or to defend against any claims, or as required by law or
court order, all information set forth in the documents to be reviewed
hereunder by Purchaser, its employees and agents shall be held in strict
confidence until Closing and thereafter in the event that the Closing does not
occur;
(iii) In the event the Closing does not occur, Purchaser shall
promptly return to Seller any documents obtained from Seller or Seller's
agents;
(iv) Purchaser shall not suffer or permit any lien, claim or
charge of any kind whatsoever resulting from such tests, investigations and
studies performed by Purchaser to attach to the Property or any part thereof;
and
(v) such tests, investigations and studies shall be at
Purchaser's sole cost and expense, and in the event of any damage to the
Property caused by Purchaser, its agents, engineers, employees, contractors or
surveyors (including, without limitation, pavement, landscaping and surface
damage), Purchaser shall pay the cost incurred by Seller to restore the
Property to substantially the condition existing prior to the performance of
such tests, investigations or studies.
Purchaser shall defend, indemnify and hold Seller and any affiliate or parent
of Seller, and all shareholders, employees, officers, directors and partners of
Seller or Seller's affiliate or parent (hereinafter collectively referred to as
"Affiliates of Seller") harmless from any and all liability, cost and expense
(including without limitation, reasonable attorneys' fees, court costs and
costs of appeal) suffered or incurred by Seller or Affiliates of Seller for
injury to persons or property caused by Purchaser's investigations, tests,
studies and inspections of the Property; provided, however, any such indemnity
will not include any claims, demands, damages, liabilities or costs of any kind
whatsoever (including, without limitation, attorneys' fees and costs) relating
to the effects of the discovery of the presence of any pre-existing hazardous
materials, toxic substances or other contaminants, any damages for economic
loss, loss of profits, diminution in value or any other consequential damages
related to pre-existing conditions. Purchaser shall undertake its obligation
to defend set forth in the preceding sentence using attorneys selected by
Purchaser and reasonably acceptable to Seller. Prior to commencing any such
tests, studies and investigations, Purchaser shall furnish to Seller a
certificate of insurance evidencing comprehensive general public liability
insurance insuring the person, firm or entity performing such tests, studies
and investigations and listing Seller and Purchaser as additional insureds
thereunder.
If Purchaser, in its sole discretion, is dissatisfied with the results of
the tests, studies or investigations performed or information received pursuant
to this Agreement, or otherwise, Purchaser shall have the right to terminate
this Agreement by giving written notice of such termination to Seller at any
time prior to the expiration of the Inspection Period. If written notice is
not given by Purchaser pursuant to this Paragraph 7.1 prior to the expiration
of the Inspection Period, then the right of Purchaser to terminate this
Agreement pursuant to this Paragraph 7.1 shall be deemed exercised. If
Purchaser terminates this Agreement by written notice to Seller prior to the
expiration of the Inspection Period: (i) so long as Seller is not in default of
its obligations hereunder, Purchaser shall promptly deliver to Seller copies of
all studies, reports and other investigations obtained by Purchaser in
connection with its due diligence during the Inspection Period without any
warranty as to the accuracy or thoroughness thereof or the ability of Seller to
rely thereon; and (ii) the ▇▇▇▇▇▇▇ Money deposited by Purchaser shall be
immediately paid to Purchaser, together with any interest earned thereon, less
the sum of One Hundred and No/100 Dollars ($100.00), which shall be paid to
Seller in consideration for such period of inspection, and neither Purchaser
nor Seller shall have any right, obligation or liability under this Agreement,
except for those covenants and obligations which expressly survive the
termination of this Agreement. Notwithstanding anything contained herein to
the contrary, Purchaser's obligation to indemnify Seller and pay the costs of
restoring the Property, as more fully set forth in this Paragraph 7.1, shall
survive Closing and recording of the Deed and the termination of this
Agreement, as applicable, for a period of one (1) year.
7.2 Except for the express representations and warranties of Seller set
forth herein, Purchaser acknowledges and agrees that it will be purchasing the
Property and the Personal Property based solely upon its inspections and
investigations of the Property and the Personal Property, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property and the Personal Property as
of the date of this Agreement, ordinary wear and tear and loss by fire or other
casualty or condemnation excepted and that Seller makes no warranty or
representation, express or implied, or arising by operation of law, including,
but not limited to, any warranty of condition, habitability, merchantability or
fitness for a particular purpose, in respect of the Property. Without limiting
the foregoing, Purchaser acknowledges that, except as may otherwise be
specifically set forth elsewhere in this Agreement, neither Seller nor its
consultants, brokers or agents have made any representations or warranties of
any kind upon which Purchaser is relying as to any matters concerning the
Property or the Personal Property, including, but not limited to: (i) the
condition of the Land or any improvements comprising the Property; (ii) the
existence or non-existence of any pollutant, toxic waste and/or any hazardous
materials or substances; (iii) economic projections or market studies
concerning the Property, or the income to be derived from the Property;
(iv) any development rights, taxes, bonds, covenants, conditions and
restrictions affecting the Property; (v) the nature and extent of any right of
way, lease, lien, encumbrance, license, reservation or other title matter;
(vi) water or water rights, topography, geology, drainage, soil or subsoil of
the Property; (vii) the utilities serving the Property; (viii) the suitability
of the Property for any and all activities and uses which Purchaser may elect
to conduct thereon; or (ix) the compliance of the Property with any zoning,
environmental, building or other laws, rules or regulations affecting the
Property. Seller makes no representation or warranty that the Property
complies with the Americans with Disabilities Act or any fire code or building
code. Purchaser hereby releases Seller and the Affiliates of Seller from any
and all liability in connection with any claims which Purchaser may have
against Seller or the Affiliates of Seller, and Purchaser hereby agrees not to
assert any claims for contribution, cost recovery or otherwise, against Seller
or the Affiliates of Seller, relating directly or indirectly to the existence
of asbestos or hazardous materials or substances on, or environmental
conditions of, the Property, whether known or unknown. As used herein, the
term "hazardous materials or substances" means (i) hazardous wastes, hazardous
substances, hazardous constituents, toxic substances or related materials,
whether solids, liquids or gases, including but not limited to substances
defined as "hazardous wastes," "hazardous substances," "toxic substances,"
"pollutants, "contaminants," "radioactive materials," or other similar
designations in, or otherwise subject to regulation under, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq.; the Toxic Substance Control Act, 15 U.S.C. Section
2601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section
1802; the Resource Conservation and Recovery Act, 42 U.S.C. Section 9601. et
seq.; the Clean Water Act, 33 U.S.C. Section 1251; the Safe Drinking Water Act,
42 U.S.C. Section 30Of et seq; the Clean Air Act, 42 U.S.C. Section 7401 et
seq.; and in any permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated pursuant to
the preceding laws or other similar federal, state or local laws, regulations,
rules or ordinance now or hereafter in effect relating to environmental matters
(collectively, "Environmental Laws"); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local law,
regulation or ordinance, including any Environmental Law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined petroleum
products, (C) waste oil, (D) waste aviation or motor vehicle fuel and (E)
asbestos. Purchaser acknowledges that having been given the opportunity to
inspect the Property, except for Seller's express representation and warranties
contained in this Agreement, Purchaser is relying solely on its own
investigation of the Property and not on any information provided or to be
provided by Seller. Purchaser further acknowledges that the information
provided and to be provided with respect to the Property was obtained from a
variety of sources, and that Seller (x) has not made any independent
investigation or verification of such information and (y) makes no
representations as to the accuracy or thoroughness of such information, except
as provided herein.
7.3 Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except for the express representations
and warranties of Seller set forth herein, Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller and the Affiliates of Seller from
any liability with respect to such historical information.
7.4 Seller has provided to Purchaser the Phase I Environmental Site
Assessment and Limited Asbestos Survey report dated August 26, 1992 prepared by
Law Associates, Inc. ("Existing Report"). Seller makes no representation or
warranty concerning the accuracy or thoroughness of the Existing Report.
Purchaser hereby releases Seller and the Affiliates of Seller from any
liability whatsoever with respect to the Existing Report, including, without
limitation, the matters set forth in the Existing Report, and the accuracy
and/or thoroughness of the Existing Report. Furthermore, Purchaser
acknowledges that it will be purchasing the Property with all faults disclosed
in the Existing Report.
7.5 Notwithstanding anything contained herein to the contrary, the
acknowledgements, agreements, waivers and releases of Purchaser set forth in
this Paragraph 7 shall survive Closing and recording of the Deed and the
termination of this Agreement as applicable.
8. CLOSING. The closing of this transaction ("Closing") shall be on December
20, 1996 ("Closing Date"), at the office of the Title Insurer, at which ▇▇▇▇
▇▇▇▇▇▇ shall deliver possession of the Property to Purchaser. This transaction
shall be closed in accordance with the provisions of the Escrow Agreement. All
escrow fees shall be paid by Purchaser.
9. CLOSING DOCUMENTS.
9.1 On the business day preceding the Closing Date, Seller and Purchaser
shall execute and deliver to Escrow Agent the parties' respective closing
statement. In addition, Purchaser shall deliver to Seller the balance of the
Purchase Price, an assumption of the documents set forth in Paragraph 9.2.3
and 9.2.4 and such other documents as may be reasonably required by the Title
Insurer and not inconsistent with the terms of this Agreement in order to
consummate the transaction as set forth in this Agreement.
9.2 On the Closing Date, Seller shall deliver to Escrow Holder through
escrow the following:
9.2.1 the Deed, subject to Permitted Exceptions and those Unpermitted
Exceptions waived by Purchaser in writing or not objected to by Purchaser in
accordance with Paragraph 5.1 hereof;
9.2.2 a special warranty ▇▇▇▇ of sale conveying the Personal Property
(in the form of Exhibit H attached hereto);
9.2.3 assignment and assumption (with respect to periods from and
after the Closing) of the Intangible property (in the form attached hereto as
Exhibit I);
9.2.4 an assignment and assumption (with respect to periods from and
after the Closing) of Leases and security deposits (in the form attached hereto
as Exhibit J);
9.2.5 non-foreign affidavit (in the form of Exhibit K attached
hereto) and California 590-RE Form;
9.2.6 originals, and/or certified copies of, the Leases in Seller's
possession (unless Seller elects to leave such documents in the on-site
management office);
9.2.7 all documents and instruments reasonably required by the Title
Insurer to issue the Title Policy;
9.2.8 possession of the Property to Purchaser, subject to the Leases
and the Permitted Exceptions;
9.2.9 evidence of the termination of the management agreement, along
with a lien waiver executed by the property manager, if applicable;
9.2.10 notice to the tenants of the Property of the transfer of title
and assumption by Purchaser of the landlord's obligation under the Leases and
the obligation to refund the refundable security deposits (in the form of
Exhibit L);
9.2.11 an updated rent roll certified by Seller to be true and
correct, subject to the provisions of Paragraph 17.1 and Paragraph 19 hereof;
9.2.12 a Broker's Lien Waiver signed by Insignia Commercial
Investments Group, Inc. ("Insignia");
9.2.13 an Owner's Title Affidavit or ALTA extended coverage statement
in form reasonably acceptable to Seller and Title Insurer;
9.2.14 such formative and authorization documents of Seller as may be
reasonably required by Title Insurer; and
9.2.15 copies of all books and records as may be necessary to
calculate tenant escalations and reconciliations (unless Seller elects to leave
such documents in the on-site management office).
10. ESTOPPEL CERTIFICATES.
10.1 Seller agrees to use reasonable efforts to obtain tenant estoppel
certificates in the form of Exhibit M ("Tenant Certificates") for the
following: (a) Hayward Sisters Hospital, (b) ▇▇▇▇▇▇▇▇ & Co., (c) Software
Pursuits, Inc., (d) Business Designs Associates (collectively, the "Major
Tenants"), IDX, Inc. ("IDX"), and the other tenants of the Property (the "Other
Tenants"). Seller shall attempt to deliver to Purchaser at least two (2)
business days prior to Closing, Tenant Certificates for all tenants at the
Property, and Purchaser hereby acknowledges that any tenant may respond on the
form of certificate, if any, required under its Lease. If Seller is unable to
obtain the Tenant Certificates from IDX, at least 3 of the Major Tenants, and
at least 75% of the Other Tenants (the "Required Tenants"), Seller shall be
obligated to deliver to Purchaser a Seller Tenant Certificate for such Required
Tenants who fail to execute and return a Tenant Certificate. As used herein,
"Seller Tenant Certificate" shall mean a Tenant Certificate signed by Seller
with respect to a particular tenant which failed to execute and deliver a
Tenant Certificate.
10.2 Notwithstanding anything contained herein to the contrary, the
representations and warranties contained in any Seller Tenant Certificate
executed by Seller (i) shall be made only to the knowledge of both Seller as
set forth in Paragraph 17 hereof and to the best knowledge of the property
manager for the Property, and (ii) shall be subject to the provisions of
Paragraph 18 hereof.
10.3 Upon receipt after Closing by Purchaser of a Tenant Certificate
containing the information herein required from a tenant under a Lease for whom
Seller has executed and delivered a Seller Tenant Certificate at Closing, or
from any other tenant or tenants which would, in computing the Required Amount,
negate the need for any or all of the Seller Tenant Certificates, any Seller
Tenant Certificate executed and delivered by Seller at Closing which is no
longer needed in achieving the Required Amount shall become null and void, and
the Tenant Certificates received from the tenant or tenants shall be
substituted therefor.
10.4 The following terms have been defined as follows for convenience of
reference in the following Paragraphs 10.4 through 10.8, inclusive:
(i) "Qualification" means any assertion in a Tenant Certificate or
Seller Tenant Certificate (whether in the form of Exhibit M or otherwise) of
(i) a claim, counterclaim, offset or defense against the landlord, (ii) a
default on the part of the landlord, (iii) unpaid credits, allowances or other
sums due from the landlord prior to the date of the estoppel (other than as set
forth on Exhibit C or Exhibit N attached hereto or pursuant to a new lease
pursuant to Paragraph 12 hereof), (iv) an unfulfilled construction or other
obligation on the part of the landlord prior to the date of estoppel (other
than as disclosed on Exhibit C or Exhibit N attached hereto or pursuant to a
new lease pursuant to Paragraph 12 hereof), or (v) information which is
contrary (in an adverse respect to the landlord) to the information contained
in the rent roll attached hereto as Exhibit C, or to information pertaining to
tenant allowances and concessions and leasing commissions contained on
Exhibit N;
(ii) "Unacceptable Qualification" means a Qualification which is not
expressly disclosed on the rent roll attached hereto as Exhibit C or the
schedule attached hereto as Exhibit N or a Qualification relating to
non-payment of December, 1996 rent (unless such rent is delinquent on the date
the estoppel is signed), provided the same is not as a result of a default by
Seller.
10.5 If a Qualification is not an Unacceptable Qualification, it shall not
affect Purchaser's obligations to close hereunder or give rise to any liability
from Seller to Purchaser.
10.6 It shall be a condition to Purchaser's obligations hereunder (the
"Estoppel Condition") that Seller deliver to Purchaser the Tenant Certificates
or Seller Tenant Certificates required by Paragraph 10.1 above.
Notwithstanding the foregoing to the contrary, Seller shall not have satisfied
the Estoppel Condition if any of the Tenant Certificates received by Seller or
Seller Tenant Certificates disclose Unacceptable Qualifications with an
"Estoppel Qualification Sum" (hereinafter defined) of less than $100,000 in the
aggregate. The "Estoppel Qualification Sum" shall mean the following:
(i) if the claim asserted arises out of a defect which can be cured,
with the expenditure of money on a one time basis, such as a physical defect,
then such sum shall be calculated by a reasonable estimate of the cost to
repair or remediate said defect; and
(ii) if the claim asserted affects a continuing obligation of a
tenant under the lease, such as the payment of rent, then the claim shall be
calculated by (a) determining the amount of the claim on a per annum basis,
(b) multiplying said amount by the number of years or partial years said claim
would affect the monetary obligations under the lease and (c) discounting said
product on a present value basis using a discount rate of 10% per annum.
If the Unacceptable Qualifications have an Estoppel Qualification Sum of
less than $100,000 in the aggregate, then Seller shall either (i) grant
Purchaser a credit at Closing for an amount equal to the Estoppel Qualification
Sum, or (ii) cure all conditions giving rise to an Unacceptable Qualification
on or before the Closing. The determination to perform the covenant contained
in subparagraphs (i) or (ii) in the preceding sentence shall be made by Seller
in its sole discretion. Provided Seller performs its covenant in this
Paragraph 10.6 the disclosure of Unacceptable Qualifications having an Estoppel
Qualification Sum of less than $100,000 in the aggregate shall not affect
Purchaser's obligations to close hereunder or give rise to any additional
liability from Seller to Purchaser.
10.7 If Seller has not satisfied the Estoppel Condition on or before the
Closing Date, then Purchaser shall have the right to terminate this Agreement
by delivering written notice to Seller on or before 5:00 p.m., California time
on the Closing Date. If Purchaser exercises its rights to terminate in
accordance with the terms of this Paragraph 10.7, this Agreement shall be null
and void without further action of the parties and all ▇▇▇▇▇▇▇ Money
theretofore deposited by Purchaser together with any interest accrued thereon,
shall be returned to Purchaser, and neither party shall have any further
liability to the other, except for those covenants and obligations which
expressly survive the termination of this Agreement. If Purchaser does not
terminate this Agreement pursuant to the first sentence of this Paragraph 10.7,
the parties shall proceed to Closing and (i) Purchaser shall receive a credit
at Closing equal to the amount of the Estoppel Qualification Sum of the
Unacceptable Qualifications contained in the Tenant Certificates or Seller
Tenant Certificates, up to an aggregate amount of $100,000 or (ii) Seller shall
cure all conditions giving rise to an Unacceptable Qualification Sum up to an
aggregate amount of $100,000. The determination to perform the covenant
contained in subparagraphs (i) or (ii) in the preceding sentence shall be made
by Seller in its sole discretion.
10.8 Notwithstanding anything contained herein to the contrary, if Seller
does not satisfy the Estoppel Condition because the Estoppel Qualification Sum
exceeds $100,000 and Purchaser has terminated the Agreement pursuant to
Paragraph 10.7, Seller shall have the right to vitiate Purchaser's termination
by written notice on or before 5:00 p.m. California time on the day which is
two (2) business days before the Closing Date in which case the parties shall
proceed to Closing and Seller shall either (i) grant Purchaser a credit at
Closing for an amount equal to the Estoppel Qualification Sum or (ii) cure all
conditions giving rise to an Unacceptable Qualification on or before the
Closing. The determination to perform the covenant contained in subparagraphs
(i) or (ii) in the preceding sentence shall be made by Seller in its sole
discretion. If Seller does not satisfy the Estoppel Condition because the
Estoppel Qualification Sum exceeds $100,000, Purchaser has terminated the
Agreement pursuant to Paragraph 10.7, and Seller has not elected to vitiate
Purchaser's termination pursuant to this ▇▇▇▇▇▇▇▇▇ ▇▇.▇, ▇▇▇▇▇▇▇▇▇ shall have
the right to withdraw its election to terminate this Agreement, by giving
written notice of its election to reinstate this Agreement on or before 5:00
p.m. California time on the day which is one (1) business day before the
Closing Date, in which case the parties shall proceed to Closing without any
adjustments to the Purchase Price.
11. SERVICE CONTRACTS. On the Closing Date, Seller shall assign the Service
Contracts to Purchaser, and Purchaser shall assume in writing responsibility of
the obligations first arising and accruing from and after the Closing Date
under the Service Contracts. Seller shall use reasonable efforts to obtain any
required consent with respect to the assignment of the Service Contracts;
provided, however, that Seller's inability to obtain such approval shall not be
a default hereunder or a condition precedent to Purchaser's obligations to
close hereunder. After the end of the Inspection Period, Seller shall not
enter into any new Service Contracts nor modify any existing Service Contracts
without first obtaining Purchaser's consent thereto. Prior to the expiration
of the Inspection Period, Seller shall advise Purchaser of the terms of any new
Service Contracts or its intent to modify any existing Service Contracts at
least three (3) business days prior to Seller's execution of such Service
Contract or modification, as the case may be.
12. LEASING OF PROPERTY. Prior to the expiration of the Inspection Period,
Seller shall advise Purchaser of the terms of any new lease, modification of
lease or extension of lease that Seller intends to execute at least three (3)
business days prior to Seller's execution of the same and shall deliver to
Purchaser a copy of any new leases or modifications or extensions executed by
Seller from and including the date hereof through the end of the Inspection
Period, together with information as to any tenant improvement obligations and
leasing commissions, and such other information as Purchaser may reasonably
require. Subject to the provisions of Paragraph 7.1 hereof, such new leases or
lease modifications and extensions shall be included in the definition of
Leases and Purchaser shall be responsible to pay for all leasing commissions,
tenant improvement costs or other costs and expenses, except for attorneys'
fees, incurred by Seller with respect to such leases. After the expiration of
the Inspection Period, Seller shall not enter into any lease for any portion of
the Property or any modification, extension or amendment to any Lease without
first obtaining the prior consent of Purchaser, which consent shall not be
unreasonably withheld. If Purchaser has not responded within five (5) business
days of receipt of a request by Seller, Purchaser's consent shall be deemed
given. If Purchaser closes the transaction contemplated by this Agreement,
Purchaser shall be responsible to pay for all leasing commission, tenant
improvement costs or other costs and expenses (including reasonable attorneys'
fees) incurred by Seller with respect to any such lease approved by Purchaser.
Seller agrees to pay any outstanding brokerage commissions now or hereafter due
or payable with respect to the existing term of any Lease. Seller does not
represent or warrant that any particular Lease will be in effect at Closing or
that the tenant will have performed the tenant's obligations thereunder. The
termination of any Lease prior to Closing by reason of a tenant's default will
not affect the obligations of Purchaser under this Agreement in any manner, or
entitle Purchaser to an abatement of or credit against the Purchase Price, or
give rise to any other claim by Purchaser, and if any space in the Improvements
is vacant on the Closing Date, Purchaser will accept the Premises subject to
the vacancy. Notwithstanding anything contained in this Paragraph 12 or
elsewhere in this Agreement, Seller shall have no obligation to conduct any
ongoing leasing activity for the Property at any time through the Closing Date.
Seller acknowledges that, after the date of this Agreement, Purchaser may
conduct or join in preliminary discussions with prospective tenants regarding
the leasing of portions of the Property after the Closing Date; provided that,
any leasing discussed between Purchaser and any prospective tenants is
expressly made contingent on the Purchase closing the transaction contemplated
by this agreement and is absolutely non-binding upon Seller.
13. DEFAULT BY PURCHASER. ALL ▇▇▇▇▇▇▇ MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE ▇▇▇▇▇▇▇ MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE AND EXCLUSIVE REMEDY, EXCEPT FOR THOSE
COVENANTS AND OBLIGATIONS OF PURCHASER WHICH EXPRESSLY SURVIVE TERMINATION OF
THIS AGREEMENT AS SET FORTH IN PARAGRAPHS 3.2, 7 AND 16. THE PARTIES HAVE
AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER,
WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY
PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE ▇▇▇▇▇▇▇ MONEY
HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF
SELLER'S DAMAGES AND NOT AS A PENALTY. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN, BUT SUBJECT TO THE LIMITATIONS ON LIABILITY PROVIDED
IN PARAGRAPH 18, IN THE EVENT THE CLOSING OCCURS AND IN THE EVENT OF A BREACH
BY PURCHASER OF ANY REPRESENTATION, WARRANTY, COVENANT, AGREEMENT, PRORATION OR
REPRORATION OBLIGATION OR INDEMNITY WHICH SURVIVES THE CLOSING, SELLER SHALL
HAVE ALL RIGHTS AND REMEDIES AT LAW OR AT EQUITY, WITHOUT LIMITATION; PROVIDED,
HOWEVER, IN NO EVENT SHALL PURCHASER'S LIABILITY UNDER ANY REPRESENTATION,
WARRANTY, COVENANT, AGREEMENT, PRORATION, REPRORATION, OBLIGATION OR INDEMNITY
MADE HEREUNDER OR UNDER ANY CLOSING DOCUMENTS EXCEED $300,000 ("PURCHASER'S
MAXIMUM LIABILITY").
14. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL ▇▇▇▇▇▇▇ MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND UPON THE RETURN OF THE ▇▇▇▇▇▇▇
MONEY THIS AGREEMENT SHALL TERMINATE WITHOUT FURTHER ACTION OF THE PARTIES AND
THE PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY,
EXCEPT FOR THOSE COVENANTS AND OBLIGATIONS WHICH EXPRESSLY SURVIVE TERMINATION
OF THIS AGREEMENT. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY,
IF SELLER'S DEFAULT RESULTS FROM (i) ITS (AND NOT AN UNRELATED THIRD PARTY'S)
AFFIRMATIVE ACTION WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE
PROPERTY AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT
PURSUANT TO PARAGRAPH 5 HEREOF; (ii) ITS FAILURE TO EXPEND UP TO $25,000 IF (a)
SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED EXCEPTION FOR A
COST NOT TO EXCEED $25,000 OR (b) THE TITLE INSURER IS WILLING TO INSURE OVER A
MINOR UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $25,000 IN ACCORDANCE WITH
THE TERMS HEREOF OR (iii) ITS REFUSAL TO DELIVER THE DOCUMENTS NECESSARY TO
EFFECTUATE THE CLOSING OR WILLFUL REFUSAL TO PERFORM THE COVENANTS NECESSARY TO
EFFECTUATE THE CLOSING, THEN PURCHASER WILL BE ENTITLED TO ▇▇▇ FOR SPECIFIC
PERFORMANCE. IN NO EVENT SHALL SELLER BE LIABLE FOR ANY ACTUAL, PUNITIVE,
SPECULATIVE OR CONSEQUENTIAL DAMAGES RESULTING FROM ANY DEFAULT BY SELLER.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, BUT SUBJECT TO THE
LIMITATIONS ON LIABILITY PROVIDED IN PARAGRAPH 18, IN THE EVENT THE CLOSING
OCCURS AND IN THE EVENT OF A BREACH BY SELLER OF ANY REPRESENTATION, WARRANTY,
COVENANT, AGREEMENT, PRORATION OR REPRORATION OBLIGATION OR INDEMNITY WHICH
SURVIVES CLOSING, THE PURCHASER SHALL HAVE ALL RIGHTS AND REMEDIES AT LAW OR AT
EQUITY, WITHOUT LIMITATION; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL SELLER'S
LIABILITY UNDER ANY REPRESENTATION, WARRANTY, COVENANT, AGREEMENT, PRORATION,
REPRORATION OBLIGATION OR INDEMNITY MADE HEREUNDER OR UNDER ANY CLOSING
DOCUMENTS EXCEED $300,000 ("SELLER'S MAXIMUM LIABILITY").
15. PRORATIONS.
15.1 Water and other utility charges; fuels; prepaid operating expenses;
real and personal property taxes prorated on a "net" basis (i.e. adjusted for
all tenants' liabilities, if any, for such items); operating expenses paid by
Seller which are reimbursable by the tenants for the period prior to the
Closing Date, less any amount previously paid by the tenants; unpaid operating
expenses for the period prior to the Closing Date prorated on a "net" basis, as
set forth above; and all other items of expense and income shall be adjusted
ratably as of 12:01 a.m. on the Closing Date ("Proration Date"). Seller shall
be entitled to a credit for all transferable utility deposits to the extent
actually transferred hereunder, if any, and all other utility deposits, if any,
may be withdrawn by and refunded to Seller and Purchaser shall make its own
replacement deposits for utilities as may be required by the respective
utilities involved. Assessments, excluding regular ad valorem real estate
taxes, payable in installments which are due prior to the Closing Date shall be
paid by Seller. Assessments, excluding regular ad valorem real estate taxes,
payable in installments which are due subsequent to the Closing Date shall be
paid by Purchaser. If the amount of any of the items to be prorated is not
then ascertainable, the adjustments thereof shall be on the basis of the most
recent ascertainable data. If any ongoing real estate tax contest has not been
finalized as of the Closing Date, Purchaser and Seller agree that the tax ▇▇▇▇
existing prior to the contest, shall be the most recent data for the tax year
being contested and (i) Purchaser agrees to re-prorate such amount as it
related to the real estate tax proration to the extent such tax contest is
successful. All other prorations will be final except as to delinquent rent
referred to in Paragraph 15.2 below and as provided in Paragraph 15.3.
Purchaser shall be credited and Seller will be charged with an amount equal to
all Tenant security deposits and interest thereon being held by Seller or
Seller's managing agent. Seller shall be entitled to retain all Tenant
security deposits, interest thereon, or other such credit due Tenants for which
Purchaser receives credit and Seller is charged pursuant to this Paragraph.
Seller and Purchaser agree to cooperate in the calculation and reporting of all
closing prorations at least two (2) business days prior to the Closing Date.
15.2 All basic rent collected by Seller shall be prorated as of 12.01 a.m.
on the Closing Date. All basic rent paid following the Closing Date by any
tenant of the Property who is indebted under a Lease for basic rent for any
period prior to the Proration Date in an amount greater than the amount of all
current basic rent owed by said tenant to Purchaser shall be deemed a
"Post-Closing Receipt" until such time as all such indebtedness is paid in
full. Within ten (10) days following each receipt by Purchaser of a
Post-Closing Receipt, after deduction of costs of collection Purchaser shall
pay such Post-Closing Receipt to Seller. Purchaser shall use its reasonable,
good faith efforts, at no additional cost or expense to Purchaser, to collect
all amounts which, upon collection, would constitute Post-Closing Receipts
hereunder. Within 180 days after the Closing Date, Purchaser shall deliver to
Seller a reconciliation statement of Post-Closing Receipts through the first
150 days after the Closing Date. Upon the delivery of the Post-Closing
Receipts reconciliation, Purchaser shall deliver to Seller any net Post-Closing
Receipts owing to Seller and not previously delivered to Seller in accordance
with the terms hereof. Purchaser shall provide Seller with any information
reasonably necessary to verify the accuracy of the Post-Closing Receipts
reconciliation statement and upon the verification of additional funds owing to
Seller, Purchaser shall pay to Seller said additional Post-Closing Receipts.
This Paragraph 15.2 of this Agreement shall survive the Closing and the
delivery and recording of the Deed.
15.3 All refunds in connection with any ongoing real estate tax protests
for the Property initiated by Seller prior to the Closing shall remain the
property of Seller and are not being assigned by Seller to Purchaser pursuant
to this Agreement. In the event any such refunds are paid to Purchaser,
Purchaser agrees to promptly remit all such sums to Seller. Purchaser agrees,
at no cost or expense to Purchaser, to execute any documents reasonably
requested by Seller in connection with such tax protests.
15.4 Seller covenants to operate, maintain and manage the Property in the
same manner that it has managed, maintained and operated the Property during
the period of Seller's ownership, subject to reasonable wear and tear and
casualty.
16. BROKER. The parties hereto represent and warrant that no broker commission
or finder fee is due and payable in connection with this transaction, by reason
of their respective actions, other than to (a) Insignia and CB Commercial Real
Estate Group, Inc. ("CB"), as the cooperating broker, all in accordance with
seller's listing agreement with Insignia (to be paid by Seller); and (b) CB, in
accordance with a separate agreement between Purchaser and CB (to be paid by
Purchaser only if this transaction actually closes). Seller's commission to
Insignia shall only be payable out of the proceeds of the sale of the Property
in the event the transaction set forth herein closes. Purchaser and Seller
shall indemnify, defend and hold the other party hereto harmless from any claim
whatsoever (including without limitation, reasonable attorneys' fees, court
costs and costs of appeal) from anyone claiming by or through the indemnifying
party any fee, commission or compensation on account of this Agreement, its
negotiation or the sale hereby contemplated other than to Insignia and CB.
Seller shall indemnify, defend and hold Purchaser harmless from any claim
(including, without limitation, reasonable attorneys' fees, court costs and
costs of appeal) for any claim by Insignia for any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated, other than any claim by Insignia on account of any agreement or
negotiations between Insignia and Purchaser. Purchaser shall indemnify, defend
and hold Seller harmless from any claim (including, without limitation,
reasonable attorneys' fees, court costs and costs of appeal) for any claim by
CB for any fee, commission or compensation on account of this Agreement, its
negotiation or the sale hereby contemplated, other than any claim by CB on
account of any agreement or negotiations between CB and Seller. The
indemnifying party shall undertake its obligations set forth in this Paragraph
16 using attorneys selected by the indemnifying party and reasonably acceptable
to the indemnified party. The provisions of this Paragraph 16 will survive the
Closing and delivery of the Deed.
17. REPRESENTATIONS, WARRANTIES AND COVENANTS.
17.1 Any reference herein to Seller's knowledge or notice of any matter or
thing shall only mean such knowledge or notice that has actually been received
by ▇▇▇ ▇▇▇▇▇▇, the Seller's asset manager for the Property ("Seller's
Representative"), and any representation or warranty of the Seller is based
upon those matters of which the Seller's Representative has actual knowledge.
Any knowledge or notice given, had or received by any of Seller's agents,
servants or employees shall not be imputed to Seller, the general partner or
limited partners of Seller, the subpartners of the general partner or limited
partners of Seller or Seller's Representative.
17.2 Subject to the limitations set forth in Paragraph 17.1, Seller hereby
makes the following representations and warranties, which representations and
warranties are made to Seller's knowledge and which shall survive Closing for
four (4) months: (i) except as listed in Exhibit N hereto, Seller has no
knowledge of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property; (ii) Seller has the power
and authority to make, execute and deliver this Agreement and consummate the
transactions contemplated herein; (iii) the rent rolls attached hereto as
Exhibit C and updated as of the Closing Date are accurate in all material
respects as of the date set forth therein; (iv) the Seller has not given or
suffered any assignment, pledge or encumbrance with respect to any of the
Leases or its interests thereunder; (v) the list of Service Contracts attached
hereto as Exhibit D is accurate as of the date hereof; (vi) except as set forth
in Exhibit N hereto, Seller has received no written notice or claim from any
governmental authority having jurisdiction over the Property relating to an
uncured breach or violation of any Environmental Laws or any other laws in
connection with the Property; (vii) except for the Existing Report and such
other matters delivered to Purchaser, Seller is not aware of any other reports
on the environmental condition of the Property; (viii) at the time of closing
there will be no outstanding contracts made by Seller for any improvements to
the Property except for the Service Contracts; (ix) Seller has received no
notice of any uncured landlord default from any tenant in connection with any
Lease; (x) except as set forth in Exhibit N hereto, there are no leasing
commissions payable in connection with the renewal of any existing leases nor
the existing leases; and (xi) except as set forth in Exhibit N hereto, there
are no tenant improvement costs payable in connection with any existing lease
or sublease of the Property.
17.3 Purchaser hereby represents and warrants to Seller that Purchaser has
the full right, power and authority to execute this Agreement and consummate
the transactions contemplated herein.
17.4 The representations, warranties and covenants set forth herein and in
any Closing Document shall survive Closing for a period of four (4) months
after the Closing Date ("Survival Period"). All rights of either party
hereunder with respect to any such surviving representation, warranty or
covenant shall be deemed waived if the party in question does not, by notice to
the other party, advise the other party of any alleged breach of
representation, warranty or covenant prior to the expiration of the Survival
Period. Notwithstanding anything herein to the contrary, each party's
liability under any representation, warranty or covenant made hereunder or in
any Closing Document shall in no event exceed Seller's Maximum Liability or
Purchaser's Maximum Liability, as applicable.
17.5 Seller covenants to operate, maintain and manage the Property in the
same manner that it has managed, maintained and operated the Property during
the period of Seller's ownership, subject to reasonable wear and tear and
casualty.
18. LIMITATION OF LIABILITY. None of the beneficiaries, shareholders,
partners, officers, agents or employees of Seller or Purchaser shall have any
personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and the
parties hereby waive for themselves and anyone who may claim by, through or
under them any and all rights to ▇▇▇ or recover on account of any such alleged
personal liability.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: ▇/▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
TO PURCHASER: Lincoln Property Company N.C., Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
with copies to: Real Estate Law Group, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
TO TITLE Fidelity National Title Insurance Company
INSURER: ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be deemed
to be delivered or made on the next business day if sent by overnight courier,
or the same day as given if sent via facsimile transmission and received by
5:00 p.m. California time, or on the fourth (4th) business day after the same
is deposited in the United States Mail as registered or certified mail,
addressed as above provided, with postage thereon fully prepaid. Any such
notice, demand or document not given, delivered or made by registered or
certified mail or by overnight courier or by facsimile transmission as
aforesaid shall be deemed to be given, delivered or made upon receipt of the
same by the party to whom the same is to be given, delivered or made. Copies of
all notices shall be served upon the Escrow Agent. All time periods for
responses by either party set forth in this Agreement shall commence upon the
receipt of notice as set forth hereinabove.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution, and Purchaser shall forward the ▇▇▇▇▇▇▇
Money to the escrow agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and three (3)
copies of the Escrow Agreement signed by the parties to the Escrow Agent, with
a direction to execute two (2) copies of the Escrow Agreement and deliver a
fully executed copy to each of the Purchaser and the Seller.
21. CONDITIONS PRECEDENT. Notwithstanding anything to the contrary contained
herein, the obligations of Purchaser to purchase the Property from Seller shall
be subject to the express condition that none of the Required Tenants nor IDX
shall have terminated its Lease at any time between the last day of the
Inspection Period and the Closing Date.
22. MISCELLANEOUS
(a) Time is of the essence of each provision of this Agreement.
(b) This Agreement and all provisions hereof shall extend to and be
obligatory upon and inure to the benefit of the respective heirs, legatees,
legal representatives, successors and assigns of the parties hereto.
(c) The section and paragraph headings of this Agreement are for
convenience only and in no way define, limit or enlarge the scope or meaning of
the language hereof. The terms "hereby," "herein," "hereof," "hereto,"
"hereunder" and any similar terms used in this Agreement refer to this
Agreement. The term "including" shall not be construed in a limiting nature,
but shall be construed to mean "including, without limitation." Words
importing persons shall include firms, associations, partnerships, trusts,
corporations and other legal entities, including public bodies, as well as
natural persons. Words importing the singular shall include the plural and
vice versa. Words of the masculine gender shall be deemed to include
correlative words of the feminine and neuter genders.
(d) This Agreement contains the entire agreement between the parties
relating to the transactions contemplated hereby, and all prior or
contemporaneous agreements, understandings, representations and statements,
oral or written, are merged herein. No representations, warranties,
undertakings or promises (whether oral or written, express or implied), can be
made or have been made by Seller or its agents, representatives or brokers to
Purchaser or any other person unless expressly stated herein. No modification
or amendment of this Agreement or any waiver of any provision hereof shall be
effective unless the same is in writing signed by the party against whom
enforcement of such modification, amendment or waiver is sought.
(e) This Agreement shall be governed by and construed in accordance
with the laws of the State of California. If any of the provisions of this
Agreement or the application thereof to any persons or circumstances shall, to
any extent, be deemed invalid or unenforceable, the remainder of this Agreement
and the application of such provisions to persons or circumstances other than
those as to whom or which it is held invalid or unenforceable shall not be
affected thereby, and every provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
(f) This Agreement and any document or instrument executed pursuant
hereto may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
(g) The submission by Seller of this Agreement to Purchaser for
examination does not constitute an offer by Seller to sell, or a reservation of
or option to purchase the Property. This Agreement shall not become a contract
until executed and delivered by Purchaser and Seller in the manner set forth
herein.
(h) If Purchaser consists of more than one person or entity, then
each such person or entity executing this Agreement as Purchaser shall be
jointly and severally liable for the obligations of Purchaser hereunder.
(i) Purchaser shall not record this Agreement or any memorandum
hereof, and any such recording shall be a default hereunder.
(j) Purchaser and Seller shall jointly prepare and issue all
releases of information relating to the sale of the Property, and any inquiries
regarding the transaction contemplated hereby shall be responded to only after
consultation with the other party hereto.
(k) If either party institutes a legal action against the other
relating to this Agreement or any default hereunder, the unsuccessful party to
such action will reimburse the successful party for the reasonable expenses of
prosecuting or defending such action, including without limitation, attorneys
fees and disbursements and court costs.
(l) This Agreement shall not be construed more strictly against one
party than against the other merely by virtue of the fact that the Agreement
may have been prepared primarily by counsel for one of the parties, it being
recognized that both Purchaser and Seller have contributed substantially and
materially to the preparation of this Agreement.
(m) Purchaser shall not have the right to assign its interest in
this Agreement without the prior written consent of Seller. Any assignment or
transfer of, or attempt to assign or transfer, Purchaser's interest in this
Agreement shall be an act of default hereunder by Purchaser and subject to the
provisions of Paragraph 13 hereof. Notwithstanding the foregoing, Purchaser
may make one (1) assignment of its interest in this Agreement without the
consent of Seller to any plan advisor for which Purchaser or a related entity
of Purchaser would be the property manager, or any entity affiliated with,
related to or controlled by Purchaser ("Assignee"), provided that Purchaser
remains liable for and the Assignee assumes the obligations of Purchaser
hereunder. If the Assignee petitions or applies for relief under any
bankruptcy laws or is adjudicated as a bankrupt or insolvent, or if Assignee
files any petition, application for relief or answer-seeking or acquiescing in
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief for itself under any present or future federal,
state or other statute, law, code or regulation relating to bankruptcy,
insolvency, or other relief for debtors (collectively, a "Bankruptcy Filing")
on or before the Closing Date, said Bankruptcy Filing shall be a default under
this Agreement and Purchaser shall indemnify Seller for all costs, attorney's
fees and expenses of Seller resulting from Seller's efforts to obtain the
▇▇▇▇▇▇▇ Money as liquidated damages and to clear title to the Property with
respect to any encumbrance resulting from the Bankruptcy Filing.
23. ALLOCATION OF RESPONSIBILITY FOR TORTIOUS OCCURRENCES.
23.1 Seller's Responsibility. Seller hereby agrees to be fully and
completely responsible and liable for and hold harmless Purchaser and its
partners, officers, directors and members from and against any and all claims,
demands, causes of action, proceedings and suits for property damage or bodily
injury (excluding any environmental claims or matters in any way related to
hazardous materials or substances) accruing or occurring prior to the Closing
Date, regardless of whether any such claims, demands, causes of action,
proceedings or suits are asserted prior to or after the Closing Date. Said
responsibility of Seller to hold Purchaser harmless shall expire one (1) year
from the Closing Date. Any claim to be made by Purchaser under this Paragraph
23.1 must be brought or made by Purchaser in writing prior to the expiration of
said one (1) year period, or is forever barred thereafter.
23.2 Purchaser's Responsibility. Purchaser hereby agrees to be fully
and completely responsible and liable for and hold harmless Seller and its
partners, officers, directors and members from and against any and all claims,
demands, causes of action, proceedings and suits for property damage or bodily
injury (excluding any environmental claims or matters in any way related to
hazardous materials or substances) accruing or occurring after the Closing
Date. Said responsibility of Purchaser to hold Seller harmless shall expire
one (1) year from the Closing Date. Any claim to be made by Seller under this
Paragraph 23.2 must be brought or made by Seller in writing prior to the
expiration of said one (1) year period, or is forever barred thereafter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
PURCHASER:
LINCOLN PROPERTY COMPANY N.C., INC.,
a Texas corporation
By: /s/ ▇▇▇▇▇ DiRaimundo
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Name: ▇▇▇▇▇ DiRaimundo
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Its: Vice President
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SELLER:
BGT LIMITED PARTNERSHIP,
an Illinois limited partnership
By: BGT Partners, Inc., an Illinois
corporation, its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
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Its: Vice President and Secretary
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Insignia Mortgage and Investment Company ("Broker") executes this Agreement in
its capacity as a real estate broker and acknowledges that the fee or
commission ("Fee") due to it as a result of the transaction described in this
Agreement is the amount as set forth in the listing agreement between Broker
and Seller. Broker also acknowledges that payment of the aforesaid Fee is
conditioned upon the Closing and the receipt of the Purchase Price by Seller.
Broker agrees to deliver a receipt to Seller at the Closing for the Fee and a
release stating that no other fees or commissions are due to Broker from Seller
or Purchaser.
INSIGNIA MORTGAGE AND
INVESTMENT COMPANY
By:
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LIST OF EXHIBITS
A. Legal Description
B. Personal Property
[Excluded Personal Property]
C. Leases/Rent Roll
D. Service and Maintenance Contracts
E. Escrow Agreement
F. Copy of Title Commitment
▇. ▇▇▇▇▇ Deed
H. ▇▇▇▇ of Sale
I. Assignment and Assumption of Service Contracts and Intangible Property
J. Assignment and Assumption of Leases, Rents and Security Deposits
K. FIRPTA
L. Tenant Notice Letter
M. Tenant Estoppel Certificate
N. Disclosures