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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 17, 1996
Commission file number: 0-12045
PRUDENTIAL ACQUISITION FUND I, L.P.
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(Exact name of Registrant as specified in its charter)
Delaware 13-3173903
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Seaport Plaza, New York, New York 10292-0116
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 214-1016
N/A
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Former name, former address and former fiscal year, if changed since last
report.
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Item 2. Acquisition or Disposition of Assets
Prudential Acquisition Fund I, L.P., a Delaware limited
partnership (``Partnership''), sold for cash the Partnership's
interest in One Executive Center, a 114,000 square foot
five-story office building located in Albuquerque, New
Mexico, on October 17, 1996 for a gross sales price of
$7,300,000 less costs to sell and pro-rations of approximately
$409,000. The gross sales price was in excess of the appraised
value. The purchaser of the One Executive Center
property was WHEXC Real Estate Limited Partnership, a Delaware
limited partnership.
The Partnership also sold for cash its interest in Norwest
Center, a 97,000 square foot multi-tenant office building
located in Rochester, Minnesota, on October 18, 1996 for a gross
sales price of $6,900,000 less costs to sell and pro-rations
of approximately $245,000. The gross sales price was in excess
of 98% of the appraised value. The purchaser of the
Norwest Center property was Norwest Bank Minnesota South,
N.A., a national banking association.
With the sale of the One Executive Center and Norwest Center
properties, there are no remaining properties in the
Partnership. A distribution of $200 per $1,000 unit will be
made in November 1996 consisting of $193.17 per $1,000 unit
from the sale of the One Executive Center and Norwest Center
properties and $6.83 per $1,000 unit from previously
undistributed cash flow from operations. The Partnership
intends to make a final liquidating distribution in 1997.
Item 7. Financial Statements and Exhibits
(c) Exhibits
10 (k) Purchase and Sale Agreement dated September 6, 1996
by and between the Registrant and WCB Properties
Limited Partnership (filed herewith)
10 (l) First Amendment to Purchase and Sale Agreement
dated September 30, 1996 by and between the
Registrant and WCB Properties Limited Partnership
(filed herewith)
10 (m) Second Amendment to Purchase and Sale Agreement
dated October 11, 1996 by and between the
Registrant and WHEXC Real Estate Limited
Partnership (filed herewith)
10 (n) Purchase and Sale Agreement dated October 18, 1996
by and between the Registrant and Norwest Bank
Minnesota South, N.A. (filed herewith)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Prudential Acquisition Fund I, L.P.
a Delaware Limited Partnership
(Registrant)
By: Prudential Realty Partnerships, Inc.
General Partner
By: /s/ Kevin R. Smith Date: November 1, 1996
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Kevin R. Smith
Vice President
By: Prudential-Bache Properties, Inc.
General Partner
By: /s/ Chester A. Piskorowski Date: November 1, 1996
--------------------------------------------
Chester A. Piskorowski
Vice President
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PURCHASE AND SALE AGREEMENT
by and between
PRUDENTIAL ACQUISITION FUND I, L.P.,
a Delaware limited partnership
and
WCB PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
Prudential Property No. PAF 1-3
Property Name: One Executive Center
Location: 8500 Menaul Boulevard
Albuquerque, New Mexico
Date: September 6, 1996
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TABLE OF CONTENTS
Page
ARTICLE 1 SALE OF PROPERTY. . . . . . . . . . . . . . . . . . . . . 1
1.1 Real Property . . . . . . . . . . . . . . . . . . . 1
1.2 Personal Property . . . . . . . . . . . . . . . . . 1
1.3 Other Property Rights . . . . . . . . . . . . . . . 1
ARTICLE 2 PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . 2
2.1 Deposit Money . . . . . . . . . . . . . . . . . . . 2
2.2 Cash at Closing . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 TITLE MATTERS . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Title to Real Property. . . . . . . . . . . . . . . 2
3.2 Title Defects . . . . . . . . . . . . . . . . . . . 3
3.2.1 Certain
Exceptions
to Title . . . . . . . . . . . . . . . . 3
3.2.2 Discharge
of Title
Objections . . . . . . . . . . . . . . . 3
3.3 Title Insurance . . . . . . . . . . . . . . . . . . 3
ARTICLE 4 BUYER'S DUE DILIGENCE/CONDITION
OF THE ROPERTY . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 5 ADJUSTMENTS AND PRORATIONS. . . . . . . . . . . . . . . . 5
5.1 Lease Rentals and Expenses. . . . . . . . . . . . . 5
5.1.1 Rents . . . . . . . . . . . . . . . . . . 5
5.1.2 Lease
Expenses . . . . . . . . . . . . . . . . 5
5.2 Real Estate and Personal
Property Taxes . . . . . . . . . . . . . . . . . . 5
5.3 Other Property Operating
Expenses . . . . . . . . . . . . . . . . . . . . . 6
5.4 Closing Costs . . . . . . . . . . . . . . . . . . . 7
5.5 Cash Security Deposits. . . . . . . . . . . . . . . 7
5.6 Apportionment Credit. . . . . . . . . . . . . . . . 7
5.7 Delayed Adjustment. . . . . . . . . . . . . . . . . 7
ARTICLE 6 CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.1 Closing Date. . . . . . . . . . . . . . . . . . . . 7
6.2 Title Transfer and Payment of
Purchase Price . . . . . . . . . . . . . . . . . . 8
6.3 Seller's Closing Deliveries . . . . . . . . . . . . 8
6.4 Buyer Closing Deliveries. . . . . . . . . . . . . . 10
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6.5 Delivery of Deed. . . . . . . . . . . . . . . . . . 11
ARTICLE 7 CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . 11
7.1 Seller's Obligations. . . . . . . . . . . . . . . . 11
7.2 Buyer's Obligations . . . . . . . . . . . . . . . . 12
7.3 Waiver of Failure of
Conditions Precedent . . . . . . . . . . . . . . . 12
ARTICLE 8 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 13
8.1 Buyer's Representations . . . . . . . . . . . . . . 13
8.1.1 Buyer's Authorization . . . . . . . . . 13
8.1.2 Buyer's Financial Condition. . . . . . . 13
8.2 Seller's Representations. . . . . . . . . . . . . . 13
8.2.1 Seller's Authorization. . . . . . . . . . 13
8.3 Other Seller's Representations. . . . . . . . . . . 14
8.3 General Provisions. . . . . . . . . . . . . . . . . 15
8.3.1 No Representation As to Leases . . . . . 15
8.3.2 Definition of "Seller's Knowledge" . .. . 15
8.3.3 Seller's Representations Deemed
Modified . . . . . . . . . . . . . . . . 15
8.3.4 Notice of Breach; Seller's Right to
Cure . . . . . . . . . . . . . . . . . . 15
8.3.5 Survival; Limitation on Seller's
Liability. . . . . . . . . . . . . . . . 16
ARTICLE 9 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 17
9.1 Buyer's Covenants . . . . . . . . . . . . . . . . . 17
9.1.1 Confidentiality . . . . . . . . . . . . . 17
9.1.2 Approvals not a Condition to
Buyer's Performance. . . . . . . . . . . 17
9.1.3 Buyer's Indemnity; Delivery of
Reports. . . . . . . . . . . . . . . . . 18
9.2 Seller's Covenants. . . . . . . . . . . . . . . . . 18
9.2.1 Service Contracts. . . . . . . . . . . . 18
9.2.2 Maintenance of Property.. . . . . . . . . 18
9.2.3 Access to Property and Property
Documents. . . . . . . . . . . . . . . . 18
9.3 Mutual Covenants. . . . . . . . . . . . . . . . . . 19
9.3.1 Publicity . . . . . . . . . . . . . . . . 19
9.3.2 Broker. . . . . . . . . . . . . . . . . . 19
9.3.3 Survival. . . . . . . . . . . . . . . . . . . . . . 19
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ARTICLE 10 FAILURE OF CONDITIONS . . . . . . . . . . . . . . . . . . 20
10.1 To Seller's Obligations . . . . . . . . . . . . . . 20
10.2 To Buyer's Obligations. . . . . . . . . . . . . . . 20
ARTICLE 11 CONDEMNATION/CASUALTY . . . . . . . . . . . . . . . . . . 21
11.1 Condemnation. . . . . . . . . . . . . . . . . . . . 21
11.1.1 Right to Terminate. . . . . . . . . . . . 21
11.1.2 Assignment of Proceeds. . . . . . . . . . 21
11.2 Destruction or Damage . . . . . . . . . . . . . . . 21
11.3 Insurance . . . . . . . . . . . . . . . . . . . . . 22
11.4 Effect of Termination . . . . . . . . . . . . . . . 22
11.5 Waiver. . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 12 ESCROW. . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 13 LEASING MATTERS . . . . . . . . . . . . . . . . . . . . . 24
13.1 New Leases. . . . . . . . . . . . . . . . . . . . . 24
13.2 Lease Expenses. . . . . . . . . . . . . . . . . . . 24
13.3 Other Lease Activity. . . . . . . . . . . . . . . . 25
13.4 Lease Enforcement . . . . . . . . . . . . . . . . . 26
13.5 Lease Termination Prior to Closing. . . . . . . . . 26
ARTICLE 14 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 26
14.1 Buyer's Assignment. . . . . . . . . . . . . . . . . 26
14.2 Designation Agreement . . . . . . . . . . . . . . . 27
14.3 Survival/Merger . . . . . . . . . . . . . . . . . . 27
14.4 Integration; Waiver . . . . . . . . . . . . . . . . 27
14.5 Governing Law . . . . . . . . . . . . . . . . . . . 28
14.6 Captions Not Binding;
Schedules and Exhibits . . . . . . . . . . . . . . 28
14.7 Binding Effect. . . . . . . . . . . . . . . . . . . 28
14.8 Severability. . . . . . . . . . . . . . . . . . . . 28
14.9 Notices . . . . . . . . . . . . . . . . . . . . . . 28
14.10 Counterparts. . . . . . . . . . . . . . . . . . . . 29
14.11 No Recordation. . . . . . . . . . . . . . . . . . . 29
14.12 Additional Agreements; Further
Assurances . . . . . . . . . . . . . . . . . . . . 30
14.13 Construction. . . . . . . . . . . . . . . . . . . . 30
14.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . 30
14.15 Business Day. . . . . . . . . . . . . . . . . . . . 30
14.16 Seller's Maximum Aggregate Liability. . . . . . . . 31
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EXHIBITS
Exhibit A Legal Description
Exhibit B List of Contracts And Leasing Commissions Due
Exhibit C List of Licenses, Permits and Authorizations
Exhibit D Seller's Environmental Reports
Exhibit E Form of Buyer's AS-IS Certificate
Exhibit F Form of Special Warranty Deed
Exhibit G Form of Bill of Sale
Exhibit H Form of Assignment of Leases
Exhibit I List of Leases
Exhibit J Form of Assignment of Contracts
Exhibit K-1 List of Major Tenants
Exhibit K-2 Form of Tenant Estoppel Letter
Exhibit K-3 Form of Seller's Estoppel Certificate
Exhibit L Form of Notice to Tenants
Exhibit M Form of Seller's FIRPTA Affidavit
Exhibit N Form of Buyer's ERISA Representation
Exhibit O Litigation Notices, Contract Defaults,
Governmental Violations and Lease Defaults
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement")
is made this 6th day of September, 1996, by and between
PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware limited
partnership ("Seller"), and WCB PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited partnership ("Buyer").
W I T N E S S E T H:
In consideration of the mutual covenants and
agreements set forth herein the parties hereto do hereby
agree as follows:
ARTICLE 1 - SALE OF PROPERTY
Seller agrees to sell, transfer and assign and
Buyer agrees to purchase, accept and assume, subject to the
terms and conditions stated herein, all of Seller's right,
title and interest in and to the following (herein
collectively called the "Property"):
1.1 Real Property. That certain parcel of
real estate located in Albuquerque, New Mexico and legally
described in Exhibit A attached hereto and incorporated
herein by this reference, together with all buildings,
improvements and fixtures located thereon and all rights,
privileges and appurtenances pertaining thereto including all
of Seller's right, title and interest in and to all rights-
of-way, open or proposed streets, alleys, easements, strips
or gores of land adjacent thereto (herein collectively called
the "Real Property"); and
1.2 Personal Property. All tangible personal
property owned by Seller (excluding any computer or computer
equipment and software owned by Seller or Seller's property
manager, Terranomics Retail Services (the "Property
Manager")), located on the Real Property, and used in the
ownership, operation and maintenance of the Real Property and
all nonconfidential books, records and files (excluding
appraisals, budgets, Seller's strategic plans for the
Property, marketing information, submissions relating to
Seller's obtaining of corporate authorization, or other
information in the possession or control of Seller or the
Property Manager which is privileged (provided that
inadvertent disclosure shall not constitute a waiver of any
privilege)) relating to the Real Property (herein
collectively called the "Personal Property"); and
1.3 Other Property Rights. (a) Seller's
interest as landlord in all Leases (as defined in Section
6.3(c)); and (b) if and to the extent assignable by Seller,
(i) all service, supply, maintenance, utility and commission
agreements, all equipment leases, and other agreements
relating to the Property that are described in Exhibit B
attached hereto and incorporated herein by this reference,
and (ii) all licenses, permits and other written authorizations
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necessary for the use, operation or ownership
of the Real Property or Personal Property and in Seller's
possession or control that are described in Exhibit C (the
rights and interests of Seller described in clauses (a) and
(b) hereinabove being herein collectively called the "Other
Property Rights").
ARTICLE 2 - PURCHASE PRICE
The total purchase price to be paid by Buyer
for the purchase of the Property is the sum of SEVEN MILLION
THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($7,300,000) in
immediately available funds (the "Purchase Price"). The
Purchase Price shall be paid in the following manner:
2.1 Deposit Money. At the expiration of the
Due Diligence Period, provided that the Agreement shall
continue to be effective, Buyer shall deposit the sum of
SEVENTY-THREE THOUSAND AND NO/100 DOLLARS ($73,000) in
immediately available funds as a deposit (the "Deposit") with
Fidelity Title Company whose mailing address is One Executive
Center, 8500 Menaul Boulevard, Albuquerque, New Mexico
_______, Attention: Richard Davis, as escrow agent ("Escrow
Agent"). The Deposit shall be non-refundable except as
herein provided and shall be held and delivered by Escrow
Agent in accordance with the provisions of Article 12. Any
interest earned on the Deposit shall be considered a part of
the Deposit. Except as expressly otherwise set forth herein,
the Deposit shall be applied against the Purchase Price on
the Closing Date.
2.2 Cash at Closing. On the Closing Date,
Buyer shall pay to Seller an amount equal to the difference
between (a) the Purchase Price, and (b) the amount of the
Deposit as of the Closing Date (the "Balance"), subject to
the prorations and adjustments set forth in Article 5 or as
otherwise provided under this Agreement, plus any other
amounts required to be paid by Buyer at Closing, in
immediately available funds by wire transfer as more
particularly set forth in Section 6.2.
ARTICLE 3 - TITLE MATTERS
3.1 Title to Real Property. Buyer shall
obtain (a) Fidelity Title Company's (the "Title Company")
commitment to issue an Owner's Policy of Title Insurance with
respect to the Property (the "Title Report"), (b) copies of
all recorded documents referred to on Schedule B of the Title
Report as exceptions to coverage (the "Title Documents"), and
(c) a certified ALTA survey of the Property, prepared by
Clint Sherrill & Assoc. (the "Survey").
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3.2 Title Defects.
3.2.1 Certain Exceptions to Title. Buyer
shall have the right to approve in writing the Title
Report, Title Documents and Survey prior to the end of
the Due Diligence Period (as defined in Section 4.1).
Unless Buyer shall have approved such matters prior to
the end of the Due Diligence Period, all matters
constituting exceptions to title which are evidenced by
the Title Report, Title Documents or Survey, including
all amendments thereto, shall be deemed disapproved by
Buyer (any such matters which are approved by Buyer
prior to the end of the Due Diligence Period shall be
referred to herein as "Permitted Exceptions"). Any
exceptions which are objected to or deemed disapproved
by Buyer in accordance with the foregoing provisions of
this Section 3.2.1 shall be herein collectively called
the "Title Objections." Seller may elect (but shall not
be obligated) to remove, or cause to be removed at its
expense, any Title Objections, and shall be entitled to
a reasonable adjournment of the Closing (not to exceed
thirty (30) days) for the purpose of such removal, which
removal will be deemed effected by the issuance of title
insurance eliminating or insuring against the effect of
the Title Objections. Seller shall notify Buyer in
writing within five (5) days after the later (a) of
receipt of Buyer's notice of Title Objections and, (b)
if any Title Objections result from deemed disapproval,
the end of the Due Diligence Period, whether Seller
elects to remove the same. If Seller is unable to
remove or endorse over any Title Objections prior to the
Closing, or if Seller elects not to remove one or more
Title Objections, Buyer may elect to either (x)
terminate this Agreement, in which event the Deposit
shall be paid to Buyer and, thereafter, the parties
shall have no further rights or obligations hereunder
except for obligations which expressly survive the
termination of this Agreement, or (y) waive such Title
Objections, in which event such Title Objections shall
be deemed "Permitted Exceptions" and the Closing shall
occur as herein provided without any reduction of or
credit against the Purchase Price.
3.2.2 Discharge of Title Objections. If
on the Closing Date there are any Title Objections which
Seller has elected to pay and discharge, Seller may use
any portion of the Balance that would otherwise be
disbursed to Seller to satisfy the same, provided Seller
shall deliver to Buyer at the Closing instruments in
recordable form and sufficient to satisfy such Title
Objections of record, together with the cost of
recording or filing such instruments, or provided that
Seller shall cause the Title Company to insure over the
same, without any additional cost to Buyer, whether such
insurance is made available in consideration of payment,
bonding, indemnity of Seller or otherwise.
3.3 Title Insurance. At Closing, the Title
Company shall issue to Buyer an ALTA Owner's Form of Title
Insurance Policy (Form B-1970) (the "Owner's Title Policy"),
in the amount of the Purchase Price, insuring that fee simple
title to the Real Property is vested in Buyer subject only to
the Permitted Exceptions. Buyer shall be entitled to request
that the Title Company provide, at Buyer's sole cost and
expense, such endorsements (or amendments) to the Owner's
Title Policy as Buyer may reasonably require, provided that
(a) such endorsements (or
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amendments) shall be at no cost or additional liability to Seller,
(b) Buyer's obligations under this Agreement shall not be conditioned
upon Buyer's ability to obtain such endorsements and, if Buyer is
unable to obtain such endorsements, Buyer shall nevertheless be
obligated to proceed to close the transaction contemplated by this
Agreement (the "Transaction") without reduction of or set off
against the Purchase Price, and (c) the Closing shall not be
delayed as a result of Buyer's request.
ARTICLE 4 - BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY
Buyer acknowledges that commencing prior to the
execution of this Agreement and continuing for a period which
will expire on September 30, 1996 (the "Due Diligence
Period"), Buyer has conducted, and shall continue to conduct,
its examinations, inspections, testing, studies and/or
investigations (herein collectively called the "Due
Diligence") of the Property and information regarding the
Property. In connection with Buyer's Due Diligence, Seller
shall deliver to Buyer on or before September 23, 1996,
copies of the executed estoppel certificates, the originals
of which are to be delivered to Buyer at Closing pursuant to
Section 6.3(e); provided, however, that in the event Seller
fails to deliver all such estoppel certificates by such date,
Buyer's sole remedy shall be an extension of the end of the
Due Diligence Period, with respect only to Buyer's review of
such outstanding estoppel certificates, by one business day
for each business day after September 23, 1996 that Seller
has failed to deliver all such estoppel certificates;
provided, further, however, that if Seller has failed to
deliver such estoppel certificates by October 7, 1996, then
this agreement shall terminate without further action of the
parties and Seller and Buyer shall be relieved of all of
their obligations hereunder, except for those provisions that
by their terms survive the termination of this Agreement
unless, prior to the expiration of said date, Buyer delivers
to Seller written notice of its election to have this
Agreement remain in effect. Notwithstanding the foregoing,
the Due Diligence Period, with respect to all matters other
than Buyer's review of such outstanding estoppel
certificates, shall expire on September 30, 1996, and, with
respect to Buyer's review of such outstanding estoppel
certificates, shall expire no later than October 14, 1996.
This Agreement shall terminate without further action of the
parties upon the expiration of the Due Diligence Period
unless prior thereto Buyer delivers to Seller written notice
of its election to have this Agreement remain in effect. If
this Agreement remains in effect following the expiration of
the Due Diligence Period as a result of Buyer's election,
then Buyer and Seller each acknowledge and agree that Buyer
shall have no additional period after the expiration of the
Due Diligence Period to conduct further physical Due
Diligence or regarding the Property. At Closing and as a
material inducement for Seller to consummate the Transaction,
Buyer will deliver a certification in the form of Exhibit E
attached hereto and incorporated herein by this reference.
ARTICLE 5 - ADJUSTMENTS AND PRORATIONS
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The following adjustments and prorations shall
be made at Closing:
5.1 Lease Rentals and Expenses.
5.1.1 Rents. All collected rents and
other payments from tenants under the leases shall be
prorated between Seller and Buyer as of the day prior to
the Closing Date. Seller shall be entitled to all rents
(including any percentage rent, additional rent and any
accrued tax and operating expense reimbursements and
escalations), charges, and other revenue of any kind
attributable to any period under the Leases to but not
including the Closing Date. Buyer shall be entitled to
all rents (including any percentage rent, additional
rent and any accrued tax and operating expense
reimbursements and escalations), charges and other
revenue of any kind attributable to any period under the
Leases on and after the Closing Date. Rents and expense
escalations or other reimbursements due landlord under
the Leases not collected as of the Closing Date shall
not be prorated at the time of Closing, but Buyer shall
make a good faith effort to collect the same on Seller's
behalf and to tender the same to Seller upon receipt
(which obligation of Buyer shall survive the Closing and
not be merged therein); provided, however, that all
rents, escalations and other reimbursements due landlord
under the Leases collected by Buyer on or after the
Closing Date shall first be applied to all amounts due
under the Leases at the time of collection (i.e.,
current rents and sums due Buyer as the current owner
and landlord) with the balance (if any) payable to
Seller, but only to the extent of amounts delinquent and
actually due Seller. Buyer shall not have an exclusive
right to collect the sums due Seller under the Leases
and Seller hereby retains its rights to pursue any
tenant under the Leases for sums due Seller for periods
attributable to Seller's ownership of the Property;
provided, that Seller shall not disturb a tenant's
possessory right in its premises. Seller's rights under
the immediately preceding sentence shall survive the
Closing and not be merged therein. Buyer shall receive
a credit against the Purchase Price for pre-paid rentals
held by Seller covering the period post-Closing.
5.1.2 Lease Expenses. At Closing, Buyer
shall reimburse Seller for the Lease Expenses (as
defined in Section 13.2) to the extent required by the
terms of Section 13.2.
5.2 Real Estate and Personal Property Taxes.
Real estate and personal property taxes shall be prorated on
an accrual basis for the current tax year, regardless of the
year of assessment as of midnight of the day prior to the
Closing Date. Seller shall pay all real estate and personal
property taxes due with respect to the Property for the
period prior to midnight of the Closing Date and shall be
entitled to all tax refunds and credits due with respect to
the Property for the period prior to midnight of the Closing
Date, without regard to the year assessed. Buyer shall pay
all real estate and personal property taxes due with respect
to the Property for the period subsequent to midnight of the
Closing Date and shall be entitled to all tax refunds and
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credits due with respect to the Property for the period
subsequent to midnight of the Closing Date. If the real
estate and/or personal property tax rate and assessments have
not been set for the year in which the Closing occurs, then
the proration of such taxes shall be based upon the rate and
assessments for the preceding tax year, and such proration
shall be adjusted between Seller and Buyer upon presentation
of written evidence that the actual taxes paid for the year
in which the Closing occurs differ from the amounts used at
Closing and in accordance with the provisions of Section 5.7.
Seller shall be entitled, after Closing, to pursue tenants
under the Leases for reimbursement of real estate taxes, or
the recovery of any increase in real estate taxes, for any
tax period with respect to the Property prior to midnight of
the Closing Date; provided that Seller shall not disturb a
tenant's possessory right in its premises. Buyer shall not
be entitled to a credit for any amounts that the owner of the
Property is to be reimbursed by tenants of the Property with
respect to taxes attributable to Buyer's period of ownership
of the Property, the burden of collecting such tax
reimbursements being solely on Buyer. In the event the
Property has been assessed for property tax purposes at such
rates as would result in reassessment (i.e., "escape
assessment" or "roll-back taxes") based upon the change in
land usage or ownership of the Property, Buyer hereby agrees
to pay all such taxes and to indemnify and save Seller
harmless from and against all claims and liability for such
taxes. Such indemnity shall survive the Closing and not be
merged therein. To the extent not paid by tenants, Seller
shall pay all installments of special assessments payable
prior to the Closing Date and Buyer shall pay all
installments of special assessments payable on and after the
Closing Date; provided, however, that Seller shall not be
responsible for any installments of special assessments which
have not been confirmed or which relate to projects that have
not been completed on the date hereof.
5.3 Other Property Operating Expenses.
Operating expenses for the Property shall be prorated as of
midnight of the day prior to the Closing Date. Seller shall
pay all utility charges and other operating expenses
attributable to the Property to, but not including the
Closing Date (except for those utility charges and operating
expenses payable by tenants in accordance with the Leases)
and Buyer shall pay all utility charges and other operating
expenses attributable to the Property on or after the Closing
Date. To the extent that the amount of actual consumption of
any utility services is not determined prior to the Closing
Date, a proration shall be made at Closing based on the last
available reading and post-closing adjustments between Buyer
and Seller shall be made within thirty (30) days of the date
that actual consumption for such pre-closing period is
determined, which obligation shall survive the Closing and
not be merged therein. Seller shall not assign to Buyer any
deposits which Seller has with any of the utility services or
companies servicing the Property. Buyer shall arrange with
such services and companies to have accounts opened in
Buyer's name beginning at 12:01 a.m. on the Closing Date.
5.4 Closing Costs. Buyer shall pay all
premiums and charges of the Title Company for any and all
endorsements to the Owner's Title Policy, one-half (1/2) of
all escrow or closing charges, all costs of Buyer's Due
Diligence and any other costs customarily paid by the buyer
pursuant to local practice. Seller shall pay all premiums
and charges (not to exceed Twenty-One Thousand Three Hundred
Thirty-Five Dollars ($21,335)) of the Title Company for
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the Owner's Title Policy (excluding endorsements), the cost of
the Survey, all recording and filing charges in connection
with the instruments by which Seller conveys the Property,
one-half (1/2) of all escrow or closing charges and any other
costs customarily paid by the seller pursuant to local
practice. Except as otherwise agreed by the parties, each
party shall pay its own attorneys. The obligations of the
parties to pay applicable escrow or closing charges shall
survive the termination of this Agreement.
5.5 Cash Security Deposits. At Closing,
Seller shall give Buyer a credit against the Balance in the
aggregate amount of the unapplied cash security deposits then
held by Seller under the Leases and any interest thereon
less, any administrative or similar charges to which Seller
may be entitled under applicable law.
5.6 Apportionment Credit. In the event the
apportionments to be made at the Closing result in a credit
balance (i) to Buyer, such sum shall be paid (at Seller's
option) at the Closing by giving Buyer a credit against the
Balance in the amount of such credit balance, or (ii) to
Seller, Buyer shall pay the amount thereof to Seller at the
Closing by wire transfer of immediately available funds to
the account or accounts to be designated by Seller for the
payment of the Balance.
5.7 Delayed Adjustment. If at any time
following the Closing Date, the amount of an item listed in
any section of this Article 5 shall prove to be incorrect
(whether as a result in an error in calculation or a lack of
complete and accurate information as of the Closing), the
party in whose favor the error was made shall promptly pay to
the other party the sum necessary to correct such error upon
receipt of proof of such error, provided that such proof is
delivered to the party from whom payment is requested on or
before one (1) year after Closing. The provisions of this
Section 5.7 shall survive the Closing and not be merged
therein.
ARTICLE 6 - CLOSING
Buyer and Seller hereby agree that the
Transaction shall be consummated as follows:
6.1 Closing Date. Subject to Seller's and
Buyer's right to extend the Closing as provided in this
Agreement, the Transaction shall close ("Closing") on October
15, 1996 (the "Closing Date"). Closing shall be through
escrow. The Closing shall take place at 8:00 a.m. Mountain
Time. Buyer and Seller shall conduct a "pre-closing" on the
last business day prior to the Closing Date with title
transfer and payment of the Purchase Price to be completed in
time to permit an 8:00 a.m. closing on the Closing Date as
set forth in Section 6.2. Time is of the essence with
respect to the Closing Date.
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6.2 Title Transfer and Payment of Purchase
Price. Provided all conditions precedent to Seller's
obligations hereunder have been satisfied, Seller agrees to
convey title to the Real Property to Buyer by special
warranty deed upon confirmation of receipt of the Purchase
Price by the Escrow Agent as set forth below. Provided all
conditions precedent to Buyer's obligations hereunder have
been satisfied, Buyer agrees to deliver the payment specified
in Section 2.2 by timely delivering the same to the Escrow
Agent no later than 8:00 a.m. Pacific Time on the Closing
Date.
6.3 Seller's Closing Deliveries. At the
Closing, Seller shall deliver or cause to be delivered to the
Escrow Agent the following:
(a) Deed. A warranty deed substantially in
the form of Exhibit F attached hereto and incorporated
herein by this reference, conveying to Buyer all of
Seller's right, title and interest in and to the Real
Property, subject only to the Permitted Exceptions
("Deed").
(b) Bill of Sale. A bill of sale in the form
of Exhibit G attached hereto and incorporated herein by
this reference conveying all of Seller's right, title
and interest in and to the Personal Property.
(c) Assignment of Tenant Leases. An
assignment and assumption of tenant leases, in the form
of Exhibit H attached hereto and incorporated herein by
this reference ("Assignment of Leases") transferring all
of Seller's interest in the tenant space leases
encumbering the Property on the Closing Date described
in Exhibit I attached hereto and incorporated herein by
this reference (as updated at Closing) and any
amendments, guarantees and other documents relating
thereto (herein collectively called the "Leases"),
together with all assignable non-cash security deposits
deposited by the tenants thereunder and not applied by
Seller in accordance with the terms of the Leases.
(d) Assignment of Equipment Leases,
Commission Agreements and Service Contracts. An
assignment and assumption of equipment leases,
commission agreements, service contracts, warranties and
guaranties and the Other Property Rights (to the extent
the same are not transferred by the Deed, Bill of Sale
or Assignment of Leases) in the form of Exhibit J
attached hereto and incorporated herein by this
reference ("Assignment of Contracts"), transferring, to
the extent assignable, without liability or expense to
Seller, all of Seller's interest in the equipment leases
and any lease commission agreements in effect at the
Property on the Closing Date, all uncanceled service
contracts encumbering the Property on the Closing Date,
all warranties and guaranties which remain in effect on
the Closing Date and any Other Property Rights not
otherwise transferred to Buyer (all of the foregoing
being herein collectively called the "Contracts").
Seller shall not assign any existing management
agreement or any contracts or policies of insurance for
the Property.
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(e) Estoppel Letters. Executed estoppel
letters from (a) each of those tenants identified on
Exhibit K-1 attached hereto and incorporated herein by
this reference as "Major Tenants" (the "Major Tenants"),
and (b) all other tenants (the "Other Tenants"). All of
such estoppel letters shall be dated no earlier than
forty-five (45) days prior to the initially scheduled
Closing Date and shall be substantially in the form of
Exhibit K-2 attached hereto and incorporated herein by
this reference; provided, however, that in the event any
Major Tenant or Other Tenant refuses to execute such
form, the form of estoppel executed by such Major Tenant
or Other Tenant shall be the form such Major Tenant or
Other Tenant is required to provide pursuant to the
terms of such Major Tenant's or Other Tenant's Lease.
In the event Seller cannot for any reason obtain a
tenant estoppel letter from any Other Tenant, Seller
shall deliver to Buyer a Seller's (landlord) estoppel
letter in the form of Exhibit K-3 attached hereto and
incorporated herein by this reference. Seller's
liability under Seller's estoppel letters shall expire
and be of no further force or effect on the one hundred
eightieth (180th) day following the Closing Date;
provided, however, that if prior to the expiration of
such one hundred eighty (180) day period, Seller shall
obtain an estoppel certificate from any such tenant
after delivery of such Seller's estoppel letter with
respect to such tenant, Seller's (landlord) estoppel
letter shall, as of the date of such tenant's estoppel
letter, be without further force or effect.
(f) Notice to Tenants. A single form letter
in the form of Exhibit L attached hereto and
incorporated herein by this reference to each tenant
under the Leases, duplicate copies of which would be
sent notifying it of the sale of the Property to Buyer
and advising it that all future payments of rent and
other payments due under the Leases are to be made to
Buyer at an address designated by Buyer.
(g) Non-Foreign Status Affidavit. A non-
foreign status affidavit in the form of Exhibit M
attached hereto and incorporated herein by this
reference, as required by Section 1445 of the Internal
Revenue Code.
(h) Evidence of Authority. A certificate of
an Assistant Secretary of Seller with respect to the
authority to act on behalf of Seller of the individual
executing on behalf of Seller all documents contemplated
by this Agreement.
(i) Seller's Certificate. The Certificate of
Seller certifying to the matters set forth in Section
8.2.
(j) Property Documents. (i) To the extent in
the possession of Seller or the current manager of the
Property, (x) the original (or, if unavailable, a copy)
of the existing certificate or certificates of occupancy
for the Property, (y) all original (or, if unavailable,
copies of) certificates, licenses, permits,
authorizations and approvals issued for or with respect
to the Property by governmental and quasi-governmental
authorities
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having jurisdiction; and (ii) all books and
records (excluding appraisals, budgets, Seller's
strategic plans for the Property, marketing information,
submissions relating to Seller's obtaining of corporate
authorization, or other information in the possession or
control of Seller or the Property Manager which is
privileged (provided that inadvertent disclosure shall
not constitute a waiver of any privilege)) located at
the Property or at the office of the Property Manager
relating to the Property and the ownership and operation
thereof (the items described in clauses (i) and (ii)
being herein collectively called the "Property
Documents").
(k) Other Documents. Such other documents as
may be reasonably required by the Title Company or as
may be agreed upon by Seller and Buyer to consummate the
Transaction.
(l) Letters of Credit as Tenant Security
Deposits. With respect to any security deposits which
are letters of credit, Seller shall, if the same are
assignable, (i) deliver to Buyer at the Closing such
letters of credit, (ii) execute and deliver such other
instruments as the issuers of such letters of credit
shall reasonably require, and (iii) cooperate with Buyer
to change the named beneficiary under such letters of
credit to Buyer so long as Seller does not incur any
additional liability or expense in connection therewith.
(m) Keys and Original Documents. Keys to all
locks on the Real Property (in Seller's or the Property
Manager's possession) and originals or, if originals are
not available, copies, of the Leases and Contracts
(unless canceled as set forth herein) encumbering the
Property on the Closing Date.
(n) Transfer Taxes. If applicable, duly
completed and signed real estate transfer tax returns.
6.4 Buyer Closing Deliveries. At the
Closing, Buyer shall deliver or cause to be delivered to the
Escrow Agent the following:
(a) Balance. The Balance, as adjusted for
apportionments and other adjustments required under this
Agreement, plus any other amounts required to be paid by
Buyer at Closing.
(b) Assignment of Leases. The Assignment of
Leases executed and acknowledged by Buyer.
(c) Assignment of Equipment Leases,
Commission Agreements and Service Contracts. The
Assignment of Contracts executed and acknowledged by
Buyer.
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(d) Buyer's Certificates. The certificate of
Buyer required under Article 4 hereof and a certificate
of Buyer certifying as to the matters set forth in
Section 8.1.
(e) Buyer's ERISA Certificate. The
certificate of Buyer substantially in the form of
Exhibit N attached hereto and incorporated herein by
this reference and any other certificate or other
information reasonably required by Seller to satisfy
Seller that the Transaction does not constitute a non-
exempt prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended
("ERISA") and that the Transaction complies with ERISA
in all respects.
(f) Evidence of Authority. Documentation to
establish to Seller's reasonable satisfaction the due
authorization of Buyer's acquisition of the Property and
Buyer's delivery of the documents required to be
delivered by Buyer pursuant to this Agreement
(including, but not limited to, the organizational
documents of Buyer and its general partners, as they may
have been amended from time to time, resolutions of
Buyer and its general partners and incumbency
certificates of Buyer and its general partners).
(g) Other Documents. Such other documents
as may be reasonably required by the Title Company or
may be agreed upon by Seller and Buyer to consummate the
Transaction.
(h) Transfer Taxes. If applicable, duly
completed and signed real estate transfer tax returns.
6.5 Delivery of Deed. Effective upon
delivery of the Deed, actual and exclusive possession
(subject only to the Permitted Exceptions) and risk of loss
to the Property shall pass from Seller to Buyer.
ARTICLE 7 - CONDITIONS TO CLOSING
7.1 Seller's Obligations. Seller's
obligation to close the Transaction is conditioned on all of
the following, any or all of which may be waived by Seller by
an express written waiver, at its sole option:
(b) Representations True. All
representations and warranties made by Buyer in this
Agreement shall be true and correct in all material
respects on and as of the Closing Date, as if made on
and as of such date except to the extent they expressly
relate to an earlier date;
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(d) Buyer's Deliveries Complete. Buyer shall
have delivered the funds required hereunder and all of
the documents to be executed by Buyer set forth in
Section 6.4 and shall have performed all other
covenants, undertakings and obligations, and complied
with all conditions required by this Agreement, to be
performed or complied with by Buyer at or prior to the
Closing.
7.2 Buyer's Obligations. Buyer's obligation
to close the Transaction is conditioned on all of the
following, any or all of which may be expressly waived by
Buyer in writing, at its sole option:
(a) Representations True. Subject to the
provisions of Section 8.3, all representations and
warranties made by Seller in this Agreement, as the same
may be amended as provided in Section 8.3, shall be true
and correct in all material respects on and as of the
Closing Date, as if made on and as of such date except
to the extent that they expressly relate to an earlier
date;
(b) Title Conditions Satisfied. At the time
of the Closing, title to the Property shall be as
provided in Article 3 of this Agreement; and
(c) Seller's Deliveries Complete. Seller
shall have delivered all of the documents and other
items required pursuant to Section 6.3 and shall have
performed all other covenants, undertakings and
obligations, and complied with all conditions required
by this Agreement, to be performed or complied with by
Seller at or prior to the Closing.
(d) No Material Adverse Change. No event
shall have occurred between the end of the Due Diligence
Period and the Closing Date that shall cause the value
of the Property to decrease by more than Two Hundred
Fifty Thousand Dollars ($250,000), as reasonably
determined by Buyer, nor shall have occurred any
environmental contamination of the Property between the
end of the Due Diligence Period and the Closing Date.
7.3 Waiver of Failure of Conditions
Precedent. At any time or times on or before the date
specified for the satisfaction of any condition, Buyer or
Seller may elect in writing to waive the benefit of any such
condition set forth in Section 7.1 or Section 7.2,
respectively. By closing the Transaction, Buyer shall be
conclusively deemed to have waived the benefit of any
remaining unfulfilled conditions set forth in Section 7.2.
In the event any of the conditions set forth in Sections 7.1
or 7.2 are neither waived nor fulfilled, Buyer or Seller (as
appropriate) may terminate their obligations to perform at
the Closing and otherwise under this Agreement in accordance
with the provisions of Article 10.
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ARTICLE 8 - REPRESENTATIONS AND WARRANTIES
8.1 Buyer's Representations. Buyer
represents and warrants to, and covenants with, Seller as
follows:
8.1.1 Buyer's Authorization. Buyer is
duly organized (or formed), validly existing and in good
standing under the laws of its State of organization and
the State in which the Property is located, and is
authorized to consummate the Transaction and fulfill all
of its obligations hereunder and under all documents
contemplated hereunder to be executed by Buyer, and has
all necessary power to execute and deliver this
Agreement and all documents contemplated hereunder to be
executed by Buyer, and to perform all of its obligations
hereunder and thereunder. This Agreement and all
documents contemplated hereunder to be executed by
Buyer, have been duly authorized by all requisite
partnership or corporate action on the part of Buyer and
are the valid and legally binding obligation of Buyer,
enforceable in accordance with their respective terms.
Neither the execution and delivery of this Agreement and
all documents contemplated hereunder to be executed by
Buyer, nor the performance of the obligations of Buyer
hereunder or thereunder will result in the violation of
any law or any provision of the agreement of partnership
or articles of incorporation and by-laws of Buyer or
will conflict with any order or decree of any court or
governmental instrumentality of any nature by which
Buyer is bound.
8.1.2 Buyer's Financial Condition.
Buyer's financial condition is as is represented to
Seller on any financial statements previously submitted
to Seller by Buyer.
8.2 Seller's Representations. Seller
represents and warrants to Buyer as follows:
8.2.1 Seller's Authorization. Seller is
(a) duly organized (or formed), validly existing and in
good standing under the laws of its State of
organization and the State in which the Property is
located, (b) subject to obtaining the approvals
described in Subsection 7.1(a), is authorized to
consummate the Transaction and fulfill all of its
obligations hereunder and under all documents
contemplated hereunder to be executed by Seller, and
(c) has all necessary power to execute and deliver this
Agreement and all documents contemplated hereunder to be
executed by Seller and to perform its obligations
hereunder and thereunder. Subject to obtaining the
approvals described in Subsection 7.1(a), this Agreement
and all documents contemplated hereunder to be executed
by Seller have been duly authorized by all requisite
corporate action on the part of Seller and are the valid
and legally binding obligation of Seller enforceable in
accordance with their respective terms. Neither the
execution and delivery of this Agreement and all
documents contemplated hereunder to be executed by
Seller nor the performance of the obligations of Seller
hereunder or thereunder will result in the violation of
any law or any provision of the partnership agreement by
which Seller was formed or will conflict with any order or
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decree of any court or governmental instrumentality
of any nature by which Seller is bound.
8.2.2 Designated Employee. The
Designated Employee (as defined below) is, as of the
date of execution of this Agreement, the employee of
Seller responsible for the asset management of the
Property.
8.3 Other Seller's Representations. To
Seller's knowledge (as such term is hereinafter
defined):
(a) Except as listed in Exhibit O
attached hereto and incorporated herein by this
reference, Seller has not received any written
notice of pending or threatened litigation
against Seller which would adversely affect the
Property.
(b) Seller has not entered into any
service, supply, maintenance or utility
contracts affecting the Property which will be
binding upon Buyer after the Closing other than
the Contracts listed in Exhibit B attached
hereto.
(c) Seller has not received any written
notice of default under the terms of any of the
Contracts except as listed in Exhibit O
attached hereto.
(d) As of the date of this Agreement,
the only tenants of the Property are the
tenants listed in Exhibit I attached hereto and
incorporated herein by this reference.
(e) Except as listed in Exhibit O
attached hereto, Seller has not received any
written notice from any governmental authority
of any violation of any zoning, building, fire,
or health code, statute, ordinance, rule or
regulation applicable to the Property.
(f) All non-confidential books, records
and files relating to the Property and used by
Seller in its ordinary course of business or
for the purpose of reporting to its investors
(excluding appraisals, budgets, Seller's
strategic plans for the Property, marketing
information, submissions relating to Seller's
obtaining of corporate authorization, or other
information in the possession or control of
Seller or the Property Manager which is
privileged (provided that inadvertent
disclosure shall not constitute a waiver of any
privilege)) located at Seller's offices at 2029
Century Park East, Suite 2050, Los Angeles,
California or the Property Manager's office,
have been made
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available to Buyer. All such books, records and
files have been maintained in the ordinary course
of business at Seller's offices at 2029 Century
Park East, Suite 2050, Los Angeles, California or
the Property Manager's office.
8.3 General Provisions.
8.3.1 No Representation As to Leases.
Seller does not represent or warrant that any particular
Lease or Leases will be in force or effect on the
Closing Date or that the tenants will have performed
their obligations thereunder.
8.3.2 Definition of "Seller's Knowledge".
All references in this Agreement to "Seller's knowledge"
or words of similar import shall refer only to the
actual knowledge of John Woo (the "Designated Employee")
and shall not be construed to refer to the knowledge of
any other officer, agent or employee of Seller or any
affiliate thereof or to impose or have imposed upon the
Designated Employee any duty to investigate the matters
to which such knowledge, or the absence thereof,
pertains, including, but not limited to, the contents of
the files, documents and materials made available to or
disclosed to Buyer or the contents of files maintained
by the Designated Employee. There shall be no personal
liability on the part of the Designated Employee arising
out of any representations or warranties made herein.
8.3.3 Seller's Representations Deemed
Modified. To the extent that Buyer knows or is deemed
to know prior to the expiration of the Due Diligence
Period that Seller's representations and warranties are
inaccurate, untrue or incorrect in any way, such
representations and warranties shall be deemed modified
to reflect Buyer's knowledge or deemed knowledge, as the
case may be. For purposes of this Agreement, Buyer
shall be "deemed to know" that a representation or
warranty was untrue, inaccurate or incorrect to the
extent that this Agreement, the Documents, any estoppel
certificate executed by any tenant of the Property and
delivered to Buyer, or any studies, tests, reports, or
analyses prepared by or for Buyer or any of its
employees, agents, representatives or attorneys (all of
the foregoing being herein collectively called the
"Buyer's Representatives") or otherwise obtained by
Buyer or Buyer's Representatives contains information
which is inconsistent with such representation or
warranty.
8.3.4 Notice of Breach; Seller's Right to
Cure. If after the expiration of the Due Diligence
Period but prior to the Closing, Buyer or any Buyer's
Representative obtains actual knowledge that any of the
representations or warranties made herein by Seller are
untrue, inaccurate or incorrect in any material respect,
Buyer shall give Seller written notice thereof within
five (5) business days of obtaining such knowledge (but,
in any event, prior to the Closing). If at or prior to
the Closing, Seller obtains knowledge that any of the
representations or warranties made herein by Seller are
untrue, inaccurate
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or incorrect in any material respect, Seller shall give
Buyer written notice thereof within five (5) business
days of obtaining such knowledge (but, in any event, prior
to the Closing). In either such event, Seller shall have
the right to cure such misrepresentation or breach and shall
be entitled to a reasonable adjournment of the Closing (not
to exceed thirty (30) days) for the purpose of such cure. If
Seller is unable to so cure any misrepresentation or
breach, then Buyer, as its sole remedy for any and all
such materially untrue, inaccurate or incorrect material
representations or warranties, shall elect either (a) to
waive such misrepresentations or breaches of warranties
and consummate the Transaction without any reduction of
or credit against the Purchase Price, or (b) to
terminate this Agreement by written notice given to
Seller on the Closing Date, in which event this
Agreement shall be terminated, the Deposit shall be
returned to Buyer and, thereafter, neither party shall
have any further rights or obligations hereunder except
as provided in any section hereof that by its terms
expressly provides that it survives any termination of
this Agreement. If any such representation or warranty
is untrue, inaccurate or incorrect but is not untrue,
inaccurate or incorrect in any material respect, Buyer
shall be deemed to waive such misrepresentation or
breach of warranty, and Buyer shall be required to
consummate the Transaction without any reduction of or
credit against the Purchase Price. The untruth,
inaccuracy or incorrectness of a representation or
warranty shall be deemed material only if Buyer's
aggregate damages resulting from the untruth, inaccuracy
or incorrectness of any of the representations or
warranties are reasonably estimated by Buyer to exceed
Fifty Thousand Dollars ($50,000).
8.3.5 Survival; Limitation on Seller's
Liability. The representations and warranties made by
Seller in Section 8.2 shall survive the Closing and not
be merged therein for a period of one hundred eighty
(180) days and Seller shall only be liable to Buyer
hereunder for a breach of a representation and warranty
made herein or in any of the documents executed by
Seller at the Closing with respect to which a claim is
made by Buyer against Seller on or before the one
hundred eightieth (180th) day after the date of the
Closing. Anything in this Agreement to the contrary
notwithstanding, the maximum aggregate liability of
Seller for Seller's breaches of representations and
warranties herein or in any documents executed by Seller
at Closing (including, but not limited to, any Seller
estoppel letters delivered pursuant to Section 6.3(e))
shall be limited as set forth in Section 14.16 hereof.
Notwithstanding the foregoing, however, if the Closing
occurs, Buyer hereby expressly waives, relinquishes and
releases any right or remedy available to it at law, in
equity or under this Agreement to make a claim against
Seller for damages that Buyer may incur, or to rescind
this Agreement and the Transaction, as the result of any
of Seller's representations or warranties being untrue,
inaccurate or incorrect if (a) Buyer knew or is deemed
to know that such representation or warranty was untrue,
inaccurate or incorrect at the time of the Closing, or
(b) Buyer's damages as a result of such representations
or warranties being untrue, inaccurate or incorrect are
reasonably estimated to aggregate less than Fifty
Thousand Dollars ($50,000). Section 8.3.5(ii) shall
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not apply to the extent that Seller's liability arises from
its fraudulent actions or fraudulent omissions, as
determined by a court of competent jurisdiction
(sustained on appeal, if any).
ARTICLE 9 - COVENANTS
9.1 Buyer's Covenants. Buyer hereby
covenants as follows:
9.1.1 Confidentiality. Buyer acknowledges
that any information furnished to Buyer with respect to
the Property is and has been so furnished on the
condition that Buyer maintain the confidentiality
thereof. Accordingly, Buyer shall hold, and shall cause
its directors, officers and other personnel and
representatives to hold, in strict confidence, and not
disclose to any other person without the prior written
consent of Seller until the Closing shall have been
consummated, any of the information in respect of the
Property delivered to or for the benefit of Buyer
whether by agents, consultants, employees or
representatives of Buyer or by Seller or any of its
agents, representatives or employees, including, but not
limited to, any information obtained by Buyer or any of
Buyer's Representatives in connection with any studies,
inspections, testings or analyses conducted by Buyer as
part of its Due Diligence. In the event the Closing
does not occur and this Agreement is terminated, Buyer
shall promptly return to Seller all copies of documents
containing any of such information without retaining any
copy thereof or extract therefrom. Notwithstanding
anything to the contrary hereinabove set forth, Buyer
may disclose such information (i) on a need-to-know
basis to its employees or members of professional firms
serving it, and (ii) as any governmental agency may
require in order to comply with applicable laws or
regulations. The provisions of this Subsection 9.1.1
shall survive the Closing (and not be merged therein) or
earlier termination of this Agreement.
9.1.2 Approvals not a Condition to Buyer's
Performance. Buyer acknowledges and agrees that its
obligation to perform under this Agreement is not
contingent upon Buyer's ability to obtain any (a)
governmental or quasi-governmental approval of changes
or modifications in use or zoning, or (b) modification
of any existing land use restriction, or (c) consents to
assignments of any service contracts, management
agreements or other agreements which Buyer requests, or
(d) endorsements to the Title Policy.
9.1.3 Buyer's Indemnity; Delivery of
Reports. Buyer hereby agrees to indemnify, defend, and
hold Seller, its counsel, CB Commercial Real Estate
Group, Inc. ("Broker"), its sales agents, each partner,
officer, director, employee, agent or attorney of
Seller, their respective counsel, Broker or its sales
agents and each other party related in any way to the
foregoing parties (collectively, the "Seller Parties"),
and the Property free and harmless from and against any
and all costs, loss, damages and expenses, of any kind
or nature whatsoever (including attorneys fees and
costs), arising out of or resulting from
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the entry and/or the conduct of activities upon the
Property by Buyer, its agents, contractors and/or
subcontractors in connection with the inspections,
examinations, testings and investigations of the
Property conducted at any time prior to the Closing,
which indemnity shall survive the Closing (and not be
merged therein) or any earlier termination of this
Agreement. This Section 9.1.3 shall not apply to
pre-existing conditions at the Property,
except to the extent such pre-existing conditions are
exacerbated by such entry and/or activities upon the
Property. Buyer shall deliver promptly to Seller copies
of all third party reports commissioned by Buyer
evidencing the results of tests, studies or inspections
of the Property.
9.2 Seller's Covenants. Seller hereby
covenants as follows:
9.2.1 Service Contracts. Without Buyer's
prior consent, which consent shall not be unreasonably
withheld, between the date hereof and the Closing Date
Seller shall not extend, renew, replace or modify any
Contract unless such contract (as so extended, renewed,
replaced or modified) can be terminated by the owner of
the Property without penalty on not more than thirty
(30) days' notice.
9.2.2 Maintenance of Property. Except to
the extent Seller is relieved of such obligations by
Article 11 hereof, between the date hereof and the
Closing Date Seller shall maintain and keep the Property
in a manner consistent with Seller's past practices with
respect to the Property; provided, however, that Buyer
hereby agrees that it shall accept the Property subject
to, and Seller shall have no obligation to cure, (i) all
violations of law or municipal ordinances, orders or
requirements and (ii) all physical conditions which
would give rise to violations existing, which, with
respect to both clauses (i) and (ii), exist on the last
day of the Due Diligence Period or which arise between
the last day of the Due Diligence Period and the Closing
Date. Between the date hereof and the Closing Date,
Seller shall not intentionally take any affirmative
action that would constitute a material violation of any
law or ordinance relating to the Property and Seller
will advise Buyer of any written notice Seller receives
after the date hereof from any governmental authority
relating to the violation of any law or ordinance
regulating the condition or use of the Property.
9.2.3 Access to Property and Property
Documents. Between the date hereof and the expiration
of the Due Diligence Period Seller shall allow Buyer or
Buyer's representatives access to the Property and the
Property Documents upon reasonable prior notice at
reasonable times provided (a) such access does not
interfere with the operation of the Property, the rights
of tenants or any of the other operations of Seller or
Property Manager; (b) Buyer shall not contact any tenant
without Seller's prior written consent; (c) after the
expiration of the Due Diligence Period Buyer shall not
be permitted to perform any further testing or other
physical evaluation of the Property prior to Closing;
(d) Seller or its designated representative shall have
the right to pre-approve and be present during
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any physical testing of the Property; and (e) Buyer shall
return the Property and Property Documents to their
condition existing prior to such tests and inspections.
Prior to such time as Buyer or any of Buyer's
Representatives enter the Property, Buyer shall obtain
policies of general liability insurance which name
Seller as an additional insured and which are with such
insurance companies, provide such coverages and carry
such limits as Seller shall reasonably require.
Promptly after Seller's request therefor, Buyer shall
provide Seller with certificates of insurance evidencing
that Buyer has obtained the aforementioned policies of
insurance.
9.3 Mutual Covenants.
9.3.1 Publicity. Seller and Buyer each
hereby covenant that prior to the Closing neither Seller
nor Buyer shall issue any press release or public
statement (a "Release") with respect to the Transaction
without the prior consent of the other, except to the
extent required by law. If either Seller or Buyer is
required by law to issue a Release, such party shall, at
least two (2) business days prior to the issuance of the
same, deliver a copy of the proposed Release to the
other party for its review.
9.3.2 Broker. Seller and Buyer expressly
acknowledge that Broker has acted as the exclusive
broker with respect to the Transaction and with respect
to this Agreement, and that Seller shall pay any
brokerage commission due to Broker in accordance with
the separate agreement between Seller and Broker.
Seller and Buyer each represents and warrants to the
other that it has not dealt with any other broker in the
Transaction and each agrees to hold harmless the other
and indemnify the other from and against any and all
damages, costs or expenses (including, but not limited
to, reasonable attorneys' fees and disbursements)
suffered by the indemnified party as a result of acts of
the indemnifying party that would constitute a breach of
its representation and warranty in this section.
9.3.3 Survival. The provisions of this
Section 9.3 shall survive the Closing (and not be merged
therein) or earlier termination of this Agreement.
ARTICLE 10 - FAILURE OF CONDITIONS
10.1 To Seller's Obligations. If, on or
before the Closing Date, (i) Buyer is in default of any of
its obligations hereunder, or (ii) any of Buyer's material
representations or warranties are untrue in any material
respect, or (iii) the Closing otherwise fails to occur by
reason of Buyer's failure or refusal to perform its
obligations hereunder in a prompt and timely manner, then
Seller may elect to (a) terminate this Agreement by written
notice to Buyer; or (b) proceed to close the Transaction.
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FROM AND AFTER THE DATE HEREOF, IN THE EVENT THE SALE OF THE
PROPERTY AS CONTEMPLATED HEREUNDER IS NOT CONSUMMATED FOR ANY
REASON, EXCEPT A DEFAULT UNDER THIS AGREEMENT ON THE PART OF
SELLER, THE DEPOSIT (INCLUDING ALL INTEREST EARNED FROM THE
INVESTMENT THEREOF) SHALL BE PAID TO AND RETAINED BY SELLER
AS LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S
ACTUAL DAMAGES IN THE EVENT THAT THE SALE IS NOT CONSUMMATED
WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE.
THEREFORE, BY SEPARATELY EXECUTING THIS SECTION 10.1 BELOW,
THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED
UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE
OF SELLER'S DAMAGES AND AS SELLER'S EXCLUSIVE REMEDY AT LAW
OR IN EQUITY AGAINST BUYER IN THE EVENT THE CLOSING (AS
DEFINED IN SECTION 6.1 HEREOF) DOES NOT OCCUR AND AS SELLER'S
SOLE AND EXCLUSIVE REMEDY AGAINST BUYER ARISING FROM SUCH
FAILURE OF THE SALE TO CLOSE. BY THEIR SEPARATELY EXECUTING
THIS SECTION 10.1 BELOW, BUYER AND SELLER ACKNOWLEDGE THAT
THEY HAVE READ AND UNDERSTOOD THE ABOVE PROVISION COVERING
LIQUIDATED DAMAGES, AND THAT EACH PARTY WAS REPRESENTED BY
COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS LIQUIDATED
DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS EXECUTED.
SELLER: BUYER:
________________ ________________
10.2 To Buyer's Obligations. If, at the
Closing, (i) Seller is in default of any of its obligations
hereunder, or (ii) any of Seller's material representations
or warranties are untrue in any material respect, or
(iii) the Closing otherwise fails to occur by reason of
Seller's failure or refusal to perform its obligations
hereunder in a prompt and timely manner, Buyer shall have the
right, to elect, as its sole and exclusive remedy, to (a)
terminate this Agreement by written notice to Seller,
promptly after which the Deposit shall be returned to Buyer,
or (b) waive the condition and proceed to close the
Transaction, or (c) seek specific performance of this
Agreement by Seller.
ARTICLE 11 - CONDEMNATION/CASUALTY
11.1 Condemnation.
11.1.1 Right to Terminate. If, prior to
the Closing Date, all or any significant portion (as
hereinafter defined) of the Property is taken by eminent
domain (or is the subject of a pending taking which has
not yet been consummated), Seller shall notify
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Buyer in writing of such fact promptly after obtaining
knowledge thereof, either Buyer or Seller shall have the
right to terminate this Agreement by giving written notice
to the other no later than ten (10) days after the giving of
Seller's notice, and the Closing Date shall be extended,
if necessary, to provide sufficient time for Buyer or
Seller to make such election. The failure by Buyer and
Seller to so elect in writing to terminate this
Agreement within such ten (10) day period shall be
deemed an election not to terminate this Agreement. For
purposes hereof, a "significant portion" of the Property
shall mean such a portion as shall have a value, as
reasonably determined by Seller, in excess of Two
Hundred Fifty Thousand Dollars ($250,000). If either
party elects to terminate this Agreement as aforesaid,
the provisions of Section 11.4 shall apply.
11.1.2 Assignment of Proceeds. If (a)
neither Seller nor Buyer elects to terminate this
Agreement as aforesaid if all or any significant portion
of the Property is taken, or if (b) a portion of the
Property not constituting a significant portion of the
Property is taken or becomes subject to a pending
taking, by eminent domain, there shall be no abatement
of the Purchase Price; provided, however, that, at the
Closing, Seller shall pay to Buyer the amount of any
award for or other proceeds on account of such taking
which have been actually paid to Seller prior to the
Closing Date as a result of such taking (less all costs
and expenses, including attorneys' fees and costs,
incurred by Seller as of the Closing Date in obtaining
payment of such award or proceeds) and, to the extent
such award or proceeds have not been paid, Seller shall
assign to Buyer at the Closing (without recourse to
Seller) the rights of Seller to, and Buyer shall be
entitled to receive and retain, all awards for the
taking of the Property or such portion thereof.
11.2 Destruction or Damage. In the event any
of the Property is damaged or destroyed prior to the Closing
Date, Seller shall notify Buyer in writing of such fact
promptly after obtaining knowledge thereof. If any such
damage or destruction (a) is an insured casualty and (b)
would cost less than Two Hundred Fifty Thousand Dollars
($250,000) to repair or restore, then this Agreement shall
remain in full force and effect and Buyer shall acquire the
Property upon the terms and conditions set forth herein. In
such event, Buyer shall receive a credit against the Purchase
Price equal to the deductible amount applicable under
Seller's casualty policy (less all costs and expenses,
including attorneys' fees and costs, incurred by Seller as of
the Closing Date in connection with the negotiation and/or
settlement of the casualty claim with the insurer (the
"Realization Costs")), and Seller shall assign to Buyer all
of Seller's right, title and interest in and to all proceeds
of insurance on account of such damage or destruction. In
the event the Property is damaged or destroyed prior to the
Closing Date and the cost of repair would equal or exceed Two
Hundred Fifty Thousand Dollars ($250,000), or the casualty is
an uninsured casualty, then, notwithstanding anything to the
contrary set forth above in this section, either Buyer or
Seller shall have the right, at its respective election, to
terminate this Agreement. Buyer and Seller shall have thirty
(30) days after Seller notifies Buyer that a casualty has
occurred to make such election by delivery to the other of a
written election notice (the "Election Notice") and the
Closing Date shall be extended, if necessary, to provide
sufficient time for Buyer or Seller
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to make such election. The failure by Buyer and Seller to
deliver the Election Notice within such thirty (30) day
period shall be deemed an election not to terminate this
Agreement. In the event neither party elects to terminate
this Agreement as set forth above, this Agreement shall
remain in full force and effect, Seller shall assign to
Buyer all of Seller's right, title and interest in and
to any and all proceeds of insurance on account of such
damage or destruction, if any, and, if the casualty was an
insured casualty, Buyer shall receive a credit against the
Purchase Price equal to the deductible amount (less the
Realization Costs) under Seller's casualty insurance policy.
11.3 Insurance. Seller shall maintain the
property insurance coverage currently in effect for the
Property through the Closing Date.
11.4 Effect of Termination. If this Agreement
is terminated pursuant to Section 11.1 or Section 11.2,
Seller promptly shall direct that the Deposit be refunded to
Buyer. Upon such refund, this Agreement shall terminate and
neither party to this Agreement shall have any further rights
or obligations hereunder other than any arising under any
section herein which expressly provides that it shall survive
the termination of this Agreement.
11.5 Waiver. The provisions of this Article
11 supersede the provisions of any applicable statutory or
decisional law with respect to the subject matter of this
Article 11.
ARTICLE 12 - ESCROW
The Deposit and any other sums which the
parties agree shall be held in escrow (herein collectively
called the "Escrow Deposits"), together with all interest
earned thereon, shall be held by the Escrow Agent, in trust,
and disposed of only in accordance with the following
provisions:
(a) The Escrow Agent shall invest the Escrow
Deposits in government insured interest-bearing
instruments satisfactory to both Buyer and Seller, shall
not commingle the Escrow Deposits with any funds of the
Escrow Agent or others, and shall promptly provide Buyer
and Seller with confirmation of the investments made.
(b) If the Closing occurs, the Escrow Agent
shall deliver the Escrow Deposits to, or upon the
instructions of, Seller on the Closing Date by wire
transfer.
(c) If for any reason the Closing does not
occur, the Escrow Agent shall deliver the Escrow
Deposits and all interest earned thereon to Seller or
Buyer only upon receipt of a written demand therefor
from such party, subject to the following provisions of
this Subsection 12.1(c). If for any reason the Closing
does not occur and either party makes a written demand
upon the Escrow Agent for payment of the Escrow Deposits
and the interest earned thereon, the Escrow Agent shall
give written notice to the
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other party of such demand. If the Escrow Agent does not
receive a written objection from the other party to the
proposed payment within ten (10) days after the giving of
such notice, the Escrow Agent is hereby authorized to make
such payment. If the Escrow Agent does receive such written
objection within such period, the Escrow Agent shall continue
to hold such amount until otherwise directed by written
instructions signed by Seller and Buyer or a final
judgment of a court.
(d) The parties acknowledge that the Escrow
Agent is acting solely as a stakeholder at their request
and for their convenience, that the Escrow Agent shall
not be deemed to be the agent of either of the parties,
and that the Escrow Agent shall not be liable to either
of the parties for any action or omission on its part
taken or made in good faith,and not in disregard of this
Agreement, but shall be liable for its negligent acts
and for any loss, cost or expense incurred by Seller or
Buyer resulting from the Escrow Agent's mistake of law
respecting the Escrow Agent's scope or nature of its
duties. Seller and Buyer shall jointly and severally
indemnify and hold the Escrow Agent harmless from and
against all costs, claims and expenses, including
reasonable attorneys' fees, incurred in connection with
the performance of the Escrow Agent's duties hereunder,
except with respect to actions or omissions taken or
made by the Escrow Agent in bad faith, in disregard of
this Agreement or involving negligence on the part of
the Escrow Agent.
(e) Buyer shall pay any income taxes on any
interest earned on the Deposit. Buyer represents and
warrants to the Escrow Agent that its taxpayer
identification number is ____________________.
(f) The Escrow Agent has executed this
Agreement in the place indicated on the signature page
hereof in order to confirm that the Escrow Agent has
received and shall hold the Escrow Deposits and the
interest earned thereon, in escrow, and shall disburse
the Escrow Deposits, and the interest earned thereon,
pursuant to the provisions of this Article 12.
(g) The escrow fee, if any, charged by the
Escrow Agent shall be shared equally by Seller and
Buyer.
ARTICLE 13 - LEASING MATTERS
13.1 New Leases. After the date hereof,
except as set forth in the fourth sentence of this Section
13.1, Seller shall not, without Buyer's prior written consent
in each instance, which consent shall be given or denied
within three (3) business days after receipt by Buyer of the
information referred to in the next sentence, enter into a
new lease for space in the Property or renew or extend any
Lease (except pursuant to the exercise by a tenant of a
renewal, extension or expansion option contained in such
tenant's Lease). Seller shall furnish Buyer with
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all information regarding any proposed new leases, renewals and
extensions reasonably necessary to enable Buyer to make
informed decisions with respect to the advisability of the
proposed action. If Buyer fails to approve in writing any
such proposed new lease, renewal or extension, as the case
may be, within three (3) business days after receipt of the
aforementioned information, Buyer shall be deemed to have
rejected the proposed new lease, renewal or extension, as the
case may be. If Buyer rejects or is deemed to have rejected
the proposed action, Seller nevertheless retains full right,
power and authority to, and shall be entitled to, execute
such documents as are necessary to effect such action, and
Seller shall promptly advise Buyer of the same. The
foregoing notwithstanding, in the event Buyer has rejected or
is deemed to have rejected the proposed action but Seller
nonetheless proceeds to effect it, Buyer shall have the
right, within three (3) business days after receipt of
Seller's notice that Seller has taken such action, to elect
to continue the effectiveness of this Agreement by the
delivery to Seller of a written notice of continuation. If
Buyer delivers a notice of continuation to Seller within such
time period, Buyer shall be deemed to have fully waived any
rights to terminate this Agreement pursuant to this Section
13.1. If Buyer fails to deliver a notice of continuation
within such time period, this Agreement shall be deemed
terminated, the Deposit shall be paid to Buyer and,
thereafter, the parties shall have no further rights or
obligations hereunder other than any arising under any
section herein which expressly provides that it shall survive
the termination of this Agreement. Seller shall deliver to
Buyer a true and complete copy of each such new lease,
renewal and extension agreement, if any, promptly after the
execution and delivery thereof.
13.2 Lease Expenses. At Closing, Buyer shall
reimburse Seller for any and all Lease Expenses (as defined
below) arising out of or in connection with:
(a) any extensions, renewals or expansions
under the Leases exercisable and exercised by any tenant
between the date of this Agreement and the Closing Date;
and
(b) any lease for space at the Property
entered into between the date of the full execution of
the Letter of Interest and the Closing Date, or any
extension, renewal or expansion of a Lease where such
Lease does not provide for its extension, renewal or
expansion, entered into on or after the date of this
Agreement (a "New Lease").
"Lease Expenses" shall mean all fees, costs and expenses
incurred by Seller prior to the Closing in connection with
the matters described in paragraphs (a) and (b) above if and
to the extent such fees, costs and expenses were described
(in terms of the type of the fee, expense and the amount
thereof) in the summary of the proposed lease transaction
delivered to Buyer in connection with Seller's request for
Buyer's approval of such lease transaction, and shall
include, without limitation, (i) brokerage commissions and
fees to effect any such leasing transaction, (ii) expenses
incurred for repairs, improvements, equipment, painting,
decorating, partitioning and other items to satisfy the
tenant's requirements with regard to such leasing
transaction, (iii) legal fees for services in connection with
the preparation of documents and other services rendered in
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connection with the effectuation of the leasing transaction,
(iv) if there are any rent concessions covering any period
that the tenant has the right to be in possession of the
demised space, the rents that would have accrued during the
period of such concession prior to the Closing Date as if
such concession were amortized over (A) with respect to any
extension or renewal, the term of such extension or renewal,
(B) with respect to any expansion, that portion of the term
remaining under the subject Lease after the date of any
expansion, or (C) with respect to any New Lease, the entire
initial term of any New Lease, and (v) expenses incurred for
the purpose of satisfying or terminating the obligations of a
tenant under a New Lease to the landlord under another lease
(whether or not such other lease covers space in the
Property). At the Closing, Buyer shall assume Seller's
obligations to pay, when due (whether on a stated due date or
accelerated) any Lease Expenses unpaid as of the Closing, and
Buyer hereby agrees to indemnify and hold Seller harmless
from and against any and all claims for such Lease Expenses
which remain unpaid for any reason at the time of Closing,
which obligations of Buyer shall survive the Closing and
shall not be merged therein. Each party shall make available
to the other all records, bills, vouchers and other data in
such party's control verifying Lease Expenses and the payment
thereof.
13.3 Other Lease Activity. Except as provided
in this Section 13.3, without the prior consent of Buyer,
which shall not be unreasonably withheld (a) no Lease shall
be modified or amended except as provided in Section 13.1
with respect to extensions, renewals or expansions of Leases
and the execution of New Leases, (b) Seller shall not consent
to any assignment or sublease in connection with any Lease or
New Lease and (c) Seller shall not remove any tenant under
any Lease or New Lease, whether by summary proceedings or
otherwise, except by reason of a default of the tenant under
the Lease or New Lease. In furtherance of the foregoing,
Seller shall deliver to Buyer a written notice of each
proposed action of the type described in clauses (a) through
(c) above which Seller has been asked or proposes to take,
stating, if applicable, whether Seller is willing to consent
to such action and setting forth the relevant information
therefor. Buyer shall notify Seller in writing whether or
not it approves such action within three (3) business days
after delivery to Buyer of Seller's notice containing the
aforementioned information. If Buyer notifies Seller that it
disapproves such action, Buyer's notice shall state with
specificity the reasons for such disapproval. If Buyer shall
not give written notice of its approval or disapproval of
such action within such three (3) business day period, Buyer
shall be deemed to have disapproved such action. If any
Lease requires that the landlord's consent be given under the
applicable circumstances (or not be unreasonably withheld),
then Buyer shall be deemed ipso facto to have approved such
action. Subject to its reimbursement rights pursuant to
Section 13.2, Seller shall perform all of the obligations of
the landlord under the Leases and New Leases which under the
terms of such Leases and New Leases are required to be
performed by the landlord prior to the Closing Date.
13.4 Lease Enforcement. Subject to the
provisions of Section 13.3 above, prior to the Closing Date,
Seller shall have the right, but not the obligation (except
to the extent that Seller's failure to act shall constitute a
waiver of such rights or remedies), to enforce the rights and
remedies of the landlord under any Lease or New Lease, by
summary proceedings
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or otherwise, and to apply all or any portion of any security
deposits then held by Seller toward any loss or damage incurred
by Seller by reason of any defaults by tenants.
13.5 Lease Termination Prior to Closing. The
termination of any Lease or New Lease or the removal of any
tenant by reason of a default by such tenant (by summary
proceedings or otherwise) prior to the Closing shall not
affect the obligations of Buyer under this Agreement in any
manner or entitle Buyer to a reduction in, or credit or
allowance against, the Purchase Price or give rise to any
other claim on the part of Buyer.
ARTICLE 14 - MISCELLANEOUS
14.1 Buyer's Assignment. Buyer shall not
assign this Agreement or its rights hereunder to any
individual or entity without the prior written consent of
Seller, which consent Seller may grant or withhold in its
sole discretion, and any such assignment shall be null and
void; provided, however, that Buyer shall have the one-time
option to assign this Agreement to a single-purpose entity
that Buyer or another entity capitalized by a Whitehall Real
Estate Fund controls and owns the right to receive, directly
or indirectly, at least 50% of the profits and losses (a
"Related Party"). Upon delivery to Seller of a written
assignment to a Related Party, and execution and delivery to
Seller by such Related Party of a written agreement of
assumption in favor of Seller, Buyer shall enter into a
mutual release with Seller, pursuant to which Buyer and
Seller shall release each other from any further obligations
under this Agreement (other than Seller's ongoing obligations
hereunder to the applicable Related Party).
14.2 Designation Agreement. Section 6045(e)
of the United States Internal Revenue Code and the
regulations promulgated thereunder (herein collectively
called the "Reporting Requirements") require an information
return to be made to the United States Internal Revenue
Service, and a statement to be furnished to Seller, in
connection with the Transaction. Escrow Agent ("Agent") is
either (i) the person responsible for closing the Transaction
(as described in the Reporting Requirements) or (ii) the
disbursing title or escrow company that is most significant
in terms of gross proceeds disbursed in connection with the
Transaction (as described in the Reporting Requirements).
Accordingly:
(a) Agent is hereby designated as the
"Reporting Person" (as defined in the Reporting
Requirements) for the Transaction. Agent shall perform
all duties that are required by the Reporting
Requirements to be performed by the Reporting Person for
the Transaction.
(b) Seller and Buyer shall furnish to Agent,
in a timely manner, any information requested by Agent
and necessary for Agent to perform its duties as
Reporting Person for the Transaction.
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(c) Agent hereby requests Seller to furnish
to Agent Seller's correct taxpayer identification
number. Seller acknowledges that any failure by Seller
to provide Agent with Seller's correct taxpayer
identification number may subject Seller to civil or
criminal penalties imposed by law. Accordingly, Seller
hereby certifies to Agent, under penalties of perjury,
that Seller's correct taxpayer identification number is
13-3173903.
(d) Each of the parties hereto shall retain
this Agreement for a period of four (4) years following
the calendar year during which Closing occurs.
14.3 Survival/Merger. Except for the
provisions of this Agreement which are explicitly stated to
survive the Closing, (a) none of the terms of this Agreement
shall survive the Closing, and (b) the delivery of the Deed
and any other documents and instruments by Seller and the
acceptance thereof by Buyer shall effect a merger, and be
deemed the full performance and discharge of every obligation
on the part of Buyer and Seller to be performed hereunder.
14.4 Integration; Waiver. This Agreement,
together with the Schedules and Exhibits hereto, embodies and
constitutes the entire understanding between the parties with
respect to the Transaction and all prior agreements,
understandings, representations and statements, oral or
written, are merged into this Agreement. Neither this
Agreement nor any provision hereof may be waived, modified,
amended, discharged or terminated except by an instrument
signed by the party against whom the enforcement of such
waiver, modification, amendment, discharge or termination is
sought, and then only to the extent set forth in such
instrument. No waiver by either party hereto of any failure
or refusal by the other party to comply with its obligations
hereunder shall be deemed a waiver of any other or subsequent
failure or refusal to so comply.
14.5 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the law of the
State in which the Property is located.
14.6 Captions Not Binding; Schedules and
Exhibits. The captions in this Agreement are inserted for
reference only and in no way define, describe or limit the
scope or intent of this Agreement or of any of the provisions
hereof. All Schedules and Exhibits attached hereto shall be
incorporated by reference as if set out herein in full.
14.7 Binding Effect. This Agreement shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
14.8 Severability. If any term or provision
of this Agreement or the application thereof to any persons
or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement or the
application of such term or provision to persons or
circumstances other than those as to which it is held invalid
or unenforceable shall not
27
<PAGE>
be affected thereby, and each term and provision of this Agreement
shall be valid and enforced to the fullest extent permitted by law.
14.9 Notices. Any notice, request, demand,
consent, approval and other communications under this
Agreement shall be in writing, and shall be deemed duly given
or made at the time and on the date when personally delivered
as shown on a receipt therefor (which shall include delivery
by a nationally recognized overnight delivery service) or
three (3) business days after being mailed by prepaid
registered or certified mail, return receipt requested, to
the address for each party set forth below. Any party, by
written notice to the other in the manner herein provided,
may designate an address different from that set forth below.
IF TO BUYER:
c/o WCB Properties Limited Partnership
450 Newport Center Drive
Suite 304
Newport Beach, California 92660
Attention: Robert V. Neary, Esq.
Senior Vice President and General Counsel
COPY TO:
c/o WCB Properties Limited Partnership
450 Newport Center Drive
Suite 304
Newport Beach, California 92660
Attention: Mr. Brad Baker
COPY TO:
Munger, Tolles & Olson
355 South Grand Avenue
35th Floor
Los Angeles, California 90071
Attention: O'Malley M. Miller, Esq.
IF TO SELLER:
28
<PAGE>
Prudential Acquisition Fund I, L.P.
Prudential Real Estate Investors
2029 Century Park East, Suite 2050
Los Angeles, California 90067-3022
Attention: John Woo, Vice President
COPY TO:
Prudential Acquisition Fund I, L.P.
Prudential Asset Management Group
Real Estate
51 JFK Parkway
Short Hills, New Jersey 07078
Attention: Regional Counsel
14.10 Counterparts. This Agreement may be
executed in counterparts, each of which shall be an original
and all of which counterparts taken together shall constitute
one and the same agreement.
14.11 No Recordation. Seller and Buyer each
agrees that neither this Agreement nor any memorandum or
notice hereof shall be recorded.
14.12 Additional Agreements; Further
Assurances. Subject to the terms and conditions herein
provided, each of the parties hereto shall execute and
deliver such documents as the other party shall reasonably
request in order to consummate and make effective the
Transaction; provided, however, that the execution and
delivery of such documents by such party shall not result in
any additional liability or cost to such party.
14.13 Construction. The parties acknowledge
that each party and its 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 amendment, Schedule
or Exhibit hereto.
14.14 ERISA. To satisfy compliance with ERISA,
Buyer represents and warrants to Seller that:
(a) Neither Buyer nor any of its affiliates
(within the meaning of Part V(c) of Prohibited
Transaction Exemption 84-14 granted by the U.S.
Department of Labor ("PTE 84-14") has, or during the
immediately preceding year has exercised, the authority
to appoint or terminate Seller as investment manager of
any assets of the
29
<PAGE>
employee benefit plans whose assets are held by Seller or
to negotiate the terms of any management agreement with
Seller on behalf of any such plan;
(b) The Transaction is not specifically
excluded by Part I(b) of PTE 84-14;
(c) Buyer is not a related party of Seller
(as defined in Part V(h) of PTE 84-14); and
(d) The terms of the Transaction have been
negotiated and determined at arm's length, as such terms
would be negotiated and determined by unrelated parties.
Buyer hereby agrees to execute such documents or provide such
information as Seller may require in connection with the
Transaction or to otherwise assure Seller that: (i) this is
not a prohibited Transaction under ERISA, (ii) that the
Transaction is otherwise in full compliance with ERISA and
(iii) that Seller is not in violation of ERISA by compliance
with this Agreement and by closing the Transaction. Seller
shall not be obligated to consummate the Transaction unless
and until the Transaction complies with ERISA and Seller is
satisfied that the Transaction complies in all respects with
ERISA. The obligations of Buyer under this section shall
survive the Closing and shall not be merged therein.
14.15 Business Day. As used herein, the term
"business day" shall mean any day other than a Saturday,
Sunday, or any Federal or State of New Mexico holiday.
14.16 Seller's Maximum Aggregate Liability.
Notwithstanding any provision to the contrary contained in
this Agreement or any documents executed by Seller pursuant
hereto or in connection herewith, the maximum aggregate
liability of Seller, and the maximum aggregate amount which
may be awarded to and collected by Buyer, under this
Agreement (including, without limitation, the breach of any
representations and warranties contained herein) and any and
all documents executed pursuant hereto or in connection
herewith (including, without limitation, any Seller's
estoppel letter provided in accordance with the terms of
Section 6.3(e) hereof), for which a claim is timely made by
Buyer shall not exceed One Million Dollars ($1,000,000). The
provisions of this section shall survive the Closing and
shall not be merged therein.
30
<PAGE>
IN WITNESS WHEREOF, each party hereto has
caused this Agreement to be duly executed on its behalf on
the day and year first above written.
PRUDENTIAL ACQUISITION FUND I,
L.P., a Delaware limited
partnership
By: Prudential Realty
Partnerships, Inc., a
Delaware corporation
General Partner
By: The Prudential
Insurance Company of
America, a New Jersey
corporation
Its Agent
By: /s/ Peter L. Ruggiero
--------------------------
Peter L. Ruggiero
Vice President
WCB PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: WCB Management Gen-Par,
Inc., a Delaware
corporation
General Partner
By: /s/ Ted L. Hoover
------------------------------
Name: Ted L. Hoover
-------------------------
Its: Executive Vice President
--------------------------
31
PAGE
<PAGE>
The undersigned has executed this
Agreement solely to confirm its
agreement to (i) hold the Escrow
Deposits in escrow in accordance
with the provisions hereof and
(ii) comply with the provisions
of Article 12 and Section 14.2.
FIDELITY TITLE COMPANY
By: /s/ Richard A. Davis
-----------------------
Name: Richard A. Davis
------------------
Its: Vice President
-------------------
Date: September 25, 1996
----------------------
32
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
Tract One - SNOW HEIGHTS ADDITION, a Replat of a
Portion of Block "A", SNOW HEIGHTS ADDITION, as the
same is shown and designated on the Summary Plat
filed in the Office of the County Clerk of
Bernalillo County, New Mexico, on September 28,
1981, as Document Number 81-51559, recorded in Vol.
C18, folio 189, records of Bernalillo County, New
Mexico.<PAGE>
<PAGE>
EXHIBIT B
LIST OF CONTRACTS AND LEASING COMMISSIONS DUE
Contractor Contract Date Expiration Date
1. Harley's Building May 1, 1996 April 30, 1997
(Janitorial Services)
2. U.S. Elevator August 1, 1996 July 31, 1997
3. Burns Security August 1, 1992 month- to-month
4. All Seasons January 1, 1992 December 31, 1996
(Exterior Landscaping)
5. Southwest Growers January 1, 1992 month-to-month
(Interior Landscaping)
6. CMC Technology (HVAC) January 1, 1992 month-to-month
<PAGE>
EXHIBIT C
LIST OF LICENSES PERMITS AND AUTHORIZATIONS
1. Elevator Permit No. 07400, April 25, 1996
2. Elevator Permit No. 07399, April 25, 1996
3. Elevator Permit No. 06535, August 3, 1995<PAGE>
<PAGE>
EXHIBIT D
SELLER'S ENVIRONMENTAL REPORTS
1. Elevator Shaft (#3) hydraulic fluid
investigative report by CDM Engineers &
Constructors Inc., dated July 5, 1995.
2. PCB Questionnaire by CenterWest Properties,
dated February 7, 1989.
3. Asbestos Survey Report by BCM Converse Inc.,
dated June 18, 1986.
<PAGE>
EXHIBIT E
FORM OF BUYER'S AS-IS CERTIFICATE AND AGREEMENT
THIS CERTIFICATE AND AGREEMENT ("Agreement"),
is made as of the day of , 1996, by WCB
PROPERTIES LIMITED PARTNERSHIP, a Delaware limited
partnership ("Buyer") to and for the benefit of PRUDENTIAL
ACQUISITION FUND I, L.P., a Delaware limited partnership
("Seller").
RECITALS
Seller, as seller, and Buyer, as buyer, are
parties to a Purchase and Sale Agreement ("Sale Agreement")
dated as of September 6, 1996, which provides for the sale of
certain real property (the "Property") located in County of
Bernalillo, State of New Mexico, as legally described on
Exhibit A attached to the Sale Agreement and incorporated
herein by this reference. Any initially capitalized terms
not otherwise defined herein shall have the meaning ascribed
to such term in the Sale Agreement; and
The Sale Agreement requires, inter alia, that,
as a condition precedent to Seller's obligations under the
Sale Agreement, Buyer shall execute and deliver this
Agreement to Seller at Closing.
NOW, THEREFORE, in consideration of TEN AND
NO/100 DOLLARS ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, Buyer hereby certifies and agrees as
follows:
1. Buyer acknowledges that, prior to the
date hereof:
(a) Buyer has conducted all such inspections,
investigations, tests, analyses, appraisals and
evaluations of the Property (including for Hazardous
Materials) as Buyer considers necessary or appropriate
(all of such inspections, investigations and reports
being herein collectively called the "Investigations");
and
(b) Seller has made available to Buyer and
otherwise allowed Buyer access to the Title Report, the
Survey, the Title Documents, the Leases, the Contracts,
the environmental reports listed on Exhibit D attached
to the Sale Agreement, and the other reports, documents,
books and records listed on Schedule 1 hereto (all of
the foregoing documents described in this clause (b)
being herein collectively called the "Documents").
Buyer has reviewed, examined and evaluated all Documents
and the results of the Investigations to the extent it
deems necessary or appropriate with the assistance of such
E-1
<PAGE>
experts as Buyer deemed appropriate. In particular, Buyer
has determined to its satisfaction the assignability of any
Documents to be assigned hereunder. Buyer acknowledges and
agrees that it (w) is familiar with the physical condition
of the Property, (x) has completed its due diligence with
respect to the Property and the Documents to its satisfaction,
(y) is acquiring the Property based exclusively upon its own
investigations and inspections of the Property and the
Documents, and (z) shall have no additional period after
the date hereof to conduct further physical due
diligence regarding the Property.
2. Buyer acknowledges and agrees that
(a) the Property shall be sold, and Buyer shall accept
possession of the Property on the Closing Date, "as is, where
is, with all faults", with no right of setoff or reduction in
the Purchase Price; (b) except for Seller's representations
and warranties set forth in Section 8.2 of the Sale Agreement
and the limited warranty of title to be given in the deed
(herein collectively called the "Seller's Warranties"), none
of Seller, its counsel, CB Commercial Real Estate Group, Inc.
("Broker"), its sales agents, nor any partner, officer,
director, employee, agent or attorney of Seller, its counsel,
Broker, or its sales agents, nor any other party related in
any way to any of the foregoing (all of which parties are
herein collectively called the "Seller Parties") have or
shall be deemed to have made any verbal or written
representations, warranties, promises or guarantees (whether
express, implied, statutory or otherwise) to Buyer with
respect to the Property, any matter set forth, contained or
addressed in the Documents (including, but not limited to,
the accuracy and completeness thereof) or the results of the
Investigations; and (c) Buyer has confirmed independently all
information that it considers material to its purchase of the
Property or the Transaction. Buyer specifically acknowledges
that, except for Seller's Warranties, Buyer is not relying on
and has not relied on (and Seller and each of the other
Seller Parties does hereby disclaim and renounce) any
representations or warranties of any kind or nature
whatsoever, whether oral or written, express, implied,
statutory or otherwise, from Seller or any other Seller
Parties, as to: (i) the operation of the Property or the
income potential, uses, or merchantability or fitness of any
portion of the Property for a particular purpose; (ii) the
physical condition of the Property or the condition or safety
of the Property or any improvements thereon, including, but
not limited to, plumbing, sewer, heating and electrical
systems, roofing, air conditioning, foundations, soils and
geology, including Hazardous Materials, lot size, or
suitability of the Property or any improvements thereon for a
particular purpose; (iii) the presence or absence, location
or scope of any Hazardous Materials in, at, or under the
Property; (iv) whether the appliances, if any, plumbing or
utilities are in working order; (v) the habitability or
suitability for occupancy of any structure and the quality of
its construction; (vi) whether the Improvements are
structurally sound, in good condition, or in compliance with
applicable municipal, county, state or federal statutes,
codes or ordinances; (vii) the accuracy of any statements,
calculations or conditions stated or set forth in Seller's
books and records concerning the Property or set forth in any
of Seller's offering materials with respect to the Property;
(viii) the dimensions of the Property or the accuracy of any
floor plans, square footage, lease abstracts, sketches,
revenue or expense projections related to the Property; (ix)
the operating performance, the income and expenses of the
Property or the economic status of the Property; (x) the
ability of Buyer to obtain any and all necessary governmental
approvals or
E-2
<PAGE>
permits for Buyer's intended use and development
of the Property or any of the Documents; (xi) the leasing
status of the Property or the intentions of any parties with
respect to the negotiation and/or execution of any lease for
any portion of the Property; and (xii) Seller's ownership of
any portion of the Property. Except for Seller's Warranties,
Buyer further acknowledges and agrees that Seller is under no
duty and was under no duty to make any affirmative
disclosures or inquiry regarding any matter which may or may
not be known to Seller, its officers, directors, contractors,
agents or employees.
3. Any reports, repairs or work required by
Buyer are the sole responsibility of Buyer, and Buyer agrees
that there is no obligation on the part of Seller to make any
changes, alterations or repairs to the Property or to cure
any violations of law or to comply with the requirements of
any insurer. Buyer is solely responsible for obtaining any
certificate of occupancy or any other approval or permit
necessary for transfer or occupancy of the Property and for
any repairs or alterations necessary to obtain the same, all
at Buyer's sole cost and expense.
4. Buyer acknowledges and agrees that
Buyer's obligations hereunder shall remain in full force and
effect with Buyer having no right to terminate or modify this
Certificate regardless of any facts or information learned by
Buyer after the date hereof.
5. Buyer, for Buyer and Buyer's successors
and assigns, hereby releases Seller from, and waives all
claims and liability, known and unknown, foreseen or
unforeseen, against Seller for or attributable to the
following:
(a) any and all statements or opinions
heretofore made, or information furnished with respect
to the Transaction, by the Seller Parties to Buyer or
its agents or representatives, except for Seller's
Warranties; and
(b) any structural, physical or environmental
condition at the Property, including without limitation,
claims or liabilities relating to the presence,
discovery or removal of any Hazardous Materials in, at,
about or under the Property, or for, connected with or
arising out of any and all claims or causes of action
based upon CERCLA (Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq., As amended by SARA [Superfund
Amendment and Reauthorization Act of 1986] and as may be
further amended from time to time), the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section
6901 et seq., or any related claims or causes of action
or any other federal or state based statutory or
regulatory causes of action for environmental
contamination at, in or under the Property.
(c) Except for any claims arising (i) on
account of Seller's breach of any obligation of Seller
under the Sale Agreement that survives Closing, (ii)
under the Assignment of Leases, (iii) under the
Assignment of Contracts and (iv) under any Seller's
E-3
<PAGE>
estoppel certificate delivered concurrently herewith
pursuant to the Sale Agreement, any losses, costs,
claims, liabilities, expenses, demands or obligations of
any kind or nature whatsoever attributable to the
Property, whether arising before, on or after the date
hereof, including, without limitation, all losses,
costs, claims liabilities, expenses and demands with
respect to the structural, physical or environmental
condition of the Property, and any and all obligations
(contractual, legal or equitable) arising out of the
Property (including, without limitation, any Hazardous
Materials in, at, under or about the Property).
6. Except as expressly provided to the
contrary in this Section 6, Buyer hereby assumes and takes
responsibility and liability for all obligations arising
after the Closing attributable to the structural, physical or
environmental condition of the Property (including, without
limitation, any Hazardous Materials, in at, under or about
the Property) and Buyer agrees to indemnify, defend and hold
harmless Seller from any loss, cost, claim, liability,
expense or demand with respect thereto that arises after the
Closing, including, without limitation, claims of any
subsequent purchasers of the Property or any lessees of any
owners of the Property (collectively, "Covered Claims").
Notwithstanding the foregoing, (i) Buyer is not assuming,
shall not be obligated to indemnify Seller against, and
"Covered Claims" shall exclude, any losses, costs, claims,
liabilities, expenses or demands that arise after the Closing
to the extent Buyer proves that the injury or damage giving
rise to such loss, cost, claim, liability expense or demand
occurred prior to the Closing, and (ii) Seller shall not
require Buyer to repair the Property or remediate conditions
at the Property in the absence of a Covered Claim. By its
execution of this Agreement, Buyer hereby agrees that it
shall at all times comply with all applicable federal, state
and local laws, rules and regulations involving Hazardous
Materials in, at, or under the Property or their removal from
the Property; provided that such obligation to comply with
such laws, rules and regulations shall not, by itself, impose
an affirmative obligation on Buyer to indemnify Seller with
respect to Hazardous Materials present on the Property on or
before the Closing.
7. For purposes of this Agreement, the term
"Hazardous Material" shall mean any substance, chemical,
waste or material that is or becomes regulated by any
federal, state or local governmental authority because of its
toxicity, infectiousness, radioactivity, explosiveness,
ignitability, corrosiveness or reactivity, including, without
limitation, asbestos or any substance containing more than
0.1 percent asbestos, the group of compounds known as
polychlorinated biphenyls, flammable explosives, oil,
petroleum or any refined petroleum product.
8. Buyer acknowledges and agrees that the
provisions of this Agreement were a material factor in Seller's
acceptance of the Purchase Price and, while Seller has provided
the Documents and cooperated with Buyer, Seller is unwilling to
sell the Property unless Seller and the other Seller Parties are
expressly released as set forth in Section 5 and Buyer assumes
the obligations specified in, and provides the indemnifications
set forth in, Section 8.
E-4
<PAGE>
IN WITNESS WHEREOF, Buyer has executed this
Agreement as of the date first set forth hereinabove.
WCB PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB Management Gen-Par, Inc.,
a Delaware corporation
General Partner
By:___________________________
Name:
Its:
E-5
PAGE
<PAGE>
EXHIBIT F
FORM OF WARRANTY DEED
RECORDING REQUESTED BY
AND WHEN RECORDED DELIVER TO:
___________________________
___________________________
___________________________
___________________________
WARRANTY DEED
Prudential Acquisition Fund I, L.P., a Delaware Limited
Partnership, whose address is 100 Gold Street, New York, NY
10297, for consideration paid, grants to WCB Properties Limited
Partnership, a Delaware Limited Partnership, the following
described real estate in Bernalillo County, New Mexico:
TRACT ONE - SNOW HEIGHTS ADDITION, a
Replat of a portion of Block "A",
SNOW HEIGHTS ADDITION, as the same is
shown and designated on the Summary
Plat thereof, filed in the Office of
the County Clerk of Bernalillo
County, New Mexico, on September 28,
1981, and recorded in plat Book C-18,
page 189, records of Bernalillo
County, New Mexico.
SUBJECT TO: patent reservations and restrictions of
record; existing easements and rights-of-way; assessments;
taxes for 1995 and all subsequent years; and other matters
of record; and
with warranty covenants.
<PAGE>
IN WITNESS WHEREOF, Grantor has caused this Warranty Deed to be
executed as of this ___ day of __________ 1996.
PRUDENTIAL ACQUISITION FUND I,
L.P., a Delaware limited
partnership
By: Prudential Realty
Partnerships, Inc., a Delaware
corporation
General Partner
By: The Prudential Insurance
Company of America, a New
Jersey corporation
Its Agent
By:___________________________
John Woo
Vice President
PAGE
<PAGE>
STATE OF -----------------------)
)
COUNTY OF ----------------------)
The foregoing instrument was acknowledged before me on
______________________, 19___ by _______________________,
__________________________ of Prudential Acquisition Fund I,
L.P., a Delaware limited partnership, on behalf of said partnership.
_______________________, Notary Public
My Commission Expires:
______________________
<PAGE>
<PAGE>
EXHIBIT G
FORM OF BILL OF SALE
WHEREAS, by special warranty deed (the "Deed") of even
date herewith, PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware limited
partnership ("Seller") conveyed to WCB PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership ("Buyer"), that certain tract of land
more particularly described in Exhibit 1 attached to the Deed and
incorporated herein by this reference, together with all improvements
located thereon ("Real Property").
WHEREAS, in connection with the above described conveyance Seller
desires to sell, transfer and convey to Buyer certain items of tangible
personal property as hereinafter described.
NOW, THEREFORE, in consideration of the receipt of TEN AND
NO/100 DOLLARS ($10.00) and other good and valuable consideration paid
in hand by Buyer to Seller, the receipt and sufficiency of which are
hereby acknowledged, Seller has GRANTED, CONVEYED, SOLD, TRANSFERRED,
SET OVER and DELIVERED and by these presents does hereby GRANT, SELL,
TRANSFER, SET OVER and DELIVER to Buyer, its legal representatives,
successors and assigns, all of its right, title and interest in and
to all tangible personal property owned by Seller (excluding any
computer or computer equipment and software), located on the Real Property,
and used in the ownership, operation and maintenance of the Real Property
and all nonconfidential books, records and files (excluding appraisals,
budgets, marketing information or other information in the possession or
control of Seller or Seller's property manager which Seller deems proprietary)
relating to the Real Property (herein collectively called the "Personal
Property"), to have and to hold, all and singular, the Personal Property
unto Buyer forever.
<PAGE>
EXECUTED this _____ day of ______________________, 19____, TO BE
EFFECTIVE as of the _____ day of ___________________, 19____.
SELLER:
PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware
limited partnership
By: Prudential Realty Partnerships, Inc., a
Delaware corporation
General Partner
By: The Prudential Insurance Company
of America, a New Jersey
corporation
Its Agent
By:___________________________
John Woo
Vice President
<PAGE>
<PAGE>
EXHIBIT H
FORM OF ASSIGNMENT OF LEASES
RECORDING REQUESTED BY
AND WHEN RECORDED DELIVER TO:
___________________________
___________________________
___________________________
___________________________
ASSIGNMENT OF LEASES
THIS ASSIGNMENT OF LEASES ("Assignment"), is made by
and between PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware limited
partnership ("Assignor") and WCB PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership ("Assignee").
W I T N E S S E T H:
WHEREAS, by Purchase and Sale Agreement ("Sale Agreement")
dated as of September 6, 1996, by and between Assignor and Assignee,
Assignor agreed to sell to Assignee certain real property described on
Exhibit 1 attached hereto and incorporated herein by this reference,
and the improvements located thereon ("Property") as more particularly
described in the Sale Agreement; and
WHEREAS, the Sale Agreement provides, inter alia, that
Assignor shall assign to Assignee certain leases and Assignee shall
assume all of the obligations of Seller under such leases from and after
the date of such assignment, and that Assignor and Assignee shall enter
into this Assignment.
H-1
<PAGE>
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. Assignment of Tenant Leases. Assignor hereby assigns,
sets over and transfers to Assignee all of its right, title and interest
in, to and under those certain tenant space leases set forth in Exhibit 2
attached hereto and incorporated herein by this reference ("Leases").
Assignee hereby assumes all liabilities and obligations of Assignor
under the Leases and hereby agrees to indemnify, defend and hold harmless
Assignor from all of the liabilities and obligations of Assignor under the
Leases whether arising or accruing before, on or after the date hereof.
Notwithstanding the foregoing, Assignor hereby agrees to pay, or reimburse
Assignee promptly upon demand therefor, as the case may be, for any
amounts that were due and payable by Assignor under the Leases prior to
the Closing; provided, however, that if the tenant under the applicable
Lease has delivered an estoppel certificate to Assignee in connection
herewith which states that no such amounts are due and payable, then
Assignor shall have no liability to Assignee for any such amounts which the
tenant later claims were due and payable as of the date of the estoppel
certificate; provided further that Buyer will not be liable for leasing
commissions and tenant improvement obligations that arose prior to the
date of this Assignment and that are not set forth in the Leases and
that are not set forth on Exhibit 2 attached hereto.
2. Miscellaneous. This Assignment and the obligations of the
parties hereunder shall survive the closing of the transaction referred to
in the Sale Agreement and shall not be merged therein, shall be binding upon
and inure to the benefit of the parties hereto, their respective legal
representatives, successors and assigns, shall be governed by and construed
in accordance with the laws of the State of New Mexico applicable to
agreements made and to be wholly performed within said State and may not
be modified or amended in any manner other than by a written agreement
signed by the party to be charged therewith.
3. This Assignment may be executed in counterparts, each of
which shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.
H-2
<PAGE>
EXECUTED this _____ day of _____________, 19____, TO BE
EFFECTIVE as of the _____ day of ____________, 19____.
ASSIGNOR:
PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware
limited partnership
By: Prudential Realty Partnerships, Inc., a
Delaware corporation
General Partner
By: The Prudential Insurance Company
of America, a New Jersey
corporation
Its Agent
By:___________________________
John Woo
Vice President
ASSIGNEE:
WCB PROPERTIES LIMITED PARTNERSHIP, a Delaware
limited partnership
By: WCB Management Gen-Par, Inc., a Delaware
corporation
General Partner
By:___________________________
Name:
Its:
<PAGE>
<PAGE>
EXHIBIT 1
[Legal Description]<PAGE>
<PAGE>
EXHIBIT 2
[List of Leases]
PAGE
<PAGE>
STATE OF ------------------)
)
COUNTY OF -----------------)
The foregoing instrument was acknowledged before me
on ______________________, 19___ by _______________________,
__________________________ of Prudential Acquisition Fund I,
L.P., a Delaware limited partnership, on behalf of said partnership.
_______________________, Notary Public
My Commission Expires:
______________________
<PAGE>
EXHIBIT I
LIST OF TENANTS
[See Rent Roll Attached]<PAGE>
<PAGE>
EXHIBIT J
FORM OF ASSIGNMENT OF CONTRACTS
THIS ASSIGNMENT OF CONTRACTS ("Assignment"), is made by
and between PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware limited
partnership ("Assignor") and WCB PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership ("Assignee").
W I T N E S S E T H:
WHEREAS, by Purchase and Sale Agreement ("Sale Agreement")
dated as of September 6, 1996, by and between Assignor and Assignee,
Assignor agreed to sell to Assignee certain real property, and the
improvements located thereon ("Property") as more particularly described
in the Sale Agreement; and
WHEREAS, the Sale Agreement provides, inter alia, that
Assignor shall assign to Assignee rights to certain intangible property
and that Assignee shall assume all of the obligations of Assignor under
such intangible property from and after the date of such assignment, and
that Assignor and Assignee shall enter into this Assignment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. Assignment of Equipment Leases and Commission Agreements.
Assignor hereby assigns, sets over and transfers to Assignee all of its right,
title and interest in, to and under (a) if and to the extent assignable by
Assignor, all service, supply, maintenance, utility and commission agreements,
all equipment leases, and all other agreements relating to the Property that
are described in Exhibit 1 attached hereto and incorporated herein by this
reference (herein collectively called the "Contracts"), and (b) if and to
the extent assignable, all licenses, permits and other written authorizations
necessary for the use, operation or ownership of the Property and in
Assignor's possession or control (herein collectively called the "Licenses
and Permits"). Assignee hereby assumes all obligations under the Contracts
and the Licenses and Permits.
2. Assignment of Warranties and Guarantees. Assignor hereby
assigns, set over and transfers to Assignee all of its right, title and
interest in, to and under
J-1
<PAGE>
those certain warranties and guarantees set forth in Exhibit 2 attached hereto
and incorporated herein by this reference, to the extent assignable.
3. Indemnity. Assignee agrees to indemnify, defend and hold
harmless Assignor from any loss, cost, claim, liability, expense or demand of
whatever nature under the Contracts and the Licenses and Permits, whether
arising or accruing before, on or after the date hereof. Notwithstanding
the foregoing, Assignor hereby agrees to pay, or reimburse Assignee promptly
upon demand therefor, as the case may be, for any amounts that were due and
payable by Assignor under the Contracts or the Licenses and Permits prior
to the Closing.
4. Miscellaneous. This Assignment and the obligations of the
parties hereunder shall survive the closing of the transaction referred to
in the Sale Agreement and shall not be merged therein, shall be binding upon
and inure to the benefit of the parties hereto, their respective legal
representatives, successors and assigns, shall be governed by and construed in
accordance with the laws of the State of New Mexico applicable to agreements
made and to be wholly performed within said State and may not be modified
or amended in any manner other than by a written agreement signed by the
party to be charged therewith.
5. Counterparts. This Assignment may be executed in
counterparts, each of which shall be an original and all of which
counterparts taken together shall constitute one and the same agreement.
J-2
<PAGE>
EXECUTED this _____ day of _____________, 19____, TO
BE EFFECTIVE as of the _____ day of ____________, 19____.
ASSIGNOR:
PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware
limited partnership
By: Prudential Realty Partnerships, Inc., a
Delaware corporation
General Partner
By: The Prudential Insurance Company
of America, a New Jersey
corporation
Its Agent
By:___________________________
John Woo
Vice President
ASSIGNEE:
WCB PROPERTIES LIMITED PARTNERSHIP, a Delaware
limited partnership
By: WCB Management Gen-Par, Inc., a Delaware
corporation
General Partner
By:___________________________
Name:
Its:
J-3
PAGE
<PAGE>
EXHIBIT 1
[Equipment Leases]<PAGE>
<PAGE>
EXHIBIT 2
[Warranties and Guaranties]<PAGE>
<PAGE>
EXHIBIT K-1
LIST OF MAJOR TENANTS
1. Citicorp Credit Services
2. Fidelity National Title
3. Gram, Inc.
4. Webster University
<PAGE>
<PAGE>
EXHIBIT K-2
FORM OF TENANT ESTOPPEL LETTER
PREMISES:
LANDLORD:
LEASE DATED: ("Lease")
DATE:
The undersigned Tenant, in recognition that WCB Properties Limited
Partnership or a related entity (in either event, "WCB") is considering
an acquisition of the Premises and obtaining a loan to finance such
acquisition, hereby certifies to WCB and any lender providing
a loan to WCB secured by the Premises ("Lender") that:
(i) Tenant has accepted possession of the Premises pursuant to
the Lease. A true and accurate copy of the Lease is attached hereto.
The Lease term commenced on ___________. The termination date of the
Lease term, excluding renewals and extensions, is ___________. Tenant
has not assigned its rights under the Lease or sublet any portion of
the leased premises. The Lease is dated ______________ and has not
been amended except as follows: [List the dates of any amendments or
modifications of the Lease]
(ii) Any improvements required by the terms of the Lease to be
made by Landlord have been completed to the satisfaction of Tenant in
all respects, and Landlord has fulfilled all of its duties under the Lease.
(iii) Except as disclosed in Paragraph 1 above, the Lease has
not been assigned, modified, supplemented or amended in any way. The
Lease constitutes the entire agreement between the parties and there
are no other agreements or understandings between Landlord and Tenant
concerning the Premises. The undersigned does not have any option or
preferential right to purchase all or any part of the Premises or the
building of which the Premises are a part or any right, title or interest
with respect to the Premises or such building other than as Lessee under
the Lease.
(iv) The Lease is valid and in full force and effect, and to
the best of Tenant'sknowledge, neither Landlord nor Tenant is in
default thereunder. Tenant has no defense, setoff or counterclaim
against Landlord arising out of the Lease or against the payment of
rent or other charges under the Lease or in any way relating thereto,
or arising out of any other
K-2-1
<PAGE>
transaction between Tenant and Landlord, and no event has occurred and
no condition exists, which with the giving of notice or the passage of
time, or both, will constitute a default under the Lease. Tenant is
current in the payment of any taxes, utilities, common area maintenance
or other charges to be paid by Tenant.
(v) There are no actions, whether voluntary or involuntary,
pending against Tenant under any insolvency, bankruptcy or other debtor
relief laws of the United States of America or California.
(vi) The minimum monthly rent presently payable under the Lease
is $_______________. Landlord is holding a security deposit of
$_________________. Landlord holds no other funds for Tenant's account.
No rent or other sum payable under the Lease has been paid more than one
month in advance.
(vii) There are no deficiencies or other conditions in the building
of which the Premises are a part which impair, inhibit or otherwise
adversely affect Tenant's operations. Without limiting the generality of
the foregoing, Tenant has not advised Landlord of any changes, repairs or
alterations that Tenant would require to be made to the Premises as a
condition to agreeing to extend or renew the Lease.
(viii) Tenant acknowledges that, upon WCB's acquisition of the
Premises, the Lease will be assigned to WCB as owner and then to Lender
as lender, and Tenant has received no notice of a prior assignment,
hypothecation or pledge of the Lease or the rents, under the provisions of
the assignment, the Lease cannot be terminated (either directly or
by the exercise of any option which could lead to termination) or
modified in any of its terms, or consent be given to the release of
any party having liability thereunder, without the prior written
consent of Lender, that without such consent, no rent may be collected or
accepted more than one month in advance and that the interest of the
Landlord in the Lease shall be assigned to Lender solely as security
for the purposes specified in the assignment and Lender shall assume
no duty, liability or obligations whatever under the Lease or any
extension or renewal thereof.
(ix) Tenant hereby acknowledges and agrees that if Lender shall
succeed to the interest of Landlord under the lease, Lender shall assume
(only while owner of and in possession or control of the building or which
the Premises are a part) and perform all of the Landlord's obligations
under the Lease, but shall not be liable for any act or omission of
any prior landlord (including the present Landlord), liable for the
return of any security deposit, subject to any offset or defense which
Tenant may have against any such prior landlord, bound by any rent or
additional rent Tenant may have paid for more than the current month to
any such prior landlord or bound by any assignment, surrender,
termination, cancellation, waiver, release, amendment or modification
of the Lease made without its express written consent.
K-2-2
<PAGE>
(x) Tenant shall give Lender prompt written notice of any default
of Landlord under the Lease if such default entitles Tenant, under law or
otherwise, to terminate the Lease, reduce rent or credit or offset any
amount against future rents and shall give Lender reasonable time (but
in no event less than 90 days after receipt of such notice) to cure or
commence during such default prior to exercising (and as a condition
precedent to its right to exercise) any right Tenant may have to terminate
the Lease, reduce rent or credit or offset any amounts against the rent.
Tenant shall give written notice to any successor in interest of Lender,
any transferee who acquired the property by deed in lieu of foreclosure or
any successor or assign thereof (collectively, the "Mortgagee").
(xi) Tenant shall not look to the Mortgagee, as mortgagee,
mortgagee in possession, or successor in title to the Premises, in
connection with the return of or accountability with respect to any
security deposit required by Landlord, unless said sum has actually
been received by Mortgagee as security for Tenant's performance
under the Lease.
(xii) Tenant is not under or subject to any environmental
consent decree or other enforcement action regarding, nor has Tenant
permitted, suffered or itself manufactured, stored, handled, transported,
disposed of, spilled, leaked or dumped on the Premises other than in
compliance with all laws, rules and regulations applicable to its
business, any toxic or hazardous waste, waste product or substance
(as they may be defined in any federal or state statute, rule or
regulation pertaining to or governing such waste products or substances).
Tenant shall neither permit, suffer nor itself manufacture, store,
handle, transport, dispose of, spill, leak or dump, any such toxic
or hazardous waste, waste product or substance on the Premises at any
time during the term, or extended term, of the Lease other than in
compliance with all laws, rules and regulations applicable to its business.
(xiii) All notices and other communications from Tenant to WCB
shall be in writing and shall be delivered or mailed by registered mail,
postage paid, return receipt requested, addressed to:
WCB Properties Limited Partnership
450 Newport Center Drive, Suite 304
Newport Beach, CA 92660
Attn: Robert V. Neary, Esq.
Or at such other address as WCB or its successors, assigns or transferees
shall furnish to Tenant in writing. All notices and other communications
from Tenant to Lender shall be given in the same manner provided above and
delivered to such address as Lender or its successors, assigns, or
transferees shall furnish to Tenant in writing.
(xiv) As used in this paragraph, (i) "Deeds of Trust" means any
one or more deeds of trust encumbering the Premises in favor of Lender
or any affiliate thereof, and (ii)
K-2-3
<PAGE>
"Transferee" means Lender, or any other person or entity, who acquires
title to the Premises pursuant to foreclosure of, or deed in lieu of
foreclosure of, any Deed of Trust, and their respective successors
and assigns. Tenant shall attorn to any Transferee and pay all rent
and perform all obligations under the Lease to such Transferee. Such
attornment shall be effective and self-operative without notice and
without the execution of any further documents, provided that Tenant
shall, upon the written request of such Transferee, promptly confirm
such attornment in writing and, if requested by such Transferee, shall
enter into a new lease with such Transferee for the balance of the term
remaining under the Lease on the same terms and conditions as are
contained in the Lease.
Tenant: ________________________
By:_____________________________
Date:___________________________
K-2-4
PAGE
<PAGE>
EXHIBIT K-3
FORM OF SELLER'S ESTOPPEL CERTIFICATE
TO:
RE: Lease dated:
Landlord:
Tenant:
Demised Premises:
Current Base Rental:
The undersigned ("Seller") hereby certifies as of the date
hereof, the following:
1. Attached hereto is a true, correct and complete copy
of the above-described Lease along with all amendments and modifications
thereto (the "Lease").
2. The Lease is in full force and effect and has not been
amended, modified, supplemented or superseded except as follows:
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________.
3. The information describing the Lease as shown above
is correct except as follows:
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________.
This letter is given by Seller to WCB PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited partnership ("Buyer") in connection
with the sale of that
K-3-1
<PAGE>
certain property described in that certain Purchase and Sale Agreement,
dated as of September 6, 1996, by and between Buyer and Seller (the
"Sale Agreement") and is intended solely for the benefit of Buyer and
no other person or entity may rely on any matter set forth herein.
Seller shall only be liable to Buyer hereunder for a breach
of a representation and warranty made herein with respect to which a
claim is made by Buyer against Seller on or before the one hundred
eightieth (180th) day after the date hereof; provided, however, that if
Seller obtains an estoppel certificate from the tenant identified
hereinabove after the date hereof that complies with the terms of
Section 6.3(e) of the Sale Agreement, this letter shall be without
further force or effect as of the date of such tenant's estoppel letter.
Anything in this letter to the contrary notwithstanding,
the maximum aggregate liability of Seller for Seller's breaches of
representations and warranties contained herein shall be limited as
set forth in Section 14.16 of the Sale Agreement. Notwithstanding
the foregoing, however, Buyer hereby expressly waives, relinquishes
and releases any right or remedy available to it at law, in equity or
under the Sale Agreement to make a claim against Seller for damages
that Buyer may incur as the result of any of Seller's representations
or warranties being untrue, inaccurate or incorrect if (a) Buyer
knew or is deemed to know that such representation or warranty was
untrue, inaccurate or incorrect on or before the date hereof, or
(b) Buyer's damages as a result of such representations or warranties
being untrue, inaccurate or incorrect are reasonably estimated to
aggregate less than $50,000.
Dated as of this ____ day of _____________________, 1996.
PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware
limited partnership
By: Prudential Realty Partnerships, Inc., a
Delaware corporation
General Partner
By: The Prudential Insurance Company
of America, a New Jersey
corporation
Its Agent
By:___________________________
John Woo
Vice President<PAGE>
K-3-2
EXHIBIT L
FORM OF NOTICE TO TENANTS
Date
RE: Notice of Change of Ownership of
One Executive Center
8500 Menaul Boulevard
Albuquerque, New Mexico
Dear _____________:
You are hereby notified as follows:
1. That as of the date hereof, Prudential Acquisition
Fund I, L.P. has transferred, sold, assigned, and conveyed all of its
interest in and to the above-described property, (the "Property") to WCB
Properties Limited Partnership (the "New Owner").
2. Future notices and rental payments with respect to
your lease premises at the Property should be made to the New Owner in
accordance with your Lease terms at the following address:
____________________________
____________________________
____________________________
____________________________
<PAGE>
3. Your security deposit in the amount of $_________ has
been transferred to the New Owner and as such the New Owner shall be
responsible for holding the same in accordance with the terms of your lease.
Sincerely,
PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware
limited partnership
By: Prudential Realty Partnerships, Inc., a
Delaware corporation
General Partner
By: The Prudential Insurance Company
of America, a New Jersey
corporation
Its Agent
By:___________________________
John Woo
Vice President
PAGE
<PAGE>
EXHIBIT M
FORM OF SELLER'S FIRPTA AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that a
transferee of a United States real property interest must withhold tax if
the transferor is a foreign person. To inform the transferee that withholding
of tax is not required upon the disposition of a United States real property
interest by PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware limited
partnership ("Prudential"), the undersigned hereby certifies the following
on behalf of Prudential:
1. Prudential is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined
in the Internal Revenue Code and Income Tax Regulations); and
2. Prudential's U.S. employer tax identification number
is 13-3173903; and
3. Prudential's office address is 751 Broad Street, Newark,
New Jersey, 07102-3777.
Prudential understands that this certification may be disclosed
to the Internal Revenue Service by transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
<PAGE>
The undersigned officer of Prudential declares that he has
examined this certification and to the best of his knowledge and belief it
is true, correct and complete, and he further declares that he has authority
to sign this document on behalf of Prudential.
Dated: ___________________, 1996.
PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware
limited partnership
By: Prudential Realty Partnerships, Inc., a
Delaware corporation
General Partner
By: The Prudential Insurance Company
of America, a New Jersey
corporation
Its Agent
By:___________________________
John Woo
Vice President
<PAGE>
<PAGE>
EXHIBIT N
FORM OF BUYER'S ERISA REPRESENTATION
______________________, 1996
Prudential Acquisition Fund I, L.P.
Attention:
Re: Sale of (Property Number)
One Executive Center
8500 Menaul Boulevard
Albuquerque, New Mexico
Ladies and Gentlemen:
To satisfy compliance with the Employee Retirement Income
Security Act of 1974, as amended, the undersigned represents and warrants
to Prudential Acquisition Fund I, L.P. ("Prudential") that:
1. neither the undersigned nor any of its affiliates
(within the meaning of Part V(c) of Prohibited Transaction Exemption
84-14 granted by the U.S. Department of Labor ("PRE 84-14")) has, or
during the immediately preceding year has exercised, the authority to
appoint or terminate Prudential as investment manager of any assets of
the employee benefit plans whose assets are held by Prudential or to
negotiate the terms of any management agreement with Prudential on behalf
of any such plan;
2. the transaction contemplated hereunder is not specifically
excluded by Part I(b) of PTE 84-14;
3. the undersigned is not a related party of Prudential
(as defined in V(h) of PTE 84-14); and
<PAGE>
4. the terms of the transaction contemplated hereunder
have been negotiated and determined at arm's length, as such terms would
be negotiated and determined by unrelated parties.
WCB PROPERTIES LIMITED PARTNERSHIP, a Delaware
limited partnership
By: WCB Management Gen-Par, Inc., a Delaware
corporation
General Partner
By:___________________________
Name:
Its:
PAGE
<PAGE>
EXHIBIT O
LITIGATION NOTICES, CONTRACT DEFAULTS,
GOVERNMENTAL VIOLATIONS AND LEASE DEFAULTS
1. Mary Nielsen allegedly fell in the parking lot of the Building
on April 15, 1996, according to a letter from her attorney,
Lynn Barnhill of Nancy Garner & Associates, P.C., to
Terranomics/Prudential Real Estate Investors, dated
July 9, 1996. Copies of the correspondence relating to
this matter are attached to this Exhibit O.
<PAGE>
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
(One Executive Center)
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
(this "Amendment") is made as of September 30, 1996 by and between PRUDENTIAL
ACQUISITION FUND I, L.P., a Delaware limited partnership ("Seller"), and WCB
PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership ("Buyer"), with
reference to the following facts:
WHEREAS, Seller and Buyer have entered into that certain Purchase
and Sale Agreement dated as of September 6, 1996 (the "Purchase Agreement"),
pursuant to which Seller has agreed to sell to Buyer, and Buyer has agreed to
purchase from Seller, the Property, which consists of, among other things,
certain real property located in Albuquerque, New Mexico and more particularly
described in Exhibit A to the Purchase Agreement, all upon the terms and
subject to the conditions contained in the Purchase Agreement; and
WHEREAS, Seller and Buyer desire to amend the Purchase Agreement as
set forth in this Amendment.
NOW, THEREFORE, with reference to the foregoing recitals, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, Seller and Buyer hereby agree as follows:
1. Definitions. All initially-capitalized terms used in this
Amendment without definition shall have the meanings given such terms in the
Purchase Agreement.
2. Amendment to Purchase Agreement. Effective as of the date of
this Amendment, the Purchase Agreement is hereby amended to provide that the
Due Diligence Period shall expire at 5:00 p.m. (Pacific Time) on October 4,
1996. Notwithstanding any provision of the Purchase Agreement to the
contrary, including, without limitation, Article 4 thereof, there shall be
no further extensions of the Due Diligence Period unless Seller and Buyer
hereafter agree to an extension in writing.
3. No Other Amendments. The Purchase Agreement has not been
amended other than by this Amendment and, as amended by this Amendment, the
Purchase Agreement is and remains in full force and effect.
4. Counterparts. This Amendment may be executed in counterparts,
each of which shall be an original and all of which counterparts taken
together shall constitute but one and the same agreement.
[SIGNATURES ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this Amendment to
be duly executed on its behalf as of the day and year first above written.
SELLER: PRUDENTIAL ACQUISITION FUND I, L.P.,
a Delaware limited partnership
By: Prudential Realty Partnerships, Inc.,
a Delaware corporation,
General Partner
By: /s/ Peter L. Ruggiero
-------------------------
Name: Peter L. Ruggiero
--------------------
Its: Vice President
---------------------
BUYER: WCB PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WCB Management Gen-Par, Inc.,
a Delaware corporation,
General Partner
By: /s/ Brad R. Baker
--------------------------
Name: Brad R. Baker
---------------------
Its: Senior Vice President
---------------------
<PAGE>
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
(One Executive Center)
THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
(this "Amendment") is made as of October 11, 1996, by and between PRUDENTIAL
ACQUISITION FUND I, L.P., a Delaware limited partnership ("Seller") and WHEXC
REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership ("Buyer").
RECITALS
A. Seller and WCB Properties Limited Partnership, a Delaware limited
partnership have entered into that certain Purchase and Sale
Agreement, dated as of September 6, 1996, as amended by that
certain First Amendment to Purchase and Sale Agreement, dated
as of September 30, 1996, and as assigned to Buyer pursuant to
that certain Assignment, Assumption, Consent and Release
Agreement, dated as of even date herewith (as so amended and
assigned, the "Purchase Agreement"), pursuant to which Seller
has agreed to sell to Buyer, and Buyer has agreed to purchase
from Seller, the Property, which consists of, among other things,
certain real property located in Albuquerque, New Mexico and more
particularly described in Exhibit A to the Purchase Agreement,
all upon the terms and subject to the conditions contained in
the Purchase Agreement.
B. Seller and Buyer desire to amend the Purchase Agreement as set
forth in this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, Seller and Buyer hereby agree as follows:
1. Definitions. All initially-capitalized terms used in this
Amendment and not otherwise defined herein shall have the meanings given
such terms in the Purchase Agreement.
2. Closing Date. The Purchase Agreement is amended to provide
that the Closing Date, as defined in Section 6.1 of the Purchase Agreement,
shall be October 17, 1996.
3. Closing Pricing Adjustment. At Closing, Buyer shall be credited
Sixteen Thousand Dollars ($16,000) to reflect the undisbursed tenant
improvement allowance (the "Technadyne Allowance") under that certain
Supplemental Lease Agreement,
1
<PAGE>
dated as of May 31, 1995, by and between Seller and Technadyne Engineering
Consultants, Inc.
4. Elevator Shaft Hydraulic Spill. Notwithstanding the provisions of
Article 4 of the Purchase Agreement, Seller shall indemnify Buyer with respect
to the direct costs of remediating the spill of hydraulic fluid (the "Hydraulic
Fluid Spill") identified in that certain letter from CDM Engineers and
Consultants, Inc. to Prudential Realty Group, dated as of July 5, 1996 (the
"CDM Report"). The indemnity set forth in this Paragraph 4 shall only become
effective as such time as (i) Buyer has delivered to the New Mexico
Environmental Department ("NMED") the CDM Report and requested that the NMED
issue a letter or other written statement to both Buyer and Seller to the
effect that no further action is required with respect to the Hydraulic
Fluid Spill ("No Further Action Letter") and (ii) the NMED has informed
Buyer that further action is required with respect to the Hydraulic Fluid
Spill. The indemnity set forth in this Paragraph 4 shall cease to be of effect
upon the earlier of (i) the date on which the NMED has issued a No Further
Action Letter, and (ii) the date six (6) months after the Closing; provided,
however, that if the NMED has informed Seller that further action is required,
and Seller has commenced abatement work, with respect to the Hydraulic Fluid
Spill prior to the expiration of such six (6) month period, the indemnity set
forth in this Paragraph 4 shall continue in effect until the earlier of (x) the
date a No Further Action Letter is issued or (y) the date on which Seller's
maximum liability (as set forth in the following sentence) is reached.
Seller's maximum liability under the indemnity set forth in this Paragraph 4
shall be Twenty-Five Thousand Dollars ($25,000). In no event, shall Seller
be responsible for any costs not directly related to the abatement of the
Hydraulic Fluid Spill, including, without limitation, any consultant's fees
incurred in connection with any work other than the direct remediation of
the portion of the Property affected by the Hydraulic Fluid Spill and any
attorney's fees. Seller hereby authorizes Buyer to request the No Further
Action Letter, and agrees to send a separate letter to the NMED authorizing
Buyer's request for the No Further Action Letter. In addition, Seller shall
instruct its consultants ("Seller's Consultants") to turn over to Buyer's
consultants copies of all materials relating to the Hydraulic Fluid Spill and
in Seller's Consultants' possession.
5. Continuing Force and Effect. Except as amended by this Amendment,
the Purchase Agreement has not been amended or modified. The Purchase
Agreement, as amended by this Amendment, remains in full force and effect.
6. Counterparts. This Amendment may be executed in counterparts,
each of which shall be an original, and all of which, taken together, shall
constitute one document.
2
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this Amendment to
be duly executed on its behalf as of the day and year first above written.
SELLER: PRUDENTIAL ACQUISITION FUND I, L.P.,
a Delaware limited partnership
By: Prudential Realty Partnerships, Inc.,
a Delaware corporation,
General Partner
By: /s/ Peter L. Ruggiero
------------------------
Peter L. Ruggiero
Vice President
BUYER: WHEXC REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WHEXC Gen-Par, Inc.,
a Delaware corporation,
General Partner
By: /s/ Brad R. Baker
-----------------------------
Name: Brad R. Baker
------------------------
Title: Senior Vice President
-----------------------
3
<PAGE>
PURCHASE AND SALE AGREEMENT
by and between
PRUDENTIAL ACQUISITION FUND I, L.P.,
a Delaware limited partnership
and
NORWEST BANK MINNESOTA SOUTH, N.A.,
a national banking association
Prudential Property No.
Property Name: Norwest Center Building
Location: Rochester, Minnesota
Date: October 18, 1996
<PAGE>
<PAGE>
TABLE OF CONTENTS
Article Page
1 SALE OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Real Property . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Personal Property . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Other Property Rights . . . . . . . . . . . . . . . . . . . . 1
2 PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 TITLE MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Title to Real Property. . . . . . . . . . . . . . . . . . . . 2
3.2 Title Insurance . . . . . . . . . . . . . . . . . . . . . . . 2
4 BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY. . . . . . . . . . 3
4.1 Buyer's Inspections and Due Diligence . . . . . . . . . . . . 3
4.2 Property Sold "As Is.". . . . . . . . . . . . . . . . . . . . 4
5 ADJUSTMENTS AND PRORATIONS . . . . . . . . . . . . . . . . . . . . 8
5.1 Lease Rentals and Expenses. . . . . . . . . . . . . . . . . . 8
5.1.1 Rents . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Real Estate and Personal Property Taxes . . . . . . . . . . . 9
5.3 Other Property Operating Expenses . . . . . . . . . . . . . . 9
5.4 Closing Costs . . . . . . . . . . . . . . . . . . . . . . . . 10
5.5 Cash Security Deposits. . . . . . . . . . . . . . . . . . . . 10
5.6 Apportionment Credit. . . . . . . . . . . . . . . . . . . . . 10
5.7 Mayo Foundation Leases. . . . . . . . . . . . . . . . . . . . 10
5.8 Prorations Final. . . . . . . . . . . . . . . . . . . . . . . 11
6 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Intentionally Omitted . . . . . . . . . . . . . . . . . . . . 11
6.3 Seller's Closing Deliveries.. . . . . . . . . . . . . . . . . 11
6.4 Buyer Closing Deliveries. . . . . . . . . . . . . . . . . . . 13
6.5 Delivery of Deed. . . . . . . . . . . . . . . . . . . . . . . 14
7 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 14
7.1 Buyer's Representations . . . . . . . . . . . . . . . . . . . 14
7.1.1 Buyer's Authorization . . . . . . . . . . . . . . . 14
7.1.2 Buyer's Financial Condition . . . . . . . . . . . . 14
i
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7.2 Seller's Representations. . . . . . . . . . . . . . . . . . . 14
7.2.1 Seller's Authorization. . . . . . . . . . . . . . . 14
7.2.2 Other Seller's Representations. . . . . . . . . . . 15
7.3 General Provisions. . . . . . . . . . . . . . . . . . . . . . 16
7.3.1 No Representation As to Leases. . . . . . . . . . . 16
7.3.2 Definition of "Seller's Knowledge". . . . . . . . . 16
7.3.3 Seller's Representations Deemed
Modified. . . . . . . . . . . . . . . . . . . . . . . . 16
7.3.4 Survival; Limitation on Seller's
Liability . . . . . . . . . . . . . . . . . . . . . . . 16
8 COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 Buyer's Covenants . . . . . . . . . . . . . . . . . . . . . . 17
8.1.1 Confidentiality . . . . . . . . . . . . . . . . . . 17
8.1.2 Buyer's Indemnity; Delivery of Reports. . . . . . . 17
8.2 Mutual Covenants. . . . . . . . . . . . . . . . . . . . . . . 18
8.2.1 Publicity . . . . . . . . . . . . . . . . . . . . . 18
8.2.2 Broker. . . . . . . . . . . . . . . . . . . . . . . 18
8.2.3 Tax Refunds and Credits . . . . . . . . . . . . . . 18
8.2.4 Survival. . . . . . . . . . . . . . . . . . . . . . 19
9 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.1 Buyer's Assignment. . . . . . . . . . . . . . . . . . . . . . 19
9.2 Designation Agreement . . . . . . . . . . . . . . . . . . . . 19
9.3 Survival/Merger . . . . . . . . . . . . . . . . . . . . . . . 20
9.4 Integration; Waiver . . . . . . . . . . . . . . . . . . . . . 20
9.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 20
9.6 Captions Not Binding; Schedules and Exhibits. . . . . . . . . 20
9.7 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . 20
9.8 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 21
9.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 21
9.11 No Recordation. . . . . . . . . . . . . . . . . . . . . . . . 22
9.12 Additional Agreements; Further Assurances . . . . . . . . . . 22
9.13 Construction. . . . . . . . . . . . . . . . . . . . . . . . . 22
9.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.15 Business Day. . . . . . . . . . . . . . . . . . . . . . . . . 23
9.16 Seller's Maximum Aggregate Liability. . . . . . . . . . . . . 23
ii
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EXHIBITS
Exhibit A - Legal Description
Exhibit B - List of Tangible Personal Property
Exhibit C - List of Contracts
Exhibit D - Title Report
Exhibit E - Form of Special Warranty Deed
Exhibit F - Form of Bill of Sale
Exhibit G - Form of Assignment of Leases
Exhibit H - List of Tenants
Exhibit I - Form of Assignment of Contracts
Exhibit J - Form of Notice to Tenants
Exhibit K - Form of Seller's FIRPTA Affidavit
Exhibit L - Litigation Notices, Contract Defaults and
Governmental Violations
Exhibit M - Permitted Exceptions
iii
PAGE
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made this
18th day of October, 1996, by and between PRUDENTIAL ACQUISITION
FUND I, L.P., a Delaware limited partnership ("Seller"), and
NORWEST BANK MINNESOTA SOUTH, N.A., a national banking
association ("Buyer").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements set
forth herein the parties hereto do hereby agree as follows:
ARTICLE 1
SALE OF PROPERTY
Seller agrees to sell, transfer and assign and Buyer agrees
to purchase, accept and assume, subject to the terms and
conditions stated herein, all of Seller's right, title and
interest in and to the following (herein collectively called the
"Property"):
1.1 Real Property. That certain parcel of real estate
located in Rochester, Minnesota, and legally described in
Exhibit A attached hereto and incorporated herein by this
reference, together with all buildings, improvements and
fixtures located thereon and all rights, privileges and
appurtenances pertaining thereto including all of Seller's
right, title and interest in and to all rights-of-way, open or
proposed streets, alleys, easements, strips or gores of land
adjacent thereto (herein collectively called the "Real
Property"); and
1.2 Personal Property. The tangible personal property
listed on Exhibit B attached hereto and incorporated hereby this
reference, and all books, records, operating statements and
files (excluding appraisals, budgets, Seller's strategic plans
for the Property, internal analyses, marketing information,
submissions relating to Seller's obtaining of corporate
authorization, attorney and accountant work product, or other
information in the possession or control of Seller or Seller's
property manager which Seller deems proprietary ("Seller's
Proprietary Information")), relating to the Real Property
(herein collectively called the "Personal Property"); and
1.3 Other Property Rights. (a) Seller's interest as
landlord in all leases encumbering the Real Property on the
Closing Date (as defined in Section 6.1); and (b) if and to the
extent assignable by Seller, (i) all service, supply,
maintenance, utility and commission agreements, all equipment
leases, and all contracts, subcontracts and agreements relating
to the construction of
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any unfinished tenant improvements described in Exhibit C attached
hereto and incorporated herein by this reference, and (ii) all
licenses, permits and other written authorizations necessary for the
use, operation or ownership of the Real Property or Personal Property
(the rights and interests of Seller described in clauses (a) through (b)
hereinabove being herein collectively called the "Other Property
Rights").
ARTICLE 2
PURCHASE PRICE
The total purchase price to be paid by Buyer for the
purchase of the Property is the sum of SIX MILLION NINE HUNDRED
THOUSAND AND NO/100 DOLLARS ($6,900,000.00) in immediately
available funds (the "Purchase Price"). The Purchase Price
shall be paid concurrently herewith, subject to the prorations
and adjustments set forth in Article 5 or as otherwise provided
under this Agreement, plus any other amounts required to be paid
by Buyer at Closing.
ARTICLE 3
TITLE MATTERS
3.1 Title to Real Property. Seller has previously
delivered to Buyer (a) Chicago Title Insurance Company's (the
"Title Company") commitment to issue an Owner's Policy of Title
Insurance with respect to the Property (the "Title Report")
identified as Title Insurance Commitment File No. C2466598, with
an effective date of September 10, 1996 at 7:00 a.m., a copy of
which is attached hereto as Exhibit D and incorporated herein
by this reference, (b) copies of all recorded documents referred
to on Schedule B of the Title Report as exceptions to coverage
(the "Title Documents"), and (c) a certified boundary survey of
the Property dated August 22, 1983, prepared by McGhie & Betts,
Inc. (the "Survey").
3.2 Title Insurance. Concurrently herewith, the Title
Company shall issue to Buyer, at Buyer's sole cost and expense
(less the service fee for the Title Report which shall be paid
by Seller as provided in Section 5.4 below), an ALTA Owner's
Form of title insurance policy in the form of the Title Report
(the "Owner's Title Policy"), in the amount of the Purchase
Price, insuring that fee simple title to the Real Property is
vested in Buyer subject only to the Permitted Exceptions listed
on Exhibit M attached hereto and incorporated hereby by this
reference. Buyer shall be entitled to request that the Title
Company provide, at Buyer's sole cost and expense, such
endorsements (or amendments) to the Owner's Title Policy as
Buyer may reasonably require, provided that (a) such
endorsements (or amendments) shall be at no cost or additional
liability to Seller, (b) Buyer's obligations under this
Agreement shall not be conditioned upon
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Buyer's ability to obtain such endorsements and, if Buyer is
unable to obtain such endorsements, Buyer shall nevertheless
be obligated to proceed to close the transaction contemplated
by this Agreement (the "Transaction") without reduction of or
set off against the Purchase Price, and (c) the Closing shall
not be delayed as a result of Buyer's request.
ARTICLE 4
BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY
4.1 Buyer's Inspections and Due Diligence.
(a) Buyer acknowledges that, prior to Buyer's
execution of this Agreement:
(i) Buyer has conducted all such inspections,
investigations, tests, analyses, appraisals
and evaluations of the Property (including
for Hazardous Materials (as defined in
Subsection 4.2(e)) as Buyer considers
necessary or appropriate (all of such
inspections, investigations and reports being
herein collectively called the
"Investigations"); and
(ii) Seller has made available to Buyer and
otherwise allowed Buyer access to, copies of
certain documents in Seller's possession
applicable to the Property, including, but
not limited to, the Title Report, the Survey,
the Title Documents, the Leases, the
Contracts (as defined in Subsection 6.3(d)),
the Property Documents (as defined in
Subsection 6.3(i)), and such other non-
proprietary, non-privileged reports,
documents, books and records which pertain to
the Property as Buyer has deemed necessary or
appropriate (all of the foregoing documents
described in this clause (ii) being herein
collectively called the "Documents").
Buyer has reviewed, examined, evaluated and
verified all Documents and the results of the
Investigations to the extent it deems necessary or
appropriate with the assistance of such experts as
Buyer deemed appropriate. In particular, Buyer
has determined to its satisfaction the
assignability of any Documents to be assigned
hereunder. Buyer acknowledges and agrees that it
(A) is familiar with the physical condition of the
Property, (B) has completed its due diligence with
respect to the Property and the Documents to its
satisfaction, (C) is acquiring the Property based
exclusively upon its own investigations and
inspections of the Property and the Documents, and
(D) shall have no additional period
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after the date hereof to conduct further physical
due diligence regarding the Property.
4.2 Property Sold "As Is."
(a) BUYER ACKNOWLEDGES AND AGREES THAT (i) THE
PROPERTY SHALL BE SOLD, AND BUYER SHALL ACCEPT POSSESSION OF
THE PROPERTY ON THE CLOSING DATE, "AS IS, WHERE IS, WITH ALL
FAULTS", WITH NO RIGHT OF SETOFF OR REDUCTION IN THE
PURCHASE PRICE; (ii) EXCEPT FOR SELLER'S REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTION 8.2 AND THE LIMITED WARRANTY
OF TITLE TO BE GIVEN IN THE DEED (AS DEFINED IN
SECTION 6.3(a)) (HEREIN COLLECTIVELY CALLED THE "SELLER'S
WARRANTIES"), NONE OF SELLER, ITS COUNSEL, WELSH COMPANIES
("BROKER"), ITS SALES AGENTS, NOR ANY PARTNER, OFFICER,
DIRECTOR, EMPLOYEE, AGENT OR ATTORNEY OF SELLER, ITS
COUNSEL, BROKER, OR ITS SALES AGENTS, NOR ANY OTHER PARTY
RELATED IN ANY WAY TO ANY OF THE FOREGOING (ALL OF WHICH
PARTIES ARE HEREIN COLLECTIVELY CALLED THE "SELLER PARTIES")
HAVE OR SHALL BE DEEMED TO HAVE MADE ANY VERBAL OR WRITTEN
REPRESENTATIONS, WARRANTIES, PROMISES OR GUARANTEES (WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE) TO BUYER WITH
RESPECT TO THE PROPERTY, ANY MATTER SET FORTH, CONTAINED OR
ADDRESSED IN THE DOCUMENTS (INCLUDING, BUT NOT LIMITED TO,
THE ACCURACY AND COMPLETENESS THEREOF) OR THE RESULTS OF THE
INVESTIGATIONS; AND (iii) BUYER HAS CONFIRMED INDEPENDENTLY
ALL INFORMATION THAT IT CONSIDERS MATERIAL TO ITS PURCHASE
OF THE PROPERTY OR THE TRANSACTION. BUYER SPECIFICALLY
ACKNOWLEDGES THAT, EXCEPT FOR SELLER'S WARRANTIES (AS SUCH
TERM IS HEREIN DEFINED), BUYER IS NOT RELYING ON (AND SELLER
AND EACH OF THE OTHER SELLER PARTIES DOES HEREBY DISCLAIM
AND RENOUNCE) ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
OR NATURE WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER OR ANY OTHER
SELLER PARTIES, AS TO: (1) THE OPERATION OF THE PROPERTY OR
THE INCOME POTENTIAL, USES, OR MERCHANTABILITY OR FITNESS OF
ANY PORTION OF THE PROPERTY FOR A PARTICULAR PURPOSE; (2)
THE PHYSICAL CONDITION OF THE PROPERTY OR THE CONDITION OR
SAFETY OF THE PROPERTY OR ANY IMPROVEMENTS THEREON,
INCLUDING, BUT NOT LIMITED TO, PLUMBING, SEWER, HEATING AND
ELECTRICAL SYSTEMS, ROOFING, AIR CONDITIONING, FOUNDATIONS,
SOILS AND GEOLOGY, INCLUDING HAZARDOUS MATERIALS, LOT SIZE,
OR SUITABILITY OF THE PROPERTY OR ANY IMPROVEMENTS THEREON
FOR A PARTICULAR PURPOSE; (3) THE PRESENCE OR ABSENCE,
LOCATION OR SCOPE OF ANY HAZARDOUS MATERIALS IN, AT,
4
<PAGE>
OR UNDER THE PROPERTY; (4) WHETHER THE APPLIANCES, IF ANY,
PLUMBING OR UTILITIES ARE IN WORKING ORDER; (5) THE
HABITABILITY OR SUITABILITY FOR OCCUPANCY OF ANY STRUCTURE
AND THE QUALITY OF ITS CONSTRUCTION; (6) WHETHER THE
IMPROVEMENTS ARE STRUCTURALLY SOUND, IN GOOD CONDITION, OR
IN COMPLIANCE WITH APPLICABLE MUNICIPAL, COUNTY, STATE OR
FEDERAL STATUTES, CODES OR ORDINANCES; (7) THE ACCURACY OF
ANY STATEMENTS, CALCULATIONS OR CONDITIONS STATED OR SET
FORTH IN SELLER'S BOOKS AND RECORDS CONCERNING THE PROPERTY
OR SET FORTH IN ANY OF SELLER'S OFFERING MATERIALS WITH
RESPECT TO THE PROPERTY; (8) THE DIMENSIONS OF THE PROPERTY
OR THE ACCURACY OF ANY FLOOR PLANS, SQUARE FOOTAGE, LEASE
ABSTRACTS, SKETCHES, REVENUE OR EXPENSE PROJECTIONS RELATED
TO THE PROPERTY; (9) THE OPERATING PERFORMANCE, THE INCOME
AND EXPENSES OF THE PROPERTY OR THE ECONOMIC STATUS OF THE
PROPERTY; (10) THE ABILITY OF BUYER TO OBTAIN ANY AND ALL
NECESSARY GOVERNMENTAL APPROVALS OR PERMITS FOR BUYER'S
INTENDED USE AND DEVELOPMENT OF THE PROPERTY OR ANY OF THE
DOCUMENTS; (11) THE LEASING STATUS OF THE PROPERTY OR THE
INTENTIONS OF ANY PARTIES WITH RESPECT TO THE NEGOTIATION
AND/OR EXECUTION OF ANY LEASE FOR ANY PORTION OF THE
PROPERTY; AND (12) SELLER'S OWNERSHIP OF ANY PORTION OF THE
PROPERTY. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT,
EXCEPT FOR THE DISCLOSURES MADE IN THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTION 8.2 HEREOF, SELLER IS UNDER
NO DUTY TO MAKE ANY AFFIRMATIVE DISCLOSURES OR INQUIRY
REGARDING ANY MATTER WHICH MAY OR MAY NOT BE KNOWN TO
SELLER, ITS OFFICERS, DIRECTORS, CONTRACTORS, AGENTS OR
EMPLOYEES.
(b) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE
THE SOLE RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT
THERE IS NO OBLIGATION ON THE PART OF SELLER TO MAKE ANY
CHANGES, ALTERATIONS OR REPAIRS TO THE PROPERTY OR TO CURE
ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF
ANY INSURER. BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY
CERTIFICATE OF OCCUPANCY OR ANY OTHER APPROVAL OR PERMIT
NECESSARY FOR TRANSFER OR OCCUPANCY OF THE PROPERTY AND FOR
ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL
AT BUYER'S SOLE COST AND EXPENSE. BUYER ACKNOWLEDGES AND
AGREES THAT BUYER'S OBLIGATIONS HEREUNDER SHALL REMAIN IN
FULL FORCE AND EFFECT WITH BUYER HAVING NO RIGHT TO DELAY
THE CLOSING OR TERMINATE THIS AGREEMENT REGARDLESS OF ANY
FACTS OR INFORMATION LEARNED BY BUYER AFTER THE DATE HEREOF,
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.
5
<PAGE>
(c) BUYER, FOR BUYER AND BUYER'S SUCCESSORS AND
ASSIGNS, HEREBY RELEASES SELLER FROM, AND WAIVES ALL CLAIMS
AND LIABILITY AGAINST SELLER FOR OR ATTRIBUTABLE TO THE
FOLLOWING:
(i) ANY AND ALL STATEMENTS OR OPINIONS HERETOFORE
OR HEREAFTER MADE, OR INFORMATION FURNISHED,
BY THE SELLER PARTIES TO BUYER OR ITS AGENTS
OR REPRESENTATIVES, EXCEPT FOR SELLER'S
WARRANTIES (AS SUCH TERM IS HEREIN DEFINED);
AND
(ii) ANY STRUCTURAL, PHYSICAL OR ENVIRONMENTAL
CONDITION AT THE PROPERTY, INCLUDING WITHOUT
LIMITATION, CLAIMS OR LIABILITIES RELATING TO
THE PRESENCE, DISCOVERY OR REMOVAL OF ANY
HAZARDOUS MATERIALS IN, AT, ABOUT OR UNDER
THE PROPERTY, OR FOR, CONNECTED WITH OR
ARISING OUT OF ANY AND ALL CLAIMS OR CAUSES
OF ACTION BASED UPON CERCLA (COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION, AND
LIABILITY ACT OF 1980, 42 U.S.C. ''9601 ET
SEQ., AS AMENDED BY SARA [SUPERFUND AMENDMENT
AND REAUTHORIZATION ACT OF 1986] AND AS MAY
BE FURTHER AMENDED FROM TIME TO TIME), THE
RESOURCE CONSERVATION AND RECOVERY ACT OF
1976, 42 U.S.C. ''6901 ET SEQ., OR ANY
RELATED CLAIMS OR CAUSES OF ACTION OR ANY
OTHER FEDERAL OR STATE BASED STATUTORY OR
REGULATORY CAUSES OF ACTION FOR ENVIRONMENTAL
CONTAMINATION AT, IN OR UNDER THE PROPERTY.
(d) EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY IN
THIS SUBSECTION (d), BUYER HEREBY (i) ASSUMES AND TAKES
RESPONSIBILITY AND LIABILITY FOR ALL LOSSES, COSTS, CLAIMS,
LIABILITIES, EXPENSES, DEMANDS AND OBLIGATIONS OF EVERY KIND
OR NATURE WHATSOEVER ATTRIBUTABLE TO THE PROPERTY, WHETHER
ARISING OR ACCRUING BEFORE OR AFTER THE DATE HEREOF AND
WHETHER ATTRIBUTABLE TO EVENTS OR CIRCUMSTANCES WHICH HAVE
HERETOFORE OR MAY HEREAFTER OCCUR, INCLUDING, WITHOUT
LIMITATION, ALL LOSSES, COSTS, CLAIMS, LIABILITIES, EXPENSES
AND DEMANDS WITH RESPECT TO THE STRUCTURAL, PHYSICAL OR
ENVIRONMENTAL CONDITION OF THE PROPERTY (INCLUDING, WITHOUT
LIMITATION, ANY HAZARDOUS MATERIALS, IN AT, UNDER OR ABOUT
THE PROPERTY), AND (ii) AGREES TO
6
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INDEMNIFY, DEFEND AND HOLD HARMLESS SELLER FROM ANY LOSS,
COST, CLAIM, LIABILITY, EXPENSE OR DEMAND WITH RESPECT
THERETO. BY ITS EXECUTION OF THIS AGREEMENT, BUYER HEREBY
AGREES THAT IT SHALL AT ALL TIMES COMPLY WITH ALL APPLICABLE
FEDERAL, STATE AND LOCAL LAWS, RULES AND REGULATIONS
INVOLVING HAZARDOUS MATERIALS IN, AT, UNDER OR ABOUT THE
PROPERTY OR THEIR REMOVAL FROM THE PROPERTY. NOTWITHSTANDING
THE FOREGOING, HOWEVER, BUYER DOES NOT ASSUME (AND SHALL NOT
BE REQUIRED TO INDEMNIFY SELLER FOR) ANY RESPONSIBILITY OR
LIABILITY ARISING OUT OF OR IN CONNECTION WITH:
(i) ANY CLAIMS MADE OR CAUSES OF ACTION BROUGHT
BY ANY THIRD PARTY UNRELATED TO BUYER
ALLEGING A DEFAULT OR BREACH BY SELLER WHICH
IS ALLEGED TO HAVE OCCURRED PRIOR TO THE
CLOSING DATE UNDER ANY CONTRACT OR AGREEMENT
(OTHER THAN ANY LEASE (AS SUCH TERM IS HEREIN
DEFINED)) ENTERED INTO BETWEEN SELLER AND ANY
SUCH CLAIMANT; PROVIDED, HOWEVER, THAT BUYER
SHALL BE DEEMED TO ASSUME AND SHALL INDEMNIFY
SELLER IN ACCORDANCE WITH THE TERMS OF THIS
SUBSECTION (d) WITH RESPECT TO ANY SUCH
CLAIMS OR CAUSES OF ACTION TO THE EXTENT THAT
THE SAME RELATE TO ANY ALLEGED DEFAULTS OR
THE BREACH OF ANY OF THE LEASES (AS SUCH TERM
IS HEREIN DEFINED), IT BEING UNDERSTOOD AND
AGREED BY BUYER AND SELLER THAT BUYER SHALL
RELY SOLELY UPON ITS DUE DILIGENCE WITH
RESPECT TO THE PROPERTY, SELLER'S WARRANTIES
(AS SUCH TERM IS HEREIN DEFINED) AND SUCH
TENANT ESTOPPEL CERTIFICATES AS BUYER MAY
RECEIVE ON OR BEFORE THE CLOSING DATE WITH
RESPECT TO PROTECTION AGAINST ANY ALLEGED
BREACH OR DEFAULT BY SELLER UNDER ANY OF THE
LEASES THAT MAY HAVE OCCURRED PRIOR TO THE
CLOSING DATE; OR
(ii) ANY TORT CLAIMS MADE OR BROUGHT BY A THIRD
PARTY UNRELATED TO BUYER WHICH ARISE FROM ANY
ACTS OR OMISSIONS OF SELLER WHICH OCCURRED
DURING THE TIME THAT SELLER OWNED FEE TITLE
TO THE PROPERTY.
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<PAGE>
(e) For purposes of this Agreement, the term
"Hazardous Material" shall mean any substance, chemical,
waste or material that is or becomes regulated by any
federal, state or local governmental authority because of
its toxicity, infectiousness, radioactivity, explosiveness,
ignitability, corrosiveness or reactivity, including,
without limitation, asbestos or any substance containing
more than 0.1 percent asbestos, the group of compounds known
as polychlorinated biphenyls, flammable explosives, oil,
petroleum or any refined petroleum product.
(f) Buyer acknowledges and agrees that the provisions
of this Article 4 were a material factor in Seller's
acceptance of the Purchase Price and, while Seller has
provided the Documents and cooperated with Buyer, Seller is
unwilling to sell the Property unless Seller and the other
Seller Parties are expressly released as set forth in
Subsection 4.2(c) and Buyer assumes the obligations
specified in, and provides the indemnifications set forth
in, Subsection 4.2(d).
(g) Notwithstanding anything to the contrary herein,
the provisions of this Section 4.2 shall survive the Closing
and shall not be merged therein.
ARTICLE 5
ADJUSTMENTS AND PRORATIONS
The following adjustments and prorations shall be made at
Closing:
5.1 Lease Rentals and Expenses.
5.1.1 Rents. All collected rents and other
payments from tenants under the leases shall be prorated
between Seller and Buyer as of the day prior to the Closing
Date. Seller shall be entitled to all rents (including any
percentage rent, additional rent and any accrued tax and
operating expense reimbursements and escalations), charges,
and other revenue of any kind attributable to any period
under the Leases to but not including the Closing Date.
Buyer shall be entitled to all rents (including any
percentage rent, additional rent and any accrued tax and
operating expense reimbursements and escalations), charges
and other revenue of any kind attributable to any period
under the Leases on and after the Closing Date. Rents and
expense escalations or other reimbursements due landlord
under the Leases not collected as of the Closing Date shall
not be prorated at the time of Closing, but Buyer shall make
a good faith effort to collect the same on Seller's behalf
and to tender the same to Seller upon receipt (which
obligation of Buyer shall survive the Closing and not be
merged therein); provided, however, that all rents,
escalations and other reimbursements due landlord under the
Leases collected by Buyer on or after the Closing Date shall
first be applied to all
8
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amounts due under the Leases at the time of collection
(i.e., current rents and sums due Buyer
as the current owner and landlord) with the balance (if any)
payable to Seller, but only to the extent of amounts
delinquent and actually due Seller. Buyer shall not have an
exclusive right to collect the sums due Seller under the
Leases and Seller hereby retains its rights to pursue any
tenant under the Leases for sums due Seller for periods
attributable to Seller's ownership of the Property;
provided, however, that Seller shall not be permitted to
commence or pursue any legal proceedings against any tenant
seeking eviction of such tenant or the termination of the
underlying lease. Seller's rights under the immediately
preceding sentence shall survive the Closing and not be
merged therein. Buyer shall receive a credit against the
Purchase Price for pre-paid rentals held by Seller covering
the period post-Closing. Notwithstanding the foregoing, any
rent which is attributable to real estate taxes which has
been collected by Seller shall be prorated as set forth in
Section 5.2 below and Buyer shall not otherwise be entitled
to receive any such rent attributable to real estate taxes.
5.2 Real Estate and Personal Property Taxes. Seller shall
receive a proration of $__________ for real estate and personal
property taxes for the calendar year 1996 which have been paid
in full by Seller prior to the date hereof. There shall be no
proration of real estate taxes other than as aforesaid and such
proration shall be final. In the event the Property has been
assessed for property tax purposes at such rates as would result
in reassessment (i.e., "escape assessment" or "roll-back taxes")
based upon the change in land usage or ownership of the
Property, Buyer hereby agrees to pay all such taxes and to
indemnify and save Seller harmless from and against all claims
and liability for such taxes. Such indemnity shall survive the
Closing and not be merged therein.
5.3 Other Property Operating Expenses. Operating expenses
for the Property shall be prorated as of midnight of the day
prior to the Closing Date. Seller shall pay all utility charges
and other operating expenses attributable to the Property to,
but not including the Closing Date (except for those utility
charges and operating expenses payable by tenants in accordance
with the Leases) and Buyer shall pay all utility charges and
other operating expenses attributable to the Property on or
after the Closing Date. To the extent that the amount of actual
consumption of any utility services is not determined prior to
the Closing Date, a proration shall be made at Closing based on
the last available reading and such proration shall be final.
Seller shall not assign to Buyer any deposits which Seller has
with any of the utility services or companies servicing the
Property. Buyer shall arrange with such services and companies
to have accounts opened in Buyer's name beginning at 12:01 a.m.
on the Closing Date. Notwithstanding the foregoing terms of
this Section, Seller shall have no obligation to pay (and Buyer
shall not receive a credit at Closing for) any operating
expenses to the extent that Buyer is entitled after Closing to
reimbursement of operating expenses, or the recovery of any
increase in operating expenses, from the tenants under the
Leases, regardless of whether Buyer actually collects such
reimbursement or increased operating expenses from such tenants,
it being understood and agreed by Buyer and Seller that the
burden of collecting such reimbursements shall be solely on Buyer.
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5.4 Closing Costs. Buyer shall pay all premiums and
charges of the Title Company for the Owner's Title Policy
(including endorsements) to be issued pursuant to the Title
Report (less the service fee for the Title Report which shall
be paid by Seller), the cost of any survey obtained by Buyer,
all recording and filing charges in connection with the
instrument by which Seller conveys the Property, one-half (1/2)
of all escrow or closing charges, all costs of Buyer's Due
Diligence and any other costs customarily paid by the buyer
pursuant to local practice. Seller shall pay the service fee
for the Title Report, one-half (1/2) of all escrow or closing
charges and all transfer taxes and similar charges, if any,
applicable to the transfer of the Property to Buyer and any
other costs customarily paid by the seller pursuant to local
practice. Except as otherwise agreed by the parties, each party
shall pay its own attorneys. The obligations of the parties to
pay applicable escrow or closing charges shall survive the
termination of this Agreement.
5.5 Cash Security Deposits. At Closing, Seller shall give
Buyer a credit against the Purchase Price in the aggregate
amount of the unapplied cash security deposits then held by
Seller under the Leases and any interest thereon.
5.6 Apportionment Credit. In the event the apportionments
to be made at the Closing result in a credit balance (i) to
Buyer, such sum shall be paid (at Seller's option) at the
Closing by giving Buyer a credit against the Purchase Price in
the amount of such credit balance, or (ii) to Seller, Buyer
shall pay the amount thereof to Seller at the Closing by wire
transfer of immediately available funds to the account or
accounts to be designated by Seller for the payment of the
Purchase Price.
5.7 Mayo Foundation Leases. Seller has agreed to give
Buyer a credit against the Purchase Price in the amount of
$86,452.00. This credit represents (a) $40,580 which will
become due and payable to Mayo Foundation under the lease for
Suite 550 for a tenant improvement allowance upon satisfaction
of certain conditions in the lease, including, without
limitation, the delivery of final lien waivers, (b) $33,620.00
which will become due and payable to Mayo Foundation under the
lease for Suite 555 for a tenant improvement allowance upon
satisfaction of certain conditions in the lease, including,
without limitation, the delivery of final lien waivers and (c)
$12,252.00 which will become due and payable to Welsch Companies
upon the execution of the lease for Suite 620 with Mayo
Foundation as tenant. Buyer agrees to pay such parties the
foregoing amounts when the same become due and payable. In
consideration of the aforesaid credit, Buyer hereby releases
Seller from any liability and obligation with respect to such
tenant improvement allowances and such commission, and Buyer
agrees to assume such liabilities and obligations and agrees to
indemnify and hold harmless Seller from and against any loss,
cost, claim, liability, expense or demand with respect thereto.
Seller and Buyer agree that Seller shall have no other
liabilities or obligations with respect to the leases with the
Mayo Foundation for said suites.
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5.8 Prorations Final. All prorations between the parties
made at Closing shall be final.
ARTICLE 6
CLOSING
Buyer and Seller hereby agree that the Transaction shall be
consummated as follows:
6.1 Closing Date. The Transaction shall close ("Closing")
on the date hereof (the "Closing Date"). Closing may, at
Seller's election, be either by a so-called "New York style"
closing or through escrow.
6.2 Intentionally Omitted.
6.3 Seller's Closing Deliveries. Concurrently herewith,
Seller shall deliver or cause to be delivered to the Escrow
Agent the following:
(a) Deed. A special warranty deed in the form of
Exhibit E attached hereto and incorporated herein by this
reference, conveying to Buyer all of Seller's right, title
and interest in and to the Real Property, subject only to
the Permitted Exceptions ("Deed").
(b) Bill of Sale. A bill of sale in the form of
Exhibit F attached hereto and incorporated herein by this
reference conveying all of Seller's right, title and
interest in and to the Personal Property.
(c) Assignment of Tenant Leases. An assignment and
assumption of tenant leases, in the form of Exhibit G
attached hereto and incorporated herein by this reference
("Assignment of Leases") transferring all of Seller's
interest in the tenant space leases for the tenants
identified on Exhibit H attached hereto and incorporated
herein by this reference and any amendments, guarantees and
other documents relating thereto (herein collectively called
the "Leases"), together with all assignable non-cash
security deposits deposited by the tenants thereunder and
not applied by Seller in accordance with the terms of the
Leases.
(d) Assignment of Equipment Leases, Commission
Agreements and Service Contracts. An assignment and
assumption of equipment leases, commission agreements,
service contracts, warranties and guaranties and the Other
Property Rights (to the extent the same are not transferred
by the Deed, Bill of Sale or Assignment of Leases) in the
form of Exhibit I attached hereto and incorporated herein by
this reference ("Assignment
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of Contracts"), transferring, to the extent assignable,
without liability or expense to Seller, all of Seller's
interest in the equipment leases and
any lease commission agreements in effect at the Property on
the Closing Date, all uncanceled service contracts
encumbering the Property on the Closing Date, all warranties
and guaranties which remain in effect on the Closing Date
and any Other Property Rights not otherwise transferred to
Buyer (all of the foregoing being herein collectively called
the "Contracts"). Seller shall not assign any existing
management agreement or any contracts or policies of
insurance for the Property.
(e) Tenant Estoppel Letters. Tenant estoppel letters
from each of the tenants listed on Exhibit H attached hereto
and incorporated by this reference in form satisfactory to
Buyer.
(f) Notice to Tenants. A single form letter in the
form of Exhibit J attached hereto and incorporated herein by
this reference to each tenant under the Leases, duplicate
copies of which would be sent notifying it of the sale of
the Property to Buyer and advising it that all future
payments of rent and other payments due under the Leases are
to be made to Buyer at an address designated by Buyer.
(g) Non-Foreign Status Affidavit. A non-foreign
status affidavit in the form of Exhibit K attached hereto
and incorporated herein by this reference, as required by
Section 1445 of the Internal Revenue Code.
(h) Evidence of Authority. A certificate of an
Assistant Secretary of Seller with respect to the authority
to act on behalf of Seller of the individual executing on
behalf of Seller all documents contemplated by this
Agreement.
(i) Property Documents. (i) To the extent in the
possession of Seller or the current manager of the
Property, (A) the original (or, if unavailable, a copy) of
the existing certificate or certificates of occupancy for
the Property, and (B) all original (or, if unavailable,
copies of) certificates, licenses, permits, authorizations
and approvals issued for or with respect to the Property by
governmental and quasi-governmental authorities having
jurisdiction; and (ii) all non-proprietary books and records
located at the Property or at the office of Seller's
building manager relating to the Property and the ownership
and operation thereof (the items described in clauses (i)
and (ii) being herein collectively called the "Property
Documents").
(j) Other Documents. Such other documents as may be
reasonably required by the Title Company or as may be agreed
upon by Seller and Buyer to consummate the Transaction.
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(k) Letters of Credit as Tenant Security Deposits.
With respect to any security deposits which are letters of
credit, Seller shall, if the same are assignable,
(i) deliver to Buyer at the Closing such letters of credit,
(ii) execute and deliver such other instruments as the
issuers of such letters of credit shall reasonably require,
and (iii) cooperate with Buyer to change the named
beneficiary under such letters of credit to Buyer.
(l) Keys and Original Documents. Keys to all locks on
the Real Property (in Seller's or Seller's building
manager's possession) and originals or, if originals are not
available, copies, of the Leases and Contracts (unless
canceled as set forth herein) encumbering the Property on
the Closing Date.
(m) Transfer Taxes. If applicable, duly completed and
signed real estate transfer tax returns.
6.4 Buyer Closing Deliveries. Concurrently herewith, Buyer
shall deliver or cause to be delivered to the Escrow Agent the
following:
(a) Purchase Price. The Purchase Price, as adjusted
for apportionments and other adjustments required under this
Agreement, plus any other amounts required to be paid by
Buyer at Closing.
(b) Assignment of Leases. The Assignment of Leases
executed and acknowledged by Buyer.
(c) Assignment of Equipment Leases, Commission
Agreements and Service Contracts. The Assignment of
Contracts executed and acknowledged by Buyer.
(d) Evidence of Authority. Documentation to
establish to Seller's reasonable satisfaction the due
authorization of Buyer's acquisition of the Property and
Buyer's delivery of the documents required to be delivered
by Buyer pursuant to this Agreement (including, but not
limited to, the organizational documents of Buyer, as they
may have been amended from time to time, resolutions of
Buyer and incumbency certificates of Buyer.
(e) Other Documents. Such other documents as may be
reasonably required by the Title Company or may be agreed
upon by Seller and Buyer to consummate the Transaction.
(f) Transfer Taxes. If applicable, duly completed and
signed real estate transfer tax returns.
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6.5 Delivery of Deed. Effective upon delivery of the Deed,
actual and exclusive possession (subject only to the Permitted
Exceptions) and risk of loss to the Property shall pass from
Seller to Buyer.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 Buyer's Representations. Buyer represents and warrants
to, and covenants with, Seller as follows:
7.1.1 Buyer's Authorization. Buyer is duly
organized (or formed), validly existing and in good standing
under the laws of the United States of America and the State
in which the Property is located, and is authorized to
consummate the Transaction and fulfill all of its
obligations hereunder and under all documents contemplated
hereunder to be executed by Buyer, and has all necessary
power to execute and deliver this Agreement and all
documents contemplated hereunder to be executed by Buyer,
and to perform all of its obligations hereunder and
thereunder. This Agreement and all documents contemplated
hereunder to be executed by Buyer, have been duly authorized
by all requisite partnership or corporate action on the part
of Buyer and are the valid and legally binding obligation of
Buyer, enforceable in accordance with their respective
terms. Neither the execution and delivery of this Agreement
and all documents contemplated hereunder to be executed by
Buyer, nor the performance of the obligations of Buyer
hereunder or thereunder will result in the violation of any
law or any provision of the agreement of partnership or
articles of incorporation and by-laws of Buyer or will
conflict with any order or decree of any court or
governmental instrumentality of any nature by which Buyer is
bound.
7.1.2 Buyer's Financial Condition. Buyer's
financial condition is as is represented to Seller on any
financial statements previously submitted to Seller by
Buyer.
7.2 Seller's Representations. Seller represents and
warrants to Buyer as follows:
7.2.1 Seller's Authorization. Seller is (a) duly
organized (or formed), validly existing and in good standing
under the laws of its State of organization and the State in
which the Property is located, (b) is authorized to
consummate the Transaction and fulfill all of its
obligations hereunder and under all documents contemplated
hereunder to be executed by Seller, and (c) has all
necessary power to execute and deliver this Agreement and
all documents contemplated hereunder to be executed by
Seller and to perform its obligations hereunder and
thereunder. This Agreement and all documents contemplated
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hereunder to be executed by Seller have been duly authorized
by all requisite partnership action on the part of Seller
and are the valid and legally binding obligation of Seller
enforceable in accordance with their respective terms.
Neither the execution and delivery of this Agreement and all
documents contemplated hereunder to be executed by Seller
nor the performance of the obligations of Seller hereunder
or thereunder will result in the violation of any law or any
provision of the partnership agreement of Seller or will
conflict with any order or decree of any court or
governmental instrumentality of any nature by which Seller
is bound.
7.2.2 Other Seller's Representations. To Seller's
knowledge (as such term is hereinafter defined):
(a) Except as listed in Exhibit L attached hereto
and incorporated herein by this reference,
Seller has not received any written notice of
pending litigation against Seller which
would, if determined adversely to Seller,
adversely affect the Property.
(b) Seller has not entered into any service,
supply, maintenance or utility contracts
affecting the Property which will be binding
upon Buyer after the Closing other than the
Contracts listed in Exhibit B attached
hereto.
(c) Seller has not received any written notice of
default under the terms of any of the
Contracts or Leases except as listed in
Exhibit L attached hereto.
(d) As of the date of this Agreement, the only
tenants of the Property are the tenants
listed in Exhibit H attached hereto and
incorporated herein by this reference.
(e) Except as listed in Exhibit L attached
hereto, Seller has not received any written
notice from any governmental authority of any
violation of any zoning, building, fire, or
health code, statute, ordinance, rule or
regulation applicable to the Property.
(f) The files for the Property which Seller has
delivered to Buyer for its review are, to
Seller's knowledge, the files kept in the
ordinary course of business for the operation
of the Property, except that Seller has
removed from such files Seller's Proprietary
Information.
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7.3 General Provisions.
7.3.1 No Representation As to Leases. Seller does
not represent or warrant, except as may be expressly
provided in Section 7.2 above, that any particular Lease or
Leases will be in force or effect on the Closing Date or
that the tenants will have performed their obligations
thereunder.
7.3.2 Definition of "Seller's Knowledge". All
references in this Agreement to "Seller's knowledge" or
words of similar import shall refer only to the actual
knowledge of Edward G. Kerley (the "Designated Employee")
and shall not be construed to refer to the knowledge of any
other officer, agent or employee of Seller or any affiliate
thereof or to impose or have imposed upon the Designated
Employee any duty to investigate the matters to which such
knowledge, or the absence thereof, pertains, including, but
not limited to, the contents of the files, documents and
materials made available to or disclosed to Buyer or the
contents of files maintained by the Designated Employee.
There shall be no personal liability on the part of the
Designated Employee arising out of any representations or
warranties made herein.
7.3.3 Seller's Representations Deemed Modified. To
the extent that Buyer knows or is deemed to know on or prior
to the date hereof that Seller's representations and
warranties are inaccurate, untrue or incorrect in any way,
such representations and warranties shall be deemed modified
to reflect Buyer's knowledge or deemed knowledge, as the
case may be. For purposes of this Agreement, Buyer shall be
"deemed to know" that a representation or warranty was
untrue, inaccurate or incorrect to the extent that this
Agreement, the Documents, any estoppel certificate executed
by any tenant of the Property and delivered to Buyer, or any
studies, tests, reports, or analyses prepared by or for
Buyer or any of its employees, agents, representatives or
attorneys (all of the foregoing being herein collectively
called the "Buyer's Representatives") or otherwise obtained
by Buyer or Buyer's Representatives contains information
which is inconsistent with such representation or warranty.
7.3.4 Survival; Limitation on Seller's Liability.
The representations and warranties made by Seller in
Section 7.2 shall survive the Closing and not be merged
therein for a period of one (1) year and Seller shall only
be liable to Buyer hereunder for a breach of a
representation and warranty made herein or in any of the
documents executed by Seller at the Closing with respect to
which a claim is made by Buyer against Seller on or before
the first anniversary of the date of the Closing. Anything
in this Agreement to the contrary notwithstanding, the
maximum aggregate liability of Seller for Seller's breaches
of representations and warranties herein or in any documents
executed by Seller at Closing shall be limited as set forth
in Section 9.16 hereof. Notwithstanding the foregoing,
however, if the Closing occurs, Buyer hereby expressly
waives, relinquishes and releases any right or remedy
available to it at law, in equity or under this
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Agreement to make a claim against Seller for damages that Buyer may
incur, or to rescind this Agreement and the Transaction, as
the result of any of Seller's representations or warranties
being untrue, inaccurate or incorrect if (a) Buyer knew or
is deemed to know that such representation or warranty was
untrue, inaccurate or incorrect at the time of the Closing,
or (b) Buyer's damages as a result of such representations
or warranties being untrue, inaccurate or incorrect are
reasonably estimated to aggregate less than $10,000.00.
ARTICLE 8
COVENANTS
8.1 Buyer's Covenants. Buyer hereby covenants as follows:
8.1.1 Confidentiality. Buyer acknowledges that any
information furnished to Buyer with respect to the Property
is and has been so furnished on the condition that Buyer
maintain the confidentiality thereof. Accordingly, Buyer
shall hold, and shall cause its directors, officers and
other personnel and representatives to hold, in strict
confidence, and not disclose to any other person without the
prior written consent of Seller until the Closing shall have
been consummated, any of the information in respect of the
Property delivered to or for the benefit of Buyer whether by
agents, consultants, employees or representatives of Buyer
or by Seller or any of its agents, representatives or
employees, including, but not limited to, any information
obtained by Buyer or any of Buyer's Representatives in
connection with any studies, inspections, testings or
analyses conducted by Buyer as part of its Due Diligence.
In the event the Closing does not occur and this Agreement
is terminated, Buyer shall promptly return to Seller all
copies of documents containing any of such information
without retaining any copy thereof or extract therefrom.
Notwithstanding anything to the contrary hereinabove set
forth, Buyer may disclose such information (i) on a need-to-
know basis to its employees or members of professional firms
serving it, and (ii) as any governmental agency may require
in order to comply with applicable laws or regulations.
The provisions of this Subsection 8.1.1 shall survive the
Closing (and not be merged therein) or earlier termination
of this Agreement.
8.1.2 Buyer's Indemnity; Delivery of Reports.
Buyer hereby agrees to indemnify, defend, and hold Seller,
each of the Seller Parties and the Property free and
harmless from and against any and all costs, loss, damages
and expenses, of any kind or nature whatsoever (including
attorneys fees and costs), arising out of or resulting from
the entry and/or the conduct of activities upon the Property
by Buyer, its agents, contractors and/or subcontractors in
connection with the inspections, examinations, testings and
investigations of the Property conducted at any time prior
to the Closing,
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which indemnity shall survive the Closing
(and not be merged therein) or any earlier termination of
this Agreement. Buyer shall deliver promptly to Seller
copies of all third party reports commissioned by Buyer
evidencing the results of tests, studies or inspections of
the Property.
8.2 Mutual Covenants.
8.2.1 Publicity. Seller and Buyer each hereby
covenant that after the Closing, any Release issued by
either Seller or Buyer shall be subject to the review and
approval of both parties (which approval shall not be
unreasonably withheld). If either Seller or Buyer is
required by law to issue a Release, such party shall, at
least two (2) business days prior to the issuance of the
same, deliver a copy of the proposed Release to the other
party for its review.
8.2.2 Broker. Seller and Buyer expressly
acknowledge that Broker has acted as the exclusive broker
with respect to the Transaction and with respect to this
Agreement, and that Seller shall pay any brokerage
commission due to Broker in accordance with the separate
agreement between Seller and Broker. Seller and Buyer each
represents and warrants to the other that it has not dealt
with any other broker in the Transaction and each agrees to
hold harmless the other and indemnify the other from and
against any and all damages, costs or expenses (including,
but not limited to, reasonable attorneys' fees and
disbursements) suffered by the indemnified party as a result
of acts of the indemnifying party that would constitute a
breach of its representation and warranty in this section.
8.2.3 Tax Refunds and Credits. All real estate and
personal property tax refunds and credits with respect to
the Property shall be apportioned between Buyer and Seller
as follows:
(a) with respect to any refunds or credits
attributable to real estate and personal
property taxes due and payable in the
calendar year in which the Closing occurs
(regardless of the year for which such taxes
are assessed), such refunds and credits shall
be apportioned between Buyer and Seller in
proportion to the number of days in such
calendar year that each party owned the
Property (with title to the Property being
deemed to have passed as of 12:01 a.m. on the
Closing Date);
(b) with respect to any refunds or credits
attributable to real estate and personal
property taxes due and payable during any
period prior to the calendar year in which
the Closing occurs (regardless of the
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year for which such taxes are assessed), Seller
shall be entitled to the entire refunds and
credits; and
(c) with respect to any refunds or credits
attributable to real estate and personal
property taxes due and payable during any
period after the calendar year in which the
Closing occurs (regardless of the year for
which such taxes are assessed), Buyer shall
be entitled to the entire refunds and
credits.
8.2.4 Survival. The provisions of this Section 8.2
shall survive the Closing (and not be merged therein) or
earlier termination of this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 Buyer's Assignment. Buyer shall not assign this
Agreement or its rights hereunder to any individual or entity
without the prior written consent of Seller, which consent
Seller may grant or withhold in its sole discretion, and any
such assignment shall be null and void, except that Buyer may
assign this Agreement to any subsidiary of Norwest Corporation
without the prior written consent of Seller.
9.2 Designation Agreement. Section 6045(e) of the United
States Internal Revenue Code and the regulations promulgated
thereunder (herein collectively called the "Reporting
Requirements") require an information return to be made to the
United States Internal Revenue Service, and a statement to be
furnished to Seller, in connection with the Transaction. Escrow
Agent ("Agent") is either (i) the person responsible for closing
the Transaction (as described in the Reporting Requirements) or
(ii) the disbursing title or escrow company that is most
significant in terms of gross proceeds disbursed in connection
with the Transaction (as described in the Reporting
Requirements). Accordingly:
(a) Agent is hereby designated as the "Reporting
Person" (as defined in the Reporting Requirements) for the
Transaction. Agent shall perform all duties that are
required by the Reporting Requirements to be performed by
the Reporting Person for the Transaction.
(b) Seller and Buyer shall furnish to Agent, in a
timely manner, any information requested by Agent and
necessary for Agent to perform its duties as Reporting
Person for the Transaction.
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(c) Agent hereby requests Seller to furnish to Agent
Seller's correct taxpayer identification number. Seller
acknowledges that any failure by Seller to provide Agent
with Seller's correct taxpayer identification number may
subject Seller to civil or criminal penalties imposed by
law. Accordingly, Seller hereby certifies to Agent, under
penalties of perjury, that Seller's correct taxpayer
identification number is 22-1211670.
(d) Each of the parties hereto shall retain this
Agreement for a period of four (4) years following the
calendar year during which Closing occurs.
9.3 Survival/Merger. Except for the provisions of this
Agreement which are explicitly stated to survive the Closing,
(a) none of the terms of this Agreement shall survive the
Closing, and (b) the delivery of the Deed and any other
documents and instruments by Seller and the acceptance thereof
by Buyer shall effect a merger, and be deemed the full
performance and discharge of every obligation on the part of
Buyer and Seller to be performed hereunder.
9.4 Integration; Waiver. This Agreement, together with the
Schedules and Exhibits hereto, embodies and constitutes the
entire understanding between the parties with respect to the
Transaction and all prior agreements, understandings,
representations and statements, oral or written, are merged into
this Agreement. Neither this Agreement nor any provision hereof
may be waived, modified, amended, discharged or terminated
except by an instrument signed by the party against whom the
enforcement of such waiver, modification, amendment, discharge
or termination is sought, and then only to the extent set forth
in such instrument. No waiver by either party hereto of any
failure or refusal by the other party to comply with its
obligations hereunder shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.
9.5 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the law of the State in which
the Property is located except to the extent its conflict of law
principles would direct the application of the law of a
different state or forum.
9.6 Captions Not Binding; Schedules and Exhibits. The
captions in this Agreement are inserted for reference only and
in no way define, describe or limit the scope or intent of this
Agreement or of any of the provisions hereof. All Schedules and
Exhibits attached hereto shall be incorporated by reference as
if set out herein in full.
9.7 Binding Effect. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
9.8 Severability. If any term or provision of this
Agreement or the application thereof to any persons or
circumstances shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement or the application of such term
or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected
thereby, and each
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term and provision of this Agreement shall be
valid and enforced to the fullest extent permitted by law.
9.9 Notices. Any notice, request, demand, consent,
approval and other communications under this Agreement shall be
in writing, and shall be deemed duly given or made at the time
and on the date when personally delivered as shown on a receipt
therefor (which shall include delivery by a nationally
recognized overnight delivery service) or three (3) business
days after being mailed by prepaid registered or certified mail,
return receipt requested, to the address for each party set
forth below. Any party, by written notice to the other in the
manner herein provided, may designate an address different from
that set forth below.
IF TO BUYER:
c/o Norwest Corporation Law Division
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: David Nelson
IF TO SELLER:
Prudential Acquisition Fund I, L.P.
c/o The Prudential Insurance Company of America
130 East Randolph Street
Chicago, Illinois 60601
Attention: Edward G. Kerley
COPY TO:
The Prudential Insurance Company of America
51 JFK Parkway
Short Hills, New Jersey 07078
Attention: Regional Counsel
9.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and all of
which counterparts taken together shall constitute one and the
same agreement.
9.11 No Recordation. Seller and Buyer each agrees that
neither this Agreement nor any memorandum or notice hereof shall
be recorded and Buyer agrees (a) not to file any notice of
pendency or other instrument (other than a judgment) against the
Property or any portion thereof in connection herewith and (b)
to indemnify Seller against all costs, expenses and
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damages, including, without limitation, reasonable attorneys' fees and
disbursements, incurred by Seller by reason of the filing by
Buyer of such notice of pendency or other instrument.
9.12 Additional Agreements; Further Assurances. Subject to
the terms and conditions herein provided, each of the parties
hereto shall execute and deliver such documents as the other
party shall reasonably request in order to consummate and make
effective the Transaction; provided, however, that the execution
and delivery of such documents by such party shall not result
in any additional liability or cost to such party.
9.13 Construction. The parties acknowledge that each party
and its 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
amendment, Schedule or Exhibit hereto.
9.14 ERISA. To satisfy compliance with ERISA, Buyer
represents and warrants to Seller that:
(a) Neither Buyer nor any of its affiliates (within
the meaning of Part V(c) of Prohibited Transaction Exemption
84-14 granted by the U.S. Department of Labor ("PTE 84-14")
has, or during the immediately preceding year has exercised,
the authority to appoint or terminate Seller as investment
manager of any assets of the employee benefit plans whose
assets are held by Seller or to negotiate the terms of any
management agreement with Seller on behalf of any such plan;
(b) The Transaction is not specifically excluded by
Part I(b) of PTE 84-14;
(c) Buyer is not a related party of Seller (as defined
in Part V(h) of PTE 84-14); and
(d) The terms of the Transaction have been negotiated
and determined at arm's length, as such terms would be
negotiated and determined by unrelated parties.
Buyer hereby agrees to execute such documents or
provide such information as Seller may require in connection
with the Transaction or to otherwise assure Seller that: (i)
this is not a prohibited Transaction under ERISA, (ii) that
the Transaction is otherwise in full compliance with ERISA
and (iii) that Seller is not in violation of ERISA by
compliance with this Agreement and by closing the
Transaction. Seller shall not be obligated to consummate
the Transaction unless and until the Transaction complies
with ERISA and Seller is satisfied that the Transaction
complies in all respects with ERISA. The obligations of
Buyer under this section shall survive the Closing and shall
not be merged therein.
22
<PAGE>
9.15 Business Day. As used herein, the term "business day"
shall mean any day other than a Saturday, Sunday, or any Federal
or State of Minnesota holiday.
9.16 Seller's Maximum Aggregate Liability. Notwithstanding
any provision to the contrary contained in this Agreement or any
documents executed by Seller pursuant hereto or in connection
herewith, the maximum aggregate liability of Seller, and the
maximum aggregate amount which may be awarded to and collected
by Buyer, under this Agreement (including, without limitation,
the breach of any representations and warranties contained
herein) and any and all documents executed pursuant hereto or
in connection herewith, for which a claim is timely made by
Buyer shall not exceed One Hundred Thousand Dollars
($100,000.00). The provisions of this section shall survive the
Closing and shall not be merged therein.
IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be duly executed on its behalf on the day and year
first above written.
PRUDENTIAL ACQUISITION FUND
I, L.P., a Delaware limited
partnership
By: Prudential Realty
Partnerships, Inc., a
Delaware corporation,
General Partner
By: /s/ Edward G. Kerley
------------------------
Edward G. Kerley,
Vice President
NORWEST BANK MINNESOTA SOUTH,
N.A., a national banking
association
By: /s/ Harold P. Richey
---------------------------
Name: Harold P. Richey
----------------------
Its: Senior Vice President
-----------------------
Date: October 18, 1996
-------------------
23
PAGE
<PAGE>
The undersigned has executed this
Agreement solely to confirm its
agreement to Section 14.2.
CHICAGO TITLE AND TRUST COMPANY
Name: /s/ Christine Schimdt
--------------------------
Its: Commercial Closer
----------------------
Date: October 18, 1996
---------------------
24
<PAGE>
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
TRACT A
The west 60 feet of the south 32 feet of Lot 9, and the west 60
feet of Lots 10, 11 and 12, all in Block 32, Original Plat
Rochester, Minnesota.
Containing 9,341 square feet.
TRACT B
Commencing at the southwest corner of Block 32, Original Plat,
Rochester, Minnesota; thence North, assumed bearing, along the
west line of said Block 32 a distance of 5.00 feet for a point
of beginning; thence continue North along said west line, 159.00
feet; thence North 89 degrees 58 minutes 30 seconds West, 30.00
feet; thence South 15.00 feet; thence North 89 degrees 58
minutes 30 seconds West, 17.50 feet; thence South, 116.28 feet;
thence South 59 degrees 42 minutes 45 seconds East, 55.01 feet
to the point of beginning.
Containing 6,632 square feet.
TRACT C
Commencing at the southwest corner of Block 32, Original Plat,
Rochester, Minnesota; thence North, assumed bearing, along the
west line of said Block 32 a distance of 164.00 feet; thence
North 89 degrees 58 minutes 30 seconds West, 30.00 feet; thence
South 15.00 feet; thence North 89 degrees 58 minutes 30 seconds
West, 17.50 feet for a point of beginning; thence continue North
89 degrees 58 minutes 30 seconds West, 47.50 feet to the east
line of Block 31, Original Plat, Rochester, Minnesota; thence
South, along the east line of said Block 31 a distance of 108.97
feet to a point 40.00 feet North of the southeast corner of said
Block 31; thence South 89 degrees 57 minutes 30 seconds East,
35.00 feet; thence South 59 degrees 42 minutes 45 seconds East,
14.47 feet; thence North, 116.28 feet to the point of beginning.
Containing 5,221 square feet.
A-1
PAGE
<PAGE>
EXHIBIT B
LIST OF TANGIBLE PERSONAL PROPERTY
B-1
PAGE
<PAGE>
EXHIBIT C
LIST OF CONTRACTS
C-1
PAGE
<PAGE>
EXHIBIT D
TITLE REPORT
D-1
PAGE
<PAGE>
EXHIBIT E
FORM OF SPECIAL WARRANTY DEED
THE STATE OF __________)
) ss. KNOW ALL MEN BY THESE PRESENTS
THAT:
COUNTY OF _____________)
PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware limited
partnership ("Grantor"), for and in consideration of the sum of
TEN AND NO/100 DOLLARS ($10.00) and other good and valuable
consideration paid in hand to Grantor by NORWEST BANK MINNESOTA
SOUTH, N.A., a national banking association ("Grantee"), whose
mailing address is Norwest Center, Sixth and Marquette,
Minneapolis, Minnesota 55479-1026, the receipt and sufficiency
of which is hereby acknowledged, has GRANTED, BARGAINED, SOLD
and CONVEYED, and by these presents does GRANT, BARGAIN, SELL
and CONVEY unto Grantee that certain tract of land located in
Rochester, Minnesota, more particularly described in Exhibit A
attached hereto and incorporated herein by this reference,
together with all buildings, improvements and fixtures located
thereon and owned by Grantor as of the date hereof and all
rights, privileges and appurtenances pertaining thereto
including all of Grantor's right, title and interest in and to
all rights-of-way, open or proposed streets, alleys, easements,
strips or gores of land adjacent thereto (herein collectively
called the "Real Property").
This conveyance is made by Grantor and accepted by Grantee
subject to the matters set forth in Exhibit B attached hereto
and incorporated herein by this reference ("Permitted
Exceptions").
TO HAVE AND TO HOLD the Real Property together with all
improvements located thereon all and singular the rights and
appurtenances thereto in anywise belonging, subject to the
Permitted Exceptions, unto Grantee, its legal representatives,
successors and assigns, and Grantor does hereby bind itself, its
legal representatives, successors and assigns, to WARRANT and
FOREVER DEFEND all and singular the Real Property unto the
Grantee, its legal representatives, successors and assigns,
against Grantor and every person whomsoever lawfully claiming
or to claim the same or any part thereof, by, through or under
Grantor, but not otherwise, subject to the Permitted Exceptions.
Grantee, by its acceptance hereof, does hereby assume and
agree to pay all ad valorem taxes pertaining to the Real
Property due and payable during the calendar year 1997 and
subsequent years, there having been a proper proration of same
between Grantor and Grantee.
Grantor certifies that Grantor does not know of any wells
on the described Real Property.
E-1
<PAGE>
EXECUTED this ______ day of ____________________, 1996, TO
BE EFFECTIVE as of the _____ day of __________________, 1996.
PRUDENTIAL ACQUISITION FUND
I, L.P., a Delaware limited
partnership
By: Prudential Realty
Partnerships, Inc., a
Delaware corporation,
General Partner
By:____________________
Edward G. Kerley,
Vice President
E-2
<PAGE>
STATE OF ____________)
) ss.
COUNTY OF __________)
This instrument was acknowledged before me on
______________________, 1996 by Edward G. Kerley, Vice President
of Prudential Realty Partnerships, Inc., a Delaware corporation,
general partner of Prudential Acquisition Fund I, L.P., a
Delaware limited partnership, on behalf of said corporation, as
general partner of said partnership.
_______________________, Notary Public
My Commission Expires:
______________________
AFTER RECORDING RETURN TO:
Norwest Bank Minnesota South, N.A.
c/o Norwest Corporation Law Division
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: David Nelson
E-3
PAGE
<PAGE>
EXHIBIT F
FORM OF BILL OF SALE
STATE OF ________ )
) ss. KNOW ALL MEN BY THESE PRESENTS
THAT:
COUNTY OF ________)
WHEREAS, by special warranty deed of even date herewith,
PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware limited
partnership ("Seller") conveyed to NORWEST BANK MINNESOTA SOUTH,
N.A., a national banking association ("Buyer"), whose mailing
address is Norwest Center, Sixth and Marquette, Minneapolis,
Minnesota 55479-1026, that certain tract of land more
particularly described in Exhibit A attached hereto and
incorporated herein by this reference, together with all
improvements located thereon ("Real Property").
WHEREAS, in connection with the above described conveyance
Seller desires to sell, transfer and convey to Buyer certain
items of tangible personal property as hereinafter described.
NOW, THEREFORE, in consideration of the receipt of TEN AND
NO/100 DOLLARS ($10.00) and other good and valuable
consideration paid in hand by Buyer to Seller, the receipt and
sufficiency of which are hereby acknowledged, Seller has
GRANTED, CONVEYED, SOLD, TRANSFERRED, SET OVER and DELIVERED and
by these presents does hereby GRANT, SELL, TRANSFER, SET OVER
and DELIVER to Buyer, its legal representatives, successors and
assigns, all of its right, title and interest in and to all
tangible personal property owned by Seller (excluding any
computer or computer equipment and software), located on the
Real Property, and used in the ownership, operation and
maintenance of the Real Property and all nonconfidential books,
records and files (excluding appraisals, budgets, marketing
information or other information in the possession or control
of Seller or Seller's property manager which Seller deems
proprietary) relating to the Real Property (herein collectively
called the "Personal Property"), to have and to hold, all and
singular, the Personal Property unto Buyer forever.
F-1
PAGE
<PAGE>
EXECUTED this _____ day of ______________________, 1996,
TO BE EFFECTIVE as of the _____ day of ___________________,
1996.
SELLER:
PRUDENTIAL ACQUISITION FUND
I, L.P., a Delaware limited
partnership
By: Prudential Realty
Partnerships, Inc., a
Delaware corporation,
General Partner
By:____________________
Edward G. Kerley,
Vice President
F-2
PAGE
<PAGE>
STATE OF ___________)
) ss.
COUNTY OF _________)
This instrument was acknowledged before me on
_______________________, 1996 by Edward G. Kerley, Vice
President of Prudential Realty Partnerships, Inc., a Delaware
corporation, general partner of Prudential Acquisition Fund I,
L.P., a Delaware limited partnership, on behalf of said
corporation, as general partner of said partnership.
_______________________, Notary
Public
My Commission Expires:
______________________
<PAGE>
F-3
<PAGE> EXHIBIT G
FORM OF ASSIGNMENT OF LEASES
THIS ASSIGNMENT OF LEASES ("Assignment"), is made by and
between PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware limited
partnership ("Assignor"), and NORWEST BANK MINNESOTA SOUTH,
N.A., a national banking association ("Assignee").
W I T N E S S E T H:
WHEREAS, by Purchase and Sale Agreement ("Sale Agreement")
dated as of October ___, 1996, by and between Assignor and
Assignee, Assignor agreed to sell to Assignee certain real
property, and the improvements located thereon ("Property") as
more particularly described in the Sale Agreement; and
WHEREAS, the Sale Agreement provides, inter alia, that
Assignor shall assign to Assignee certain leases and Assignee
shall assume all of the obligations of Seller under such leases
from and after the date of such assignment, and that Assignor
and Assignee shall enter into this Assignment.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto hereby
agree as follows:
1. Assignment of Tenant Leases. Assignor hereby assigns,
sets over and transfers to Assignee all of its right, title and
interest in, to and under those certain tenant space leases set
forth in Exhibit A attached hereto and incorporated herein by
this reference ("Leases"). Assignee hereby assumes all
liabilities and obligations of Assignor under the Leases and
hereby agrees to indemnify and hold harmless Assignor from all
of the liabilities and obligations of Assignor under the Leases
whether arising or accruing before or after the date hereof.
2. Miscellaneous. This Assignment and the obligations
of the parties hereunder shall survive the closing of the
transaction referred to in the Sale Agreement and shall not be
merged therein, shall be binding upon and inure to the benefit
of the parties hereto, their respective legal representatives,
successors and assigns, shall be governed by and construed in
accordance with the laws of the State of Minnesota applicable
to agreements made and to be wholly performed within said State
and may not be modified or amended in any manner other than by
a written agreement signed by the party to be charged therewith.
G-1
<PAGE>
3. This Assignment may be executed in counterparts, each
of which shall be an original and all of which counterparts
taken together shall constitute one and the same agreement.
EXECUTED this _____ day of _____________, 1996, TO BE
EFFECTIVE as of the _____ day of ____________, 1996.
ASSIGNOR:
PRUDENTIAL ACQUISITION FUND
I, L.P., a Delaware limited
partnership
By: Prudential Realty
Partnerships, Inc., a
Delaware corporation,
General Partner
By:____________________
Edward G. Kerley,
Vice President
ASSIGNEE:
NORWEST BANK MINNESOTA SOUTH,
N.A., a national banking
association
By:_________________________
Name:____________________
Title:___________________
G-2
<PAGE>
<PAGE>
EXHIBIT H
LIST OF TENANTS
H-1
<PAGE>
EXHIBIT I
FORM OF ASSIGNMENT OF CONTRACTS
THIS ASSIGNMENT OF CONTRACTS ("Assignment"), is made by and
between PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware limited
partnership ("Assignor"), and NORWEST BANK MINNESOTA SOUTH,
N.A., a national banking association ("Assignee").
W I T N E S S E T H:
WHEREAS, by Purchase and Sale Agreement ("Sale Agreement")
dated as of October __, 1996, by and between Assignor and
Assignee, Assignor agreed to sell to Assignee certain real
property, and the improvements located thereon ("Property") as
more particularly described in the Sale Agreement; and
WHEREAS, the Sale Agreement provides, inter alia, that
Assignor shall assign to Assignee rights to certain intangible
property and that Assignee shall assume all of the obligations
of Assignor under such intangible property from and after the
date of such assignment, and that Assignor and Assignee shall
enter into this Assignment.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto hereby
agree as follows:
1. Assignment of Equipment Leases and Commission
Agreements. Assignor hereby assigns, sets over and transfers
to Assignee all of its right, title and interest in, to and
under (a) if and to the extent assignable by Assignor, all
service, supply, maintenance, utility and commission agreements,
and all equipment leases described in Exhibit A attached hereto
and incorporated herein by this reference (herein collectively
called the "Contracts"), and (b) if and to the extent
assignable, all licenses, permits and other written
authorizations necessary for the use, operation or ownership of
the Property and in Assignor's possession or control (herein
collectively called the "Licenses and Permits"). Assignee
hereby assumes all obligations under the Contracts and the
Licenses and Permits whether arising or accruing before or after
the date hereof except for liabilities and obligations under the
Contracts that arise or accrue as a result of claims made or
causes of actions brought by a party thereto alleging a default
or breach by Assignor under the Contracts.
2. Assignment of Warranties and Guarantees. Assignor
hereby assigns, set over and transfers to Assignee all of its
right, title and interest in, to and under those certain
I-1
<PAGE>
warranties and guarantees set forth in Exhibit B attached hereto
and incorporated herein by this reference, to the extent
assignable.
3. Indemnity. Assignee agrees to indemnify, defend and
hold harmless Assignor from any loss, cost, claim, liability,
expense or demand of whatever nature under the Contracts and the
Licenses and Permits, whether arising or accruing before or
after the date hereof except for liabilities and obligations
under the Contracts that arise or accrue as a result of claims
made or causes of actions brought by a party thereto alleging
a default or breach by Assignor under the Contracts.
4. Miscellaneous. This Assignment and the obligations
of the parties hereunder shall survive the closing of the
transaction referred to in the Sale Agreement and shall not be
merged therein, shall be binding upon and inure to the benefit
of the parties hereto, their respective legal representatives,
successors and assigns, shall be governed by and construed in
accordance with the laws of the State of Minnesota, applicable
to agreements made and to be wholly performed within said State
and may not be modified or amended in any manner other than by
a written agreement signed by the party to be charged therewith.
5. Counterparts. This Assignment may be executed in
counterparts, each of which shall be an original and all of
which counterparts taken together shall constitute one and the
same agreement.
I-2
PAGE
<PAGE>
EXECUTED this _____ day of _____________, 1996, TO BE
EFFECTIVE as of the _____ day of ____________, 1996.
ASSIGNOR:
PRUDENTIAL ACQUISITION FUND I, L.P.,
a Delaware limited partnership
By: Prudential Realty Partnerships,
Inc., a Delaware corporation,
General Partner
By:___________________________
Edward G. Kerley, Vice President
ASSIGNEE:
NORWEST BANK MINNESOTA SOUTH, N.A.,
a national banking association
By:________________________________
Name:__________________________
Title:________________________
I-3
PAGE
<PAGE>
EXHIBIT J
FORM OF NOTICE TO TENANTS
Date
- -----------------------------
- -----------------------------
- -----------------------------
- -----------------------------
RE: Notice of Change of Ownership of Norwest Center Building
Property Address
Rochester, Minnesota
Dear _____________:
You are hereby notified as follows:
1. That as of the date hereof, Prudential Acquisition
Fund I, L.P. has transferred, sold, assigned, and conveyed all
of its interest in and to the above-described property, (the
"Property") to Norwest Bank Minnesota South, N.A. (the "New
Owner").
2. Future notices and rental payments with respect to
your lease premises at the Property should be made to the New
Owner in accordance with your Lease terms at the following
address:
Norwest Bank Minnesota South, N.A.
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
J-1
<PAGE>
3. Your security deposit in the amount of $_________ has
been transferred to the New Owner and as such the New Owner
shall be responsible for holding the same in accordance with the
terms of your lease.
Sincerely,
PRUDENTIAL ACQUISITION FUND
I, L.P., a Delaware limited
partnership
By: Prudential Realty
Partnerships, Inc., a
Delaware corporation,
General Partner
By:______________________
Edward G. Kerley,
Vice President
J-2
<PAGE>
<PAGE>
EXHIBIT K
FORM OF SELLER'S FIRPTA AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that a
transferee of a United States real property interest must
withhold tax if the transferor is a foreign person. To inform
the transferee that withholding of tax is not required upon the
disposition of a United States real property interest by
PRUDENTIAL ACQUISITION FUND I, L.P., a Delaware limited
partnership ("Prudential"), the undersigned hereby certifies the
following on behalf of Prudential:
1. Prudential is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms
are defined in the Internal Revenue Code and Income Tax
Regulations); and
2. Prudential's U.S. employer tax identification number
is ___________; and
3. Prudential's office address is 751 Broad Street,
Newark, New Jersey, 07102-3777.
Prudential understands that this certification may be
disclosed to the Internal Revenue Service by transferee and that
any false statement contained herein could be punished by fine,
imprisonment, or both.
The undersigned officer of Prudential declares that he has
examined this certification and to the best of his knowledge and
belief it is true, correct and complete, and he further declares
that he has authority to sign this document on behalf of
Prudential.
Dated: ___________________, 1996.
PRUDENTIAL ACQUISITION FUND
I, L.P., a Delaware limited
partnership
By: Prudential Realty
Partnerships, Inc., a
Delaware corporation,
General Partner
By:______________________
Edward G. Kerley
Vice President
K-1
<PAGE>
STATE OF _____________)
) ss.
COUNTY OF ____________)
This instrument was acknowledged before me on
___________________, 1996 by Edward G. Kerley, Vice President
of Prudential Realty Partnerships, Inc., a Delaware corporation,
general partner of Prudential Acquisition Fund I, L.P., a
Delaware limited partnership, on behalf of said corporation, as
general partner of said partnership.
Notary Public, State of _____________
MY COMMISSION EXPIRES:
______________________
K-2
PAGE
<PAGE>
EXHIBIT L
LITIGATION NOTICES, CONTRACT DEFAULTS
AND GOVERNMENTAL VIOLATIONS
<PAGE>
L-1
<PAGE>
EXHIBIT M
PERMITTED EXCEPTIONS
1. Taxes or special assessments which are not shown as
existing liens by the public records.
2. General and special taxes and assessments which are not
yet due and payable.
3. Rights or claims of tenants in possession under unrecorded
leases.
4. Interest of Kahler, Inc. in the subject property pursuant
to a Quit Claim Deed filed July 9, 1981 in Book 379, Page
968.
5. Easement in favor of the City of Rochester for public
right-of-way purposes over that part of the subject
property described in a Quit Claim Deed dated July 9,
1981, filed July 9, 1981 in Book 379, Page 967.
6. Easement in favor of the City of Rochester for public
utilities over that portion of the subject property
described in a Public Utility Easement dated July 9, 1981,
filed July 9, 1981 in Book L-4, Page 526.
7. Terms and conditions of an Agreement of Tenants in Common
dated July 9, 1981, filed July 9, 1981 in Book L-4, Page
527.
8. Terms and conditions of a Tunnel Agreement as reflected by
a Memorandum of Tunnel Agreement dated July 9, 1981, filed
July 9, 1981 in Book L-4, Page 528.
9. Terms and conditions of an Entryway Agreement as reflected
by a Memorandum of Entryway Agreement dated July 9, 1981,
filed July 9, 1981 in Book L-4, Page 529.
10. Covenants, conditions, restrictions and easements
contained and described in a Declaration of Easements,
Covenants and Agreement dated July 9, 1981, filed July 9,
1981 in Book L-4, Page 530. This Declaration was
subsequently amended by an Amendment to Declaration of
Easements, Covenants and Agreements dated August 29, 1983,
filed January 23, 1981 in Book Q-4, Page 232.
11. Terms and conditions of a Lease Agreement as evidenced by
a Memorandum of Lease Agreement dated July 9, 1981, filed
July 9,1981 in Book L-4, Page 531 by and between
Normandale Properties, Inc., landlord, and Northwestern
National Bank of Rochester, tenant. This lease was
subsequently amended by a First Amendment to Lease
Agreement as evidenced by a Memorandum of First Amendment
to Lease Agreement dated May 3, 1982, filed May 10, 1982
in Book M-4, Page 933.
M-1
<PAGE>
12. The interests of the City of Rochester in that portion of
the subject property described in a Final Certificate
dated October 26, 1987, filed November 25, 1987 in Book
403, Page 631.
13. Terms and conditions of an Assessment Agreement dated July
9, 1981, filed July 9, 1981 in Book L-4, Page 532.
M-2
