PURCHASE AND SALE AGREEMENT
Between
CORPORATE REALTY INCOME FUND I, L.P.
(Seller)
and
INVESCO REALTY ADVISORS
(Purchaser)
Property: 5775 Flatiron Parkway
Boulder, Colorado
Dated as of May ___, 2000
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is made as of the ____ day
of May 2000 (the "Effective Date") by and between CORPORATE REALTY INCOME FUND
I, L.P., a Delaware limited partnership ("Seller") and INVESCO REALTY ADVISORS,
a division of Invesco Realty Advisors, Inc. ("Purchaser").
A. Seller owns in fee simple a certain parcel of real property located in
the City of Boulder, County of Boulder, State of Colorado at 5775 Flatiron
Parkway (hereinafter referred to as the "Real Property").
B. Subject to the terms and conditions herein, Seller desires to sell and
Purchaser desires to purchase the Real Property and certain items of personal
property.
NOW THEREFORE, in consideration of the mutual covenants contained herein,
Seller and Purchaser agree as follows:
1. PURCHASE AND SALE
1.1 Property.
Subject to the terms and conditions hereof, Seller hereby agrees to sell,
convey and assign to Purchaser, and Purchaser hereby agrees to purchase and
accept from Seller on the Closing Date (as defined in Section 4.1 below) the
following (collectively, the "Property"):
(a) the Real Property, which is legally described on Exhibit A attached
hereto, together with any and all rights, privileges and easements
appurtenant thereto, which are owned by Seller;
(b) all buildings located on the Real Property, and all other improvements
and fixtures located on the Real Property, if any, and any apparatus,
equipment and appliances incorporated therein and used in connection
with the operation and occupancy thereof, such as heating and air
conditioning systems and facilities used to provide any utility
service, ventilation, or other services thereto, but excluding
fixtures and property owned by tenants (all of which are collectively
referred to as the "Improvements");
(c) all right, title and interest of Seller in and to any personal
property located on and used in connection with the Real Property and
Improvements, including without limitation the personal property
listed on Schedule 1 (the "Personal Property");
(d) all assignable or transferable intangible property, including, but not
limited to: (i) all guaranties and warranties (including guaranties
and warranties pertaining to construction of the Improvements); (ii)
all air
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rights, excess floor area rights and other development rights relating
or appurtenant to the Real Property or the Improvements; (iii) all
rights to obtain utility service in connection with the Improvements
and the Real Property; (iv) all assignable licenses and other
governmental permits and permissions relating to the Real Property,
the Improvements or the operation thereof, including without
limitation the licenses and permits listed on Schedule 2 (the
"Permits"); and (v) all assignable contracts and contract rights
relating to the Real Property or the Improvements, including the
contracts listed on Exhibit H (the "Service Contracts"), which are
approved by Purchaser in accordance with the terms of this Agreement
(all of the foregoing are hereinafter collectively referred to as the
"Intangible Property"); and
(e) All right, title and interest of Seller in and to the leases and other
occupancy agreements covering all or any portion of the Real Property
or the Improvements to the extent they are in effect on the date of
Closing (collectively the "Leases"), together with all current rents
and other sums due thereunder (the "Rents") and any and all security
deposits in connection therewith (the "Security Deposits"). The
Leases, in each case together with the current monthly rent and
Security Deposit relative thereto, are set forth on Exhibit L (the
"Rent Roll").
2. PURCHASE PRICE
Purchaser shall pay as the total Purchase Price for the Property ("Purchase
Price") the amount of Thirteen Million One Hundred Thousand and no/100ths U.S.
Dollars ($13,100,000.00), which shall be payable as follows:
2.1 Deposit.
Within two (2) Business Days (as hereinafter defined) after the Out Date
(as hereinafter defined), Purchaser shall cause One Hundred Fifty Thousand and
No/100ths U.S. Dollars ($150,000.00) (the "Downpayment") to be delivered by wire
transfer to Escrow Holder (as hereinafter defined) to be held by the Escrow
Holder in accordance with the terms and conditions of this Agreement. The
Downpayment shall be held in an interest bearing account or instrument, as
approved by Purchaser, as an earnest money deposit toward the Purchase Price.
Purchaser will provide Escrow Holder with its Taxpayer Identification Number and
such additional information and documents as may be required by Escrow Holder.
The Escrow Holder shall be subject to the following terms and conditions
and no others:
(a) The duties and obligations of the Escrow Holder shall be determined
solely by the express provisions of this Agreement and no implied
duties and obligations shall be read into this Agreement against the
Escrow Holder.
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(b) The Escrow Holder shall be entitled to rely, and shall not be subject
to any liability in acting in reliance, upon any joint writing
furnished to the Escrow Holder by Purchaser and Seller and shall be
entitled to treat as genuine the document it purports to be, including
any such letter, paper or other document furnished to the Escrow
Holder in connection with this Agreement.
(c) In the event of any disagreement between Purchaser and Seller
resulting in adverse claims and demands being made in connection with
or against the funds held in the escrow created hereby, the Escrow
Holder shall refuse to comply with the claims and demands of either
party until such disagreement is finally resolved, either by Purchaser
and Seller, as evidenced by a joint writing reflective thereof
delivered to the Escrow Holder pursuant to subparagraph (b) above, or
by a court of competent jurisdiction (in proceedings which the Escrow
Holder or any other party may initiate, it being understood and agreed
by Purchaser and Seller that the Escrow Holder has the authority (but
no obligation) to initiate such proceedings).
(d) Subject to the provisions of Section 11.13 below and Seller's right to
retain the Deposit as liquidated damages pursuant to Section 12 below,
in the event of a termination of this Agreement by either Seller or
Purchaser as permitted by the terms of this Agreement, the Escrow
Holder is authorized and directed by Seller and Purchaser to deliver
the Deposit (as hereinafter defined) to the party hereto entitled to
same pursuant to the terms hereof no sooner than the fifth Business
Day and no later than the tenth Business Day following receipt by the
Escrow Holder and the non-terminating party of written notice of
termination delivered in accordance with Section 10 of this Agreement
from the terminating party and receipt of evidence reasonably
satisfactory to the Escrow Holder that the non-terminating party has
in fact received written notice of such termination in accordance with
Section 10 of this Agreement, unless the non-terminating party hereto
notifies the Escrow Holder that it disputes the right of the other
party to receive the Deposit. In such event, the Escrow Holder shall
either continue to hold the Deposit or interplead the Deposit into a
court of competent jurisdiction until such dispute is resolved, as
more specifically provided in Section 2.1(c) above. All reasonable
attorney's fees and costs of the Escrow Holder incurred in connection
with such dispute or interpleader shall be assessed against the party
that is not awarded the Deposit, or if the Deposit is distributed in
part to both parties then in the inverse proportion of such
distribution.
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2.2 Interest.
Except as provided in Section 2.1 above and in other provisions of this
Agreement where Seller shall be entitled to retain the Downpayment and all
interest earned thereon (collectively, the "Deposit") as liquidated damages
pursuant to Section 12 below, interest on the Downpayment shall accrue to the
benefit of Purchaser. At Closing, Purchaser may elect to apply the Deposit to
the Purchase Price or to have that amount released to Purchaser upon tender of
the Purchase Price.
2.3 Cash at Closing.
The Purchase Price, adjusted for the Deposit (if applied by Purchaser),
plus any other amounts required to be paid by Purchaser at Closing, and plus or
minus any prorations and credits as provided for in this Agreement, in the form
of immediately available U.S. funds, shall be paid by Purchaser into escrow with
the Escrow Holder, as defined in Section 4.1, in time to allow the Closing to
occur on the Closing Date (as hereinafter defined) by wire transfer as more
particularly set forth in Section 4.3 below.
3. TITLE
3.1 Title Commitment; Survey.
Purchaser acknowledges and agrees that Seller has furnished to Purchaser
the following:
(a) A commitment for title insurance dated as of March 30, 2000 (the
"Title Commitment"), issued by Chicago Title Insurance Company,
covering the Real Property and Improvements.
(b) A copy of all recorded documents referred to in the Title Commitment
as exceptions to title to the Property (the "Title Documents").
(c) A copy of the existing ALTA survey of the Real Property and
Improvements (the "Survey").
3.2 Review of Title
Promptly after the Effective Date, Purchaser, at Seller's sole cost and
expense, shall procure a commitment for title insurance (the "Updated Title
Commitment") issued by Commonwealth Land Title Insurance Company, 1700 Pacific
Avenue, Suite 4740, Dallas, Texas 75201 (the "Title Company") agreeing to issue
the Title Policy, as defined in Section 3.4 below, covering the Real Property
and Improvements, and within three (3) days after the Effective Date, Seller
shall, at Seller's sole cost and expense, deliver to Purchaser an update of the
Survey prepared in accordance with the survey requirements attached hereto as
Exhibit M (the "Updated Survey"). Purchaser shall have until 5:00 p.m. Eastern
Standard Time on the date that is twenty-one (21) days after the later to occur
of (i) the date of Purchaser's receipt of the Updated Title Commitment (which
date shall be deemed to be not later than five (5) days after the Effective
Date) and (ii) the date
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of Purchaser's receipt of the Updated Survey (the "Title Approval Date") to
review the Updated Title Commitment, Title Documents and the Updated Survey
(collectively, "Title Evidence") and render any objections as to matters of
title in writing to Seller. Any such matters of title not timely objected to by
Purchaser shall be deemed waived and Purchaser shall be deemed to agree to
acquire the Property subject to such exceptions (collectively, "Permitted
Exceptions") hereunder. Seller, in its sole and absolute discretion, may elect
to remove or satisfy any such objections, provided that Seller shall have ten
(10) days from the date of such objections to have such objections that Seller
so elects removed or satisfied. Subject to Purchaser's approval, which may be
granted in Purchaser's sole and absolute discretion, Seller may cause the Title
Company to issue a title endorsement or "insure over" any objection (each, a
"Seller Endorsement") and it shall have the same effect as if such objection was
cured by Seller. If Seller shall fail to have such objections removed, insured
over or satisfied within such time or during such time delivers a written notice
to Purchaser that notwithstanding Seller's reasonable efforts, such objections
may not be cured, then, Purchaser may, by written notice to Seller within five
(5) days after the expiration of such time or the delivery of such written
notice, either (a) terminate this Agreement without any liability on its part,
Purchaser shall return all documents, including all Due Diligence Documents (as
hereinafter defined in Section 3.6(c)), received from Seller or Seller's agents
to Seller and neither party shall have any further rights or obligations
hereunder (except as set forth in Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and
11.12 hereof) or (b) proceed to Closing and take title subject to such
objections, in which case such non-cured objections shall become Permitted
Exceptions hereunder. After the Title Approval Date but prior to the Closing
Date, Purchaser shall also have the right to disapprove in writing any
additional item not previously set forth in the Title Commitment that Title
Company intends to show as an exception to title in the Title Policy. Any such
additional item not specifically disapproved in writing delivered within three
(3) Business Days following Purchaser's receipt of written notice of such
additional item shall be deemed approved. Seller shall have until Closing to
remove or cause Title Company to insure over (subject to Purchaser's approval,
which may be granted in Purchaser's sole and absolute discretion) any such
disapproved item at Seller's own expense. Seller may elect to (a) extend the
Closing until the day after the date upon which Seller is able to remove or
cause Title Company to insure over (subject to Purchaser's approval, which may
be granted in Purchaser's sole and absolute discretion) any such disapproved
item (but in no event shall such extension exceed ten (10) Business Days after
the Closing Date), or (b) terminate this Agreement, unless Purchaser elects to
take title subject to such disapproved item, and, if Seller elects to terminate
this Agreement, Purchaser shall return all documents, including all Due
Diligence Documents, received from Seller or Seller's agents, to Seller and, in
the absence of a default by Purchaser, the Deposit shall be returned to
Purchaser and, thereupon, neither Seller nor Purchaser shall have any further
obligation hereunder (except as set forth under Sections 3.5(a) and (e), 3.6(b),
9.1, 11.2 and 11.12 hereof). Notwithstanding anything in this Agreement to the
contrary, and notwithstanding any approval or consent given by Purchaser
hereunder, Seller shall cause all mortgages and deeds of trust encumbering
Seller's interest in the Real Property and all mechanic's liens filed against
the Property relating to work performed on the Property and contracted for by
Seller, to be released and reconveyed from the Real Property, or, with respect
to such
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mechanic's liens, otherwise bonded (subject to Purchaser's reasonable approval),
on or prior to the Closing and shall cause the Title Company to insure title to
the Real Property as vested in Purchaser without any exception for such matters.
3.3 Vesting of Title.
At Closing, Seller shall convey the Real Property and Improvements to
Purchaser by special warranty deed (as further described in Section 4.2(a)(i)
below), subject to the Permitted Exceptions, and shall convey Seller's interest
in the Personal Property to Purchaser by bill of sale (as further described in
Section 4.2(a)(ii) below).
3.4 Title Insurance.
At Closing, the Title Company shall issue to Purchaser an extended ALTA
Owner's Policy of Title Insurance in the amount of the Purchase Price insuring
that title to the Real Property and Improvements is vested in Purchaser subject
only to the Permitted Exceptions and with such endorsements as Purchaser shall
reasonably specify (the "Title Policy").
3.5 Inspection Period.
Purchaser shall have until 5:00 p.m. Central Standard Time on June 23,
2000, (the "Inspection Period") to inspect the Property and the Due Diligence
Documents, and to perform such other due diligence with respect to the Property
as Purchaser reasonably deems necessary, subject to the rights of tenants in
possession of the Property. Purchaser agrees to immediately commence its
inspection efforts and will pursue same diligently, and will advise Purchaser of
its findings as soon as practicable. Purchaser may, on or before the final day
of the Inspection Period (the "Out Date"), in its sole discretion, advise Seller
and Escrow Holder, in writing, of its election to proceed with the purchase of
the Property. If Purchaser, in its sole discretion, decides that it will not
proceed with the purchase of the Property, Purchaser shall on or before the Out
Date give notice to Seller and Escrow Holder that it is terminating this
Agreement. If Purchaser fails to notify Seller and Escrow Holder of its decision
on or before the Out Date, Purchaser shall be deemed to have notified Seller and
Escrow Holder on the Out Date that Purchaser is terminating this Agreement. Upon
any such termination, all documents, including all Due Diligence Documents,
received from Seller or Seller's agents, shall be returned by Purchaser to
Seller, and, subject to Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and 11.12
hereof, neither party shall have any further rights or obligations hereunder. In
the event this Agreement is not so terminated, the Deposit shall be delivered as
hereinabove provided and shall become non-refundable (subject to the other terms
and conditions of this Agreement) and Seller and Purchaser shall proceed to
Closing in accordance with the terms and conditions hereof and the Inspection
Period termination rights shall be deemed waived by Purchaser. Purchaser shall
not undertake any soil borings, ground water testing or other "Phase 2"
investigative procedures without first having obtained the prior written consent
of Seller, which consent shall not be unreasonably withheld or delayed. In
connection with Purchaser's inspection of the Property, Purchaser agrees that:
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(a) All inspection fees, engineering fees, or other expenses of any kind
incurred by Purchaser relating to the inspection of the Property will
be at Purchaser's sole cost and expense;
(b) Purchaser will give Seller reasonable advance notice of the dates of
all inspections and will schedule all tests and inspections during
normal business hours whenever feasible unless otherwise requested by
Seller;
(c) Seller will have the right to have one or more representatives of
Seller accompany Purchaser and Purchaser's representatives, agents or
designees while they are on the Property (provided that the exercise
of such right shall not unreasonably delay Purchaser's inspections);
(d) Any entry by Purchaser, its representatives, agents or designees will
not unreasonably interfere with Seller's use of the Property or with
the operations of any tenant;
(e) Purchaser will restore any damage caused to the Property by
Purchaser's entry on the Property for inspection purposes at
Purchaser's sole cost and expense if this transaction does not close;
and
(f) In making any inspection hereunder, Purchaser will treat and will
cause any representative of Purchaser to treat all information
obtained by Purchaser pursuant to the terms of this Agreement as
confidential in accordance with Section 11.12 below.
Purchaser shall have the right to further inspect the Property as provided in
Section 3.6(b) hereafter (during normal business hours and upon notice to
Seller), including for the purpose of confirming that the Property is in the
same condition at Closing as existing at the end of the Inspection Period,
reasonable wear and tear excepted; provided, however, that such continuing right
of inspection shall in no way be deemed to extend or resurrect the Inspection
Period or constitute a condition to Closing, subject however, to the other terms
and conditions of this Agreement. For purposes of this Agreement, the term
"Business Day" shall mean a day other than any Saturday, Sunday, or day upon
which national banks in the City of Boulder, Colorado are not open for general
banking business.
The covenants of Purchaser contained in this Section 3.5(a) and (e) shall
survive the Closing Date or any earlier termination of this Agreement.
3.6 Furnishing of Information
(a) In furtherance of Purchaser's rights set forth above, Seller has
furnished to Purchaser:
(i) a current rent roll (the "Rent Roll") with respect to the
Property attached as Exhibit L, together with copies of all
Leases and amendments and/or modifications currently in effect,
together with
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a list pertaining to the status of rental payments by tenants
under the Leases and any delinquencies in connection therewith;
(ii) a copy of all Phase I Environmental Assessments of the Property
and any other environmental study or report of the Property
prepared for Seller, to the extent same are in Seller's
possession or under Seller's control;
(iii) copies of any service, maintenance and other such contracts
relating to the day-to-day operation or maintenance of the
Property listed on Schedule 3, together with any engineering
reports relative to the Property prepared by third-parties, to
the extent such engineering reports are in Seller's possession
or under Seller's control;
(iv) copies of financial statements for the Property for the last two
(2) years and year to date 2000 in the form prepared by or for
Seller in the ordinary course of business with respect to the
Property; and
(v) copies of the current tax bill for the Property and current
property tax assessment information in Seller's possession.
(b) Seller will allow Purchaser and Purchaser's agents reasonable access
to the Property during regular business hours to inspect the Property
during the Inspection Period and thereafter until the earlier of any
termination of this Agreement and the Closing Date, subject to the
terms of the Leases. Purchaser hereby indemnifies, defends and holds
Seller and the Property harmless from any and all costs, loss, damages
or expenses, of any kind or nature (including, without limitation,
mechanics' liens and reasonable attorneys' fees and expenses) arising
out of or resulting from any act or omission of Purchaser, its
employees, agents, contractors, subcontractors, and/or assigns, in
connection with any inspection, investigation and/or entry upon the
Property. Notwithstanding anything to the contrary herein, the
indemnity set forth in this Section 3.6(b) shall survive (i) any
termination of this Agreement and (ii) the Closing and shall not be
merged therein.
(c) In addition to the information to be furnished to Purchaser under
Section 3.6(a) above, Seller shall deliver to Purchaser within three
(3) Business Days after the Effective Date, true, correct and complete
copies of each of the following: (i) the Leases and lease files; (ii)
copies of financial statements for the Property for the last two (2)
years and copies of such historical information in Seller's possession
or control or the possession or control of Seller's agents regarding
operating expenses of the Property as Purchaser shall reasonably
request; (iii) the documents listed in Section 3.6(a) above; (iv)
guaranties, warranties, licenses, governmental permits (including
Certificates of Occupancy) and relevant, pertinent reports and
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agreements in the possession or under the control of Seller or its
agents pertaining to the Property, if any (i.e., engineering reports,
environmental reports, development records and as-built plans and
specifications) and Service Contracts relating to the Property; (v) a
list of all utility deposits currently maintained by Seller with
respect to the Property; and (vi) each of the items set forth on
Exhibit M attached hereto (collectively, the "Due Diligence
Documents"). Seller shall reasonably cooperate with Purchaser to
obtain any consents required in connection with an assignment of any
of the Due Diligence Documents. All of the Due Diligence Documents are
confidential and shall not be distributed or disclosed by Purchaser to
any person or entity not associated with Purchaser in accordance with
Section 11.12 hereof. Seller agrees to deliver to Purchaser a copy of
any written notices which Seller receives prior to Closing from any
governmental authority pertaining to any violation of law or ordinance
regulating the use of the Property which are received by Seller prior
to the Closing Date and of any notice which Seller receives prior to
Closing from any tenant regarding any default under any Lease. If the
transaction fails to close for any reason whatsoever, Purchaser shall
return to Seller all copies of the Due Diligence Documents which
Seller or its agents may have delivered to Purchaser in accordance
with this Section 3.6. SUBJECT TO SECTION 6.1 BELOW, THE FURNISHING OF
ANY MATERIALS, DOCUMENTS, REPORTS, OR AGREEMENTS DESCRIBED ABOVE SHALL
NOT BE INTERPRETED IN ANY MANNER AS A REPRESENTATION OR WARRANTY OF
ANY TYPE OR KIND BY SELLER, ANY PARTNER OF SELLER OR AGENT OF SELLER,
OR ANY OFFICER, DIRECTOR, OR EMPLOYEE OF SELLER, OR ITS AGENTS, OR ANY
OTHER PARTY RELATED IN ANY WAY TO ANY OF THE FOREGOING.
4. CLOSING
4.1 Closing.
The purchase and sale of the Property ("Closing") shall occur within the
period expiring seven (7) days after the termination of the Inspection Period
except that if such day shall not be a Business Day, the Closing shall occur on
the next Business Day thereafter (the "Closing Date"); provided, however, that
in the event Seller has not obtained and delivered to Purchaser the Tenant
Estoppel Certificates and CC&R Estoppels provided for under Article 15 and
Article 16 hereof, respectively, on or before the Closing Date, Purchaser shall
be entitled to one (1) extension of the Closing Date for a period not to exceed
five (5) days upon prior written notice thereof to Seller. Seller and Purchaser
agree that this transaction shall close in escrow through the Title Company,
which shall serve as escrow holder hereunder ("Escrow Holder"). In this regard,
Seller and Purchaser shall execute Escrow Holder's standard form general
provisions and such other instructions consistent herewith as Escrow Holder may
require and are reasonably acceptable to Seller and Purchaser. Purchaser and
Seller shall endeavor to conduct a "pre-closing" on the Business Day prior to
the Closing Date with title transfer and
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payment of the Purchase Price to be completed on the Closing Date as set forth
in Section 4.3 below.
4.2 Transactions at Closing.
One (1) Business Day prior to the Closing Date:
(a) Seller shall deliver or cause to be delivered to Escrow Holder the
following documents (collectively, the "Conveyance Documents") duly
executed and acknowledged where appropriate:
(i) A special warranty deed (the "Deed") conveying the Real
Property and the Improvements, subject to the Permitted
Exceptions, in the form attached hereto as Exhibit F;
(ii) Bill of Sale in the form set forth on Exhibit B attached hereto
conveying the Personal Property to Purchaser;
(iii) Two counterparts of the Assignment and Assumption Agreement
(the "Assignment") in the form set forth on Exhibit C attached
hereto, conveying all interest of Seller as landlord in and to
the Leases pertaining to the Real Property and Improvements as
more specifically set forth on Schedule B to the Assignment and
Assumption Agreement; and in and to any equipment leases,
commission agreements and service contracts, as set forth on
Schedules C, D and E, respectively, to the Assignment and
Assumption Agreement;
(iv) Certificate of non-foreign status in the form set forth on
Exhibit D attached hereto, to confirm that Purchaser is not
required to withhold part of the Purchase Price pursuant to
Section 1445 of the Internal Revenue Code of 1986, as amended;
(v) Original executed copies of all Leases; provided, however, that
the original Leases shall be held at the Property for delivery
to the Purchaser incident to the Closing;
(vi) Information required by the Title Company to comply with the
real estate reporting requirements set forth in Section 6045(e)
of the Internal Revenue Code of 1986, as amended;
(vii) Certificate confirming that the representations and warranties
of Seller under this Agreement remain true and correct in the
form attached hereto as Exhibit J;
(viii) Evidence as to the authority of the person or persons executing
documents on behalf of the Seller reasonably acceptable to
Purchaser and the Title Company;
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(ix) The Service Contracts which survive Closing, as provided in
Section 9.5 below, together with leasing and property files and
records pertaining to day-to-day operation, leasing and
maintenance of the Property, to the extent such files and
records are in the possession or control of Seller or agents of
Seller, and all personal property owned by Seller and used in
connection with the operation and/or maintenance of the
Property (including all keys to the Property); provided,
however, that such documentation and other personal property
shall be held at the Property for delivery to the Purchaser
incident to the Closing, and provided, further, that
proprietary information of Seller not relevant to the ownership
or operation of the Property shall not be included. Until the
earlier to occur of (i) the sale of the Property by Purchaser,
or (ii) the expiration of a period of one (1) year after the
Closing, Purchaser shall allow Seller and its agents and
representatives access without charge to all files, records and
documents delivered to Purchaser at the Closing upon reasonable
advance notice and at all reasonable times, to examine and make
copies of any and all such files, records and documents, which
right shall survive the Closing;
(x) Affidavits as may be customarily and reasonably required by the
Title Company, in form reasonably acceptable to Seller;
(xi) Closing Statement acceptable to Seller;
(xii) An updated Rent Roll in the same form as set forth as Exhibit
L, certified by Seller as correct and complete as of the date
of delivery thereof; and
(xiii) Such other documents as may be reasonably necessary and
appropriate to complete the Closing of the transaction
contemplated herein.
(b) Purchaser shall deliver to Escrow Holder the following:
(i) The Purchase Price as adjusted in Section 2.3 above, and as
further adjusted to reflect the Purchaser's share of closing
costs, and any fees as more particularly set forth in Section
4.3 below;
(ii) Intentionally Omitted.
(iii) Two counterparts of a duly executed and acknowledged Assignment
(as described in Section 4.2(a)(iii) above);
(iv) Information required by the Title Company to comply with the
real estate reporting requirements set forth in Section 6045(i)
of the Internal Revenue Code of 1986, as amended;
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(v) Evidence of the authority of the person or persons executing
documents on behalf of Purchaser reasonably acceptable to
Seller and the Title Company;
(vi) Certificate confirming that the representations and warranties
of Purchaser under this Agreement remain true and correct in
the form attached hereto as Exhibit K;
(vii) Closing Statement acceptable to Purchaser;
(viii) Affidavits as may be customarily and reasonably required by the
Title Company, in form reasonably acceptable to Purchaser; and
(ix) Such other documents as may be reasonably necessary and
appropriate to complete the Closing of the transaction
contemplated herein.
(c) Seller and Purchaser shall execute a tenant notification letter to all
tenants under the Leases (the "Tenant Notification Letter") in the
form attached hereto as Exhibit G, and Purchaser shall, within
forty-eight (48) hours following the Closing, cause the Tenant
Notification Letter to be delivered to such tenants.
4.3 Title Transfer and Payment of Purchase Price.
(a) Purchaser agrees to deliver the cash payment specified in Section
4.2(b)(i) above by wiring the same to the Escrow Holder so that the
wire may be confirmed in time to allow Closing to occur on the Closing
Date and directing the Escrow Holder to deposit or wire the same into
Seller's designated account(s) upon the recording by the Title Company
of the documents to be executed and delivered by Seller under Sections
4.2(a) above or upon issuance by the Title Company of, an
unconditional agreement by the Title Company to issue, the Title
Policy.
(b) Upon receipt of all items specified in Section 4.2 and following the
satisfaction or waiver of all conditions precedent to Closing and upon
Title Company issuing or committing to issue the Title Policy, Escrow
Holder shall take the following actions:
(i) Prorate any and all amounts to be prorated pursuant to Sections
5.1 and 5.2 below;
(ii) Date and cause to be recorded the Deed as of Closing and
designate that the Deed be returned directly to Purchaser after
recordation;
(iii) Issue the Title Policy to Purchaser;
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(iv) Deliver the Purchase Price to Seller, plus or minus appropriate
adjustments;
(v) Credit Purchaser with the total of any and all tenant security
deposits called for in the Leases and any and all prorated
rents and other items;
(vi) Deliver properly executed copies of the Closing Statement to
Seller and to Purchaser, which Closing Statement shall have
been approved by Seller and Purchaser prior to Closing;
(vii) Deliver to Seller a copy of the Deed as recorded and executed
originals of all documents delivered by Purchaser to Escrow
Holder pursuant to Section 4.2(b) above;
(viii) Deliver to Purchaser executed originals of all documents
delivered by Seller to Escrow Holder pursuant to Section 4.2(a)
above, other than that set forth in Section 4.2(a)(i) above;
and
(ix) Pay any broker's commissions as provided herein.
4.4 Reporting Requirements. The Escrow Holder shall comply with all
applicable federal, state and local reporting requirements relating to the
closing of the transactions contemplated herein. Without limiting the generality
of the foregoing, to the extent the transactions contemplated by this Agreement
involve a real estate transaction within the purview of Section 6045 of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), Escrow
Holder shall have sole responsibility to comply with the requirements of Section
6045 of the Internal Revenue Code (and any similar requirements imposed by state
or local law). Escrow Holder shall hold Purchaser, Seller and their respective
counsel free and harmless from and against any and all liability, claims,
demands, damages and costs, including reasonable attorneys' fees and other
litigation expenses, arising or resulting from the failure of Escrow Holder to
comply with such reporting requirements.
5. PRORATIONS; CLOSING ITEMS
5.1 Prorations; Closing Costs; Reserve Accounts.
(a) The amount due on any gas, electric, water, sewer, or other utility
bill, or service contract relating to the Property shall be prorated
between Seller and Purchaser as of the Closing Date, to the extent
such utilities or service contracts are the obligation of the Seller
and not a direct or indirect obligation of a tenant under any of the
Leases. Any utility deposits made by Seller shall be and remain the
property of Seller.
(b) All collected rents and other payments from each tenant under the
Leases, including, but not limited to, base rent, additional rent,
percentage rent (if any), and expense reimbursements, shall be
prorated between Seller and
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Purchaser as of the Closing Date. The balance remaining from any
security deposits or prepaid rent under the Leases held by Seller
shall be credited to Purchaser (including the balance of estimated
tax, insurance and common area maintenance payments made to Seller by
tenants under the Leases net of any payments by Seller thereon).
Purchaser agrees to indemnify and hold harmless Seller from and
against any loss, cost or expense (including, but not limited to,
attorneys' fees and expenses) resulting from any claim for such
deposits or prepaid rent actually paid or credited to Purchaser. If
any rent or other payments under the Leases are in arrears as of the
Closing Date ("Delinquent Rents"), the amount of any such Delinquent
Rents which are collected by Purchaser shall be promptly paid by
Purchaser to Seller after Closing. Purchaser shall be entitled to
deduct from any such payment (i) Purchaser's reasonable costs of
collection incurred with respect to such Delinquent Rents (including
attorneys' fees), (ii) rents due for the month in which such payment
is received by Purchaser, and (iii) rents from such tenant
attributable to any period after the Closing that are past due on the
date of receipt. Purchaser agrees to periodically invoice tenants in
an effort to collect Delinquent Rents after the Closing provided
Purchaser shall not be required to bring any action or proceeding
against any tenant on account of Delinquent Rents. Purchaser's
obligations hereunder with respect to the collection and payment of
Delinquent Rents shall survive the Closing. Seller may make reasonable
efforts to collect Delinquent Rents from and after the Closing Date;
provided, however, that Seller shall not be entitled to pursue any
action for eviction of any tenant from the Property. The provisions of
this Section shall survive Closing and shall not be merged therein.
(c) All real estate taxes (whether general or special) and personal
property taxes payable in respect of the Property for the calendar
year 2000 shall be prorated as of the Closing; provided, Seller shall
be entitled to recover any reimbursements from the tenants on account
of such taxes for the period prior to Closing, and Purchaser shall
immediately remit to Seller any such reimbursements received by
Purchaser upon receipt thereof, subject to Section 5.1(b) above. Any
real estate taxes (whether general or special) and personal property
taxes due and payable for any periods subsequent to the calendar year
2000 shall be the obligation of Purchaser and any real estate taxes
(whether general or special) and personal property taxes due and
payable for any periods prior to calendar year 2000 shall be the
obligation of Seller, provided Purchaser shall cooperate with Seller
to obtain any reimbursement from any tenant in respect of any such
taxes. Seller and Purchaser agree to mutually cooperate with each
other in connection with ongoing real estate tax reduction proceedings
relating to prior tax years, if any, and any ongoing or future
proceedings relating to the year in which the Closing occurs, if any,
and any refund resulting therefrom (to the extent not refundable to
tenants under the Leases) shall be prorated between Seller and
Purchaser based on the Closing Date, after deducting therefrom the
reasonable out-of-pocket expenses incurred by the
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parties. The provisions of the immediately preceding two sentences
shall survive Closing and shall not be merged therein.
(d) Purchaser shall pay the cost of any endorsements (other than Seller
Endorsements) or special or extended coverages of any nature in
connection with the Title Policy, one-half (1/2) of any escrow fees
and closing fees to the Escrow Holder, and any lender's title
insurance coverage on account of any loan obtained by Purchaser.
Purchaser shall pay for all costs relating to any financing obtained
by Purchaser in connection with its purchase of the Property and all
costs incurred by Purchaser in performing any related tests and
investigations. Seller shall pay for the cost of recording the Deed,
the base premium for the Title Policy and for the Seller Endorsements
(but not the cost of any endorsements or special or extended coverages
other than the Seller Endorsements), any customary updates to the
Survey, one-half (1/2) of all escrow fees and closing fees charged by
the Escrow Holder, any prepayment or reconveyance fee in connection
with any payoff or release of any existing deed of trust or mortgage,
documentary stamp taxes, if any, and the recording fees with respect
to documents which Seller elects to place of record in order to cure
title objections raised by Purchaser to the extent Seller elects to
cure the same, as fully described in Section 3.2. Each party shall pay
its own attorneys' fees.
5.2 Calculation of Prorations
For purposes of calculating prorations, Seller shall be deemed to be in
title to the Property, and therefore entitled to the income therefrom and
responsible for the expenses thereof, through the day prior to the Closing Date
and Purchaser shall be deemed to be in title to the Property, and therefore
entitled to the income therefrom and responsible for the expenses thereof, from
and after 12:01 a.m. on the Closing Date. All prorations shall be made on the
basis of the actual number of days of the year and month which have elapsed as
of the Closing Date. All prorations which cannot be ascertained as of the
Closing shall be prorated on the basis of the parties' reasonable estimate of
such amount. Except as otherwise stated above, if necessary, the amount of
prorations shall be adjusted in cash after Closing, as and when complete and
accurate information becomes available but in any event no later than ninety
(90) days after the Closing Date; provided, however, the ninety (90) day period
shall be extended for a reasonable time for any real property tax reduction or
abatement proceeds, which are to be prorated between Purchaser and Seller
pursuant to Section 5.1(c), and for a period of one (1) year after the Closing
Date for reconciliation of tax, insurance, and common area maintenance expenses
for the calendar year in which the Closing Date occurs. Purchaser and Seller
each agree to reasonably cooperate with the other with respect to such final
proration. This provision shall survive Closing and shall not be merged therein.
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6. REPRESENTATIONS AND WARRANTIES
6.1 Seller's Representations and Warranties.
Seller hereby represents and warrants to Purchaser as follows:
(a) Seller's Entity. Seller is a Delaware limited partnership duly
organized, validly existing and in good standing under the laws of the
State of Delaware. Seller has qualified as a foreign limited
partnership in the state in which the Property is located, and the
execution and performance of this Agreement will not violate any term
of its limited partnership certificate or agreement, or any judicial
decree, statute or regulation by which it may be bound or affected.
(b) Seller's Authority. Seller has full power and authority to enter into
this Agreement and to perform all its obligations hereunder, and has
taken all action required by law, its governing instruments, or
otherwise to authorize the execution, delivery and performance of this
Agreement and all the deeds, agreements, certificates, and other
documents contemplated herein, and this Agreement has been duly
executed by and is a valid and binding agreement of Seller,
enforceable in accordance with its terms, except as enforceability may
be limited by equitable principles or by the laws of bankruptcy,
insolvency, or other laws affecting creditors' rights generally.
(c) No Conflict or Lien. To the best of Seller's knowledge, neither the
execution or delivery of this Agreement nor the consummation of the
transactions contemplated herein will conflict with or result in a
breach of any contract, license or undertaking to which Seller is a
party or by which any of its property is bound, or constitute a
default thereunder or, except as contemplated herein, result in the
creation of any lien or encumbrance upon the Property.
(d) No Proceedings. No legal or administrative proceeding is (i) pending
or to the best of Seller's knowledge threatened against the Property
or (ii) pending or to the best of Seller's knowledge threatened
against Seller which would affect the Property or Seller's right to
convey the Property to Purchaser as contemplated in this Agreement.
(e) Leases. Seller has delivered to Purchaser a correct and complete copy
of each of the Leases and any amendments thereto. The information
regarding the Leases contained on the Rent Roll attached as Exhibit L,
which identifies all tenants of the Property as of May 15, 2000, is
true, correct and complete as of the date of this Agreement. To the
knowledge of Seller, each of the Leases is in full force and effect,
no notice has been given of any cancellation or surrender thereof, and
neither Seller nor the tenant is in default thereunder. Except as set
forth on the Rent Roll, no
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Tenant is entitled to receive free rent or other concession under any
of the Leases.
(f) Violations. Seller has no knowledge of and has not received written
notice from any governmental body, authority or agency of any
violation of federal, state or local laws, ordinances, codes, rules or
regulations affecting the Property, including any notice with respect
to any Hazardous Materials (as hereinafter defined) or of any
violation of any insurance requirements relative to the Property.
(g) Condemnation. Seller has no knowledge of and has received no written
notice of any pending or threatened condemnation proceedings relating
to the Property.
(h) Commissions. No leasing commissions are due and payable with respect
to the existing terms of the Leases except as set forth on the Rent
Roll described in Section 3.6(a)(i) hereof; provided, however, that
nothing contained in this Section 6.1(h) shall be construed in any way
to modify the obligations with respect to leasing commissions and
tenant improvements described in Sections 9.2 and 9.3 hereof.
(i) Service Contracts. All Service Contracts affecting the Property are
accurately set forth on Exhibit H hereto. To the best of its
knowledge, Seller is not in default under any of the Service
Contracts.
(j) Documents. All documents delivered by Seller to Purchaser, or made
available to Purchaser for review, including, without limitation, the
Due Diligence Documents, are, to the best of Seller's knowledge, true
and complete copies thereof.
(k) Financial Statements. To the best of Seller's knowledge, the financial
statements to be provided by Seller pursuant to Section 3.6 hereof
will accurately and fairly reflect the financial condition and
operation of the Property for the period of time reflected by such
statements.
(l) Structural Issues. To the best of Seller's knowledge, the Improvements
and the Personal Property are free from any material physical,
mechanical or structural defects.
Except with respect to the warranties set forth in Section 6.1 hereof,
Seller has not made any warranty or representation, express or implied, written
or oral, concerning the Property, including without limitation any
representations relating to Hazardous Materials (as defined in Section 6.3(c)
below).
All representations and warranties of Seller contained herein are intended
to and shall remain true and correct as of the Closing and shall survive the
delivery of the Deed for a period of twelve (12) months after Closing and shall
thereafter expire unless a claim thereunder has been commenced in compliance
with the next sentence and diligently
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pursued thereafter. Any claims by Purchaser with respect to such representations
or warranties shall be commenced by written notice to Seller within said six
(12) twelve month period and shall be diligently pursued thereafter or shall be
deemed waived by Purchaser. Notwithstanding the foregoing, Purchaser shall have
no claim against Seller with respect to the representations and warranties set
forth in this Section 6.1 if Purchaser had actual knowledge that a
representation or warranty was untrue or inaccurate or incorrect as of the time
of Closing and Purchaser nevertheless chose to proceed with Closing hereunder.
Whenever in this Agreement a representation of Seller is based on the
"Seller's knowledge" or words of similar import, such reference shall be deemed
to be to the actual knowledge of Robert F. Gossett, Jr., without investigation
or inquiry of any kind other than due inquiry of Sheri Valentiner of The
Colorado Group, Inc., the managing agent of the Property. There shall be no
personal liability to said individuals arising out of said representations or
warranties. Except for Robert F. Gossett, Jr., no knowledge of parties
affiliated with, employed by, or related by agency to Seller shall be imputed to
Seller or to the above-named persons.
Notwithstanding anything to the contrary contained in this Agreement, the
aggregate amount which may be collected by Purchaser pursuant to the
representations and warranties of Seller set forth herein shall not exceed
$500,000.
6.2 Purchaser's Representations and Warranties
Purchaser represents, warrants, and covenants to Seller that:
(a) Authority to Execute; Organization. This Agreement constitutes the
valid and binding obligation of Purchaser and is enforceable against
Purchaser in accordance with its terms, except as enforceability may
be limited by equitable principles or by the laws of bankruptcy,
insolvency, or other laws affecting creditors' rights generally.
Purchaser is a corporation validly organized and in good standing
under the laws of the state of its organization, and the execution of
this Agreement, delivery of money and all required documents,
Purchaser's performance of this Agreement and the transaction
contemplated hereby have been duly authorized by the requisite action
on the part of the Purchaser and Purchaser's directors, shareholders,
partners, members or trustees.
(b) Recording. Purchaser shall not record this Agreement or a memorandum
hereof at any time.
(c) Litigation. There is no litigation pending or, to Purchaser's
knowledge, threatened, against Purchaser or any basis therefore before
any court, regulatory authority or administrative agency that would
likely result in any material adverse change in the business or
financial condition of the Purchaser that would impede the ability of
Purchaser to purchase the Property in accordance with the terms and
conditions of this Agreement.
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(d) Financial Condition. Purchaser or Purchaser's Permitted Assignee shall
have adequate financial resources to make timely payment of all sums
due from Purchaser hereunder and to perform all of its obligations
hereunder.
(e) Purchaser Experience. Purchaser is experienced in contracting for and
investigating the suitability of real property similar to the Property
for the acquisition thereof for investment purposes and is represented
or has had an opportunity to be represented by counsel in connection
with this transaction. Purchaser has the responsibility under this
Agreement to inspect the Property and the real estate market in
sufficient detail to fully satisfy itself with respect to the
environmental conditions and the market conditions affecting the
Property including, without limitation, property values, interest
rates, and similar market factors. Purchaser has reached its
conclusions based upon its own analysis and without relying upon
representations by Seller, its employees, agents or consultants.
6.3 Purchaser Accepts Property "As Is".
(a) Purchaser Acknowledgment. Effective as of the expiration of the
Inspection Period, Purchaser acknowledges for Purchaser and
Purchaser's successors, heirs and assignees, (i) that Purchaser has
been given full opportunity to inspect and investigate the Property,
all improvements thereon and all aspects relating thereto, either
independently or through agents and experts of Purchaser's choosing,
(ii) that Purchaser is acquiring the Property based solely upon
Purchaser's own investigation and inspection thereof and Seller's
representations and warranties set forth in Section 6.1(a) through (l)
hereof inclusive, and (iii) that the provisions of this Section 6.3(a)
shall survive Closing and shall not be merged therein. SELLER AND
PURCHASER AGREE THAT UPON CLOSING THE PROPERTY SHALL BE SOLD AND THAT
PURCHASER SHALL ACCEPT POSSESSION OF THE PROPERTY ON THE CLOSING DATE
"AS IS, WHERE IS, WITH ALL FAULTS" WITH NO RIGHT OF SET-OFF OR
REDUCTION IN THE PURCHASE PRICE, AND THAT EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN SECTION 6.1(a)
THROUGH (l) HEREOF INCLUSIVE, SUCH SALE SHALL BE WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, WARRANTY OF INCOME POTENTIAL, OPERATING EXPENSES,
USES, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND SELLER
DOES HEREBY DISCLAIM AND RENOUNCE ANY SUCH REPRESENTATION OR WARRANTY.
PURCHASER SPECIFICALLY ACKNOWLEDGES THAT PURCHASER IS NOT RELYING ON
ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR
IMPLIED, FROM SELLER, SELLER'S AGENTS OR BROKERS, AS TO ANY MATTER
CONCERNING THE PROPERTY (EXCEPT FOR
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THE WARRANTIES SPECIFICALLY SET FORTH IN SECTION 6.1(a) THROUGH (l)
HEREOF INCLUSIVE), INCLUDING WITHOUT LIMITATION: (l) 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, IF ANY, FOUNDATIONS, SOIL AND GEOLOGY INCLUDING
HAZARDOUS MATERIALS (AS HEREINAFTER DEFINED), LOT SIZE, OR SUITABILITY
OF THE PROPERTY OR ITS IMPROVEMENTS FOR A PARTICULAR PURPOSE; (2)
WHETHER THE APPLIANCES, IF ANY, PLUMBING OR UTILITIES ARE IN WORKING
ORDER; (3) THE HABITABILITY OR SUITABILITY FOR OCCUPANCY OF ANY
STRUCTURE AND THE QUALITY OF ITS CONSTRUCTION; (4) THE FITNESS OF ANY
PERSONAL PROPERTY; OR (5) WHETHER THE IMPROVEMENTS ARE STRUCTURALLY
SOUND, IN GOOD CONDITION, OR IN COMPLIANCE WITH APPLICABLE CITY,
COUNTY, STATE OR FEDERAL STATUTES, CODES OR ORDINANCES, INCLUDING,
WITHOUT LIMITATION THE REQUIREMENTS OF THE AMERICANS WITH DISABILITIES
ACT, 42 USCA ss. 12101 et. seq. SUBJECT ONLY TO THE REPRESENTATIONS
AND WARRANTIES EXPRESSLY SET FORTH IN SECTIONS 6.1(a) THROUGH (l)
HEREOF, PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT IT IS RELYING
SOLELY UPON ITS OWN INSPECTION OF THE PROPERTY AND NOT UPON ANY
REPRESENTATIONS MADE TO IT BY SELLER, ITS OFFICERS, DIRECTORS,
CONTRACTORS, AGENTS OR EMPLOYEES OR ANY PERSON WHOMSOEVER. ANY
REPORTS, REPAIRS OR WORK REQUIRED BY PURCHASER ARE TO BE THE SOLE
RESPONSIBILITY OF PURCHASER AND PURCHASER AGREES THAT THERE IS NO
OBLIGATION ON THE PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS, OR
REPAIR TO THE PROPERTY AND PURCHASER ACKNOWLEDGES THAT, IN THE EVENT
THAT PURCHASER ELECTS TO PROCEED TO CLOSING PRIOR TO THE EXPIRATION OF
THE INSPECTION PERIOD AS PROVIDED IN THIS AGREEMENT, PURCHASER WILL
HAVE COMPLETED ITS DUE DILIGENCE WITH RESPECT TO THE PROPERTY TO ITS
SATISFACTION.
(b) No Claim for Hazardous Materials. Upon Closing, Purchaser, for
Purchaser and Purchaser's successors in interest, releases Seller
from, and waives all claims and liability which Purchaser may have
against Seller for, any structural, physical and environmental
condition of the Property, including without limitation 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 the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 ("CERCLA"), the
Superfund Amendments and
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Reauthorization Act of 1986 ("SARA"), the Resource Conservation and
Recovery Act ("RCRA"), the Toxic Substances Control Act (the "TSCA"),
as such acts may be amended from time to time, or any other federal or
state statutory or regulatory cause of action arising from or related
to Hazardous Materials at, in or under the Property (collectively, the
"Hazardous Waste Laws"), except solely for any contribution action
against Seller (and not any officer, director, employee, agent,
affiliate, member, representative, partner, stockholder or other
principal or representative of Seller) brought under CERCLA as part of
any lawsuit commenced under CERCLA. The waiver and release of
Purchaser set forth in this Section 6.3(b) shall survive the Closing
Date and shall be enforceable at any time after the Closing Date.
Notwithstanding anything herein to the contrary, the aforementioned
waiver and release shall not obligate Purchaser to defend, indemnify
and/or hold harmless Seller as to third-party claims asserted against
Seller relating to Hazardous Materials in, on or under the Property.
(c) "Hazardous Materials" Defined. 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, those substances regulated
by the Hazardous Waste Laws.
(d) No Representations as to Hazardous Materials. Purchaser acknowledges
that Seller has made no representations or warranties whatsoever to
Purchaser regarding the presence or absence of any Hazardous Materials
in, at, or under the Property; provided, however, that Seller and
Purchaser acknowledge that Seller has made certain representations as
to no proceedings, notices received, knowledge or otherwise as more
specifically set forth in Sections 6.1 (d), (f), (g) and (j) hereof.
Purchaser has made such studies and investigations, conducted such
tests and surveys, and engaged such specialists as Purchaser has
deemed appropriate to evaluate fairly the Property and its risks from
an environmental and Hazardous Materials standpoint.
7. CONDITIONS TO CLOSING
7.1 Seller's Conditions.
The obligation of Seller to sell and convey the Property under this
Agreement is subject to the satisfaction of the following conditions precedent
or conditions concurrent (the satisfaction of which may be waived only in
writing by Seller):
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(a) Delivery and execution by Purchaser to Escrow Holder of all monies,
items, and other instruments required to be delivered by Purchaser to
Escrow Holder;
(b) Purchaser's covenants, warranties, and representations set forth
herein shall be true and correct as of the Closing Date; and
(c) Intentionally Omitted;
(d) There shall be no uncured default by Purchaser of any of its material
obligations under this Agreement.
7.2 Purchaser's Conditions.
The obligation of Purchaser to acquire the Property under this Agreement is
subject to the satisfaction of the following conditions precedent or conditions
concurrent:
(a) Delivery of Purchaser's notice to proceed, as provided in Section 3.5;
(b) Delivery and execution by Seller to Escrow Holder of all monies, items
and other instruments to be delivered by Seller to Escrow Holder,
provided, however, that the original Leases, the Service Contracts
which survive Closing, and the leasing and property files and records
pertaining to day-to-day operation, leasing and maintenance of the
Property, to the extent same are in the possession or under the
control of Seller or Seller's agents, shall be held at the Property
for delivery to the Purchaser incident to Closing;
(c) Seller's covenants, warranties and representations set forth herein
shall be true and correct as of the Closing Date;
(d) Intentionally Omitted;
(e) There shall be no uncured default by Seller of any of its material
obligations under this Agreement;
(f) Purchaser shall have received, on or before five (5) days before the
Closing Date, the Tenant Estoppel Certificates, as set forth in
Section 15; and
(g) Title Company shall be irrevocably committed to issue the Title Policy
subject to the Permitted Exceptions.
7.3 Failure of Condition.
(a) In the event of a failure of any condition contained in Section 7.1 or
7.2 above which is not the result of a default by either party, the
party for whose benefit the condition existed may either waive the
condition and
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proceed to Closing or may terminate this Agreement in which event the
Deposit and all documents and funds deposited by Purchaser shall be
immediately returned to Purchaser, all documents deposited by Seller
shall be immediately returned to Seller, and neither party shall have
any further rights or obligations hereunder (except as set forth in
Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and 11.12);
(b) In the event of a failure of any condition contained in Section 7.2
above due to a default by Seller, then Purchaser may in its sole
discretion:
(i) terminate this Agreement in which event the Deposit and all
documents and funds deposited by Purchaser shall be immediately
returned to Purchaser, all documents deposited by Seller shall
be immediately returned to Seller, and neither party shall have
any further rights or obligations hereunder (except as set forth
in Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and 11.12);
(ii) pursue specific performance of Seller's obligation to convey the
Property to Purchaser in accordance with the terms of this
Agreement; or
(iii) waive such default and close the transaction.
(c) In the event of a failure of any condition contained in Section 7.1
above due to a default by Purchaser, Seller may in its sole
discretion:
(i) terminate this Agreement and Seller shall be entitled to
liquidated damages (including, if applicable, the retention of
the Deposit), as described in Article 12, in which event all
documents deposited by Purchaser shall be immediately returned to
Purchaser, and all documents deposited by Seller shall be
immediately returned to Seller and neither party shall have any
further rights or obligations hereunder (except as set forth in
Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and 11.12); or
(ii) Seller may waive such default and close the transaction.
(d) Seller waives any rights it may have to specific performance in the
event of a default by Purchaser with the exclusive remedy of Seller
being the right to liquidated damages more fully described in Section
12 hereof. Purchaser waives any right to any claim of any nature for
damages or otherwise in the event of a default by Seller prior to
closing and Purchaser acknowledges that its exclusive remedies in the
event of such a default by Seller shall be to either terminate this
Agreement in accordance with Section 7.3(b)(i) above, to seek specific
performance in accordance with Section 7.3(b)(ii) above, or waive such
default and close the transaction in accordance with Section
7.3(b)(iii) above.
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(e) Anything herein to the contrary notwithstanding, in the event the
transaction herein contemplated shall fail to close in accordance with
the terms and conditions of this Agreement solely by reason of either
(i) Seller's default hereunder or (ii) Seller's election to terminate
this Agreement pursuant to Section 8.1(a) below (in either case when
all material obligations of Purchaser have been satisfied as herein
provided at the time of such Seller default or election), then, in
addition to Purchaser's right to terminate this Agreement as set forth
in Section 7.3(b)(i) above, upon such termination Seller shall
reimburse Purchaser an amount not to exceed $50,000 for costs and
expenses actually incurred by Purchaser in connection with its due
diligence and closing related costs (including reasonable attorneys'
fees and expenses), which sum shall be paid by Seller to Purchaser
within ten (10) days of presentment by Purchaser of invoices and/or,
receipts reasonably acceptable to Seller substantiating Purchaser's
claim for reimbursement hereunder.
8. DAMAGE OR DESTRUCTION OF THE PROPERTY; CONDEMNATION
8.1 Damage or Destruction of the Property.
(a) If, between the Effective Date and the Closing Date, the Property is
Materially Damaged or Destroyed (as hereinafter defined), Purchaser
may elect in writing, within five (5) days after receipt of notice by
Purchaser from Seller of such damage or destruction (the "Casualty
Notice Date"), accompanied by information regarding the amount and
payment of insurance, to terminate this Agreement or to purchase all
of the Property without regard to such damage or destruction. If
Purchaser fails to notify Seller of Purchaser's election, Purchaser
will be deemed to have elected not to proceed with the purchase of all
of the Property. In the event that Purchaser purchases all of the
Property, Seller shall have no obligation to repair any such damage or
destruction, nor shall the Purchase Price be adjusted except as
provided in 8.1(b) below. "Materially Damaged or Destroyed" shall mean
damage or destruction the repair or replacement of which either would
not be permitted due to the then effective requirements of any
applicable law, ordinance, rule or regulation of any governmental or
quasi-governmental agency having jurisdiction, or, as determined by a
licensed general contractor having at least five (5) years experience
in the construction of commercial office/warehouse buildings, selected
by Seller and reasonably approved by Purchaser, would exceed One
Hundred Fifty Thousand ($150,000) Dollars as to any casualty of a type
against which insurance is maintained (a "Major Insured Casualty") or
would exceed One Hundred Thousand ($100,000) Dollars as to any
casualty against which insurance is not maintained (a "Major Uninsured
Casualty"). As used herein, repair or replacement means such repair or
replacement to the Improvements as may be required to restore the
Improvements to a condition having substantially the same design,
specifications and equipment of the Improvements immediately prior to
the casualty. If,
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between the Effective Date and the Closing Date, the Property sustains
nonmaterial damage, the parties shall proceed to Closing. If between
the Effective Date and the Closing Date, the Property is Materially
Damaged or Destroyed due to a Major Uninsured Casualty, Seller may
elect in writing, within five (5) days after the Casualty Notice Date,
to terminate this Agreement. If Seller fails to notify Purchaser of
Seller's election, Seller will be deemed to have elected not to
proceed with the sale of all of the Property. Notwithstanding the
foregoing, in the event that any damage or destruction results in the
termination of any Lease, the Property shall be deemed to have been
Materially Damaged or Destroyed due to a Major Insured Casualty.
(b) If Purchaser elects or is required to purchase the Property despite
such damage or destruction, Seller shall assign its rights to and
Purchaser shall be entitled to receive any insurance proceeds (with
any accrued interest thereon) at or after Closing (as the same are
available) and Purchaser shall receive a credit toward the Purchase
Price (i) for the insurance deductible relative to Seller's insurance
on the Property with respect to an insured casualty, including a Major
Insured Casualty, or (ii) for the cost of repair not covered by
insurance with respect to an uninsured casualty, including a Major
Uninsured Casualty. Seller shall reasonably cooperate with Purchaser
to allow Purchaser to collect any available insurance proceeds. Seller
agrees to maintain until the Closing the level of insurance coverage
in effect on the Property as of the Effective Date.
(c) If, as a result of any casualty, any determination, election or
agreement required by the terms of this Section 8.1 is not made by the
scheduled Closing Date, the Closing Date shall be extended for an
appropriate time, not to exceed twenty (20) days, after such
determination, election or agreement.
8.2 Condemnation.
If prior to Closing all or any part of the Property is subject to a
proposed taking by any public authority, Seller shall promptly notify Purchaser
in writing of such proposed taking and Purchaser may terminate this Agreement by
notice to Seller within five (5) days after written notice thereof. If Purchaser
so elects, this Agreement shall terminate. If Purchaser does not so elect to
terminate this Agreement, Purchaser shall accept the Property subject to the
taking without a reduction in the Purchase Price and shall receive at Closing an
assignment of all of Seller's rights to any condemnation award to the extent
that such amount does not exceed the Purchase Price plus any legal fees and
expenses actually expended in obtaining such award, with any condemnation award
in excess of such amount to be divided equally between Seller and Purchaser.
Seller shall reasonably cooperate with Purchaser to allow Purchaser to collect
any such award.
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9. COMMISSIONS AND EXPENSES
9.1 Payment of the Sale Commission.
Purchaser and Seller represent and warrant to each other that no real
estate broker or agent has been authorized to act on either parties' behalf
except Trammel Crow Company and The Colorado Group, Inc. ("Seller's Agents")
under separate commission agreements between Seller and each of Seller's Agents,
which commissions ("Brokers' Commissions") under said commission agreements
Seller will pay or cause to be paid to Seller's Agents at Closing. Purchaser
hereby indemnifies Seller and holds Seller harmless from and against any and all
demands or claims which now or hereafter may be asserted against Seller for any
brokerage fees, commissions or similar types of compensation which may be
claimed by any broker which was engaged or which claims to have been engaged by
Purchaser and all expenses and costs in handling or defending any such demand or
claim, including reasonable attorneys' fees. Seller hereby indemnifies Purchaser
and holds Purchaser harmless from and against any and all demands or claims
which now or hereafter may be asserted against Purchaser for any brokerage fees,
commissions or similar types of compensation which may be claimed by any broker
which was engaged or which claims to have been engaged by Seller and all
expenses and costs in handling or defending any such demand or claim, including
reasonable attorneys' fees. This provision shall survive (i) any termination of
this Agreement and (ii) the Closing and shall not be merged therein. Seller
shall, as a condition to Purchaser's obligation to acquire the Property under
this Agreement, cause each of Seller's Agents to execute and deliver to
Purchaser a confidentiality agreement in form and content substantially in
accordance with Exhibit O attached hereto.
9.2 Leasing Commissions/Tenant Improvements.
(a) Seller shall pay all leasing commissions or tenant improvement costs
payable under Leases executed prior to the Effective Date except for
commissions and costs payable by reason of any expansion, extension or
renewal of such Leases (to the extent such expansions, extensions or
renewals are pursuant to option rights expressly set forth in such
Leases as of the Effective Date, herein called the "Existing Rights")
occurring on or after the Effective Date, which shall be paid by
Seller and Purchaser as hereinafter provided. A summary of the
business terms of any amendment, renewal or expansion of an existing
Lease (unless such renewal or expansion is pursuant to and in
accordance with the terms of any Existing Rights, in which case Seller
and Purchaser agree that any such renewal or expansion shall be
effective upon the valid exercise by a tenant pursuant to the terms of
any such Existing Rights) or of any new Lease which Seller wishes to
execute between the Effective Date and the Closing Date will be
submitted to Purchaser prior to execution by Seller. Purchaser agrees
to notify Seller in writing within five (5) Business Days after its
receipt thereof of either its approval or disapproval thereof,
including all leasing commissions, tenant improvement and inducement
payments to be incurred in connection therewith. If Purchaser informs
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Seller within such five (5) Business Day period that Purchaser does
not approve the amendment, renewal or expansion of the existing Lease
or the new Lease (a "New Lease Agreement"), and such notice is given
after Purchaser has delivered the notice to proceed pursuant to
Section 3.5 above, then Seller shall not enter into the proposed New
Lease Agreement. If such notice is given prior to Purchaser's delivery
of the notice to proceed pursuant to Section 3.5 above, Seller may
elect by written notice to the Purchaser prior to the Out Date (i) not
to enter into the proposed New Lease Agreement or (ii) to proceed with
such New Lease Agreement; provided, however, that in the event that
Seller elects to proceed with such New Lease Agreement and the parties
shall thereafter proceed to Closing, all leasing commissions, tenant
improvement costs, inducement payments, attorneys' fees or other fees
payable incident to the initial tenancy under such New Lease Agreement
shall be paid by Seller. In the event Purchaser fails to notify Seller
in writing of its approval or disapproval of any New Lease Agreement
within the five (5) Business Day period set forth above, Purchaser
shall be deemed to have approved such New Lease Agreement. All leasing
commissions and tenant improvement costs, inducement payments,
attorneys' fees and other fees paid or expenses incurred with respect
to any New Lease Agreement (regarding which Seller has advised
Purchaser in the requisite summary of business terms delivered to
Purchaser as required above) approved or deemed approved by Purchaser
as set forth above in this Section 9.2(a) shall be the obligation of
Purchaser and Seller, divided pro rata based upon an allocation
determined by the rental income received by Seller relative to such
New Lease Agreement prior to Closing and the total rental income
projected to be paid during the initial term of such New Lease
Agreement.
(b) To the extent Seller shall be obligated for any leasing commissions,
tenant improvement costs, inducement payments, attorneys' fees or
other fees payable in connection with any Lease or New Lease Agreement
pursuant to Section 9.2(a) above for which actual payment thereof has
not been made by or on behalf of Seller on or before the Closing,
Purchaser shall receive a credit at Closing for all such unpaid
commissions, costs, expenses and fees.
9.3 Lease Expense Reimbursement and Assumption.
Seller shall comply with and perform all of its obligations under the
Leases until Closing. At Closing, Purchaser shall (i) reimburse Seller for all
leasing commissions, tenant improvement costs, inducement payments, attorneys'
fees and other fees paid or expenses incurred by Seller under any New Lease
Agreement made on or after the Effective Date, if any, which has been approved
or deemed approved by Purchaser pursuant to Section 9.2, less the pro rata share
of all such costs and expenses otherwise payable by Seller pursuant to the last
sentence of Section 9.2(a) above and (ii) assume all obligations of the landlord
under Leases which either (a) arise after Closing or (b) are continuing
covenants of the landlord which apply after Closing, if any.
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9.4 Maintenance of the Property; Property Personnel.
Between Seller's execution of this Agreement and the Closing, Seller shall
maintain the Property in its existing condition and repair, reasonable wear and
tear excepted.
9.5 Service Contracts and Equipment Lease.
Seller shall comply with and perform all of Seller's obligations under the
Service Contracts, including equipment leases, relative to the Property prior to
Closing. Seller shall not, after the date of this Agreement, enter into any
service contract or equipment lease affecting the Property or any amendment
thereof, which shall be an obligation of Purchaser after Closing, or waive,
compromise or settle any rights of Seller under any Service Contract or
equipment lease which shall be assumed by Purchaser upon Closing, or agree to,
or modify, amend, or terminate any Service Contract or equipment lease which
shall be assumed by Purchaser upon Closing, without in each case obtaining
Purchaser's prior written consent thereto. Seller shall terminate at or before
Closing those existing Service Contracts, including equipment leases, that
Seller is contractually entitled to terminate without cost and that Purchaser
designates to Seller, on or before the Out Date, as not to survive Closing.
10. NOTICES
All notices, requests or demands to a party hereunder shall be in writing
and shall be effective (i) when received by overnight courier service, (ii) upon
receipt of written electronic confirmation by the sender if sent by facsimile
telecommunication, or (iii) three (3) days after being deposited into the United
States mail (sent certified or registered, return receipt requested), in each
case addressed as follows (or to such other address as Purchaser or Seller may
designate in writing in accordance with this Section 10):
If to Seller:
Corporate Realty Income Fund I, L.P.
475 Fifth Avenue, 21st Floor
New York, New York 10017
Attention: Robert F. Gossett, Jr.
Phone No.: (212) 696-1134
Fax No.: (212) 696-1271
With a copy to:
Arnold & Porter
399 Park Avenue
New York, New York 10022
Attention: Michael J. Canning, Esq.
Phone No.: (212) 715-1110
Fax No.: (212) 715-1399
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If to Purchaser:
INVESCO Realty Advisors
One Lincoln Centre, Suite 700
5400 LBJ Freeway/LB2
Dallas, Texas 75240
Attention: Amy Morris
Phone No.: (972) 715-5857
Fax No.: (972) 715-5811
With a copy to:
Jenkins & Gilchrist
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202
Attention: George Dunlap, Esq.
Phone No. (214) 855-4723
Fax No. (214) 855-4300
11. MISCELLANEOUS
11.1 Time.
Time is of the essence in the performance of each party's obligations
hereunder.
11.2 Attorneys' Fees.
If any legal action, arbitration or other proceeding is commenced to
enforce or interpret any provision of this Agreement, the prevailing party shall
be entitled to an award of its attorneys' fees and expenses. The phrase
"prevailing party" shall include a party which receives substantially the relief
desired whether by dismissal, summary judgment, judgment or otherwise. This
provision shall survive (i) any termination of this Agreement and (ii) the
Closing and shall not be merged therein.
11.3 No Waiver.
No waiver by any party of the performance or satisfaction of any covenant
or condition shall be valid unless in writing and shall not be considered to be
a waiver by such party of any other covenant or condition hereunder.
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11.4 Entire Agreement.
This Agreement contains the entire agreement between the parties regarding
the Property and supersedes all prior agreements, whether written or oral,
between the parties regarding the same subject. This Agreement may only be
modified in writing.
11.5 Survival.
Except for (i) the representations and indemnity obligations of Purchaser
and Seller under this Agreement, (ii) the post-closing obligations of Purchaser
and Seller under this Agreement and (iii) as otherwise specifically provided in
this Agreement, none of the agreements, warranties and representations contained
herein shall survive Closing.
11.6 Successors.
Subject to Section 11.7, this Agreement shall bind and inure to the benefit
of the parties hereto and to their respective legal representatives, successors
and permitted assigns.
11.7 Assignment.
Purchaser shall be entitled, without Seller's prior consent, to assign
Purchaser's rights in and to this Agreement to an entity controlled by a pension
fund to which Purchaser is an advisor having net assets in excess of $50,000,000
(a "Permitted Assignee"). Seller's written consent shall be required for any
other assignment of Purchaser's rights to a nominee under this Agreement. Any
attempted unpermitted assignment, except with Seller's prior written consent,
shall be ineffective and shall constitute a default under this Agreement.
Purchaser shall remain liable for the obligations of Purchaser under this
Agreement; provided, however, that any assignment of this Agreement to a
Permitted Assignee shall operate to release Purchaser from further liability
under this Agreement, provided, further, that such release shall only be
effective from and after Purchaser's delivery to Seller of such Permitted
Assignee's written assumption of all Purchaser's obligations hereunder.
Purchaser represents, warrants and certifies to Seller that Purchaser has not
assigned, transferred or encumbered or agreed to assign, transfer or encumber,
directly or indirectly, all or any portion of its rights or obligations under
this Agreement. Purchaser shall give written notice of any proposed assignment
at least five (5) Business Days prior to Closing. If there is an assignment
permitted hereunder or if Seller approves such assignment, Seller shall have no
obligation to reissue any estoppels, surveys, or title commitments previously
delivered to Purchaser, nor shall Seller be responsible for any costs or
expenses of any nature associated with such transfer.
11.8 Relationship of the Parties.
The parties acknowledge that neither party is an agent for the other party,
and that neither party shall or can bind or enter into agreements for the other
party.
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11.9 Governing Law.
This Agreement and the legal relations between the parties hereto shall be
governed by and construed in accordance with the laws of the State of Colorado.
11.10 Possession; Risk of Loss.
Seller shall deliver to Purchaser possession of the Property on the Closing
Date, subject only to the rights of tenants (as tenants only) under Leases and
Permitted Exceptions. All risk of loss or damage with respect to the Property
shall pass from Seller to Purchaser upon Closing.
11.11 Review by Counsel.
The parties acknowledge that each party and its counsel have reviewed and
approved this Agreement, and the parties hereby agree 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 amendments or exhibits hereto.
11.12 Confidentiality.
(a) Seller and Purchaser hereby covenant and agree that, at all times
after the date of execution hereof and prior to the Closing, unless
consented to in writing by the other party, no press release or other
public disclosure concerning this transaction shall be made, and each
party agrees to use best efforts to prevent disclosure of this
transaction, other than (i) to directors and officers of the parties,
limited partners, members and/or shareholders of Seller, Purchaser or
Permitted Assignee, and employees, prospective lenders of Purchaser or
Permitted Assignee, attorneys, accountants, agents and affiliates of
the parties who are involved in the ordinary course of business with
this transaction, all of which shall be instructed to comply with the
confidentiality provisions hereof, or (ii) as required by law or in
response to lawful process or subpoena or other valid or enforceable
order of a court of competent jurisdiction.
(b) Notwithstanding anything to the contrary contained elsewhere herein,
Purchaser hereby acknowledges that all information furnished by Seller
or its agents or representatives to Purchaser or obtained by Purchaser
in the course of Purchaser's investigation of the Property, or in any
way arising from or relating to any and all studies or entries upon
the Property by Purchaser, its agents or representatives, shall be
treated as confidential information and further, that if any such
confidential information is disclosed to unpermitted third parties
prior to the Closing, Seller may suffer damages and irreparable harm.
In connection therewith, Purchaser hereby expressly understands,
acknowledges and agrees (i) that Purchaser will not disclose any of
the contents or information contained in or
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obtained as a result of any reports or studies made in connection with
Purchaser's investigation of the Property, in any form whatsoever
(including, but not limited to, any oral information received by
Purchaser during the course of Purchaser's inspection of the
Property), to any party prior to the Closing other than (a) the
Seller, Seller's employees, agents or representatives, or Purchaser's
or a Permitted Assignee's agents, employees, representatives,
attorneys, consultants or potential institutional lenders, without the
prior express written consent of Seller (which consent shall not be
unreasonably withheld) or (b) as required by law or in response to
lawful process or subpoena or other valid and enforceable order of a
court of competent jurisdiction; (ii) that in making any disclosure of
such information as permitted hereunder, Purchaser will advise said
parties of the confidentiality of such information and the potential
of damage to Seller as a result of any disclosure of such information
by said third party; and (iii) that Seller is relying on Purchaser's
covenant not to disclose any of the contents or information contained
in any such reports or investigations to unpermitted third parties
prior to Closing (all of which is deemed to be confidential
information by the provisions of this Section). In the event this
Agreement is terminated, Purchaser agrees to return to Seller all
information, studies, or reports Purchaser or Purchaser's agents have
obtained from Seller or Seller's agents, contractors or
representatives with respect to the Property or the condition of the
Property. In the event of a breach of Purchaser's duty of
confidentiality hereunder, Purchaser shall be liable to Seller for
damages and Seller may pursue all of its remedies afforded it under
this Agreement. This provision shall survive (i) any termination of
this Agreement and (ii) the Closing and shall not be merged therein.
Seller hereby agrees that Seller shall not issue any press release
relative to this Agreement or the sale of the Property to Purchaser
pursuant to the terms and conditions thereof without the prior written
consent of Purchaser. Seller further agrees that Seller shall not
disclose the Purchase Price or the identity of the pension fund
affiliated with any Permitted Assignee without the prior written
consent of Purchaser, not to be unreasonably withheld, other than to
Seller's agents, employees or representatives or to Purchaser or
Purchaser's Permitted Assignees and their respective agents,
representatives, attorneys, consultants and the like, or as required
by law or in response to lawful process or subpoena or other valid and
enforceable order of a court of competent jurisdiction.
11.13 Termination.
Upon termination of this Agreement for any reason by either party,
Purchaser shall have the obligation to return to Seller all Due Diligence
Documents and copies thereof (including the Survey) and any other information or
documentation received by Purchaser from Seller or Seller's agents with respect
to the Property and shall not disclose to any unpermitted third party the
contents thereof. Seller shall not have any obligation to return or permit the
return of any sums due Purchaser upon any termination
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of this Agreement, including the Deposit, until the Due Diligence Documents and
copies thereof (including the Survey) and such other information or documents
provided to Purchaser by Seller or Seller's agents have been returned to Seller.
Further, to the extent that any return of the Deposit to the Purchaser permitted
hereunder upon a termination of this Agreement is conditioned upon Purchaser not
then being in default hereunder, then, in the event that Purchaser is, or is
alleged to be, in default hereunder, the Escrow Holder shall retain that portion
of the Deposit designated by Seller as being in dispute (and return the balance
to Purchaser) until such default(s) has been finally resolved by Purchaser and
Seller or finally determined by a court of competent jurisdiction, as provided
for in Section 2 of this Agreement, whereupon any amounts so determined to be
owing to Seller, to and including all of said Deposit, if appropriate, shall be
delivered to Seller on account of amounts owing Seller as a result of such
default(s), with any balance, including all of said Deposit, if appropriate, to
be returned to Purchaser; provided, however, that nothing herein shall affect
Seller's right and entitlement to all of the Deposit as provided in Section 2.1
and in other provisions of this Agreement where Seller shall be entitled to
retain the Deposit as liquidated damages pursuant to Section 12 below.
11.14 Waiver of Jury Trial. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THAT EITHER PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE PROPERTY, THE CONVEYANCE DOCUMENTS OR ANY OTHER DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, OR IN RESPECT OF ANY COURSE OF CONDUCT,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF EITHER PARTY. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS TRANSACTION.
PURCHASER'S INITIALS: ______ SELLER'S INITIALS: ______
11.15 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
will be deemed an original, and the counterparts taken together shall constitute
a single agreement.
11.16 Limitation on Liability. Purchaser expressly agrees that the
obligations and liabilities of Seller under this Agreement and any document
referenced herein shall not constitute personal obligations of the officers,
directors, employees, agents, affiliates, members, representatives, partners,
stockholders or other principals and representatives of Seller. Notwithstanding
anything to the contrary, Seller's liability, if any, arising in connection with
this Agreement or with the Property shall, prior to Closing, be limited to the
remedies as set forth in Section 7.3 of this Agreement and, post-Closing, shall
be limited to $500,000 in accordance with Section 6.1 of this Agreement. The
limitations of liability contained in this section shall apply equally and inure
to the benefit of Seller's present and future officers, directors, affiliates,
members, representatives, trustees,
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partners, shareholders, agents and employees, and their respective heirs,
successors and assigns.
11.17 Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance 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
such term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
11.18 Construction. Headings at the beginning of each section and
subsection are solely for the convenience of Purchaser and Seller and are not a
part of this Agreement and shall have no effect upon the construction or
interpretation of any part hereof. Whenever required by the context of this
Agreement, the singular shall include the plural and the masculine shall include
the feminine, and vice versa. This Agreement shall not be construed as if it had
been prepared by one of the parties, but rather as if Purchaser and Seller had
prepared the same. Unless otherwise indicated, all references to sections and
subsections are to this Agreement. All Exhibits referred to in this Agreement
are attached hereto and incorporated herein by this reference. In the event the
stated date for Closing or the date on which Purchaser or Seller is required to
take any action under the terms of this Agreement is not a Business Day, the
action shall be taken on the next succeeding Business Day thereafter.
12. LIQUIDATED DAMAGES
IF PURCHASER SHALL BREACH OR DEFAULT IN ANY OF ITS OBLIGATIONS UNDER THIS
AGREEMENT, SELLER SHALL BE ENTITLED TO TERMINATE THIS AGREEMENT AND RECEIVE THE
AMOUNT OF ONE HUNDRED FIFTY THOUSAND ($150,000) DOLLARS (WHICH AMOUNT SHALL BE
PAID BY WAY OF RETENTION OF THE AMOUNT OF THE DEPOSIT DESCRIBED IN SECTION 2.2
PLUS ANY ACCRUED INTEREST THEREON TO THE EXTENT AVAILABLE) (THE "SPECIFIED SUM")
AS LIQUIDATED DAMAGES. SELLER AND PURCHASER ACKNOWLEDGE THAT SELLER'S DAMAGES
WOULD BE DIFFICULT TO DETERMINE, AND THAT THE SPECIFIED SUM IS A REASONABLE
ESTIMATE OF SELLER'S DAMAGES. SELLER AND PURCHASER SPECIFICALLY FURTHER AGREE
AFTER NEGOTIATION THAT THIS SECTION 12 IS INTENDED TO AND DOES LIQUIDATE THE
AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER'S EXCLUSIVE REMEDY AGAINST
PURCHASER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY
PURCHASER OF ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. THE PROVISIONS OF THIS SECTION 12 SHALL NOT BE CONSTRUED AS A
LIMITATION ON THE OBLIGATIONS OF PURCHASER UNDER SECTIONS 3.5(a) and (e),
3.6(b), 9.1, 11.2 and 11.12 HEREOF. THIS
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PROVISION IS A MATERIAL INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS
TRANSACTION.
PURCHASER'S INITIALS: ______ SELLER'S INITIALS: ______
13. NO RECORDING
The provisions hereof shall not constitute a lien on the Property and this
Agreement shall not be placed or suffered to be placed by Purchaser for
recording with the office of the recorder (clerk) for the county in which the
Property is located. Purchaser hereby appoints Seller as Purchaser's true and
lawful attorney-in-fact, coupled with an interest, for the purposes of the
execution of such documents and doing such acts as shall be necessary to effect
the discharge of the recording of this Agreement if such recording shall have
been accomplished in violation of this Section.
14. EFFECTIVENESS
This Agreement shall only be effective if a counterpart is signed by both
Seller and Purchaser.
15. TENANT ESTOPPEL CERTIFICATES
Seller shall deliver to Purchaser, at least five (5) days prior to the
Closing Date, original, executed Tenant Estoppel Certificates, in substantially
the form attached hereto as Exhibit I, from tenants occupying at least eighty
five (85%) percent of the rentable square footage of the Improvements, including
specifically from Mobile Storage Technologies, VR-1, Visual Numerics, PS
Technology and PowerWork Online.
16. CC&R ESTOPPELS
Seller shall obtain and deliver to Purchaser, on or before five (5) days
prior to Closing, an estoppel certificate, in form and content reasonably
acceptable to Purchaser, and dated a date no earlier than thirty (30) days prior
to the Closing, from each person or entity having rights under any reciprocal
easement agreement or covenants, conditions and restrictions encumbering or
benefiting the Property or any portion thereof. Seller shall promptly forward to
Purchaser all such estoppel certificates as and when the same are received.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
SELLER:
CORPORATE REALTY INCOME FUND I, L.P.
By: ___________________________________
Robert F. Gossett, Jr.
General Partner
By: 1345 Realty Corporation,
General Partner
By: ______________________________
Robert F. Gossett, Jr.
President
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
PURCHASER:
INVESCO REALTY ADVISORS
By: ___________________________________
Name:
Title:
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ESCROW HOLDER:
COMMONWEALTH LAND TITLE INSURANCE
COMPANY
By: ___________________________________
Its: ___________________________________
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TABLE OF CONTENTS
1. PURCHASE AND SALE.........................................................1
1.1 Property............................................................1
2. PURCHASE PRICE............................................................2
2.1 Deposit.............................................................2
2.2 Interest............................................................4
2.3 Cash at Closing.....................................................4
3. TITLE.....................................................................4
3.1 Title Commitment; Survey............................................4
3.2 Review of Title.....................................................4
3.3 Vesting of Title....................................................6
3.4 Title Insurance.....................................................6
3.5 Inspection Period...................................................6
3.6 Furnishing of Information...........................................8
4. CLOSING..................................................................10
4.1 Closing............................................................10
4.2 Transactions at Closing............................................10
4.3 Title Transfer and Payment of Purchase Price.......................13
4.4 Reporting Requirements.............................................14
5. PRORATIONS; CLOSING ITEMS................................................14
5.1 Prorations; Closing Costs; Reserve Accounts........................14
5.2 Calculation of Prorations..........................................16
6. REPRESENTATIONS AND WARRANTIES...........................................16
6.1 Seller's Representations and Warranties............................16
6.2 Purchaser's Representations and Warranties.........................19
6.3 Purchaser Accepts Property "As Is".................................20
7. CONDITIONS TO CLOSING....................................................22
7.1 Seller's Conditions................................................22
7.2 Purchaser's Conditions.............................................22
7.3 Failure of Condition...............................................23
8. DAMAGE OR DESTRUCTION OF THE
PROPERTY; CONDEMNATION.................................................25
8.1 Damage or Destruction of the Property..............................25
8.2 Condemnation.......................................................26
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9. COMMISSIONS AND EXPENSES.................................................26
9.1 Payment of the Sale Commission.....................................26
9.2 Leasing Commissions/Tenant Improvements............................27
9.3 Lease Expense Reimbursement and Assumption.........................28
9.4 Maintenance of the Property; Property Personnel....................28
9.5 Service Contracts and Equipment Lease..............................29
10. NOTICES..................................................................29
11. MISCELLANEOUS............................................................30
11.1 Time...............................................................30
11.2 Attorneys' Fees....................................................30
11.3 No Waiver..........................................................30
11.4 Entire Agreement...................................................31
11.5 Survival...........................................................31
11.6 Successors.........................................................31
11.7 Assignment.........................................................31
11.8 Relationship of the Parties........................................32
11.9 Governing Law......................................................32
11.10 Possession; Risk of Loss...........................................32
11.11 Review by Counsel..................................................32
11.12 Confidentiality....................................................32
11.13 Termination........................................................34
11.14 Waiver of Jury Trial...............................................34
11.15 Counterparts.......................................................35
11.16 Limitation on Liability............................................35
11.17 Partial Invalidity.................................................35
11.18 Construction.......................................................35
12. LIQUIDATED DAMAGES.......................................................36
13. NO RECORDING.............................................................37
14. EFFECTIVENESS............................................................37
15. TENANT ESTOPPEL CERTIFICATES.............................................37
16. CC&R ESTOPPELS...........................................................37
EXHIBIT A - Legal Description
EXHIBIT B - Bill of Sale
EXHIBIT C - Assignment and Assumption Agreement
EXHIBIT D - Seller's Affidavit
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EXHIBIT E - Purchaser's Agreement
EXHIBIT F - Form of Limited Warranty Deed
EXHIBIT G - Tenant Notification Letter
EXHIBIT H - Service Contracts
EXHIBIT I - Tenant Estoppel Certificate
EXHIBIT J - Form of Seller's Recertification of Representations and Warranties
EXHIBIT K Form of Purchaser's Recertification of Representations and
Warranties
EXHIBIT L - Rent Roll
EXHIBIT M - Survey Requirements
EXHIBIT N - Due Diligence Documents
EXHIBIT O - Sales Agent Confidentiality Agreement
SCHEDULE 1 - Personal Property
SCHEDULE 2 - Permits
SCHEDULE 3 - Service and Other Contracts
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