EXHIBIT 10.4
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PURCHASE AGREEMENT
BETWEEN
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
an individual
AS SELLER
AND
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP,
a Texas limited partnership
AS PURCHASER
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "AGREEMENT") is made to be effective as of
the Effective Date (as hereinafter defined) by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
an individual ("SELLER"), and BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND
I LP, a Texas limited partnership ("PURCHASER").
W I T N E S S E T H:
ARTICLE I
PURCHASE AND SALE
1.1 AGREEMENT OF PURCHASE AND SALE. Subject to the terms and
conditions hereinafter set forth, Seller agrees to sell and convey and Purchaser
agrees to purchase the following:
(a) that certain tract or parcel of land situated in
Hopkins, Minnesota, more particularly described on EXHIBIT A attached
hereto and made a part hereof, together with all and singular the rights
and appurtenances pertaining to such property, including any right,
title and interest of Seller in and to adjacent streets, alleys or
rights-of-way (the property described in clause (a) of this Section 1.1
being herein referred to collectively as the "LAND");
(b) the buildings and other improvements on the Land,
including specifically, without limitation, that certain office building
having a street address of ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, and
related facilities located thereon (the property described in clause (b)
of this Section 1.1 being herein referred to collectively as the
"IMPROVEMENTS");
(c) the personal property owned by Seller upon the Land or
within the Improvements, including specifically, without limitation,
heating, ventilation and air conditioning systems and equipment,
appliances, furniture, carpeting, draperies and curtains, tools and
supplies, and other items of personal property used in connection with
the operation of the Land and the Improvements (the property described
in clause (c) of this Section 1.1 being herein referred to collectively
as the "PERSONAL PROPERTY");
(d) all of Seller's right, title and interest in all oral or
written agreements pursuant to which any portion of the Land or
Improvements is used or occupied by anyone other than Seller (the
property described in clause (d) of this Section 1.1 being herein
referred to collectively as the "LEASES"); and
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(e) all of Seller's right, title and interest in and to (i)
all assignable contracts and agreements relating to the upkeep, repair,
maintenance or operation of the Land, Improvements or Personal Property
which will extend beyond the date of Closing (as such term is defined in
Section 4.1 hereof) (collectively, the "OPERATING AGREEMENTS"); (ii) all
warranties and guaranties (express or implied) issued to Seller in
connection with the Improvements or the Personal Property; (iii) all
licenses, permits, certificates of occupancy and other consents or
approvals from governmental authorities or private parties which relate
to the Real Estate, Improvements, or Personal Property; (iv) all other
intangible property associated with the use or operation of the Land,
Improvements or Personal Property, and (v) all plans, specifications,
drawings, reports, studies, books, records and other documents, if any,
pertaining to the Land, Improvements or Personal Property (the property
described in this Section 1.1(e) being sometimes herein referred to
collectively as the "INTANGIBLES").
1.2 PROPERTY DEFINED. The Land, the Improvements, the Personal
Property, the Leases and the Intangibles are hereinafter sometimes referred to
collectively as the "PROPERTY."
1.3. PERMITTED EXCEPTIONS. The Property shall be conveyed subject to
the matters which are deemed to be Permitted Exceptions pursuant to Section 2.3
hereof (herein referred to collectively as the "Permitted Exceptions").
1.4 PURCHASE PRICE. Seller is to sell and Purchaser is to purchase
the Property for a total of Two Million Nine Hundred Twenty Five Thousand
Dollars ($2,925,000) (the "PURCHASE PRICE").
1.5 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid in
cash or immediately available funds at Closing.
1.6 INDEPENDENT CONTRACT CONSIDERATION. Upon the Effective Date
hereof, Purchaser shall deliver to Seller a check in the amount of Fifty and
No/100 Dollars ($50.00) ("INDEPENDENT CONTRACT CONSIDERATION"), which amount the
parties hereby acknowledge and agree has been bargained for and agreed to as
consideration for Seller's execution and delivery of this Agreement. The
Independent Contract Consideration is in addition to and independent of any
other consideration or payment provided in this Agreement, and is nonrefundable
in all events.
1.7 ▇▇▇▇▇▇▇ MONEY. Within two (2) business days after the Effective
Date hereof, Purchaser shall deposit with Partners Title Company (the "TITLE
COMPANY"), at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇), the sum of Two Hundred Fifty Thousand Dollars
($250,000) (the "▇▇▇▇▇▇▇ MONEY") to be held by the Title Company in an interest
bearing account. All interest accruing on such sum shall become a part of the
▇▇▇▇▇▇▇ Money and shall be distributed as ▇▇▇▇▇▇▇ Money in accordance with the
terms of this Agreement.
ARTICLE II
TITLE AND SURVEY
2.1 COMMITMENT FOR TITLE INSURANCE. Within two (2) business days
after the Effective Date, Seller shall deliver to Purchaser and the surveyor
described in Section 2.2 below (a) a current title commitment (the "TITLE
COMMITMENT") covering the Property, showing all matters affecting title to the
Property and binding the Title Company to issue at Closing an Owner's Policy of
Title Insurance in the full amount of the Purchase Price pursuant to Section 2.5
hereof, and (b) legible copies of all instruments (the "EXCEPTION INSTRUMENTS")
referenced in the Title Commitment.
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2.2 SURVEY. Within five (5) business days after the Effective Date,
Seller shall, at Seller's expense, furnish to Purchaser a current ALTA Survey
(the "SURVEY") of the Property prepared by a reputable surveyor or surveying
firm licensed by the State of Minnesota. The Survey shall (a) locate all
easements (whether of record or apparent from an inspection of the Property) and
rights of way on or adjacent to the Property (identified by recording data, if
applicable), (b) show the Improvements situated on the Real Estate and the
dimensions of all buildings thereon, (c) show the location and size of all
streets (existing or proposed) on or adjacent to the Property, (d) show any
encroachments or protrusions, railroads, rivers, creeks, or other water courses,
fences, utilities (including size and location), and other matters located on or
affecting the Property (and any recording information relating thereto), (e) set
forth the number of square feet comprising the Property, together with a legal
description of the boundaries of the Property by metes and bounds; (f) certify
that the Property does not lie within the 100-year flood plain as established by
the U.S. Army Corps of Engineers, and (g) contain a certification by the
surveyor in the form of EXHIBIT B attached hereto. Unless otherwise agreed by
Seller and Purchaser, the metes and bounds description contained in the Survey
shall be the legal description employed in the documents of conveyance of the
Property.
2.3 TITLE REVIEW PERIOD. After receipt of the last of the Title
Commitment, legible copies of the Exception Instruments, and the Survey,
Purchaser shall have a period of two (2) business days to review the state of
Seller's title to the Property (the "TITLE REVIEW PERIOD"). If the Survey, the
Title Commitment or the Exception Instruments reflect or disclose any defect,
exception or other matter affecting the Property ("TITLE DEFECTS") that is
unacceptable to Purchaser for any reason whatsoever, then prior to the
expiration of the Title Review Period, Purchaser may provide Seller with written
notice of its objections, and Seller shall have until the earlier to occur of
(x) ten (10) days from the date of the notice, or (y) the day before Closing
(the "Cure Period") to remove or cure any Title Defects to the satisfaction of
Purchaser. Seller shall use its reasonable, good faith efforts to remove or cure
the Title Defects to Purchaser's satisfaction, but shall not be required to
incur any costs in excess of One Thousand Dollars ($1,000) in doing so (other
than as provided in Section 2.4 below) or to institute litigation. If Seller
does not cure any or all of the Title Defects within the Cure Period, Seller
shall notify Purchaser in writing, prior to the expiration of the Cure Period,
of its failure to cure such Title Defects, and Purchaser may, prior to the
earlier of (a) five (5) days after receipt of Seller's notice of its failure to
cure, or (b) 10:00 a.m. Dallas, Texas time on the Closing Date, either (i)
terminate this Agreement by written notice delivered to Seller, or (ii) elect to
waive any uncured Title Defect. If Purchaser fails to terminate the Agreement by
written notice delivered to Seller prior to the expiration of the time period
referenced in the immediately preceding sentence, then any Title Defects that
Seller has not cured shall be deemed waived by Purchaser. If Purchaser shall
fail to notify Seller in writing of any objections to the state of Seller's
title to the Property as shown by the Title Commitment, the Exception Documents
or the Survey, or if Purchaser elects to waive all or any of the Title Defects,
or is deemed to have waived all or any of the Title Defects, then any exceptions
to Seller's title to which Purchaser has not objected or which have been
objected to and waived by Purchaser and which are disclosed by the Title
Commitment shall be considered to be "PERMITTED EXCEPTIONS". If Purchaser
terminates this Agreement pursuant to this section, then neither Seller nor
Purchaser shall have any further rights or obligations under this Agreement and
the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser.
2.4 OBLIGATION TO CURE LIENS. Notwithstanding anything to the
contrary contained in this Article II, if at Closing there are any mechanic's or
materialmen's liens or mortgages, deeds of trust or other instruments creating a
lien for borrowed money against all or any part of the Property (collectively,
"LIENS"), Seller shall discharge the same of record and apply such portions of
the Purchase Price or Seller's funds as may be necessary to accomplish the same.
2.5 OWNER'S POLICY OF TITLE INSURANCE. At Closing, Seller shall
cause the Title Company to issue to Purchaser, at Purchaser's expense, an ALTA
Owner's Policy of Title Insurance (the "TITLE POLICY")
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covering the Property, in the full amount of the Purchase Price, insuring that
Purchaser is the owner of good and marketable title to the Property, subject
only to the Permitted Exceptions.
ARTICLE III
INSPECTION PERIOD
3.1 RIGHT OF INSPECTION. During the period beginning upon the
Effective Date and ending on the earlier to occur of (x) 6 p.m., Dallas, Texas
time, on the tenth (10th) day following the Effective Date, or (y) 10:00 a.m.,
Dallas, Texas time on the Closing Date (hereinafter referred to as the
"INSPECTION PERIOD"), Purchaser shall have the right to make a physical
inspection of the Property, to conduct tests thereon (including specifically,
without limitation, environmental tests and soil borings), to review the Due
Diligence Materials (as hereinafter defined) and to make inquiries to
governmental authorities and other appropriate parties, so as to determine, at
the sole discretion of Purchaser, whether the Property is suitable for
Purchaser's purposes. All physical inspections of the Property shall occur at
reasonable times, upon not less than 24 hours prior written notice, and shall be
conducted so as not to unreasonably interfere with use of the Property by Seller
or its tenants. Purchaser has advised Seller that Purchaser must cause to be
prepared up to three (3) years of audited financial statements in respect of the
Property. Seller agrees to use reasonable efforts to cooperate with Purchaser's
auditors in the preparation of such audited financial statements. Without
limiting the generality of the preceding sentence (a) Seller shall, during
normal business hours, allow Purchaser's auditors reasonable access to the books
and records maintained by Seller in respect of the Property; (b) Seller shall
use reasonable efforts to provide to Purchaser such financial information and
supporting documentation as are necessary for Purchaser's auditors to prepare
audited financial statements; and (c) if Seller has audited financial statements
with respect to the Property, Seller shall promptly provide Purchaser's auditors
with a copy of such audited financial statements. Purchaser agrees to indemnify
and hold Seller harmless of and from any claim for physical damages or physical
injuries arising from Purchaser's inspection of the Property, and
notwithstanding anything to the contrary in this Agreement, such obligation to
indemnify shall survive Closing or any termination of this Agreement.
3.2 RIGHT OF TERMINATION. Seller agrees that in the event Purchaser
determines, in Purchaser's sole discretion, that the Property is not suitable
for its purposes, or that it is in the interest of Purchaser to terminate this
Agreement for any other reason, then Purchaser shall have the right to terminate
this Agreement by sending written notice thereof (hereinafter referred to as the
"NOTICE OF TERMINATION") to Seller prior to the expiration of the Inspection
Period. Upon delivery by Purchaser of such Notice of Termination within the
Inspection Period, this Agreement shall terminate and the ▇▇▇▇▇▇▇ Money shall be
returned to Purchaser. If Purchaser fails to send Seller a Notice of Termination
prior to the expiration of the Inspection Period, Purchaser shall no longer have
any right to terminate this Agreement under this Article III.
3.3 EXTENSIONS. Purchaser shall have the option to elect to extend
the title Cure Period and the Inspection Period by no more than twenty (20) days
each and to extend the Closing Date (defined below) for no more than thirty (30)
days by complying with the following requirements:
(a) on or before the first to occur of the expiration of the
title Cure Period or the expiration of the Inspection Period (the
"Deadline"), Purchaser shall notify Seller of Purchaser's election and
of the new, extended dates, and
(b) on or before the Deadline, Purchaser shall deposit with
the Title Company a Supplemental ▇▇▇▇▇▇▇ Money (herein so called)
deposit of Ten Thousand Dollars ($10,000.00). The
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Supplemental ▇▇▇▇▇▇▇ Money, once deposited by Purchaser, shall merge
with, and become part of the ▇▇▇▇▇▇▇ Money to be held and distributed by
Title Company in accordance with the terms of this Agreement.
ARTICLE IV
CLOSING
4.1 TIME AND PLACE. Unless otherwise mutually agreed in writing by
Seller and Purchaser, the closing of the transaction contemplated hereby
("CLOSING") shall be held at the offices of the Title Company on the earlier of
the following dates (the "CLOSING DATE"): (a) twenty (20) days after the
Effective Date, or (b) February 20, 2004. Notwithstanding any provision in this
Agreement to the contrary, Seller agrees to effectuate the Closing on the third
(3rd) business day after notice from Purchaser that Purchaser wishes to close
prior to the Closing Date or any extended Closing Date. At Closing, Seller and
Purchaser shall perform the obligations set forth in, respectively, Section 4.2
and Section 4.3, the performance of which obligations shall be concurrent
conditions.
4.2 SELLER'S OBLIGATIONS AT CLOSING. At Closing, Seller shall:
(a) deliver to Purchaser a Limited Warranty Deed (the
"DEED") in the form of EXHIBIT C attached hereto and made a part hereof,
executed and acknowledged by Seller and in recordable form, conveying
the Land and Improvements to Purchaser, subject only to the Permitted
Exceptions;
(b) deliver to Purchaser a ▇▇▇▇ of Sale and Assignment (the
"▇▇▇▇ OF SALE") in the form of EXHIBIT D attached hereto and made a part
hereof, executed and acknowledged by Seller and in recordable form;
(c) join with Purchaser in the execution and acknowledgment
of an Assignment and Assumption of Contracts (the "ASSIGNMENT OF
CONTRACTS") in the form of EXHIBIT E attached hereto and made a part
hereof;
(d) join with Purchaser in the execution of a letter to each
tenant of the Property in the form of EXHIBIT F attached hereto and made
a part hereof;
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(e) deliver to Purchaser a FIRPTA Affidavit in the form of
EXHIBIT G attached hereto and made a part hereof, duly executed by
Seller;
(f) deliver to Purchaser a current rent roll for the
Property certified by Seller to be true and correct as of the Closing
Date;
(g) deliver to Purchaser a "Seller's Affidavit" verifying
that, to Seller's knowledge, there are no unpaid bills, expenses or
claims with respect to the Property and indemnifying Purchaser from any
loss, liability or expense resulting from or incident to any such
matters;
(h) deliver to Purchaser such evidence as Purchaser's
counsel and/or the Title Company may reasonably require as to the
authority of the person or persons executing documents on behalf of
Seller;
(i) deliver to Purchaser original Leases, original Operating
Agreements and all other documents described in Section 1.1 hereof;
(j) deliver to Purchaser possession and occupancy of the
Property, subject to the Permitted Exceptions;
(k) deliver to Purchaser all available keys or access cards,
if any, used with respect to the Property in Seller's possession; and
(l) deliver to Purchaser a Certificate of Real Estate Value
as required by Minnesota law.
4.3 PURCHASER'S OBLIGATIONS AT CLOSING. At Closing, Purchaser shall:
(a) pay to Seller, or to an escrow agent designated in
writing by Seller, the amount of the Purchase Price in cash or
immediately available wire transferred funds, it being agreed that at
Closing the ▇▇▇▇▇▇▇ Money shall be delivered to Seller, or to an Escrow
Agent designated in writing by Seller, and applied towards payment of
the cash portion of the Purchase Price;
(b) join Seller in execution of the instruments described in
Sections 4.2(c) and 4.2(d) above;
(c) deliver to Seller such evidence as Seller's counsel
and/or the Title Company may reasonably require as to the authority of
the person or persons executing documents on behalf of Purchaser.
4.4 CREDITS AND PRORATIONS. The following provisions shall govern
the apportionment of income and expenses with respect to the Property between
Seller and Purchaser:
(a) Fixed Rent (herein so called) shall be prorated between
Seller and Purchaser based upon Fixed Rent actually collected. All
prepaid Fixed Rent and other income from the Property shall be credited
to Purchaser at Closing, to the extent same is attributable to a period
of time after Closing.
(b) Fixed Rent which is delinquent and remains uncollected
at Closing shall not be prorated between Seller and Purchaser at
Closing. At Closing, Seller shall furnish to Purchaser a schedule of
delinquent Fixed Rent due under the Lease. Purchaser shall pay Seller's
prorata share of
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any delinquent Fixed Rent if and when collected by Purchaser; provided,
however, that Purchaser shall have no obligation to collect or pursue
the collection of same. It is understood and agreed that any Fixed Rent
collected by Purchaser after Closing shall be applied first to currently
due Fixed Rent. Purchaser shall hold all landlord's liens in the
entireties thereof to enforce the payment of rentals to which Purchaser
is entitled, and Seller shall be deemed to have transferred to Purchaser
all of such landlord's liens. Seller shall have no rights to collect or
attempt to collect any delinquent Fixed Rent from any tenant, all such
rights being transferred to Purchaser at Closing.
(c) All security deposits and other deposits payable to
tenants under the Leases shall be credited to Purchaser at Closing.
(d) The prorations described in this Section 4.4 shall be
made as of 12:01 a.m. on the Closing Date, as if Purchaser were vested
with title to the Property during the entire day upon which Closing
occurs. All prorations described in this Section 4.4 shall be effected
by increasing or decreasing, as the case may be, the amount of cash to
be paid by Purchaser to Seller at Closing. Seller and Purchaser agree to
adjust between themselves after Closing any errors or omissions in the
prorations made at Closing; provided, however, that such prorations
shall be deemed final and not subject to further post Closing
adjustments if no such adjustments have been requested within one (1)
year after the Closing Date.
4.5 CLOSING COSTS. Seller shall pay (a) the fees of any counsel
representing it in connection with this transaction; (b) the cost of the Survey;
and (c) one-half (1/2) of any escrow fee which may be charged by the Title
Company. Purchaser shall pay (v) the State Deed Tax, (w) the fees of any counsel
representing Purchaser in connection with this transaction, (x) the cost of the
Title Policy, (y) one-half (1/2) of any escrow fees charged by the Title
Company, and (z) the fees for recording the deed conveying the Property to
Purchaser. All other costs and expenses incident to this transaction and the
closing thereof shall be paid by the party incurring same.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Purchaser as follows:
(a) Seller has the full right, power and authority to enter
into this Agreement and to perform all of its obligations under this
Agreement, and the execution and delivery of this Agreement and the
performance by Seller of its obligations under this Agreement require no
further action or approval of Seller's partners or of any other person
in order to constitute this Agreement as a binding and enforceable
obligation of Seller.
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(b) To the best of Seller's knowledge, the Property is not
in violation of any governmental order, regulation, statute, code or
ordinance dealing with the use, construction, operation, safety and/or
maintenance thereof, and all existing zoning and building codes and
other applicable laws and governmental regulations permit the operation
of the Property in accordance with its present usage. Seller has
received no written notice that any necessary certificates of occupancy,
licenses or permits, authorizations, consents and approvals required by
all governmental or quasi-governmental authorities having jurisdiction,
and the requisite certificates of the local Board of Fire Underwriters
(or other body exercising similar functions) have not been issued for
the Improvements, have not been paid for in full, or are not in full
force and effect.
(c) Seller has received no written demand by any mortgagee,
insurance underwriter or governmental authority for work to be done or
other action to be taken by Seller which has not been complied with to
the satisfaction of the entity making such demand.
(d) Seller has not received any written notice of any
pending condemnation, expropriation, eminent domain, litigation,
administrative action or other legal proceeding affecting all or any
portion of the Property.
(e) The Leases are in full force and effect and no default
on the part of Seller or any tenant thereunder exists or has been
alleged to exist. There are no Leases granting any person a right to
occupy the Property except as may be contained in the rent roll
delivered to Purchaser as part of the Due Diligence Materials, and,
except as may be reflected on such rent roll, no tenant has paid rent
for more than one month in advance of the current month.
(f) No tenant under the Leases has asserted any claim or
offset which would in any way affect the collection of rent from such
tenant, nor has any tenant given any notice to Seller of its intention
to terminate its tenancy.
(g) No person, firm or entity, other than Purchaser has any
right to acquire the Property or any part thereof.
(h) This Agreement and the conveyance of the Property will
not cause to be imposed on Purchaser any liability to withhold any
amount pursuant to Section 1445 of the Internal Revenue Code or the
implementing regulations.
(i) Seller has not disposed of or otherwise released or
allowed to be released any hazardous or toxic substances, petroleum
products, chemicals, or wastes of any kind on, in, or under the
Property, including any surface waters or groundwater located on such
Property, nor has Seller caused or, to the best of Seller's knowledge,
allowed to be released or discharged any hazardous or toxic substances,
petroleum products, chemicals, or wastes of any kind on, in, or under
any tracts in proximity to the Property, including the surface or
groundwaters thereof. To the best of Seller's knowledge, there are no
hazardous or toxic substances, petroleum products, chemicals, or wastes
on, in, or under the Property, including surface or groundwaters,
regardless of source or cause; provided, however, that to the best of
Seller's knowledge, there are no more than two (2) underground storage
tanks on the Property.
5.2 COVENANTS OF SELLER. Seller hereby covenants with Purchaser as
follows:
(a) Within two (2) days after the Effective Date, Seller
shall deliver to Purchaser the documents and other items (the "DUE
DILIGENCE MATERIALS") listed on EXHIBIT I attached hereto and
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made a part hereof. No later than one (1) business day prior to the
expiration of the Inspection Period, Seller shall deliver to Purchaser
tenant estoppel certificates in the form of Exhibit H attached hereto
and made a part hereof executed by each tenant under the Leases of the
Property.
(b) So long as this Agreement remains in effect, Purchaser
will be allowed access to the Property and the books and records related
to the Property under the terms and conditions set forth in Section 3.1
hereof.
(c) Seller shall not negotiate, execute or commit to enter
into (i) any Lease; or (ii) any modification, amendment, restatement or
renewal of any Lease, without Purchaser's prior written consent in each
instance (which consent shall not be unreasonably withheld or delayed).
(d) Seller shall not enter into any other contract (or an
extension or modification of any other contract) with respect to the
Property which will survive the Closing or otherwise affect the use,
operation or enjoyment of the Property after the Closing, without first
obtaining Purchaser's prior written consent thereof.
(e) After the date hereof and prior to Closing, no part of
the Property, nor any interest therein, will be alienated, liened,
encumbered or otherwise transferred.,
(f) Pending Closing, Seller shall operate and manage the
Property in a normal businesslike manner, maintaining present services
and insurance policies, and shall maintain the Property in good repair
and working order, shall keep on hand sufficient materials, supplies,
equipment, inventory and other personal property for the efficient
operation and management of the Property in a first-class manner, and
shall perform when due, all of Seller's obligations under the Leases and
other contracts affecting the Property and otherwise in accordance with
applicable laws, ordinances, rules and regulations affecting the
Property. Seller shall deliver the Property at Closing in substantially
the same condition as it was on the Effective Date, reasonable wear and
tear excepted. None of the Personal Property shall be removed from the
Property, unless replaced by personal property of equal or greater
utility and value.
(g) Any leasing commissions and Tenant Inducement Costs (as
hereinafter defined) owed by Seller and due or to become due with
respect to Leases in existence on the Effective Date or Leases obtained
prior to Closing will be paid in full by Seller on or before the Closing
Date. As used herein, the term "TENANT INDUCEMENT COSTS" means any
payment required under a Lease to be paid by the landlord thereunder to
or for the benefit of the tenant thereunder which is in the nature of a
tenant inducement, including specifically without limitation, tenant
improvement costs, lease buyouts and moving allowances.
(h) Seller shall promptly notify Purchaser of any change in
any condition with respect to the Property or of any event or
circumstance which makes any representation or warranty of Seller to
Purchaser under this Agreement untrue or misleading, or any covenant of
Seller under this Agreement incapable or less likely of being performed,
it being understood that Seller's obligation to provide notice to
Purchaser under this Section 5.2 shall in no way relieve Seller of any
liability for a breach by Seller of any of its representations,
warranties or covenants in this Agreement.
5.3 REPRESENTATIONS AND WARRANTY OF PURCHASER. Purchaser hereby
represents and warrants to Seller:
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(a) Purchaser has the full right, power and authority to
enter into this Agreement and to carry out Purchaser's obligations
hereunder, and to perform all of its obligations under this Agreement,
and the execution and delivery of this Agreement and the performance by
Purchaser of its obligations under this Agreement requires no further
action or approval of Purchaser's partners or of any other person in
order to constitute this Agreement as a binding and enforceable
obligation of Purchaser.
5.4 SURVIVAL OF OBLIGATIONS. Seller and Purchaser agree as follows:
(a) The representations and warranties made by Seller herein
shall be continuing and shall be deemed to be made by Seller as of the
Closing Date with the same force and effect as if made at and as of that
time. All representations, warranties and covenants made by Seller
herein shall survive Closing for a period of one (1) year. Seller shall
indemnify and hold Purchaser free and harmless from and against all
losses, costs, damages and expenses of every kind and nature whatsoever
(including reasonable attorneys' fees and costs) sustained by Purchaser
as a result of any breach of any representation, warranty or covenant
made by Seller in this Agreement.
(b) The representations and warranties made by Purchaser
herein shall be continuing and shall be deemed to be made by Purchaser
as of the Closing Date with the same force and effect as if made at and
as of that time. All representations and warranties of Purchaser shall
survive Closing for a period of one (1) year. Purchaser shall indemnify
and hold Seller free and harmless from and against all losses, costs,
damages, and expenses of every kind and nature whatsoever (including
reasonable attorneys' fees and costs) sustained by Seller as a result of
any breach of any representation or warranty made by Purchaser.
ARTICLE VI
CONDITIONS PRECEDENT TO THE CLOSING
6.1. CONDITIONS PRECEDENT OF PURCHASER. In addition to all other
conditions set forth in this Agreement, Purchaser's obligation to consummate the
Closing is subject to the satisfaction of each and every one of the conditions
precedent set forth in this section 6.1 (all of which are for the sole benefit
of Purchaser):
(a) All representations of Seller set forth in Section 5.1
shall be true, correct and complete in all material respects as of the
Effective Date and shall be true, correct and complete in all material
respects as of the Closing Date.
(b) Seller shall have performed in all material respects all
obligations required to be performed by Seller hereunder prior to or in
connection with the Closing.
6.2. CONDITIONS PRECEDENT OF SELLER. In addition to all other
conditions set forth in this Agreement, Seller's obligation to consummate the
Closing is subject to the satisfaction of each and every one of the conditions
precedent set forth in this Section 6.2 (all of which are for the sole benefit
of Seller):
(a) All representations of Purchaser set forth in Section
5.3 shall be true, correct and complete in all material respects as of
the Effective Date and shall be true, correct and complete in all
material respects as of the Closing Date; and
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(b) Purchaser shall have performed in all material respects
all obligations required to be performed by Purchaser hereunder prior to
or in connection with the Closing.
6.3 FAILURE OF CONDITION PRECEDENT. Upon the failure of any of the
foregoing conditions precedent, the party benefited by such failed condition
shall have the option to (a) waive such condition precedent and proceed to
Closing, or (b) terminate this Agreement by sending written notice to the other
party on or before the date of Closing, in which event the ▇▇▇▇▇▇▇ Money shall
be returned to Purchaser.
ARTICLE VII
DEFAULT
7.1 DEFAULT BY PURCHASER. In the event that Purchaser fails to
consummate this Agreement for any reason, except Seller's default or the
permitted termination of this Agreement by either Seller or Purchaser as herein
expressly provided, Seller shall be entitled, as its sole and exclusive remedy,
to terminate this Agreement and receive the ▇▇▇▇▇▇▇ Money as liquidated damages
for the breach of this Agreement, it being agreed between the parties hereto
that the actual damages to Seller in the event of such breach are impractical to
ascertain and the amount of the ▇▇▇▇▇▇▇ Money is a reasonable estimate thereof.
In the event that Purchaser closes under this Agreement and then fails to fully
and timely perform any of its other obligations under this Agreement that
survive or are performable after the Closing, Seller may seek all remedies
available at law or in equity.
7.2 DEFAULT BY SELLER. In the event Seller fails to perform any of
its obligations under Article IV of this Agreement for any reason, except
Purchaser's default or the permitted termination of this Agreement by Seller or
Purchaser as herein expressly provided, Purchaser shall be entitled, as its
exclusive remedies, either (i) to terminate this Agreement by giving written
notice thereof to Seller, whereupon neither party shall have any further rights
or obligations under this Agreement and the ▇▇▇▇▇▇▇ Money shall be returned to
Purchaser, or (ii) to enforce specific performance of Seller's obligations under
Article IV of this Agreement. In the event Seller breaches or fails to perform
any of Seller's obligations performable prior to Closing under this Agreement
other than those obligations set forth in Article IV hereof, for any reason,
except Purchaser's default or the permitted termination of this Agreement by
Seller or Purchaser as herein expressly provided, Purchaser shall be entitled,
as its exclusive remedy, to terminate this Agreement by giving written notice
thereof to Seller, whereupon neither party shall have any further rights or
obligations under this Agreement and the ▇▇▇▇▇▇▇ Money shall be returned to
Purchaser. In the event Purchaser closes under this Agreement and then Seller
fails to fully perform any of its other obligations under this Agreement that
survive or are performable after the Closing, Purchaser may seek all remedies
available at law or in equity.
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ARTICLE VIII
RISK OF LOSS
8.1 MINOR DAMAGE. In the event of loss or damage to the Property or
any portion thereof (the "premises in question") which is not "major" (as
hereinafter defined), this Agreement shall remain in full force and effect
provided Seller performs any necessary repairs or, at Seller's option, reduces
the cash portion of the Purchase Price in an amount equal to the cost of such
repairs, Seller thereby retaining all of Seller's right, title and interest to
any claims and proceeds Seller may have with respect to any casualty insurance
policies or condemnation awards relating to the premises in question. In the
event that Seller elects to perform repairs upon the Property, Seller shall use
reasonable efforts to complete such repairs promptly and the date of Closing
shall be extended a reasonable time (but in no event more than thirty (30) days)
in order to allow for the completion of such repairs.
8.2 MAJOR DAMAGE. In the event of a "major" loss or damage,
Purchaser may terminate this Agreement by written notice to Seller, in which
event the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser. If Purchaser does not
send written notice to Seller that Purchaser has elected to proceed with Closing
within ten (10) days after Seller sends Purchaser written notice of the
occurrence of major loss or damage, then Purchaser shall be deemed to have
elected to terminate this Agreement and the ▇▇▇▇▇▇▇ Money shall be returned to
Purchaser. If Purchaser sends notice to Seller within such ten (10) day period
that Purchaser desires to proceed with Closing, this Agreement shall remain in
effect, provided that the Purchase Price shall be reduced by an amount equal to
the cost of repairing the Property to its condition prior to the occurrence of
the major loss or damage. Upon Closing, full risk of loss with respect to the
Property shall pass to Purchaser. For purposes of Sections 8.1 and 8.2, "major"
loss or damage refers to the following: (i) loss or damage to the Property or
any portion thereof such that the cost of repairing or restoring the premises in
question to a condition substantially identical to that of the premises in
question prior to the event of damage would be, in the certified opinion of a
mutually acceptable architect, equal to or greater than One Hundred Thousand and
No/100 Dollars ($100,000.00), and (ii) any loss due to a condemnation.
ARTICLE IX
COMMISSIONS
9.1 BROKERAGE COMMISSIONS. Seller agrees to pay to CB ▇▇▇▇▇▇▇ ▇▇▇▇▇
(the "BROKER") a brokerage commission pursuant to a separate written agreement
between Seller and Broker in the event the transaction contemplated by this
Agreement is consummated, but not otherwise. Each party agrees that should any
claim be made for brokerage commissions or finder's fees by any broker or finder
(other than the Broker to be paid by Seller) by, through or on account of any
acts of said party or its representatives, said party will hold the other party
free and harmless from and against any and all loss, liability, cost, damage and
expense in connection therewith. The provisions of this paragraph shall survive
Closing.
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ARTICLE X
MISCELLANEOUS
10.1 DISCLAIMERS. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT
PURCHASER IS PURCHASING THE PROPERTY "AS IS" AND "WHERE IS," AND WITH ALL FAULTS
AND THAT SELLER IS MAKING NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE
PROPERTY, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT.
10.2 ASSIGNMENT. Purchaser shall have the right to assign its rights
under this Agreement without the consent of Seller.
10.3 NOTICES. Any notice pursuant to this Agreement shall be given in
writing by (a) personal delivery, or (b) expedited delivery service with proof
of delivery, or (c) United States Mail, postage prepaid, registered or certified
mail, return receipt requested, or (d) prepaid telegram, telex or telecopy
(provided that such telegram, telex or telecopy is confirmed by expedited
delivery service or by mail in the manner previously described), sent to the
intended addressee at the address set forth below, or to such other address or
to the attention of such other person as the addressee shall have designated by
written notice sent in accordance herewith, and shall be deemed to have been
given either at the time of personal delivery, or, in the case of expedited
delivery service or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or, in the case of telegram, telex or
telecopy upon receipt. Unless changed in accordance with the preceding sentence,
the addresses for notices given pursuant to this Agreement shall be as follows:
IF TO SELLER: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No. 941/▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
Fax No. (▇▇▇)▇▇▇-▇▇▇▇
IF TO PURCHASER: Harvard Property Trust, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
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with copies to: Harvard Property Trust, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
10.4 CALCULATION OF TIME PERIODS. Unless otherwise specified, in
computing any period of time described in this Agreement, the day of the act or
event after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included, unless
such last day is a Saturday, Sunday or legal holiday under the laws of the State
of Texas or the State of Minnesota, in which event the period shall run until
the end of the next day which is neither a Saturday, Sunday or legal holiday.
10.5 TIME OF ESSENCE. Seller and Purchaser agree that time is of the
essence of this Agreement.
10.6 SUCCESSORS AND ASSIGNS. The terms and provisions of this
Agreement are to apply to and bind the permitted successors and assigns of the
parties hereto.
10.7 ENTIRE AGREEMENT. This Agreement, including the Exhibits,
contains the entire agreement between the parties pertaining to the subject
matter hereof and fully supersedes all prior agreements and understandings
between the parties pertaining to such subject matter.
10.8 FURTHER ASSURANCES. Each party agrees that it will without
further consideration execute and deliver such other documents and take such
other action, whether prior or subsequent to Closing, as may be reasonably
requested by the other party to consummate more effectively the purposes or
subject matter of this Agreement.
10.9 ATTORNEYS' FEES. In the event of any controversy, claim or
dispute between the parties affecting or relating to the subject matter or
performance of this Agreement, the prevailing party shall be entitled to recover
from the nonprevailing party all of its reasonable expenses, including
reasonable attorneys' fees.
10.10 COUNTERPARTS. This Agreement may be executed in several
counterparts, and all such executed counterparts shall constitute the same
agreement. It shall be necessary to account for only one such counterpart in
proving this Agreement.
10.11 SEVERABILITY. If any provision of this Agreement is determined
by a court of competent jurisdiction to be invalid or unenforceable, the
remainder of this Agreement shall nonetheless remain in full force and effect.
10.12 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE
SUBSTANTIVE FEDERAL LAWS OF THE UNITED STATES AND THE LAWS OF THE STATE OF
MINNESOTA.
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10.13 NO THIRD PARTY BENEFICIARY. The provisions of this Agreement and
of the documents to be executed and delivered at Closing are and will be for the
benefit of Seller and Purchaser only and are not for the benefit of any third
party, and accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered at
Closing.
10.14 EXHIBITS AND SCHEDULES. The following schedules or exhibits
attached hereto shall be deemed to be an integral part of this Agreement:
(a) EXHIBIT A - Legal description of the Land
(b) EXHIBIT B - Form of Surveyor's Certificate
(c) EXHIBIT C - Form of Special Warranty Deed
(d) EXHIBIT D - Form of ▇▇▇▇ of Sale and Assignment
(e) EXHIBIT E - Form of Assignment and Assumption of Contract
(f) EXHIBIT F - Form of Tenant Notice Letter
(g) EXHIBIT G - FIRPTA Affidavit
(h) EXHIBIT H - Form of Tenant Estoppel
(i) EXHIBIT I - Due Diligence Materials
10.15 CAPTIONS. The section headings appearing in this Agreement are
for convenience of reference only and are not intended, to any extent and for
any purpose, to limit or define the text of any section or any subsection
hereof.
10.16 CONSTRUCTION. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any exhibits or amendments hereto.
10.17 EXCLUSIVE. Until this Agreement is terminated, Seller will cease
its marketing efforts and will not solicit, negotiate or enter into any backup
letters of intent, proposals, options or contracts with regard to the purchase
and sale of the Property.
10.18 TAX FREE EXCHANGE. In the event that either Seller or Purchaser
elect to purchase or sell the Property as part of a like kind exchange pursuant
to Section 1031 of the Internal Revenue Code, the other party agrees to
cooperate with such party in connection therewith and to execute and deliver all
documents which reasonably may be required to effectuate such exchange as a
qualified transaction pursuant to Section 1031 of the Code; provided that: (a)
the Closing shall not be delayed; (b) the other party incurs no additional cost
or liability in connection with the like-kind exchange; (c) such party pays all
costs associated with the like-kind exchange; and (d) the other party is not
obligated to take title to any other property. Notwithstanding anything set
forth in this Agreement to the contrary or in any other agreement to which a
party hereto is bound, each such party is (and any employee, representative or
other agent of such party are) hereby expressly authorized to disclose the "tax
treatment" or "tax structure" (as those terms are defined in Treas. Reg.
ss.ss.1.6011-4(c)(8) and (9), respectively) of the transactions the subject of
this Agreement and all materials of any kind (including tax opinions or other
tax analyses) that are provided to any such party relating to such "tax
treatment" or "tax structure" of the transactions the subject of this agreement,
except that "tax treatment" or "tax structure" shall not include the identity of
any existing or future party or its affiliates.
10.19 EFFECTIVE DATE. Upon execution of this Agreement by Purchaser
and delivery of same to Seller, this Agreement shall constitute an offer by
Purchaser. The offer by Purchaser herein contained shall automatically be
withdrawn and become of no force or effect unless this Agreement is executed by
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Seller and delivered to the Title Company on or before 5 p.m., Dallas, Texas
time, on February 11, 2004. The date of delivery to the Title Company of a fully
executed counterpart of this Agreement, as evidenced by the Title Company's
notation in the space set forth below, shall be deemed the effective date of
this Agreement (the "EFFECTIVE DATE").
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
to be effective as of the Effective Date.
SELLER:
Executed by Seller ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
this 11th day of an individual
February, 2004
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title:
---------------------------------
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PURCHASER:
Executed by Purchaser BEHRINGER HARVARD MID-TERM VALUE
this 11th day of ENHANCEMENT FUND I LP, a Texas limited
February, 2004 partnership
By: Behringer Harvard Funds I LP,
a Texas limited partnership
Its General Partner
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Title: SENIOR VICE PRESIDENT
-----------------------------
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ACKNOWLEDGMENT BY TITLE COMPANY
The Title Company hereby agrees to perform its obligations under this
Agreement and acknowledges receipt of ▇▇▇▇▇▇▇ Money from Purchaser in the amount
of Two Hundred Fifty Thousand Dollars ($250,000) on the 12th day of February,
2004, and of a fully executed counterpart of this Agreement on the 11th day of
February, 2004, which latter date shall be deemed the "Effective Date" of this
Agreement.
PARTNERS TITLE COMPANY
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Title: EXECUTIVE VICE PRESIDENT/GENERAL COUNSEL
-----------------------------------------
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