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EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made by and
between Purchaser and Seller as of the Effective Date.
In consideration of the mutual covenants and representations herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:
1.
DEFINITIONS
1.1 As used herein, the following terms shall have the meanings set
forth below in this Section 1.1:
Additional Earnest Money shall mean One Hundred Thousand and 00/100
DOLLARS $100,000.00.
Agent shall mean Trammell Crow Company.
Approval Period shall mean the period commencing on the Effective Date
and ending at 5:00 p.m., Dallas, Texas time, twenty-five (25) business days
after the Effective Date.
business day shall mean any day other than a Saturday, Sunday or a day
on which banks are permitted or required to be closed under the laws of the
State.
Casualty Amount shall mean $500,000.00
Closing shall mean the act of settlement of the purchase and sale of
the Property in accordance with this Agreement at which, among other matters,
title to the Property is conveyed from Seller to Purchaser and the Purchase
Price is paid by Purchaser to Seller.
Closing Date shall mean the date that is thirty (30) business days
after the last day of the Approval Period, as said Closing Date may be extended
as herein provided.
Contracts shall mean all contracts pertaining to the Property and not
cancelable on thirty (30) days' notice without penalty or premium, including,
but not limited to, management contracts, service contracts, equipment leases
and maintenance contracts.
Earnest Money shall mean the Initial Earnest Money and after deposit of
any Additional Earnest Money, the Initial Earnest Money and the Additional
Earnest Money, collectively, plus any interest earned thereon.
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Effective Date shall mean the first date the Title Company is in
receipt of both this Agreement executed by Purchaser and Seller (whether in
counterparts or not) and the Earnest Money.
Improvements shall mean all improvements and related amenities known as
"Paddock Place Shopping Center" in and on the Land, and located at 73 White
Bridge Road, Nashville, Tennessee.
Initial Earnest Money shall mean Two Hundred Fifty Thousand and 00/100
DOLLARS ($250,000.00), plus any interest earned thereon.
Inspection Materials shall mean copies of the following in Seller's or
its property manager's possession:
(i) Contracts (to the extent in the possession of Seller or its
property manager), copies of the Leases and a Rent Roll; (ii) copies of all
mechanical and engineering, environmental, soils and technical reports
commissioned by Seller relating to the Land or the Improvements, (iii) copies of
all plans/floor plans, drawings and specifications relating to the Improvements,
(iv) copies of all licenses, permits, certificates of occupancy and other
governmental entitlements relating to use and occupancy of the Improvements, (v)
copies of operating statements relating to the Improvements for the most recent
three-year period, (vi) copies of the most recent ad-valorem tax statements
relating to the Property; (vii) HVAC reports and inspections; (viii) property
inspection reports, (ix) schedule of personal property, (x) surveys and site
plans, (xi) warranties/guarantees, and (xii) existing title insurance policies.
Land shall mean that certain tract of land located in the City of
Nashville, Davidson County, Tennessee, being more particularly described on
Exhibit A attached hereto and made a part hereof.
Owner's Policy shall mean the Owner's Policy of Title Insurance in the
standard form in use in the State, naming Purchaser as insured, in the amount of
the Purchase Price, insuring that Purchaser owns good and marketable fee simple
title to the Property, subject only to the Permitted Encumbrances.
Property shall have the meaning provided in Section 2.1 of this
Agreement.
Purchase Price shall mean Nine Million Seven Hundred Thousand and
00/100 DOLLARS ($9,700,000.00).
Purchaser shall mean Grace Development, Inc., a Tennessee corporation,
or its permitted assigns, whose address for notice under this Agreement is as
follows:
Grace Development, Inc.
3309 Fairmont Drive
Nashville, Tennessee 37203
Attention: Jack Grace
Tel: 615-385-5433
Fax: 615-385-4868
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with a copy to:
Stokes Bartholomew Evans & Petree, P.A.
424 Church Street, Suite 2800
Nashville, Tennessee 37219-2386
Attention: Fred Russell Harwell
Tel: 615-259-1457
Fax: 615-259-1470
Rent Roll shall mean a rent roll in the form regularly prepared by the
property manager of the Property describing all Leases as of the last month
Seller received such information from the property manager.
Seller shall mean Murray Income Properties II, Ltd., a Texas limited
partnership, whose address for notice under this Agreement is as follows:
Murray Income Properties
5550 LBJ Freeway, Suite 675
Dallas, Texas 75240
Attention: Mitchell Armstrong
Tel: 972-991-9085
Fax: 972-991-9086
with a copy to:
Murray Income Properties
299 S. 9th Street, Suite 204
Oxford, Mississippi 38655
Attention: Brent Buck
Tel: 662-281-8778
Fax: 662-281-8773
and
Locke Liddell & Sapp LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
Attention: Robert J. Banta
Tel: 214-740-8509
Fax: 214-740-8800
State shall mean the State of Tennessee.
Survey shall mean a current ALTA survey of the Property prepared in
accordance with the Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Survey, including
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items 3, 7(a), 9 and 10 from Table A, and containing the surveyor's
certification in form reasonably satisfactory to Purchaser in favor of Seller,
Purchaser, Purchaser's lender, if any and the Title Company.
Title Commitment shall mean a Commitment for Owner's Policy of Title
Insurance with respect to the Property with coverage in the amount of the
Purchase Price issued by the Title Company together with legible copies of any
restrictive covenants, easements and other items listed as title exceptions in
such Commitment.
Title Company shall mean Lawyers Title Insurance Corporation, whose
address for notice under this Agreement is as follows:
Lawyers Title Insurance Corporation
SunTrust Center
424 Church Street, Suite 200
Nashville, Tennessee 37219
Attention: Stuart Jones
Tel: 615-244-0678
Fax: 615-244-2896
2.
PURCHASE AND SALE
2.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell and convey to Purchaser, and Purchaser
hereby agrees to purchase from Seller, all of the Seller's assignable and
transferable right, title and interest in and to the following described
property (herein collectively called the "Property"):
(a) Land. The Land.
(b) Easements. All easements, if any, benefiting the Land or the
Improvements.
(c) Rights and Appurtenances. All rights and appurtenances
pertaining to the Land, including any right, title and interest of
Seller in and to adjacent streets, alleys or rights-of-way.
(d) Improvements. The Improvements.
(e) Leases. All leases (the "Leases") of space in the Improvements,
concession leases and all tenant security deposits for which landlord
has liability to Tenants under the Leases on the Closing Date.
(f) Tangible Personal Property. All appliances, fixtures,
equipment, machinery, furniture, carpet, drapes and other personal
property, if any, owned by Seller and located on or about the Land and
the Improvements (the "Tangible Personal Property").
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(g) Contracts. To the extent assignable without the consent of
third parties, all Contracts.
(h) Intangible Property. To the extent assignable without the
consent of third parties, all intangible property (the "Intangible
Property"), if any, owned by Seller and pertaining to the Land, the
Improvements, or the Tangible Personal Property including, without
limitation, any trademark or tradename used in connection with the
Improvements, transferable utility contracts, transferable telephone
exchange numbers, plans and specifications, engineering plans and
studies, floor plans and landscape plans.
2.2 Independent Consideration. Upon execution of this Agreement,
Purchaser has delivered to Seller, and Seller acknowledges receipt of, FIFTY AND
NO/100 DOLLARS ($50.00) (the "Independent Consideration"), as consideration for
Purchaser's right to purchase the Property and for Seller's execution, delivery
and performance of this Agreement. The Independent Consideration is in addition
to and independent of any other consideration or payment provided for in this
Agreement, is non-refundable and shall be retained by Seller notwithstanding any
other provision of this Agreement.
3.
PURCHASE PRICE
3.1 Purchase Price. The Purchase Price shall be paid in cash by
Purchaser to Seller at the Closing by wire transfer in accordance with wire
transfer instructions to be provided by Seller.
4.
EARNEST MONEY
4.1 Earnest Money. Purchaser shall deliver the Initial Earnest Money to the
Title Company within three (3) business days after the date a fully-executed
copy of this Agreement is delivered to the Title Company, by wire transfer in
accordance with wire transfer instructions provided by the Title Company. Seller
shall have the option of terminating this Agreement if the full amount of
Initial Earnest Money is not delivered to the Title Company as prescribed in
this Section 4.1. Purchaser agrees to promptly deliver or cause the Title
Company to deliver written acknowledgment by the Title Company that the executed
copy of this Agreement and the Initial Earnest Money have been received by and
are being held by the Title Company pursuant to the terms of this Agreement. In
the event that Purchaser exercises the Extension Option pursuant to Section 7.1,
Purchaser shall, concurrently with the exercise of the Extension Option, deliver
the Additional Earnest Money to the Title Company in the form of immediately
available funds by wire transfer. The Earnest Money shall be invested by the
Title Company in an interest-bearing account as Purchaser and Seller shall
direct. If the sale of the Property is consummated under this Agreement, the
Earnest Money shall be paid to Seller and applied to the payment of the Purchase
Price at Closing. If Purchaser terminates this Agreement in accordance with any
right to terminate granted to Purchaser by the terms of this Agreement, the
Earnest Money shall be immediately returned to Purchaser, and no party hereto
shall have any further obligations under this Agreement except for such
obligations which by their terms expressly survive the termination of this
Agreement (the "Surviving Obligations"). Purchaser agrees to deliver to Seller
copies of all Reports (as defined in Section 5.2 hereof) at the time (or not
later than five
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(5) business days after delivery) of the notice to terminate this Agreement is
given. The obligations to deliver the Reports shall survive the termination of
this Agreement. In no event shall any Earnest Money be returned to Purchaser
hereunder until all Reports have been delivered to Seller.
5.
CONDITIONS TO CLOSING
5.1 Seller's Obligations. Seller shall deliver the Inspection Materials
to Purchaser, at Seller's expense, within five (5) business days after the
Effective Date. Seller's failure to timely deliver the Inspection Materials to
Purchaser shall result in the extension of the Approval Period by one (1) day
for each day of delay in delivering the Inspection Materials. In addition, from
and after the Effective Date, Seller shall make available for inspection and
copying by Purchaser and/or its representatives, at Purchaser's expense, at the
office of Seller's property manager, during normal office hours and upon
reasonable advance notice, copies of files maintained by Seller in the ordinary
course of business relating to Tenants and any portion of the Inspection
Materials to the extent any of the same are not in a form in which they are able
to be copied by Seller (e.g., being oversized such as plans and specifications).
5.1.1 Purchaser's Termination Right. If for any reason Purchaser does
not desire to purchase the Property as determined by Purchaser in its sole
discretion, Purchaser may terminate this Agreement by written notice sent to
Seller at or before the expiration of the Approval Period; and upon such
termination, Purchaser shall be entitled to the return of the Earnest Money
(subject to Purchaser's delivery of the Reports to Seller), and neither party
shall have any further obligation hereunder except for the Surviving
Obligations. If Purchaser does not terminate this Agreement by written notice to
Seller prior to the end of the Approval Period, Purchaser shall be deemed to be
satisfied with the Property and shall have waived its right of termination under
this Section 5.1.1.
5.1.2 Title Commitment and Survey.
(a) Seller shall order the Survey and cause Purchaser's counsel to
order the Title Commitment and cause the same to be delivered by the
Title Company to Purchaser as promptly as reasonably practicable. In
the event (i) the Survey shows any easement, right-of-way,
encroachment, conflict, protrusion or other matter affecting the
Property that is unacceptable to Purchaser, or (ii) any exceptions
appear in the Title Commitment that are unacceptable to Purchaser,
Purchaser shall within ten (10) business days after receipt of the
Survey and the Title Commitment, notify Seller in writing of such facts
and the reasons therefor ("Purchaser's Objections"). Upon the
expiration of said ten (10) business day period, except for Purchaser's
Objections if same are timely raised, Purchaser shall be deemed to have
accepted the form and substance of the Survey and the Title Commitment.
Notwithstanding anything to the contrary contained herein, Seller shall
have no obligations to take any steps or bring any action or proceeding
or otherwise to incur any effort or expense whatsoever to eliminate or
modify any of the Purchaser's Objections. Seller may, within ten (10)
business days after receipt of written notice of Purchaser's Objections
("Seller's Cure Period"), deliver to Purchaser written notice
("Seller's Cure Notice") setting forth which of Purchaser's Objections
Seller will endeavor to cure prior to the Closing Date and which of
Purchaser's Objections Seller
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cannot or does not intend to cure. If Seller has not given Seller's
Cure Notice by the end of Seller's Cure Period, Seller shall be deemed
to have given notice that it does not intend to cure any of Purchaser's
Objections. If by the end of Seller's Cure Period, Seller has not cured
or undertaken to cure all of Purchaser's Objections to the reasonable
satisfaction of Purchaser, Purchaser may (as its sole and exclusive
remedy) terminate this Agreement by delivering written notice thereof
to Seller not later than 5:00 p.m., Dallas, Texas time, on the first
business day following the end of Seller's Cure Period. If one (1)
business day prior to the Closing Date, Seller has not cured to the
reasonable satisfaction of Purchaser all of Purchaser's Objections
which Seller has in Seller's Cure Notice undertaken to cure, Purchaser
may (as its sole and exclusive remedy) terminate this Agreement by
written notice to Seller on the Closing Date. In the event of a
termination of this Agreement by Purchaser under this Section 5.1.2,
neither party shall have any further obligations hereunder other than
the Surviving Obligations. Notwithstanding the foregoing, Purchaser
shall maintain the right to close on the purchase of the Property
following Seller's failure to cure any such Purchaser's Objections.
(b) The term "Permitted Encumbrances" as used herein includes: (i)
any easement, right of way, encroachment, conflict, discrepancy,
overlapping of improvements, protrusion, lien, encumbrance,
restriction, condition, covenant, exception or other matter with
respect to the Property that is reflected or addressed on the Survey or
in the Title Commitment to which Purchaser fails to timely object
pursuant to Section 5.1.2(a) of this Agreement; (ii) subject to
Purchaser's termination rights provided in Section 5.1.2(a), (A) any
Purchaser's Objection which in Seller's Cure Notice Seller has
undertaken to cure that remains uncured, for whatever reason, at the
Closing Date; and (B) any Purchaser's Objections which by the end of
the Seller's Cure Period, Seller has given, or is deemed to have given,
notice that it cannot or does not intend to cure; and (iii) the rights
and interests of parties claiming under the Leases.
5.1.3 Limitations of Seller's Obligations. Notwithstanding anything
contained herein to the contrary, Seller shall have no obligation to take any
steps, bring any action or proceeding or incur any effort or expense whatsoever
to eliminate, modify or cure any objection Purchaser may have pursuant to
Section 5.1.1, Section 5.1.2 or Section 5.2.
5.2 Inspection.
(a) From and after the Effective Date through the Closing Date,
subject to the limitations hereinafter provided in this Section 5.2,
Purchaser and its authorized agents and representatives may enter upon
the Land and Improvements to conduct such investigations, studies and
tests as Purchaser shall deem necessary or desirable. Notwithstanding
the foregoing, Purchaser must obtain Seller's written approval (which
shall not be unreasonably withheld, conditioned or delayed) of the
scope and method of any environmental testing or investigation (other
than a Phase I environmental inspection) and any physical or invasive
testing or inspection prior to Purchaser's commencement of such
inspection or testing. Seller's prior written consent for physical or
invasive inspection or testing may be conditioned upon receipt of a
detailed description of the proposed physical or invasive inspection or
testing, a list of contractors who will be performing the physical or
invasive inspection or testing, evidence of insurance reasonably
satisfactory to Seller and such other information as Seller
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reasonably requires in connection with such proposed inspection or
testing. Seller shall endeavor to respond to Purchaser's request for
any such invasive or physical test or any mechanical or engineering
inspection within three (3) business days.
(b) All information provided by Seller to Purchaser or obtained by
Purchaser relating to the Property in the course of Purchaser's review,
including, without limitation, any environmental assessment or audit
(collectively, the "Reports") shall be treated as confidential
information by Purchaser, and Purchaser shall make reasonable efforts
to instruct all of its employees, agents, representatives and
contractors as to the confidentiality of all such information.
(c) In conducting any inspections, investigations or tests of the
Property, Purchaser and its agents and representatives shall (i) not
unreasonably interfere with the operation and maintenance of the
Property, (ii) not unreasonably disturb any Tenant or unreasonably
interfere with any Tenant's use of the Property pursuant to its
respective Lease, (iii) not damage any part of the Property or any
personal property owned or held by any Tenant or third party, (iv) not
injure or otherwise cause bodily harm to Seller, the property manager
or their respective guests, agents, invitees, contractors and employees
or any Tenant or its guests or invitees, (v) maintain comprehensive
general liability insurance in terms and amounts reasonably acceptable
to Seller covering any accident arising in connection with the presence
of Purchaser, its agents and representatives on the Property, and upon
written request deliver a certificate of insurance verifying such
coverage to Seller; (vi) promptly pay when due the costs of all tests,
investigations and examinations done with regard to the Property; (vii)
not permit any liens to attach to the Property or any part thereof by
reason of the exercise of Purchaser's rights hereunder, (viii) fully
restore the Property to the condition in which the same was found
before any such inspection or tests were undertaken; (ix) not reveal or
disclose any information obtained concerning the Property to anyone
outside Purchaser's organization; (x) permit Seller and its agents and
representatives to be present during any such inspection, investigation
or test; (xi) not contact any leasing agent or property manager of the
Property without Seller's prior written consent, which consent shall
not be unreasonably withheld, conditioned or delayed; and (xii) not
contact any Tenant or make any inquiry of any Tenant which in any way
relates to the Property or Seller without Seller's prior written
consent, which consent shall not be unreasonably withheld, conditioned
or delayed. Purchaser shall indemnify, defend and hold harmless Seller
and its agents, employees, officers, directors, affiliates and asset
managers from any liability, claim, damage, cost or expense incurred by
any of them arising out of or resulting from inspections,
investigations or tests of the Property conducted by Purchaser or its
agents or representatives. The foregoing indemnification by Purchaser
shall survive the Closing or the termination of this Agreement, as
applicable.
5.3 Purchaser's Representations and Warranties. Purchaser represents
and warrants to Seller that (a) if Purchaser is a partnership, corporation or
limited liability company, it is duly organized and in good standing under the
laws of the State of its organization, is qualified to do business in the State
and has the power to enter into this Agreement and to execute and deliver this
Agreement and to perform all duties and obligations imposed upon it hereunder,
and Purchaser has obtained all necessary partnership, corporate or limited
liability company, as the
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case may be, authorizations required in connection with the execution, delivery
and performance contemplated by this Agreement and has obtained the consent of
all entities and parties necessary to bind Purchaser to this Agreement, and (b)
neither the execution nor the delivery of this Agreement, nor the consummation
of the purchase and sale contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement conflict with or will
result in the breach of any of the terms, conditions, or provisions of any
agreement or instrument to which Purchaser, or any partner or related entity or
affiliate of Purchaser, is a party or by which Purchaser, any partner or related
entity or affiliate of Purchaser, or any of Purchaser's assets is bound. The
Purchaser's representations and warranties set forth in this Section 5.3 shall
survive the Closing or termination of this Agreement. Purchaser's
representations and warranties contained herein must be true and correct through
the Closing Date, the breach of same being a default by Purchaser under this
Agreement.
5.4 Seller's Representations, Warranties and Covenants.
(a) Seller represents and warrants to, and covenants with,
Purchaser that:
(i) Seller has full right, power and authority to execute and
deliver this Agreement and to consummate the purchase and sale
transactions provided for herein without obtaining any further
consents or approvals from, or the taking of any other actions with
respect to, any third parties. This Agreement, when executed and
delivered by Seller and Purchaser, will constitute the valid and
binding agreement of Seller, enforceable against Seller in
accordance with its terms.
(ii) All bills and other payments due with respect to the
ownership, operation and maintenance of the Property for the period
of Seller's ownership of the Property shall be paid by Seller in
the ordinary course of business.
(iii) From the Effective Date until the Closing Date, Seller
shall: (A) maintain and operate the Property in substantially the
same manner as Seller has heretofore done; (B) continue all Leases
and Contracts in full force and effect; and prior to the end of the
Approval Period up until the Closing Date, neither cancel, amend or
renew any of the same nor enter into a New Lease (hereinafter
defined in Section 7.3(g) or Contract other than in the ordinary
course of Seller's business, or from and after the end of the
Approval Period, neither cancel, amend or renew any Lease or
Contract nor enter into any new Lease or Contract without
Purchaser's prior written approval, which approval will not be
unreasonably withheld, conditioned or delayed; (C) not commit or
permit to be committed any physical waste to the Property; and (D)
not remove any item of the Tangible Personal Property from the Land
or Improvements unless it is replaced with an item of at least
equal value that is properly suited for its intended purpose. To
the extent that Purchaser has approved renewal of a Lease or
execution of a New Lease after the Effective Date, Purchaser shall
assume and be obligated to pay all leasing commissions and tenant
finish allowances thereunder.
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(iv) With respect to each Tenant, except as reflected in the
Rent Roll or in the Lease: (A) to Seller's Knowledge, such Tenant's
Lease is in full force and effect and no uncured breach or default
exists on the part of the landlord or Tenant thereunder; (B) Seller
has received no written notice that such Tenant is asserting any
claim of offset or other defense in respect of its or the
landlord's obligations under its Lease; (C) Seller is the owner of
the entire lessor's interest in such Tenant's Lease and neither the
landlord's interest in and to the Leases nor the rents payable
thereunder have been assigned, pledged or encumbered in any manner
by Seller, except to Seller's mortgage lender which assignments and
encumbrances will be released at or prior to Closing; and (D) no
leasing commission in connection with the Property is as of the
date hereof due or owing from Seller to any party as to any Lease,
or except as otherwise provided in Section 5.4(a)(iii) and Section
7.3(g), will be due and owing from Seller upon the execution of any
New Lease or renewal of any Lease, and except as otherwise provided
in Section 5.4(a)(iii) and 7.3(g), all such commissions shall be
paid by Seller on or before the Closing.
(v) Except as disclosed on Exhibit G, none of the Tangible
Personal Property is held by Seller under a lease or installment
sale contract, and Seller owns title to the Tangible Personal
Property reflected on the inventory to be delivered to Purchaser
herein, free and clear of any liens or claims, except liens to be
released at Closing.
(vi) Except as disclosed on Exhibit H, Seller has received no
written notice of any action, suit, proceeding or claim presently
pending in any court or before any federal, state, county or
municipal department, commission, board, bureau or agency or other
governmental instrumentality or before any arbitration, tribunal or
panel, affecting (A) the Property, or any portion thereof, (B)
Seller's title, use, operation or ownership of the Property, (C)
the Contracts, or (D) Seller's ability to perform its obligations
under this Agreement, nor, to Seller's Knowledge is any such
action, suit, proceeding or claim threatened.
(vii) To Seller's Knowledge, there is no attachment, execution,
general assignment for the benefit of creditors, or voluntary or
involuntary bankruptcy proceedings, or proceedings under any debtor
relief laws, contemplated by or pending or threatened against
Seller or the Property. Seller has received no written notice, and
otherwise has no Knowledge, of the introduction of any Hazardous
Materials or violations of any Environmental Requirements affecting
the Property.
(viii) Seller has received no written notice of any
condemnation, eminent domain or similar proceedings being
instituted or threatened against the Property by any governmental
authority having jurisdiction over the Property.
(ix) Except as disclosed on Exhibit I, Seller has received no
written notice from any governmental authority having jurisdiction
over the Property that the Improvements and the current operation
thereof violate any law, regulation,
<PAGE> 11
ordinance, rule, order or other requirement of any governmental
authority having jurisdiction over the Property.
(x) Seller has received no written notice from any governmental
authority having jurisdiction over the Property of any proposed new
assessment against the Property.
(xi) Brent Buck is Seller's authorized agent and has had direct
involvement in the management and ownership of the Property
throughout the time of Seller's ownership of the Property.
(xii) The Inspection Materials either delivered to Purchaser or
made available to Purchaser for inspection constitute all of the
documents and materials in Seller's and its property manager's
possession coming within the definition of Inspection Materials.
When used herein, the phrase "to Seller's Knowledge" or derivations
thereof shall mean the current actual knowledge of Brent Buck,
without any obligation to make any investigation or inquiry
regarding the Property, and without obligation to make any
investigation of the files, documents or studies in the possession
of the property manager or other persons, and shall not include any
knowledge which may be imputed to Seller or of any other person.
Purchaser acknowledges that the individual named above is named
solely for the purpose of defining and narrowing the scope of
Seller's knowledge and not for the purpose of limiting Seller's
liability or of imposing any liability on or creating any duties
running from such individual to Purchaser. Purchaser covenants that
it will bring no action of any kind against such individual,
related to or arising out of these representations and warranties,
but Seller acknowledges that Purchaser's waiver of the right to
bring such action shall not in any manner limit Purchaser's rights
with respect to asserting Seller's liability.
(b) Seller's representations and warranties set forth in Section
5.4(a) shall not be deemed to be merged into or waived by the
instruments of Closing, but shall survive the Closing for a period of
nine (9) months (the "Survival Period"). No broker, agent or party
other than Seller is authorized to make any representation or warranty
for or on behalf of Seller. Purchaser shall have the right to bring an
action against Seller for the breach of a representation or warranty
hereunder, but only on the following conditions: (1) Purchaser first
learns of the breach after Closing and files such action within the
Survival Period, and (2) Purchaser shall not have the right to bring a
cause of action for a breach of a representation or warranty unless the
damage to Purchaser on account of such breach (individually or when
combined with damages from other breaches) equals or exceeds
$75,000.00. Notwithstanding any other provision of this Agreement, any
agreement contemplated by this Agreement, or any rights which Purchaser
might otherwise have at law, equity, or by statute, whether based on
contract or some other claim, any liability of Seller to Purchaser will
be limited in the aggregate to $400,000.00. The general or limited
partners, employees, agent or affiliates of Seller will not in any
manner be personally or individually liable for the obligations of
Seller hereunder or for
<PAGE> 12
any claims related to this Agreement, any agreement contemplated by
this Agreement or the Property. Seller shall not have any liability
after Closing for the breach of a representation or warranty hereunder
of which Purchaser had knowledge as of Closing. The provisions of this
Section 5.4(b) shall survive Closing.
5.5 Defective Condition Extension; Termination. The obligations of
Seller hereunder are subject to and contingent upon the following:
In the event that subsequent to the execution of this
Agreement Seller obtains knowledge of, or Purchaser's inspection of
the Property reveals, either (i) the presence of any Hazardous
Materials (as defined in Section 6.2 hereof) or the violation or
potential violation of any Environmental Requirements (as defined
in Section 6.3 hereof) or (ii) any structural or other defect in
the Improvements, whether or not in violation of any applicable
law, ordinance, code, regulation or decree of any governmental
authority having jurisdiction over the Property (collectively, a
"Defective Condition"), which Seller, in its reasonable judgment,
determines could constitute a potential liability to Seller after
the Closing or should be remedied prior to the sale of the
Property, Seller shall have the right upon written notice to
Purchaser on or before the scheduled Closing Date either (i) to
extend the Closing Date for the period of time necessary to
complete such remediation at Seller's sole cost and expense, or
(ii) to terminate this Agreement upon written notice to Purchaser,
in which event the Earnest Money shall be refunded to Purchaser and
neither party shall have any further right or obligation hereunder
other than the Surviving Obligations. The terms of this Section 5.5
are solely for the benefit of Seller, and Purchaser shall have no
additional right or remedy hereunder as a result of the exercise by
Seller of its rights under this Section.
6.
NO REPRESENTATIONS OR WARRANTIES BY SELLER;
ACCEPTANCE OF PROPERTY
6.1 Disclaimer. PURCHASER ACKNOWLEDGES AND AGREES THAT EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES (OTHER THAN
THE SPECIAL WARRANTY OF TITLE AS SET OUT IN THE DEED, AS DEFINED BELOW),
PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER
WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR
FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE VALUE, NATURE, QUALITY
OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND
GEOLOGY, (B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C) THE SUITABILITY OF
THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER OR ANY TENANT
MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION
WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY, (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY,
PROFITABILITY OR FITNESS FOR A
<PAGE> 13
PARTICULAR PURPOSE OF THE PROPERTY, (F) THE MANNER OR QUALITY OF THE
CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY, (G) THE
MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY, OR (H)
COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES,
REGULATIONS, ORDERS OR REQUIREMENTS, INCLUDING THE EXISTENCE IN OR ON THE
PROPERTY OF HAZARDOUS MATERIALS (AS DEFINED BELOW) OR (I) ANY OTHER MATTER WITH
RESPECT TO THE PROPERTY. ADDITIONALLY, NO PERSON ACTING ON BEHALF OF SELLER IS
AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF OF PURCHASER ACKNOWLEDGES THAT NO
PERSON HAS MADE, ANY REPRESENTATION, AGREEMENT, STATEMENT, WARRANTY, GUARANTY OR
PROMISE REGARDING THE PROPERTY OR THE TRANSACTION CONTEMPLATED HEREIN; AND NO
SUCH REPRESENTATION, WARRANTY, AGREEMENT, GUARANTY, STATEMENT OR PROMISE IF ANY,
MADE BY ANY PERSON ACTING ON BEHALF OF SELLER SHALL BE VALID OR BINDING UPON
SELLER UNLESS EXPRESSLY SET FORTH HEREIN. PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY, PURCHASER
IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND NOT ON ANY
INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER AND AGREES TO ACCEPT THE
PROPERTY AT THE CLOSING AND EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, WAIVE ALL OBJECTIONS OR CLAIMS AGAINST SELLER (INCLUDING, BUT NOT
LIMITED TO, ANY RIGHT OR CLAIM OF CONTRIBUTION) ARISING FROM OR RELATED TO THE
PROPERTY OR TO ANY HAZARDOUS MATERIALS ON THE PROPERTY. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH
RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER
HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION
AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR TRUTHFULNESS OF SUCH
INFORMATION. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR
WRITTEN STATEMENT, REPRESENTATION OR INFORMATION PERTAINING TO THE PROPERTY, OR
THE OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, CONTRACTOR, AGENT,
EMPLOYEE, SERVANT OR OTHER PERSON. PURCHASER FURTHER ACKNOWLEDGES AND AGREES
THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS
PROVIDED FOR HEREIN IS MADE ON AN "AS IS" CONDITION AND BASIS WITH ALL FAULTS.
IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR
NEGOTIATION TO REFLECT THAT ALL OF THE PROPERTY IS SOLD BY SELLER AND PURCHASED
BY PURCHASER SUBJECT TO THE FOREGOING. PURCHASER HEREBY AGREES TO INDEMNIFY,
PROTECT, DEFEND, SAVE AND HOLD HARMLESS SELLER FROM AND AGAINST ANY AND ALL
DEBTS, DUTIES, OBLIGATIONS, LIABILITIES, SUITS, CLAIMS, DEMANDS, CAUSES OF
ACTION, DAMAGES, LOSSES, FEES AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS' FEES AND EXPENSES AND COURT COSTS) IN ANY WAY RELATING TO, OR IN
CONNECTION WITH OR ARISING OUT OF PURCHASER'S ACQUISITION, OWNERSHIP, LEASING,
USE, OPERATION,
<PAGE> 14
MAINTENANCE AND MANAGEMENT OF THE PROPERTY. THE PROVISIONS OF THIS SECTION 6
SHALL SURVIVE THE CLOSING OR ANY TERMINATION HEREOF.
6.2 Hazardous Materials. "Hazardous Materials" shall mean any substance
which is or contains (i) any "hazardous substance" as now or hereafter defined
in Section 101(14) of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.)
("CERCLA") or any regulations promulgated under CERCLA; (ii) any "hazardous
waste" as now or hereafter defined in the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et seq.) ("RCRA") or regulations promulgated under RCRA;
(iii) any substance regulated by the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.); (iv) gasoline, diesel fuel, or other petroleum
hydrocarbons; (v) asbestos and asbestos containing materials, in any form,
whether friable or non-friable; (vi) polychlorinated biphenyls; (vii) radon gas;
and (viii) any additional substances or materials which are now or hereafter
classified or considered to be hazardous or toxic under Environmental
Requirements (as hereinafter defined) or the common law, or any other applicable
laws relating to the Property. Hazardous Materials shall include, without
limitation, any substance, the presence of which on the Property, (A) requires
reporting, investigation or remediation under Environmental Requirements; (B)
causes or threatens to cause a nuisance on the Property or adjacent property or
poses or threatens to pose a hazard to the health or safety of persons on the
Property or adjacent property; or (C) which, if it emanated or migrated from the
Property, could constitute a trespass.
6.3 Environmental Requirements. "Environmental Requirements" shall mean
all laws, ordinances, statutes, codes, rules, regulations, agreements,
judgments, orders, and decrees, now or hereafter enacted, promulgated, or
amended, of the United States, the states, the counties, the cities, or any
other political subdivisions in which the Property is located, and any other
political subdivision, agency or instrumentality exercising jurisdiction over
the owner of the Property, the Property, or the use of the Property, relating to
pollution, the protection or regulation of human health, natural resources, or
the environment, or the emission, discharge, release or threatened release of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or waste or Hazardous Materials into the environment (including,
without limitation, ambient air, surface water, ground water or land or soil).
7.
CLOSING
7.1 Closing. The Closing shall be held at the offices of the Title
Company on the Closing Date, unless the parties mutually agree in writing upon
another place, time or date. Purchaser shall have the option (the "Extension
Option") to extend the Closing for up to fifteen (15) calendar days, such
Extension Option being exercisable by (i) delivering written notice to Seller of
such exercise not less than five (5) business days' prior to the originally
scheduled Closing Date and (ii) within two (2) business days thereafter,
delivering the Additional Earnest Money to the Title Company. Purchaser's notice
of exercise shall specify the extended Closing Date. Failure to timely deposit
the Additional Earnest Money shall render exercise of the Extension Option
ineffective.
7.2 Possession. Possession of the Property shall be delivered to
Purchaser at the Closing, subject to the Permitted Encumbrances.
<PAGE> 15
7.3 Proration.
(a) Seller and Purchaser agree to adjust, as of 11:59 p.m. on the
day immediately preceding the Closing Date, the following
(collectively, the "Proration Items"): real estate and personal
property taxes and assessments (subject to the terms of Section 7.3(d)
below), utility bills (except as hereinafter provided), collected Rents
(subject to the terms of Section 7.3(b) below) and Operating Expenses
(subject to the terms of Section 7.3(c) below) payable by the owner of
the Property. Seller will be charged and credited for the amount of all
of the Proration Items relating to the period up to and including the
Closing Date, and Purchaser will be charged and credited for all of the
Proration Items relating to the period after the Closing Date. Such
preliminary estimated Closing prorations shall be set forth on a
preliminary closing statement to be prepared by Seller and submitted to
Purchaser for Purchaser's written approval prior to the Closing Date
(the "Closing Statement"). The Closing Statement, once agreed upon,
shall be signed by Purchaser and Seller and delivered to Title Company
for purposes of making the proration adjustment at Closing. The
proration shall be paid at Closing by Purchaser to Seller (if the
prorations result in a net credit to Seller) or by Seller to Purchaser
(if the prorations result in a net credit to Purchaser) by increasing
or reducing the cash to be delivered by Purchaser in payment of the
Purchase Price at the Closing. If the actual amounts of the Proration
Items are not known as of the Closing Date, the prorations will be made
at Closing on the basis of the best evidence then available; such
prorations shall be conclusive and binding on the parties without
further adjustment. No prorations will be made in relation to insurance
premiums, and Seller's insurance policies will not be assigned to
Purchaser. Final readings and final billings for utilities will be made
if possible as of the Closing Date, in which event no proration will be
made at Closing with respect to utility bills. Seller will be entitled
to all deposits presently in effect with the utility providers, and
Purchaser will be obligated to make its own arrangements for deposits
with the utility providers. "Rents" shall mean and include fixed
monthly rentals, additional rentals, percentage rentals, escalation
rentals (which include each Tenant's proportionate share of building
operation and maintenance costs and expenses as provided for under the
applicable Lease, to the extent the same exceeds any expense stop
specified in such Lease), retroactive rentals, all administrative
charges, utility charges, tenant or real property association dues,
storage rentals, special event proceeds, temporary rents, telephone
receipts, locker rentals, vending machine receipts and other sums and
charges payable by Tenants under the Leases or from other occupants or
users of the Property, but excluding amounts received from Tenants
under Leases for Operating Expenses. "Operating Expenses" shall mean
operating expenses and common area maintenance charges, including
utilities, insurance and other charges, under the Leases whether deemed
additional rent or otherwise, but excluding Rents.
(b) Purchaser will receive a credit on the Closing Statement for
the prorated amount (as of 11:59 p.m. of the day immediately preceding
the Closing Date) of all Rents previously paid to or collected by
Seller and attributable to any period following Closing. Rents are
"Delinquent" when they were due prior to the Closing Date, and payment
thereof has not been made on or before the Closing Date. Delinquent
Rents will not be prorated. All sums collected by Purchaser from and
after Closing from each Tenant will be applied first to current amounts
owed by such Tenant to Purchaser and then to
<PAGE> 16
Delinquent Rents owed by such Tenant to Seller. Any sums due Seller
will be promptly remitted to Seller, but Purchaser shall be under no
obligation to collect such sums. Should Seller receive any sums
inadvertently or otherwise following Closing, Seller shall promptly
remit said sums to Purchaser. Purchaser shall not have an exclusive
right to collect any sums due Seller from Tenants under the Leases, and
Seller hereby retains the right to pursue any Tenant under the Leases
for any sums due such Seller for periods attributable to Seller's
ownership of the Property; provided, however, Seller (1) shall be
required to notify Purchaser in writing of Seller's intention to
commence or pursue any legal proceedings; (2) shall only be permitted
to commence or pursue legal proceedings after the date which is three
(3) months after Closing; and (3) shall not be permitted to commence or
pursue any legal proceedings against any Tenant seeking eviction of
such Tenant or the termination of such Tenant's Lease. The provisions
of this Section 7.3(b) will survive the Closing for one year.
(c) All Additional Rents (as defined below) which have been
received in respect to the month in which the Closing Date occurs (the
"Current Month") shall be prorated as of the Closing Date. Such
Additional Rents for the Current Month which have been received as of
the Closing Date shall be prorated on a per diem basis based upon the
number of days in the Current Month prior to, but not including, the
Closing Date (which shall be allocated to Seller) and the number of
days in the Current Month from and after the Closing Date (which shall
be allocated to Purchaser). In addition, Seller shall be credited on
the Closing Date with its share of Rents and other Tenant charges and
Additional Rents for the Current Month and for all periods prior to the
Current Month which have not been received as of the Closing Date.
Purchaser shall be solely responsible, after the Closing Date, for
collecting unpaid Additional Rents. Additional Rents for calendar year
2000 are paid on an estimated basis in monthly installments. At least
five (5) business days prior to the Closing Date, Seller shall cause to
be prepared and delivered to Purchaser a reconciliation ("Additional
Rents Reconciliation") of (1) actual operating and similar expense of
the Property upon which Additional Rents are based ("Additional Rent
Expenses") for the period commencing on January 1, 2000 and ending on
the last day of the Current Month ("Additional Rents Reconciliation
Period"), it being understood that certain Additional Rents Expenses
for the Additional Rents Reconciliation Period, if not based on actual
amounts (such as certain operating expenses for the Current Month), may
be reasonably estimated by Seller; and (2) Additional Rents collected
by Seller for that portion of the Additional Rents Reconciliation
Period prior to the Current Month and Additional Rents payable for the
Current Month. Any amount shown to be owed by Seller to the Tenants
under the Additional Rents Reconciliation shall be credited to
Purchaser at the Closing, and any amounts shown to be owed to Seller by
Tenants of the Property under the Additional Rents Reconciliation shall
be credited to Seller at the Closing. For purposes of this Section
7.3(c), "Additional Rents" shall mean any and all amounts due from
Tenants for Operating Expenses and any other Tenant charges other than
Rents.
(d) All ad valorem real estate and personal property taxes with
respect to the Property (to the extent not prorated in Section 7.3(a)
above) shall be prorated as of 11:59 p.m. of the day immediately
preceding the Closing Date on a cash basis for the calendar
<PAGE> 17
year in which the Closing occurs, regardless of the year for which such
taxes are assessed.
(e) Purchaser shall receive a credit against Purchase Price at
Closing for all security deposits for which landlord has liability to
Tenants under the Leases on the Closing Date and for all Rents made in
advance (to the extent not prorated as set forth in Section 7.3(b)
above).
(f) Purchaser shall receive a credit against the Purchase Price at
Closing for all payments due or owing under any Contract for periods
prior to the Closing Date, which amounts shall be prorated as of 11:59
p.m. of the day immediately preceding the Closing Date. If Seller has
paid any amounts under any Contract for periods after 11:59 p.m. of the
day immediately preceding the Closing Date, Purchaser shall pay such
amounts to Seller at Closing in addition to the Purchase Price. If any
Contract requires more than thirty (30) days prior notice to terminate,
then Purchaser must either (1) assume such Contracts pursuant to the
Bill of Sale, or (2) pay to Seller at Closing, in addition to the
Purchase Price, any amounts that will be due or owing under any such
Contract for periods from and after the Closing Date until such
Contract is terminable.
(g) Seller shall receive a credit for any and all Reimbursable
Lease Expenses (hereinafter defined) as set forth in Section 7.9 of
this Agreement and for any and all Reimbursable Capital Expenses, to
the extent that the same have been paid by Seller prior to Closing.
Each party shall make available to the other all records, bills,
vouchers and other data in such party's control verifying Reimbursable
Capital Expenses and the payment thereof. "Reimbursable Capital
Expenses" shall mean costs or expenses for any capital expenditures or
improvements made by Seller after the Effective Date hereof but before
Closing as to which Purchaser has agreed in writing to reimburse
Seller, or as otherwise listed on Exhibit J. "Reimbursable Lease
Expenses" shall mean, collectively, those fees, costs and expenses
listed on Exhibit K or otherwise as to which Purchaser has agreed in
writing to reimburse Seller. Reimbursable Lease Expenses shall include,
without limitation, (i) brokerage commissions and fees to effect any
such leasing transaction (including, without limitation, any fees owed
to any property manager), (ii) expenses incurred for repairs,
improvements, equipment, painting, decorating, partitioning and other
items to satisfy the Tenant's requirements with regard to such leasing
transaction, (iii) legal fees for services in connection with the
preparation of documents and other services rendered in connection with
the effectuation of the leasing transaction, and (iv) expenses incurred
for the purpose of satisfying or terminating the obligations of a
tenant under a New Lease to the landlord under another lease (whether
or not such other lease covers space in the Property). "New Lease"
shall mean any Lease entered into in accordance with this Agreement
between the Effective Date and the Closing Date.
7.4 Closing Costs. Except as otherwise expressly provided herein,
Seller shall pay, on the Closing Date, the title insurance premium for the
Owner's Policy allocable to standard owner's coverage for the amount of the
Purchase Price, the cost of the Survey, one-half (1/2) of any escrow fees and
other customary charges of the Title Company, and Purchaser shall pay, on the
Closing Date, the incremental cost of extended coverage and any endorsements to
the Owner's Policy or any charges associated with a loan policy, any documentary
stamp taxes or
<PAGE> 18
transfer taxes applicable to sale of the Property, all recording costs, one-half
(1/2) of any escrow fees and other customary charges of the Title Company.
Except as otherwise provided herein, each party shall pay its own attorneys'
fees.
7.5 Seller's Obligations at the Closing. At the Closing, or earlier as
specified below, Seller shall deliver to Purchaser the following:
(a) Title Policy. The Owner's Policy. Purchaser, at Purchaser's
sole expense, may elect to cause the Title Company to amend the survey
exception to read "any shortages in area." The Owner's Policy shall be
free and clear of all exceptions other than the Permitted Encumbrances.
(b) Evidence of Authority. Such organizational and authorizing
documents of Seller as shall be reasonably required by the Title
Company to evidence Seller's authority to consummate the transactions
contemplated by this Agreement.
(c) Foreign Person. An affidavit of Seller in the form of Exhibit E
certifying that Seller is not a "foreign person," as defined in the
federal Foreign Investment in Real Property Tax Act of 1980, and the
1984 Tax Reform Act, as amended.
(d) Leases. The originals of all of the Leases.
(e) Contracts. The originals of all of the Contracts, if any, in
Seller's possession and an assignment of such Contracts to be assumed
by Purchaser.
(f) Tenant Estoppel Certificates and SNDA's. Within seven (7)
business days of the Closing, Tenant Estoppel Certificates and
Subordination, Non-Disturbance and Attornment Agreements ("SNDA")
substantially in the form of Exhibit D (or if a Tenant's Lease or if
Purchaser's lender specifies or contemplates another form of tenant
estoppel certificate or SNDA, then such other specified or contemplated
form) executed by Tenants representing at least eighty percent (80%) of
the annual revenue from the Property with the exception of the
national/credit Tenants at the Property, in which case one hundred
percent (100%) of such estoppel certificates (collectively, the "Tenant
Estoppel Certificates") and SNDA's shall be furnished. Unless within
five (5) days after the end of the Approval Period, Purchaser furnishes
Seller with an alternative form of SNDA required by Purchaser's lender,
Seller will present the form attached to this Agreement to Tenants. For
the purposes hereof, a national credit tenant shall mean GNC, J.
Alexander's and Radio Shack.
(g) Other. To the extent in the possession of Seller or its
property manager, (i) plans, drawings and specifications relating to
the Improvements; (ii) all transferable licenses, permits, certificates
of occupancy and other governmental entitlements relating to use and
occupancy of the Improvements and any unexpired warranties, guarantees
and sureties for the Property; (iii) files maintained by Seller in the
ordinary course of business relating to Tenants and (iv) leasing and
marketing materials pertaining to the Improvements.
(h) Possession. Deliver Purchaser possession and occupancy of the
Property.
<PAGE> 19
(i) Security Deposits. All security deposits provided for in the
Leases.
(j) Prorations. A final accounting reasonably acceptable to
Purchaser showing the computations for prorated charges and rentals,
utilities and Additional Rent as provided for herein.
(k) Owner's Affidavit. Execute, acknowledge and deliver an
affidavit and indemnity agreement in form and substance reasonably
satisfactory to Seller to the Title Company enabling it to issue the
final Owner's Policy without standard printed exceptions.
7.6 Purchaser's Obligations at the Closing. At the Closing, Purchaser
shall deliver to Seller the following:
(a) Purchase Price. The Purchase Price by wire transfer of
immediately available funds.
(b) Evidence of Authority. Such organizational and authorizing
documents of Purchaser as shall be reasonably required by Seller and/or
the Title Company authorizing Purchaser's acquisition of the Property
pursuant to this Agreement and the execution of this Agreement and any
documents to be executed by Purchaser at the Closing.
7.7 Documents to be Executed by Seller and Purchaser. At the Closing,
Seller and Purchaser shall also execute and deliver the following:
(a) Deed. Special Warranty Deed (the "Deed") conveying the Land and
the Improvements to Purchaser subject to no exceptions other than the
Permitted Encumbrances, in the form attached to this Agreement as
Exhibit B.
(b) Tenant Notices. Signed statements or notices to all tenants of
the Property notifying such tenants that the Property has been
transferred to Purchaser, that Purchaser is responsible for security
deposits (specifying the amounts of such deposits), and directing the
tenants to pay rentals to Purchaser or its agent.
(c) Bill of Sale, Assignment and Assumption of Personal Property,
Contracts, Warranties and Leases. The Bill of Sale (herein so called)
in the form attached to this Agreement as Exhibit C.
7.8 Purchaser's Assumption of Obligations. As additional consideration
for the purchase and sale of the Property, Purchaser covenants and agrees that
from and after Closing it will: (i) assume and perform all of the covenants and
obligations of Seller, Seller's predecessors in title and Seller's affiliates
(A) pursuant to the Leases and Contracts, including without limitation, those
relating to any security deposits, to the extent arising on or after the Closing
Date and (B) pursuant to the Leases regarding the physical, environmental or
legal compliance status of the Property, whether arising before, on or after the
Closing Date; (ii) assume and agree to discharge, perform and comply with each
and every liability, duty, covenant, debt or obligation of Seller of any of its
affiliates resulting from, arising out of, or in any way related to any licenses
and permits and arising on or after the Closing Date; and (iii) assume Seller's
<PAGE> 20
obligations to pay, when due (whether on a stated due date or accelerated) any
Reimbursable Lease Expenses in accordance with Section 7.9 or any Reimbursable
Capital Expenses that are unpaid as of the Closing Date. Purchaser hereby
indemnifies and holds Seller harmless from and against any and all claims,
liens, damages, demands, causes of action, liabilities, lawsuits, judgments,
losses, costs and expenses (including but not limited to attorneys' fees and
expenses) asserted against or incurred by Seller and arising out of the failure
of Purchaser to perform its obligations pursuant to this Section 7.8. The
provisions of this Section 7.8 shall survive the Closing without limitation.
7.9 Lease Expenses. At Closing, Purchaser shall reimburse Seller for
any and all Reimbursable Lease Expenses to the extent that the same have been
paid by Seller prior to Closing. In addition, at Closing, Purchaser shall assume
Seller's obligations to pay, when due (whether on a stated due date or by
acceleration) any Reimbursable Lease Expenses unpaid as of the Closing, and
Purchaser hereby agrees to indemnify and hold Seller harmless from and against
any and all claims for such Reimbursable Lease Expenses which remain unpaid for
any reason at the time of Closing, which obligations of Purchaser shall survive
the Closing and shall not be merged therein. Each party shall make available to
the other all records, bills, vouchers and other data in such party's control
verifying Reimbursable Lease Expenses and the payment thereof.
8.
RISK OF LOSS
8.1 Condemnation. If, prior to the Closing, action is initiated to take
any of the Property by eminent domain proceedings or by deed in lieu thereof,
Purchaser may either at or prior to Closing (a) terminate this Agreement, or (b)
consummate the Closing, in which latter event all of Seller's assignable right,
title and interest in and to the award of the condemning authority shall be
assigned to Purchaser at the Closing and there shall be no reduction in the
Purchase Price.
8.2 Casualty. Except as provided in Sections 5.2 and 6.1 of this
Agreement, Seller assumes all risks and liability for damage to or injury
occurring to the Property by fire, storm, accident, or any other casualty or
cause until the Closing has been consummated. If the Property, or any part
thereof, suffers any damage in excess of the Casualty Amount prior to the
Closing from fire or other casualty, which Seller, at its sole option, does not
elect to repair, Purchaser may either at or prior to Closing (a) terminate this
Agreement, or (b) consummate the Closing, in which latter event all of Seller's
right, title and interest in and to the proceeds of any insurance covering such
damage and any deductible amount (less an amount equal to any expenses and costs
incurred by Seller to repair or restore the Property, provided written consent
of Purchaser is obtained for such expenses, and any portion of such proceeds
paid or to be paid on account of the loss of rents or other income from the
Property for the period prior to and including the Closing Date, all of which
shall be payable to Seller), to the extent the amount of such insurance does not
exceed the Purchase Price, shall be assigned to Purchaser at the Closing. If the
Property, or any part thereof, suffers any damage less than the Casualty Amount
prior to the Closing, Purchaser agrees that it will consummate the Closing and
accept the assignment of the proceeds of any insurance covering such damage plus
an amount equal to Seller's deductible under its insurance policy and there
shall be no reduction in the Purchase Price.
<PAGE> 21
9.
DEFAULT
9.1 Breach by Seller. Except as Purchaser's remedies may otherwise be
expressly limited by the terms of this Agreement (including, without limitation,
the terms of Section 5.4):
(a) In the event that Seller shall default in any of its
obligations hereunder to be performed prior to Closing, for any reason
other than Purchaser's default or a termination of this Agreement by
Purchaser or Seller pursuant to a right to do so under the provisions
hereof, Purchaser, as its sole and exclusive remedy, may terminate this
Agreement, receive a refund of the Earnest Money and, subject to the
provisions of Section 9.1(c) below, pursue Seller for actual damages
incurred by Purchaser as a result of such default.
(b) If Purchaser discovers prior to Closing that any representation
or warranty made by Seller in Section 5.4(a) is not true and correct as
of the Closing Date as if made on the Closing Date, then Purchaser may
extend the Closing for up to thirty (30) days to investigate the
pertinent facts, and Seller shall exercise reasonable, good faith
efforts to remedy or cure such breach. In the event that such breach
has not been cured or remedied to Purchaser's satisfaction prior to
Closing, as the same may be extended, the sole and exclusive remedy of
Purchaser shall be to either waive the breach and proceed to Closing or
terminate this Agreement by written notice to Seller. Upon a
termination of this Agreement under this Section 9.1(b), the Earnest
Money shall be returned to Purchaser, and neither party shall have any
further obligations hereunder except for Surviving Obligations.
(c) Notwithstanding the foregoing, in no event shall the aggregate
amount of actual damages which Purchaser may be entitled to recover
against Seller pursuant to Sections 9.1(a) above exceed an amount equal
to the amount of the Earnest Money and in no event shall Seller be
liable to Purchaser for any punitive, speculative or consequential
damages or to the remedy of specific performance.
(d) If Seller is unable to deliver the requisite number of Tenant
Estoppel Certificates or SNDA's, then Purchaser's sole and exclusive
remedy and recourse shall be either to waive the requirement for the
missing Tenant Estoppel Certificates and/or SNDA's and proceed to
Closing without reduction in the Purchase Price or to terminate this
Agreement by immediate written notification to Seller, in which event
the Earnest Money shall be returned to Purchaser, and neither party
shall have any further obligations hereunder except for Surviving
Obligations.
9.2 Breach by Purchaser.
(a) If Purchaser fails to comply with Section 7 of this Agreement,
Seller may terminate this Agreement and thereupon shall be entitled to
the Earnest Money as liquidated damages (and not as a penalty) and as
Seller's sole remedy and relief hereunder (except for the Surviving
Obligations). Seller and Purchaser have made this provision for
liquidated damages because it would be difficult to calculate, on the
date hereof, the
<PAGE> 22
amount of actual damages for such breach, and Seller and Purchaser
agree that these sums represent reasonable compensation to Seller for
such breach.
(b) In the event of any default by Purchaser under this Agreement,
other than Purchaser's failure to comply with Section 7 of this
Agreement, Seller shall have any and all rights and remedies available
at law or in equity by reason of such default.
The provisions of this Section 9.2 shall not limit or affect any of
Purchaser's indemnities as provided in other Sections of this Agreement.
10.
MISCELLANEOUS
10.1 Notices. All notices, demands and requests which may be given or
which are required to be given by either party to the other, and any exercise of
a right of termination provided by this Agreement, shall be in writing and shall
be deemed effective either: (a) on the date personally delivered to the address
specified in Section 1.1 above, as evidenced by written receipt therefore,
whether or not actually received by the person to whom addressed; (b) on the
third (3rd) business day after being sent, by certified or registered mail,
return receipt requested, addressed to the intended recipient at the address
specified in Section 1.1 above; (c) on the first (1st) business day after being
deposited into the custody of a nationally recognized overnight delivery service
such as Federal Express Corporation, Emery or Purolator, addressed to such party
at the address specified in Section 1.1 above; or (d) on the date sent by
facsimile to the fax number specified in Section 1.1 above to the attention of
the appropriate person, with a copy of the receipt being forwarded by overnight
delivery service as herein provided. A party may change its address for notice
by written notice to all other parties as herein provided.
10.2 Real Estate Commissions. Seller shall pay to the Agent upon the
Closing of the transaction contemplated hereby, and not otherwise, a cash
commission in the amount agreed on in a separate listing agreement between
Seller and Agent. Said commission shall in no event be payable unless and until
the transaction contemplated hereby is closed in accordance with the terms of
this Agreement; if such transaction is not closed for any reason, including,
without limitation, failure of title or default by Seller or Purchaser or
termination of this Agreement pursuant to the terms hereof, then such commission
will be deemed not to have been earned and shall not be due or payable. Except
as set forth above with respect to Agent, neither Seller nor Purchaser has
authorized any broker or finder to act on Purchaser's behalf in connection with
the sale and purchase hereunder and neither Seller nor Purchaser has dealt with
any broker or finder purporting to act on behalf of any other party. Purchaser
agrees to indemnify and hold harmless Seller from and against any and all
claims, losses, damages, costs or expenses of any kind or character arising out
of or resulting from any agreement, arrangement or understanding alleged to have
been made by Purchaser or on Purchaser's behalf with any broker or finder in
connection with this Agreement or the transaction contemplated hereby. Seller
agrees to indemnify and hold harmless Purchaser from and against any and all
claims, losses, damages, costs or expenses of any kind or character arising out
of or resulting from any agreement, arrangement or understanding alleged to have
been made by Seller or on Seller's behalf with any broker or finder in
connection with this Agreement or the transaction contemplated hereby.
Notwithstanding anything to the contrary contained herein, this Section 10.2
shall survive the Closing or any earlier termination of this Agreement.
<PAGE> 23
10.3 Entire Agreement. This Agreement embodies the entire agreement
between the parties relative to the subject matter hereof, and there are no oral
or written agreements between the parties, nor any representations made by
either party relative to the subject matter hereof, which are not expressly set
forth herein.
10.4 Amendment. This Agreement may be amended only by a written
instrument executed by the party or parties to be bound thereby.
10.5 Headings. The captions and headings used in this Agreement are for
convenience only and do not in any way limit, amplify, or otherwise modify the
provisions of this Agreement.
10.6 Time of Essence. Time is of the essence of this Agreement;
however, if the final date of any period which is set out in any provision of
this Agreement falls on a Saturday, Sunday or legal holiday under the laws of
the United States, the State of Texas or the State, then, in such event, the
time of such period shall be extended to the next day which is not a Saturday,
Sunday or legal holiday.
10.7 Governing Law. This Agreement shall be governed by the laws of the
State and the laws of the United States pertaining to transactions in the State.
10.8 Successors and Assigns; Assignment. This Agreement shall bind and
inure to the benefit of Seller and Purchaser and their respective heirs,
executors, administrators, personal and legal representatives, successors and
permitted assigns. Except as otherwise hereinafter provided in this Section
10.8, Purchaser shall not assign Purchaser's rights under this Agreement without
the prior written consent of Seller, which consent may be withheld absolutely.
In the event Seller consents to such assignment, Purchaser and such assignee
shall execute and deliver an Assignment of Purchase and Sale Agreement in the
form attached hereto as Exhibit F. Any subsequent assignment may be made only
with the prior written consent of Seller. Except as otherwise hereinafter
provided in this Section 10.8, no assignment of Purchaser's rights hereunder
shall relieve Purchaser of its liabilities under this Agreement. This Agreement
is solely for the benefit of Seller and Purchaser; there are no third party
beneficiaries hereof. Any assignment of this Agreement in violation of the
foregoing provisions shall be null and void. Notwithstanding the foregoing,
without Seller's consent, Purchaser may assign this Agreement to any Affiliate
of Purchaser, and upon such assignment, Purchaser shall be released from
liability hereunder. For these purposes, "Affiliate" shall mean any person or
entity that directly or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with another person or entity. The
term "control" for these purposes means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract or
otherwise.
10.9 Invalid Provision. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement; and, the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
such illegal, invalid, or unenforceable provision or by its severance from this
Agreement.
<PAGE> 24
10.10 Attorneys' Fees. In the event it becomes necessary for either
party hereto to file suit to enforce this Agreement or any provision contained
herein, the party prevailing in such suit shall be entitled to recover, in
addition to all other remedies or damages, as provided herein, reasonable
attorneys' fees incurred in such suit.
10.11 Multiple Counterparts. This Agreement may be executed in a number
of identical counterparts which, taken together, shall constitute collectively
one (1) agreement; in making proof of this Agreement, it shall not be necessary
to produce or account for more than one such counterpart with each party's
signature.
10.12 Exhibits. The following exhibits are attached to this Agreement
and are incorporated into this Agreement by this reference and made a part
hereof for all purposes:
Exhibit A, the legal description of the Land.
Exhibit B, the form of the Deed.
Exhibit C, the form of the Bill of Sale, Assignment and Assumption of
Personal Property, Contracts, Warranties and Leases.
Exhibit D, the form of the Estoppel Certificate; Subordination,
Non-Disturbance and Attornment Agreement.
Exhibit E, the form of the Non-Foreign Affidavit.
Exhibit F, the form of Assignment of Purchase and Sale Agreement.
Exhibit G, Tangible Personal Property Leases or Installment Sales
Contracts
Exhibit H, Pending Actions
Exhibit I, Governmental Violations
Exhibit J, Reimbursable Capital Expenses Exhibit K, Reimbursable Lease
Expenses
10.13 No Recordation. Seller and Purchaser hereby acknowledge that
neither this Agreement nor any memorandum or affidavit thereof shall be recorded
of public record. Should Purchaser ever record or attempt to record this
Agreement, or a memorandum or affidavit thereof, or any other similar document,
then, notwithstanding anything herein to the contrary, said recordation or
attempt at recordation shall constitute a default by Purchaser hereunder, and,
in addition to the other remedies provided for herein, Seller shall have the
express right to terminate this Agreement by filing a notice of said termination
in the county in which the Land is located.
10.14 Merger Provision. Except as otherwise expressly provided herein,
any and all rights of action of Purchaser for any breach by Seller of any
representation, warranty or covenant contained in this Agreement shall merge
with the Deed and other instruments executed at Closing, shall terminate at
Closing and shall not survive Closing.
10.15 Jury Waiver. PURCHASER AND SELLER DO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THEIR RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, OR UNDER OR IN CONNECTION WITH
THIS AGREEMENT, THE DOCUMENTS DELIVERED BY PURCHASER AT CLOSING OR SELLER AT
CLOSING, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ANY ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN
<PAGE> 25
ANY MANNER WITH THIS AGREEMENT OR THE PROPERTY (INCLUDING WITHOUT LIMITATION,
ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT AND ANY CLAIMS OR DEFENSES
ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR
VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR SELLER TO ENTER INTO AND
ACCEPT THIS AGREEMENT AND THE DOCUMENTS DELIVERED BY PURCHASER AT CLOSING AND
SHALL SURVIVE THE CLOSING OF TERMINATION OF THIS AGREEMENT.
10.16 Purchaser's Financing. Seller acknowledges that Purchaser intends
following the execution of this Agreement to obtain a commitment from a lender
for a permanent or other loan for the acquisition of the Property. Seller shall
cooperate with Purchaser's reasonable requests to assist Purchaser in satisfying
the requirements of such lender including but not limited to matters such as
title, survey, obtaining the Tenant Estoppel Certificates and the SNDA's, and
other matters, provided, Seller shall not be obligated to bear any cost or
expense in connection therewith.
10.17 Like-Kind Exchange. Seller acknowledges that Purchaser or one of
its affiliates or partners may purchase the Property to effect a tax deferred
exchange under I.R.C. Section 1031. Seller shall cooperate (at no extra expense)
with Purchaser or Purchaser's qualified intermediary to effectuate such exchange
and to comply with any reasonable requests.
REMAINDER OF THIS PAGE
LEFT BLANK INTENTIONALLY
<PAGE> 26
PURCHASER: GRACE DEVELOPMENT, INC.,
a Tennessee corporation
Date of Execution
by Purchaser: By: /s/ John R. Grace
----------------------------------------
Name: John R. Grace
--------------------------- Title: Vice President
SELLER: MURRAY INCOME PROPERTIES II, LTD.,
a Texas limited partnership
By: Murray Realty Investors IX, Inc., a
Texas corporation
General Partner
Date of Execution
by Seller: By: /s/ Brent Buck
------------------------------------
Name: Brent Buck
--------------------------- Title: Executive Vice President
The undersigned Title Company hereby acknowledges receipt of the Earnest Money
and a copy of this Agreement, and agrees to hold and dispose of the Earnest
Money in accordance with the provisions of this Agreement.
Date of Execution by LAWYERS TITLE INSURANCE CORPORATION
Title Company:
---------------------------
By:
----------------------------------------
---------------------------------------,
Authorized Officer
