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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 16, 1997
(January 16, 1997)
THE PRICE REIT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 1-13432 52-1746059
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
7979 IVANHOE AVENUE, SUITE 524 92037
LA JOLLA, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (619) 551-2320
NONE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Between January 16, 1997 and April 1, 1997, The Price REIT, Inc., a Maryland
corporation (the "Company"), purchased six properties for an aggregate purchase
price of $60,153,000. Although no single acquisition is a "significant
acquisition" pursuant to the rules governing the reporting of transactions on
Form 8-K, the Company considers these transactions, in the aggregate, to be
material in nature. The properties are:
o Westgate Market located in Wichita, Kansas acquired from Ewing
Industries-Wichita Westgate Limited Partnership on January 16, 1997. This
shopping center contains approximately 134,000 rentable square feet and is
anchored by Best Buy, T.J. Maxx and Michael's and is approximately 96%
leased. The purchase price of this property was $9,800,000.
o Broadmoor Village Shopping Center located in Garland, Texas acquired from
Madison Property I, L.P. on March 19, 1997. This shopping center contains
approximately 62,000 rentable square feet and is anchored by Drug Emporium,
Office Depot and Blockbuster Music and is 100% leased. The purchase price
of this property was $4,750,000.
o Richardson Plaza Shopping Center located in Richardson, Texas acquired from
Jagee Properties, Inc. on March 20, 1997. This shopping center contains
approximately 116,000 rentable square feet and is anchored by Office Max,
Northern Stores, Bally's, Berean Book Stores, McDonald's and Color Tile and
is 100% leased. The purchase price of the property was $8,506,000.
o City Place Market located in Dallas, Texas acquired from Oak Creek
Partners, Ltd. on March 28, 1997. This shopping center contains
approximately 84,000 rentable square feet and is anchored by Office Max,
Ross Dress for Less and Macfrugal's and is 100% leased. The purchase price
of the property was $8,750,000.
o Wendover Ridge Retail Center located in Greensboro, North Carolina acquired
from MaxVest Associates, Limited Partnership on March 31, 1997. This
shopping center contains approximately 41,000 rentable square feet and is
anchored by Staples, David's Bridal and Household Finance and is 100%
leased. The purchase price of this property was $4,975,000.
o Arboretum Crossing located in Austin, Texas acquired from Loop One/183,
Ltd. on April 1, 1997. This shopping center contains approximately 183,000
rentable square feet and is anchored by Circuit City, Baby Superstore (Toys
'R' Us), Cost Plus, Designer Shoe Warehouse, Just for Feet and Mikasa and
is approximately 98% leased. The purchase price of this property was
$23,372,000.
Broadmoor Village Shopping Center, Richardson Plaza Shopping Center, City Place
Market and Arboretum Crossing were purchased by Price/Baybrook, Ltd., a Texas
limited partnership, of which the Company is a 99% limited partner; the
remaining one percent general partnership interest is owned by Price/Texas,
Inc., a wholly-owned subsidiary of the Company.
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Operating cash of the Company was used to finance all of the above
acquisitions, except for the Arboretum Crossing acquisition which was financed
with operating cash of the Company and a draw of $14,000,000 from the Company's
$75,000,000 unsecured line of credit.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Properties Acquired
The Company will file a statement of revenue over specific operating
expenses for the Arboretum Crossing property described in this Form 8-K with an
amendment to this Form 8-K as soon as practicable, but not later than 60 days
after the filing of this Form 8-K.
(b) Pro Forma Financial Information
The Company will file pro forma financial information concerning the
acquired properties described in this Form 8-K with an amendment to this Form
8-K as soon as practicable, but not later than 60 days after the filing of this
Form 8-K.
(c) Exhibits
The following exhibits are filed with this report on Form 8-K:
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
2.1 Purchase and Sale Agreement and Escrow Instructions dated November 12, 1996 by and
between Ewing Industries-Wichita Westgate Limited Partnership and The Price REIT,
Inc. (Westgate Market)
2.2 Agreement of Purchase and Sale dated February 20, 1997 between Madison Property I,
L.P. and Price/Baybrook, Ltd. (Broadmoor Village Shopping Center)
2.3 Purchase and Sale Agreement and Escrow Instructions dated February 13, 1997 by and
between Jagee Properties, Inc. and The Price REIT, Inc., as amended by First
Amendment to Purchase and Sale Agreement and Escrow Instructions dated March 18,
1997 (Richardson Plaza Shopping Center)
2.4 Agreement of Purchase and Sale dated February 24, 1997 between Oak Creek Partners,
Ltd. and Price/Baybrook, Ltd. (City Place Market)
2.5 Purchase and Sale Agreement and Escrow Instructions dated February 5, 1997 by and
between MaxVest Associates, Limited Partnership and The Price REIT, Inc. (Wendover
Ridge Retail Center)
2.6 Purchase and Sale Agreement and Joint Escrow Instructions dated October 10, 1996 by
and between The Price REIT, Inc. and Loop One/183, Ltd. (Arboretum Crossing)
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE PRICE REIT, INC.
Date: April 15, 1997 By: /s/ George M. Jezek
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George M. Jezek
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
2.1 Purchase and Sale Agreement and Escrow Instructions dated November 12, 1996 by and
between Ewing Industries-Wichita Westgate Limited Partnership and The Price REIT,
Inc. (Westgate Market)
2.2 Agreement of Purchase and Sale dated February 20, 1997 between Madison Property I,
L.P. and Price/Baybrook, Ltd. (Broadmoor Village Shopping Center)
2.3 Purchase and Sale Agreement and Escrow Instructions dated February 13, 1997 by and
between Jagee Properties, Inc. and The Price REIT, Inc., as amended by First
Amendment to Purchase and Sale Agreement and Escrow Instructions dated March 18,
1997 (Richardson Plaza Shopping Center)
2.4 Agreement of Purchase and Sale dated February 24, 1997 between Oak Creek Partners,
Ltd. and Price/Baybrook, Ltd. (City Place Market)
2.5 Purchase and Sale Agreement and Escrow Instructions dated February 5, 1997 by and
between MaxVest Associates, Limited Partnership and The Price REIT, Inc. (Wendover
Ridge Retail Center)
2.6 Purchase and Sale Agreement and Joint Escrow Instructions dated October 10, 1996 by
and between The Price REIT, Inc. and Loop One/183, Ltd. (Arboretum Crossing)
</TABLE>
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EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
By and Between
EWING INDUSTRIES-WICHITA WESTGATE LIMITED PARTNERSHIP,
a Kansas limited partnership,
as Seller
THE PRICE REIT, INC.
a Maryland corporation,
as Buyer
and
SECURITY ABSTRACT & TITLE COMPANY,
as Escrow Holder
November 12, 1996
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<TABLE>
<S> <C>
ARTICLE I PROPERTY 1
1.1 LAND 1
1.2 APPURTENANCES 1
1.3 IMPROVEMENTS 2
1.4 LEASES AND RENTS 2
1.5 PERSONAL PROPERTY 2
1.6 INTANGIBLE PROPERTY 2
ARTICLE II PURCHASE PRICE 2
2.1 PURCHASE PRICE 2
2.2 PAYMENT OF PURCHASE PRICE 3
2.3 EARNEST MONEY DEPOSIT 3
2.4 INVESTMENT OF DEPOSIT 3
2.5 DEPOSIT AS LIQUIDATED DAMAGES 3
ARTICLE III TITLE TO PROPERTY 4
3.1 TITLE 4
3.2 OTHER CONVEYANCE DOCUMENTS 4
ARTICLE IV CONDITIONS TO CLOSING 5
A. BUYER'S CONDITIONS TO CLOSING 5
4.1 NON-FOREIGN STATUS OF SELLER 5
4.2 REVIEW AND APPROVAL OF TITLE AND SURVEY 5
4.3 REVIEW AND APPROVAL OF OTHER MATTERS 5
4.4 SERVICE AND OTHER CONTRACTS 6
4.5 PHYSICAL CHARACTERISTICS OF THE PROPERTY 6
4.6 GOVERNMENTAL PERMITS, APPROVALS AND REGULATIONS 7
4.7 REPRESENTATIONS AND WARRANTIES 7
</TABLE>
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<TABLE>
<S> <C>
4.8 IMPAIRMENT OF PROPERTY 7
4.9 APPROVAL 7
4.10 OBJECTIONS TO TITLE OR SURVEY 7
4.11 OBJECTIONS TO PROPERTY OR OTHER MATTERS 8
4.12 TENANT MATTERS 8
4.13 REA ESTOPPELS 9
4.14 RENT SUPPORT AGREEMENT 9
4.15 OCCUPANCY. 9
4.16 DELIVERY OF DOCUMENTS 9
B. SELLER'S CONDITIONS TO CLOSING 9
4.16 DELIVERY OF DOCUMENTS AND PURCHASE PRICE 9
ARTICLE V CLOSING, RECORDING AND TERMINATION 10
5.1 DEPOSIT WITH ESCROW HOLDER AND ESCROW INSTRUCTIONS 10
5.2 CLOSING 10
5.3 DELIVERY BY SELLER 10
5.4 DELIVERY BY BUYER 11
5.5 OTHER INSTRUMENTS 12
5.6 PRORATIONS 12
5.7 COSTS AND EXPENSES 13
5.8 CLOSING AND RECORDATION 14
5.9 TERMINATION OF AGREEMENT 14
ARTICLE VI REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER 14
6.1 AUTHORITY 15
6.2 TITLE 15
6.3 THE LEASES 15
</TABLE>
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<TABLE>
<S> <C>
6.4 NO LITIGATION OR ADVERSE EVENTS 15
6.5 COMPLIANCE WITH LAWS 15
6.6 NO DEFAULTS IN OTHER AGREEMENTS 15
6.7 EMINENT DOMAIN 16
6.8 LICENSES, PERMITS, CO'S, ZONING, ETC. 16
6.9 TAXES AND ASSESSMENTS 16
6.10 ENVIRONMENT 16
6.11 PHYSICAL CONDITION 17
6.12 EMPLOYEES 17
6.13 MECHANIC'S LIENS 18
6.14 OPERATING STATEMENTS 18
6.15 DISCLOSURE 18
6.16 NO LEASES OF PROPERTY OR ASSETS 18
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF BUYER 18
7.1 REPRESENTATIONS AND WARRANTIES OF BUYER 18
ARTICLE VIII POSSESSION, DESTRUCTION AND CONDEMNATION 19
8.1 POSSESSION 19
8.2 LOSS, DESTRUCTION AND CONDEMNATION 19
ARTICLE IX MAINTENANCE AND OPERATION OF THE PROPERTY; COVENANTS 21
9.1 MAINTENANCE 21
9.2 LEASES AND OTHER AGREEMENTS 21
9.3 ENCUMBRANCES 22
9.4 CONSENTS AND NOTICES 22
9.5 AUDIT COOPERATION 22
</TABLE>
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<TABLE>
<S> <C>
ARTICLE X MISCELLANEOUS 22
10.1 NOTICES 22
10.2 BROKERS AND FINDERS 23
10.3 SUCCESSORS AND ASSIGNS 23
10.4 AMENDMENTS 24
10.5 CONTINUATION AND SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES AND POST-CLOSING OBLIGATIONS 24
10.6 INTERPRETATION 24
10.7 GOVERNING LAW 24
10.8 MERGER OF PRIOR AGREEMENTS 24
10.9 ATTORNEYS' FEES 24
10.10 NOTICE OF TERMINATION 24
10.11 SPECIFIC PERFORMANCE; DAMAGES 25
10.12 RELATIONSHIP 25
10.13 COUNTERPARTS 25
10.14 TIME OF THE ESSENCE 25
</TABLE>
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INDEX TO SCHEDULES
<TABLE>
<S> <C>
Schedule A Legal Description of the Land
Schedule B Form of Deed
Schedule C Form of Assignment and Assumption of Leases and Rents
Schedule D Form of Bill of Sale
Schedule E Form of Assignment of Contracts, Intangible Property, Warranties and Guarantees
Schedule F Form of Non-Foreign Certificate
Schedule G Form of Tenant Estoppel Certificate
Schedule H Rent Roll
Schedule I Form of Rent Support Agreement
</TABLE>
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DEFINITIONS
The following is a list of defined terms used herein and the
sections in which such terms are defined.
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
AGREEMENT INTRODUCTION
APPROVED CONTRACTS 4.4
APPURTENANCES 1.2
ASSIGNMENT OF INTANGIBLE PROPERTY,
WARRANTIES AND GUARANTEES 1.6
ASSIGNMENT OF LEASES AND RENTS 1.4
BILL OF SALE 1.5
BUYER INTRODUCTION
BUYER APPROVAL 4.9
CLOSING 5.2
CLOSING DATE 5.2
CODE 4.1
CONTRACTS 4.4
DEED 1.1
EARNEST MONEY DEPOSIT 2.3
ESCROW HOLDER INTRODUCTION
IMPROVEMENTS 1.3
INTANGIBLE PROPERTY 1.6
LAND 1.1
LEASES 1.4
MAJOR LEASE 4.8
RENT SUPPORT AGREEMENT 4.13
NON-FOREIGN CERTIFICATE 4.1
OUTSIDE CLOSING DATE 5.2
PERSONAL PROPERTY 1.5
PERMITTED EXCEPTIONS 4.10
PHASE I REPORT 4.5
PROPERTY 1.6
PURCHASE PRICE 2.1
REAL PROPERTY 1.6
RENT ROLL 6.3
RENTS 1.4
REVIEW PERIOD 4.11
SELLER INTRODUCTION
SURVEY 4.2(C)
TITLE COMPANY 3.1
TITLE POLICY 3.1
TITLE REPORT 4.2(A)
VACANT SPACE 4.13
</TABLE>
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PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
("AGREEMENT") is made and entered into as of November __, 1996, by and between
EWING INDUSTRIES-WICHITA WESTGATE LIMITED PARTNERSHIP, a Kansas limited
partnership ("SELLER"), THE PRICE REIT, INC., a Maryland corporation ("BUYER"),
and SECURITY ABSTRACT & TITLE COMPANY ("ESCROW HOLDER"), with reference to the
following facts:
A. Seller is the owner of the Property, as hereinafter
defined.
B. Buyer desires to purchase from Seller and Seller
desires to sell to Buyer the Property, all on the terms and conditions set
forth herein.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the
mutual agreements herein set forth, and other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Seller and Buyer, and
where appropriate Escrow Holder, agree as follows:
ARTICLE I
PROPERTY
Seller hereby agrees to sell and convey to Buyer, and Buyer
hereby agrees to purchase from Seller, subject to the terms and conditions set
forth herein, the following:
1.1 Land. That certain real property (the "LAND")
described in Schedule A hereto, all of which shall be conveyed to Buyer
pursuant to a deed in the form of Schedule B hereto (the "DEED");
1.2 Appurtenances. All rights, privileges and easements
appurtenant to and for the benefit of the Land, including, without limitation,
all minerals, oil, gas and other hydrocarbon substances on and under the Land,
as well as all development rights, air rights, water, water rights and water
stock relating to the Land and any other easements, rights-of-way or
appurtenances owned by Seller and used in connection with the beneficial
operation, use and enjoyment of the Land, the Leases, the Rents, the
Improvements, the Intangible Property, or any other appurtenance, together with
all rights of Seller in and to public and private streets, roads, avenues,
alleys and passageways, sidewalks, driveways, parking areas and areas adjacent
thereto or used in connection therewith (open or proposed, in front of or
abutting the Land), and all rights of Seller in any land lying in the bed of
any existing or proposed street adjacent to the Land, all strips or gores of
land adjoining the Land, and any awards made or to be made and any unpaid award
for damage to the Land by reason of any change of grade of any such street,
road, avenue, alley or passageway (all of which are collectively referred to as
the "APPURTENANCES");
1.3 Improvements. All improvements and fixtures located
or to be located on the Land, including, without limitation, all buildings and
structures presently
Index to Schedules
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located on the Land or to be located thereon on the Closing Date, all
apparatus, equipment and appliances presently located on the Land and used in
connection with the operation or occupancy thereof, such as heating and air
conditioning systems and facilities used to provide any utility services,
parking services, refrigeration, ventilation, garbage disposal, recreation or
other services thereto, and all landscaping and leasehold improvements of
tenants, if any, which become the property of the owner of the Land (all of
which are collectively referred to as the "IMPROVEMENTS");
1.4 Leases and Rents. All leases, occupancy agreements
and other similar agreements to which Seller is a party or by which it is
bound, together with all modifications, extensions and renewals thereof, and
any guarantees of any of the foregoing with respect to or demising any part of
the Land, Appurtenances or Improvements (the "LEASES"), all income, receipts,
funds and revenues of any kind whatsoever payable under the Leases or otherwise
with respect to all or any portion of the Land, Appurtenances or Improvements
(the "RENTS"), all of which Leases and Rents shall be transferred and assigned
to Buyer pursuant to an instrument in the form of Schedule C hereto (the
"ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS");
1.5 Personal Property. All tangible personal property
located or to be located on, or situated or to be situated in and used in
connection with, the Land and/or the Improvements ("PERSONAL PROPERTY"), and
all of which Personal Property shall be transferred and assigned to Buyer
pursuant to an instrument in the form of Schedule D hereto (the "BILL OF
SALE");
1.6 Intangible Property. All of the interest of Seller
in (i) any intangible personal property which relates to and is reasonably
required for the operation and functioning of the Land, Improvements or
Personal Property generally, and (ii) any and all warranties, guarantees,
permits, contracts and other rights owned by Seller relating to the ownership,
operation or functioning of all or any part of the Property, as defined below
(including without limitation all third party guarantees and warranties,
express or implied, in connection with the construction of the Improvements)
(all of which are collectively referred to as the "INTANGIBLE PROPERTY"), and
all of which shall be assigned to Buyer pursuant to one or more (as determined
by Buyer) assignments in the form of Schedule E hereto (the "ASSIGNMENT OF
CONTRACTS, INTANGIBLE PROPERTY, WARRANTIES AND GUARANTEES"); and
All of the items described in Sections 1.1, 1.2, 1.3, 1.4, 1.5
and 1.6 above are hereinafter collectively referred to as the "PROPERTY." The
items described in Sections 1.1, 1.2, and 1.3 above are hereinafter referred to
collectively as the "REAL PROPERTY."
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. The purchase price for the Property
shall be Nine Million Eight Hundred Thousand Dollars ($9,800,000.00) (the
"PURCHASE PRICE"). The Purchase Price shall be allocated among Land,
Improvements and Personal Property as Buyer shall reasonably determine.
2.2 Payment of Purchase Price. The Purchase Price shall
be paid by Buyer into the escrow for this Agreement to be maintained by Escrow
Holder ("ESCROW")
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at the Closing by wire transfer of immediately available funds in accordance
with wiring instructions to be provided by Escrow Holder; provided, however,
that Buyer shall adjust the funds to be wired pursuant to this Section 2.2 for
the following: (i) the amount of credits due to Buyer, or debits due from
Buyer (as the case may be) for prorations hereunder, and (ii) the amount of the
Earnest Money Deposit (hereinafter defined) plus earnings thereon.
2.3 Earnest Money Deposit. Concurrently with the
delivery of one (1) fully executed copy of this Agreement with Escrow Holder,
Buyer shall deposit with Escrow Holder the sum of One Hundred Thousand Dollars
($100,000.00) (the "EARNEST MONEY DEPOSIT") in the form of a check or wire
transfer. The Earnest Money Deposit shall become nonrefundable after the end
of the Review Period, unless this Agreement terminates other than due to a
default of Buyer hereunder.
2.4 Investment of Deposit. Escrow Holder shall place the
Earnest Money Deposit in an interest-bearing account with a bank or savings
association, the deposits of which are federally insured, as Buyer may select.
All interest on the Earnest Money Deposit shall accrue for the benefit of Buyer
until the Closing. Notwithstanding the foregoing, however, in the event of any
default by Buyer hereunder, all interest earned on such account shall accrue to
the benefit of Seller. Seller shall not be responsible for, nor bear the risk
of loss of, the Earnest Money Deposit, and shall not be responsible for the
rate of return thereon.
2.5 Deposit As Liquidated Damages. IF THE SALE OF THE
PROPERTY AS CONTEMPLATED HEREUNDER IS NOT CONSUMMATED SOLELY BECAUSE OF A
DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER, ESCROW HOLDER SHALL PROMPTLY
PAY OVER TO SELLER THE EARNEST MONEY DEPOSIT, IF ANY, THEN BEING HELD BY ESCROW
HOLDER, AND SELLER SHALL RETAIN THE EARNEST MONEY DEPOSIT AS LIQUIDATED
DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT OF
A DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE.
THEREFORE, BY PLACING THEIR SIGNATURES BELOW, THE PARTIES EXPRESSLY AGREE AND
ACKNOWLEDGE THAT THE EARNEST MONEY DEPOSIT HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
THEREFORE, IF, AFTER SATISFACTION OR WAIVER OF ALL CONDITIONS PRECEDENT TO
BUYER'S OBLIGATIONS UNDER THIS AGREEMENT, BUYER BREACHES THIS AGREEMENT AND
WRONGFULLY FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY AS PROVIDED HEREIN,
SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF THE EARNEST
MONEY DEPOSIT. ON RECEIPT AND RETENTION BY SELLER OF THE EARNEST MONEY
DEPOSIT, THIS AGREEMENT SHALL TERMINATE AND BUYER SHALL HAVE NO FURTHER
OBLIGATIONS OR LIABILITY HEREUNDER. THE PARTIES FURTHER ACKNOWLEDGE THAT THE
EARNEST MONEY DEPOSIT HAS BEEN AGREED UPON AS SELLER'S EXCLUSIVE REMEDY AGAINST
BUYER IN THE EVENT OF A DEFAULT ON THE PART OF BUYER.
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Seller:
Dated:_______________________
EWING INDUSTRIES-WICHITA WESTGATE LIMITED
PARTNERSHIP, a Kansas limited partnership
By: EWING INDUSTRIES II, L.C.,
its general partner
By:___________________________
Its:__________________________
Buyer:
THE PRICE REIT, INC.
Dated:_______________________ By:_____________________________________
Its:____________________________________
ARTICLE III
TITLE TO PROPERTY
3.1 Title. At the Closing, Seller shall convey to Buyer
marketable and insurable fee simple title to the Property pursuant to the Deed.
In furtherance thereof, Seller shall cause Security Abstract & Title Company,
as issuing agent for Chicago Title Insurance Company (the "TITLE COMPANY") to
issue an ALTA extended coverage Owner's Policy of Title Insurance (Form B, Rev.
10/17/70), together with such endorsements thereto as Buyer may request (the
"TITLE POLICY") in the full amount of the Purchase Price, insuring fee simple
title to the Real Property in Buyer, subject only to (i) the lien of real
property taxes for the then applicable fiscal year, to the extent not yet due
and payable, (ii) the lien of supplemental taxes imposed by reason of transfer
on or after the Closing, and (iii) the Permitted Exceptions.
3.2 Other Conveyance Documents. At the Closing, Seller
shall (i) assign the Leases and Rents to Buyer pursuant to the Assignment and
Assumption of Leases and Rents; (ii) transfer title to the Personal Property to
Buyer pursuant to the Bill of Sale, and (iii) transfer and assign to Buyer all
of Seller's rights in and to the Intangible Property pursuant to the Assignment
of Contracts, Intangible Property, Warranties and Guarantees; such title and
rights to be free of any liens, encumbrances or interests of third parties
other than the Permitted Exceptions.
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ARTICLE IV
CONDITIONS TO CLOSING
A. Buyer's Conditions to Closing.
The complete satisfaction as of the expiration of the Review
Period (or such other date as may be specified herein) with respect to those
matters described in Sections 4.2-4.6 and 4.10 hereof, and as of the Closing
Date with respect to the balance of the following conditions, is a condition
precedent to Buyer's obligation to purchase the Property:
4.1 Non-Foreign Status of Seller. Seller's execution and
delivery to Buyer, on the Closing Date, of Seller's certificate in the form
attached hereto as Schedule F (the "NON-FOREIGN CERTIFICATE") stating, under
penalty of perjury, that (a) Seller is not a "foreign person" for the purposes
of Section 1445 of the Internal Revenue Code of 1986, as amended (the "CODE"),
and that withholding of tax will not be required thereunder, and (b)
withholding is not required under the provisions of any state laws in
connection with the contemplated transfer of the Property by Seller to Buyer.
4.2 Review and Approval of Title and Survey. There shall
be no exceptions to title to the Property other than the Permitted Exceptions.
In connection with Buyer's review of title and related matters, Seller shall,
at its sole cost and expense and as soon as practicable, but in no event later
than ten (10) days after the date of this Agreement, deliver to Buyer or cause
Escrow Holder to deliver to Buyer the following:
(a) a current extended coverage commitment (ALTA Form
1970) for title insurance for the Property issued by the Title
Company (the "TITLE REPORT"), accompanied by legible record
copies of all of the documents referred to in the Title
Report;
(b) copies of all existing easements, covenants,
restrictions, agreements or other documents which affect the
ownership of or title to the Property and which are not
disclosed by the Title Report for the Property, if any, but
which are known to Seller; and
(c) a current ALTA survey of the Property, certified to
Buyer in a form reasonably required by Buyer (the "SURVEY").
4.3 Review and Approval of Other Matters. In connection
with Buyer's review of other matters, Seller shall deliver to Buyer, within
fifteen (15) business days after the date of this Agreement, true, complete and
correct copies of the following items, to the extent in Seller's or Seller's
manager's possession:
(a) Copies of all soils and hazardous materials reports,
termite reports, engineering studies, topographical maps,
appraisals and other reports, studies, maps and analyses with
respect to the Property;
(b) Copies of subdivision maps and condominium plans;
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(c) Copies of all approvals, permits and licenses
relating to the Property;
(d) Copies of all correspondence, documents and
certificates from appropriate governmental authorities
relating to the zoning, building and platting status of the
Property;
(e) A description of existing and proposed local
improvements affecting the Property, including assessment
levels;
(f) Copies of all service contracts relating to the
Property;
(g) Copies of the real property and personal property
tax bills for the Property for the previous three (3) years;
(h) Copies of all tenant leases and proposed tenant
leases on the Property;
(i) Copies of all plans and construction drawings for all
buildings constructed or to be constructed on the Property;
and
(j) Copies of all insurance policies maintained
by Seller with respect to the Property within the last three
(3) years.
4.4 Service and Other Contracts. Buyer's review and
approval, in its sole and absolute discretion, of all utility contracts, water
and sewer service contracts, service contracts, warranties, permits, soils
reports, and other contracts or documents of any nature relating to the
Property or any portion thereof (the "CONTRACTS"; those Contracts which Buyer
approves in writing prior to the end of the Review Period (and prior to the
Closing Date in the case of contracts not entered into or delivered to the
Buyer until after the expiration of the Review Period) shall be referred to as
the "APPROVED CONTRACTS"). Buyer's remedy if it disapproves any Contract(s)
shall be (i) to the extent such disapproved Contract(s) can be terminated, to
compel the Seller to terminate such disapproved Contract(s) on or prior to the
Closing, which Seller hereby agrees to do at its sole cost and expense if so
requested by Buyer, or (ii) to the extent Seller cannot terminate such
disapproved Contract(s), Buyer shall have the option, which must be exercised
within ten (10) days of Buyer's receipt of Seller's notice to Buyer that Seller
cannot terminate such disapproved Contract(s), or Closing (whichever is
earlier), (a) to waive Buyer's disapproval of the Contract(s) and purchase the
Property as otherwise contemplated in this Agreement, and Seller shall convey
the Property to Buyer, or (b) to terminate this Agreement by written notice to
Seller and Escrow Holder, whereupon any and all right and obligations of Buyer
and Seller hereunder shall terminate and within five (5) days after Buyer has
provided notice to Escrow Holder, Escrow Holder shall deliver to Buyer the
Earnest Money Deposit, together with interest thereon.
4.5 Physical Characteristics of the Property. Buyer's
review and approval, in its sole and absolute discretion, of (a) an
environmental assessment (which shall, without limiting the scope of the
report, contain an assessment of asbestos and radon affecting the Property) by
an environmental consultant of Buyer's choice and at Buyer's cost (the "PHASE I
REPORT"), and (b) the results of Buyer's physical inspection and testing of the
Property, or any portion thereof (which testing shall be conducted at Buyer's
expense, and may include, but shall not be limited to, testing for the presence
of asbestos,
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PCBs, as defined below, and other Hazardous Materials, as defined below,
including without limitation the performance of core sampling, drilling and
other intrusive testing), of the structural, mechanical, electrical and other
physical or environmental characteristics of the Property, including any tenant
improvements or other construction installed or to be installed as of the
Closing Date. To the extent not prohibited by the Leases, Seller shall allow
Buyer reasonable access to the Property to perform any physical inspection
thereof which Buyer reasonably deems appropriate.
4.6 Governmental Permits, Approvals and Regulations.
Buyer shall have confirmed that all governmental permits and approvals with
respect to the Property relating to the zoning, entitlements, construction,
operation, use or occupancy of the Property or any portion thereof, are in full
force and effect.
4.7 Representations and Warranties. All of Seller's
representations and warranties contained herein or made in writing by Seller
shall have been true and correct in all material respects when made and shall
be true and correct in all material respects as of the Closing Date, as though
made at, and as of, the Closing Date, and Seller shall have executed and
delivered all documents and complied with all of Seller's covenants and
agreements contained in or made pursuant to this Agreement.
4.8 Impairment of Property. No material adverse change
shall have occurred in the condition or ownership of the Property or any part
thereof from and after the conclusion of the Review Period. As of the Closing
no part of the Property, or any interest of Seller therein, shall be encumbered
by any lien, pledge, security interest, financing or due and unpaid charge, tax
or other imposition (other than Permitted Exceptions and items which will be
removed on or prior to the Closing Date), or damaged and not repaired to
Buyer's satisfaction or taken in condemnation or other like proceeding and no
such proceeding shall be pending or threatened, except as otherwise provided in
Section 8.2 hereof. There shall have occurred no material adverse change in
the financial condition of any tenant under any of the Leases demising five
thousand (5,000) square feet or more of the Improvements (each, a "MAJOR
LEASE"), and there shall be no default, or event that with the giving of notice
or the passage of time or both would constitute a default, under any Major
Lease.
4.9 Approval of Buyer's Board of Directors. This
Agreement and the transactions contemplated hereby shall have been approved by
Buyer's board of directors (the "BUYER APPROVAL") on or before December 1,
1996.
4.10 Objections to Title or Survey. Buyer shall have
until the expiration of ten (10) days from the later to occur of (i) delivery
of the Title Report and (ii) delivery of the Survey, to notify Escrow Holder
and Seller in writing of Buyer's disapproval of the condition of title. Buyer
shall give Seller and Escrow Holder written notice outlining in detail any
title items objected to and specifying Buyer's desired cure. Seller shall have
ten (10) days after receipt of Buyer's notice to advise Buyer and Escrow
Holder, in writing, as to whether Seller shall cure said objections prior to
the Closing (and should Seller fail to advise Buyer of Seller's objection
within such ten(10) day period, Seller shall be deemed to have elected to
refuse to cure said objections). In the event that Seller elects not to cure
such objections, or elects to cure such objections and fails or refuses to cure
said objections, Buyer shall have the option, which must be exercised within 10
days of Buyer's receipt of Seller's response or deemed response, or Closing
(whichever is earlier), (a) to waive Buyer's objections and purchase the
Property as otherwise contemplated in this Agreement, notwithstanding such
objections, in which event the subject matter of such
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waived objections shall be included within Permitted Exceptions, and Seller
shall convey the Property to Buyer, subject to the Permitted Exceptions, or (b)
to terminate this Agreement by written notice to Seller and Escrow Holder,
whereupon any and all right and obligations of Buyer and Seller hereunder shall
terminate and within five (5) days after Buyer has provided notice to Escrow
Holder, Escrow Holder shall deliver to Buyer the Earnest Money Deposit,
together with interest thereon. All exceptions to title to, and/or
encumbrances against, the Property shown on the Title Report or Survey but not
objected to by Buyer, and those items referred to in items (i) and (ii) of the
second sentence of Section 3.1 hereof, shall be deemed "PERMITTED EXCEPTIONS";
provided, however, that Seller covenants to remove all monetary encumbrances
(other than those with respect to the liens referred to in items (i) and (ii)
of the second sentence of Section 3.1 hereof) affecting the Property or any
portion thereof prior to Closing, and Seller further agrees that no monetary
encumbrances other than the liens referred to in items (i) and (ii) of the
second sentence of Section 3.1 hereof shall be Permitted Exceptions.
4.11 Objections to Property or Other Matters. To the
extent there is a change in any of the matters described in this Article IV.A,
or any such matters first become available or are supplemented after the date
hereof, Seller shall immediately inform Buyer of such change in circumstances
and deliver any such new or supplemental information to Buyer. Buyer shall
have until the date that is thirty (30) days after the date of the full
execution and delivery of this Agreement (the "REVIEW PERIOD"), to notify
Seller of any objections Buyer has to the physical or financial state of the
Property, to the Phase I environmental report, to any contracts or leases
relating to the Property, to any item delivered (or not delivered) by Seller to
Buyer, or to any other matter covered by this Article IV.A other than Title or
Survey; provided that Buyer shall have until the Closing Date to approve the
items specified in Sections 4.1, 4.8, 4.12 and 4.13 hereof. If Buyer shall
object as provided herein, then this Agreement shall terminate and any and all
right and obligations of Buyer and Seller hereunder shall terminate, and within
five (5) days after Buyer provides notice of such termination to Escrow Holder,
Escrow Holder shall pay to Buyer the Earnest Money Deposit, together with
interest thereon. If Buyer does not give notice to Seller of its objections
prior to the end of the Review Period, Buyer shall be conclusively deemed to
have waived any right to object.
4.12 Tenant Matters. Buyer shall have received and approved
written estoppel statements, in substantially the form as that attached hereto
as Schedule G, from each of the tenants under the Major Leases, and tenants
holding leases upon not less than eighty-five percent (85%) of the remaining
gross leasable area in the Property. Each such estoppel statement shall be in
form and substance acceptable to Buyer. Buyer shall have 5 days after the date
of Buyer's receipt of each such tenant estoppel to notify Seller of any
objection Buyer may have regarding such estoppel, and in the event Buyer fails
to so notify Seller, Buyer shall be deemed to have approved such estoppel.
4.13 REA Estoppels. Buyer shall have received and approved
such written estoppel statements from each holder of a reciprocal easement
agreement affecting the Property as Buyer shall reasonably require. Each such
estoppel statement shall be in form and substance reasonably acceptable to
Buyer. Buyer shall have 5 days after the date of Buyer's receipt of each such
"REA Estoppel" to notify Seller of any objection Buyer may have regarding such
estoppel, and in the event Buyer fails to so notify Seller, Buyer shall be
deemed to have approved such estoppel.
4.14 Rent Support Agreement. Unless the 5,600 net rentable
square feet shown as vacant on the Rent Roll as of the date hereof (the "VACANT
SPACE") shall have
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been fully leased (with such approval of Buyer as may be required pursuant to
Section 9.2 hereof) upon the Closing, Seller shall have executed and delivered
a Rent Support Agreement in the form attached hereto as Schedule I (the "RENT
SUPPORT AGREEMENT") with respect to the portion of the Vacant Space remaining
unleased at Closing.
4.15 Occupancy. All buildings on the Property leased to
tenants, as set forth on the Rent Roll, shall be occupied by such tenants, and
each tenant to which a portion of the Property has been leased, as set forth on
the Rent Roll, shall have opened for business to the general public and shall
be paying scheduled monthly rent under the Lease with respect thereto.
4.16 Delivery of Documents. The due and timely delivery by
Seller of executed documents required by this Agreement, including without
limitation all of the documents and items specified in Section 5.3 below.
The foregoing conditions contained in this Article IV.A
(except to the extent otherwise provided in Article IV.B hereof) are intended
solely for the benefit of, and may be waived by, Buyer.
B. Seller's Conditions to Closing.
The following conditions are conditions precedent to Seller's
obligation to sell the Property:
4.16 Delivery of Documents and Purchase Price. Buyer's
due and timely execution and delivery of all documents and items to be executed
and delivered by Buyer (including without limitation the Purchase Price)
pursuant to this Agreement, including without limitation all of the documents
and items specified in Section 5.4 below.
The foregoing conditions contained in this Article IV.B are
intended solely for the benefit of Seller (except to the extent otherwise
provided in Article IV.A hereof).
ARTICLE V
CLOSING, RECORDING AND TERMINATION
5.1 Deposit with Escrow Holder and Escrow Instructions.
Promptly after execution of this Agreement, the parties hereto shall deliver
one (1) fully executed copy of this Agreement to the Escrow Holder and this
instrument shall serve as the escrow instructions to the Escrow Holder for
consummation of the purchase and sale contemplated hereby. Seller and Buyer
agree to execute such additional and supplementary escrow instructions as may
be appropriate to enable the Escrow Holder to comply with the terms of this
Agreement; provided, however, that in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall control.
5.2 Closing. (a) The Closing Date shall occur
no later than the date (the "OUTSIDE CLOSING DATE") which is twenty-five (25)
days after the conclusion of the Review Period. The Closing and the Closing
Date shall not have occurred until the Purchase Price shall have been paid by
Buyer to Escrow Holder as provided herein. The "CLOSING" shall be deemed to
have occurred on the date that all of the events specified in
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Section 5.8 of this Agreement shall have occurred. The "CLOSING DATE" shall be
the date on which the Closing occurs.
(b) In the event the Closing does not occur on or
before the Outside Closing Date, subject to any extension to the Outside
Closing Date contemplated by Article VIII hereof, the Escrow Holder shall,
unless it is notified by Buyer to the contrary within five (5) days after such
date, return to the depositor thereof all items which may have been deposited
with Escrow Holder hereunder. Any such return shall not, however, relieve
either party hereto of any liability it may have for its wrongful failure to
close. Buyer shall, within five (5) days after the termination of this
Agreement in accordance with the terms hereof, return to Seller all documents
and materials delivered to Buyer hereunder by or on behalf of Seller.
5.3 Delivery by Seller. At the Closing, Seller shall
deposit with the Escrow Holder, for the benefit of Buyer, or deliver directly
to Buyer the following:
(a) The Deed and the Assignment and Assumption of Leases
and Rents, each duly executed and acknowledged by Seller, in
recordable form, and ready for recordation in the official
records of the jurisdiction in which the Land is located (the
"OFFICIAL RECORDS");
(b) The Bill of Sale duly executed by Seller;
(c) A certificate from the office of the county clerk of
the county in which the Land is located and of the county in
which Seller's principal office is located, together with a
certificate from the Office of the Secretary of State of the
State of Kansas, each dated within thirty (30) days after the
Closing Date, listing, as of the date of such certificate, all
filings against Seller in said offices under the Commercial
Code of Kansas which would be a lien on any of the Personal
Property, together with fully executed termination statements
with respect to such filings;
(d) originals or copies of any warranties and guaranties
received by Seller and to be assigned to Buyer, from any
contractors, subcontractors, suppliers or materialmen in
connection with any construction, repairs or alterations of
the Improvements or any tenant improvements;
(e) The Assignment of Contracts, Intangible Property,
Warranties and Guarantees, duly executed by Seller and
acknowledged, assigning all of Seller's interest in the
Intangible Property, together with written terminations of any
Contracts which are not Approved Contracts;
(f) Originals or copies of all certificates of occupancy,
licenses and permits for the Improvements;
(g) All existing as-built plans and specifications for
the Improvements in the possession of Seller or its manager;
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(h) A closing statement prepared by Escrow Holder in form
and content consistent with this Agreement and otherwise
reasonably satisfactory to Buyer and Seller;
(i) The Non-Foreign Certificate, duly executed by Seller;
(j) If required by Section 4.13 hereof, the Rent Support
Agreement duly executed by Seller; and
(k) Complete originals of the Leases with respect to the
Property and copies of all records, books of account, ledgers,
statements and other business records relating to the
ownership and operation of the Property and/or the
administration of the Leases, in whatever mode maintained,
including information contained on computer disks.
Buyer may waive compliance on Seller's part under any of the
foregoing items by an instrument in writing.
5.4 Delivery By Buyer. Buyer shall execute and deliver
to Escrow Holder, for the benefit of Seller, or directly to Seller such
documents and instruments as may be required to the close the transactions
contemplated hereby (including without limitation, if required by Section 4.13
hereof, the Rent Support Agreement, duly executed by Buyer), which documents
and instruments shall be in form and substance reasonably acceptable to Buyer.
After Buyer's or Escrow Holder's receipt of all of the items specified in
Section 5.3 hereof, after the complete satisfaction of all of the conditions
precedent to Buyer's obligations hereunder, and after the expiration of the
Review Period, Buyer shall deliver the Purchase Price to Escrow Holder as
provided in Section 2.2 above.
5.5 Other Instruments. Seller and Buyer shall each
deposit such other instruments as are reasonably required by Escrow Holder or
otherwise required to close the escrow and consummate the purchase of the
Property in accordance with the terms hereof.
5.6 Prorations. At Closing, the parties shall prorate
(with Buyer being deemed to be the owner of the Property for the date of the
Closing) as of the date on which the Closing occurs, on the basis of a thirty
(30) day month, the following with respect to the Property:
(a) Rents. All rents and other receipts payable
for the month in which the Closing occurs shall be prorated as
of the Closing. If any tenant under a Lease is delinquent in
such month, Seller shall pay to Buyer the pro-rated amount of
the scheduled monthly rent under such Lease. Buyer shall use
reasonable efforts after the Closing to collect delinquent
rents for the period up to the Closing; provided, however,
that all collections shall be applied first to periods
commencing after the Closing, and then to periods prior to the
Closing. Percentage Rents (if any) shall be prorated by Buyer
reasonably promptly after receipt thereof by Buyer, based on
twelve thirty (30) day months.
(b) Common Area Maintenance Charges. All
reimbursable expenses shall be reconciled at Closing, such
that if
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Seller has collected sums in excess of its reimbursable
expenses under the Leases, Seller shall pay such excess to
Buyer. In the event that such reconciliation shows that
Seller has collected less than its incurred reimbursable
expenses under the Leases, Buyer shall remit the excess (to
the extent, and only to the extent, that such excess is
actually collected by Buyer, with all payments on arrearages
to be applied first to the period after the Closing Date) to
Seller not later than the expiration of three months after the
conclusion of the twelve-month period then in progress with
respect to the budgeting of such expenses under the Leases.
(c) Taxes. Unless such items are subject to
proration under subparagraph (b) above, real estate taxes,
recurring assessments, and personal property taxes, if any, on
all or any portion of the Property, based on the regular and
supplemental tax bills for the calendar year in which the
Closing occurs (or, if such tax bill has not been issued as of
the date of Closing the regular and supplemental tax bill for
the calendar year preceding that in which the Closing occurs,
with such increase thereto as Buyer reasonably estimates will
occur) shall be prorated as of the Closing. If any
supplemental real estate taxes are levied for any period
preceding the Closing, the parties will, immediately after the
Closing or the issuance of the supplemental real estate tax
bill (whichever last occurs), prorate between themselves, in
cash, without interest and to the date of the Closing Date,
the supplemental real estate taxes shown by such bill.
(d) Utilities. Unless such items are subject to
proration under subparagraph (b) above, all utilities,
including gas, water, sewer, electricity, telephone and other
utilities supplied to the Property shall be read as of the
Closing Date. Seller shall pay, prior to the Closing Date,
all such amounts for which a bill has been received or for
which payment is otherwise due prior to the Closing Date, and
Buyer shall be credited, and Seller shall be debited, with an
amount equal to all utility charges for the period from the
date such bills were issued or such payments were due until
the Closing Date. Seller shall be credited for the amount of
any deposits made by Seller for utility services which have
not been refunded to Seller and which are assigned to Buyer on
or prior to the Closing Date.
(e) Service Contracts. Amounts payable under Approved
Contracts shall be prorated on an accrual basis. Seller shall
pay, prior to the Closing Date, all such amounts for which a
bill has been received or for which payment is otherwise due
prior to the Closing Date, and Buyer shall be credited, and
Seller shall be debited, with an amount equal to all amounts
accrued under the Approved Contracts from the date such bills
were issued or such payments were due until the Closing Date.
Seller shall deliver to Escrow, for the benefit of Buyer,
evidence of the cancellation or termination of all Contracts
other than Approved Contracts, and Seller shall be responsible
for all such cancellation costs.
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(f) Improvement Lien Assessments. All
improvement lien assessments shall be paid in full by Seller
at Closing.
(g) Other Items. All other proratable items, including
without limitation licenses and permits and other income from,
and expenses associated with, the Property shall be prorated
between Buyer and Seller as of the Closing.
Buyer and Seller's obligation to prorate shall survive the Closing for a period
of one (1) year (unless within such time Buyer or Seller makes a claim against
the other party to this Agreement with respect to such obligation to prorate,
in which case such obligation shall survive without limitation), and Buyer and
Seller shall use good faith efforts to conclude prorations with respect to
percentage Rent and common area maintenance charges as soon as practicable
after the determination of the amounts thereof.
5.7 Costs and Expenses. Seller and Buyer shall each bear
and pay one-half (1/2) of the fees of Escrow Holder. Seller shall for the cost
of the Survey, the Title Policy, all legal fees and costs incurred by Seller,
the cost of any recordation fees and documentary or other transfer taxes
applicable with respect to the sale of the Real Property, all sales tax, if
any, applicable with respect to the sale of the Personal Property and/or the
Intangible Property, and other fees and charges which are typically borne by
sellers in Wichita, Kansas. Buyer shall pay for its out-of-pocket expenses,
all due diligence, all legal fees and costs incurred by Buyer in connection
herewith, and other fees and charges which are typically borne by buyers in
Wichita, Kansas.
5.8 Closing and Recordation. Provided that Escrow Holder
has received all of the items required to be delivered pursuant to this Article
V (or a waiver from the party for whose benefit such item is being delivered)
and that it has not received prior written notice from Buyer that Buyer has
elected to terminate its rights and obligations hereunder pursuant to Article
IV, Article VIII and/or Section 5.9, and provided that Buyer has received
either the Title Policy or the irrevocable commitment of Title Company to
provide it with the Title Policy immediately after recordation of the Deed,
Escrow Holder is authorized and instructed (a) with respect to the Property, to
cause the Title Company to record the documents delivered to the Escrow Holder
in accordance with recording instructions set forth in a letter to be delivered
to Escrow Holder and Title Company by Buyer (or if no such letter is received
prior to the Closing, in accordance with customary practice), (b) to deliver
those other documents and instruments delivered into Escrow to the party for
whose benefit such documents or instruments were made and (c) to deliver the
Purchase Price, as adjusted pursuant to Section 5.6 hereof, upon receiving
confirmation of recording of the Deed.
5.9 Termination of Agreement.
(a) Failure of Buyer's Conditions. If any one or more of
the conditions to Buyer's obligations, as set forth in Article IV.A, Section
5.3 or elsewhere in this Agreement, is not either fully performed, satisfied or
waived in writing (or deemed waived as provided herein) on or before the
Closing Date or such earlier date as provided elsewhere herein, then Buyer may
elect, by written notice as provided in Section 10.10 hereof, to terminate this
Agreement, in which case neither party shall have any further obligation to the
other. Nothing in this paragraph shall be construed to limit any of Buyer's
rights or remedies at law or equity in the event of a default by Seller.
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(b) Failure of Seller's Conditions. If any one or more
of the conditions to Seller's obligations, as set forth in Article IV.B,
Section 5.4 or elsewhere in this Agreement, is not either fully performed,
satisfied or waived in writing (or deemed waived as provided herein) on or
before the Closing Date or such earlier date as provided elsewhere herein, then
Seller may elect, by written notice as provided in Section 10.10 hereof, to
terminate this Agreement and neither party shall have any further obligation to
the other.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
As an inducement to Buyer to enter into this Agreement and the
consummation of the transaction contemplated hereby, Seller hereby represents
and warrants to and agrees with Buyer both as of the date hereof and again as
of the Closing Date, and as of all dates and times in between (except as
specifically provided to the contrary herein), as set forth below. As used
herein and elsewhere in this Agreement, the term "SELLER'S ACTUAL KNOWLEDGE"
shall mean the actual knowledge of each of Messrs. S. Joseph Barrett,
Steven Lipscomb and Kevin Caldwell, without any duty of investigation of any
kind. Seller hereby represents and warrants that the foregoing persons are the
persons employed by Seller or Seller's manager with executive, managerial or
daily supervisory responsibility with respect to the Property.
6.1 Authority. Seller is duly organized and validly
existing under the laws of the jurisdiction of its organization, is duly
qualified to conduct business and own real property in the State of Kansas, and
has all requisite power to own all of its properties and assets and to carry on
its business as presently conducted. The execution, delivery and performance
of this Agreement and all other agreements contemplated hereby has been duly
and validly authorized by all necessary action of Seller and the Agreement and
all other agreements contemplated thereby are and will be valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors' rights and general principles of
equity.
6.2 Title. Seller holds fee simple title to the
Property, and to Seller's actual knowledge, such fee simple title is free and
clear of all liens, encumbrances, security interests, charges, adverse claims
and other exceptions to title, except for the Leases, Contracts, matters of
record, matters disclosed by the Survey and the Permitted Exceptions.
6.3 The Leases. A list of the current Leases is set
forth in the rent roll attached hereto as Schedule H (the "RENT ROLL"). The
Rent Roll is true, complete and correct in all respects and except for the
Leases set forth in the Rent Roll, there are no other leases, licenses or other
agreements affecting the occupancy of the Property. With respect to each
Lease: (i) the Lease is in full force and effect, and constitutes the valid and
binding legal obligation of Seller and the respective tenant, enforceable
against each of them in accordance with its terms; (ii) there are no
understandings, oral or written, between the parties to the Lease which in any
manner vary the obligations or rights of either party; (iii) except as
indicated on the Rent Roll, there is no default by Seller under the Lease and
to Seller's actual
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knowledge, by the tenant under the Lease; and (iv) no rent or additional rent
under the Lease has been paid for more than thirty (30) days in advance of its
due date.
6.4 No Litigation or Adverse Events. Seller has received
no written notice of, and to Seller's actual knowledge, there are no, pending
or threatened investigations, actions, suits, proceedings or claims against or
affecting Seller, the Property, any tenant, or any adjacent property, at law or
in equity or before or by any federal, state, municipal or other governmental
department, commission, board, agency, or instrumentality, domestic or foreign.
6.5 Compliance with Laws. To Seller's actual knowledge,
Seller is in compliance in all material respects with all applicable laws,
ordinances, rules and regulations (including without limitation those relating
to zoning and the Americans With Disabilities Act) applicable to the ownership
or operation of the Property. Seller has not received from any insurance
company or Board of Fire Underwriters any notice, which remains uncured, of any
defect or inadequacy in connection with the Property or its operation.
6.6 No Defaults in Other Agreements. To Seller's actual
knowledge, neither Seller nor any other party is in material default under any
Contract affecting the Property, and no event exists which, with the passage of
time or the giving of notice or both, will become a material default thereunder
on the part of the Seller or any other party thereto. To Seller's actual
knowledge, Seller is in compliance in all material respects with the terms and
provisions of the covenants, conditions, restrictions, rights-of-way or
easements affecting the Property.
6.7 Eminent Domain. To Seller's actual knowledge, there
is no existing or proposed or threatened eminent domain or similar proceeding,
or private purchase in lieu of such a proceeding which would affect the
Property in any material way.
6.8 Licenses, Permits, CO's, Zoning, etc. To Seller's
actual knowledge, all permits, certificates of occupancy, business licenses and
all other notices, licenses, permits, certificates and authority required as of
the date hereof and as of the Closing Date in connection with the use or
occupancy of the Property have been obtained and are in full force and effect
and in good standing.
6.9 Taxes and Assessments. To Seller's actual knowledge,
all real property taxes, and all Seller's personal property taxes, relating to
the Property, excepting those for the current tax year which are not yet
overdue (i.e., which are still payable without interest or penalty), have been
paid in full. To Seller's actual knowledge, there is no existing or proposed
assessment that has or may become a lien on the Property.
6.10 Environment. (i) Seller has not engaged in any
operations or activities upon, or any use or occupancy of the Property, or any
portion thereof, for the purpose of or in any way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials (whether legal or illegal,
accidental or intentional) on, under, in or about the Property, or transported
any Hazardous Materials to, from or across the Property, except in all cases in
material compliance with Environmental Requirements and only in the course of
legitimate business operations at the Property (which shall not include any
business primarily or substantially devoted to the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of Hazardous Materials); (ii) to Seller's actual knowledge, no tenant,
occupant or user of the Property, nor any other person, has engaged in or
permitted any operations or activities upon, or any use or occupancy of the
Property, or any portion thereof,
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for the purpose of or in any material way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of any Hazardous Materials (whether legal or illegal, accidental or
intentional) on, under, in or about the Property, or transported any Hazardous
Materials to, from or across the Property, except in all cases in material
compliance with Environmental Requirements and only in the course of legitimate
business operations at the Property (which shall not include any business
primarily or substantially devoted to the handling, manufacture, treatment,
storage, use, generation, release, discharge, refining, dumping or disposal of
Hazardous Materials); (iii) to Seller's actual knowledge, no Hazardous
Materials are presently constructed, deposited, stored, or otherwise located
on, under, in or about the Property except in all cases in material compliance
with Environmental Requirements and only in the course of legitimate business
operations at the Property (which shall not include any business primarily or
substantially devoted to the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of Hazardous
Materials); (iv) to Seller's actual knowledge, no Hazardous Materials have
migrated from the Property upon or beneath other properties; and (v) to
Seller's actual knowledge, no Hazardous Materials have migrated or threaten to
migrate from other properties upon, about or beneath the Property.
As used herein:
"ENVIRONMENTAL REQUIREMENTS" shall mean all applicable present
statutes, regulations, rules, ordinances, codes, licenses, permits, orders,
approvals, plans, authorizations, concessions, franchises and similar items, of
all governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof and all applicable judicial and administrative and regulatory decrees,
judgments and orders relating to the protection of human health or the
environment, including, without limitation: (i) all requirements, including
but not limited to those pertaining to reporting, licensing, permitting,
investigation and remediation of emissions, discharges, releases or threatened
releases of "Hazardous Materials," chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes whether
solid, liquid or gaseous in nature, into the air, surface water, ground water
or land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of chemical substances,
pollutants, contaminants or hazardous or toxic substances, materials, or
wastes, whether solid, liquid or gaseous in nature; and (ii) all requirements
pertaining to the protection of the health and safety of employees or the
public.
"HAZARDOUS MATERIALS" shall mean (i) any flammable, explosive
or radioactive materials, hazardous wastes, toxic substances or related
materials including, without limitation, substances defined as "hazardous
substances," "hazardous materials," "toxic substances" or "solid waste" in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Sec. 9601, et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq.; the Toxic Substances
Control Act, 15 U.S.C., Section 2601 et seq.; the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901 et seq.; and in the regulations
adopted and publications promulgated pursuant to said laws; (ii) those
substances listed in the United States Department of Transportation Table (49
C.F.R. 172.101 and amendments thereto) or by the Environmental Protection
Agency (or any successor agency) as hazardous substances (40 C.F.R. Part 302
and amendments thereto); (iii) those substances defined as "hazardous wastes,"
"hazardous substances" or "toxic substances" in any similar federal, state or
local laws or in the regulations adopted and publications promulgated pursuant
to any of the foregoing laws or which otherwise are regulated by any
governmental authority, agency, department, commission, board or
instrumentality of the United States of America, the State of Kansas or
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<PAGE> 24
any political subdivision thereof, (iv) any pollutant or contaminant or
hazardous, dangerous or toxic chemicals, materials, or substances within the
meaning of any other applicable federal, state, or local law, regulation,
ordinance, or requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning any
hazardous, toxic or dangerous waste, substance or material, all as amended; (v)
petroleum or any by-products thereof; (vi) any radioactive material, including
any source, special nuclear or by-product material as defined at 42 U.S.C.
Sections 2011 et seq., as amended, and in the regulations adopted and
publications promulgated pursuant to said law; (vii) asbestos in any form or
condition; and (viii) polychlorinated biphenyls.
6.11 Physical Condition. To Seller's actual knowledge: (i)
there are no material structural defects in the Improvements located on or at
the Property; and (ii) the Improvements and Personal Property (including
without limitation plumbing equipment, HVAC, electric wiring and fixtures, gas
distribution system, water and sewage systems, and security systems) are in
good working order and condition, except for defects or required repairs that
are not material.
6.12 Employees. Seller has no employees.
6.13 Mechanic's Liens. All bills and claims for labor
performed and materials furnished to or for the benefit of the Property
currently due and contracted for by Seller or its manager have been paid in
full, and there are no mechanic's or materialmen's liens (whether or not
perfected) on or affecting the Property as a result of labor performed or
materials furnished and contracted for by the Partnership or its manager.
6.14 Operating Statements. The financial statements
delivered by Seller to Buyer fairly present the profit or loss from the
management and operation of the Property for the periods covered thereby and,
in all material respects, accurately reflect all rents and other gross
receipts, and all amounts paid by Seller for electricity, water, sewer, other
utility services, insurance, fuel, maintenance and repairs (whether capitalized
or expensed), real estate taxes, payroll and payroll taxes and all other
operating and other expenses associated with the Property.
6.15 Disclosure. No representation or warranty of Seller
in this Agreement, or any information, statement or certificate furnished or to
be furnished by Seller or at Seller's direction pursuant to this Agreement or
in connection with the transactions contemplated hereby, contains or shall
contain any materially untrue statement of a material fact or omits or shall
omit to state a material fact necessary to make the statements contained
therein not misleading. To Seller's actual knowledge, there is no material
misstatement or omission in the copies of contracts, agreements and other
documents delivered by Seller in connection with the transactions contemplated
hereby.
6.16 No Leases of Property or Assets. No material portion
of the Personal Property or fixtures with respect to the Property (other than
fixtures owned or installed by tenants) is leased by the Seller as lessee.
The representations and warranties set forth in this Article
VI shall survive the execution and delivery of this Agreement, the delivery of
the Deed and transfer of title to the Property, until the date that is one (1)
year after the Closing Date; provided however, that in the event Buyer makes a
written claim against Seller with respect to any representation or warranty
prior to the date which is one (1) year after the Closing Date,
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<PAGE> 25
then such representation or warranty shall survive without limitation as to
such written claim.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
7.1 Representations and Warranties of Buyer. Buyer
hereby represents and warrants to Seller as follows: Buyer is a corporation
duly organized under the laws of the State of Maryland; subject to receipt of
the Buyer Approval, this Agreement and all documents executed by Buyer which
are to be delivered to Seller at the Closing are and as of the Closing Date
will be duly authorized, executed and delivered by Buyer, and are and as of the
Closing Date will be legal, valid and binding obligations of Buyer, and do not
and as of the Closing Date will not violate any provisions of any agreement or
judicial order to which Buyer is a party or to which it is subject.
ARTICLE VIII
POSSESSION, DESTRUCTION AND CONDEMNATION
8.1 Possession. Possession of the Property shall be
delivered to Buyer on the Closing Date, subject to the Leases described on the
Rent Roll or otherwise approved by Seller. Without limiting any other
provisions of this Agreement, Seller shall afford authorized representatives of
Buyer reasonable access to the Property for the purposes of determining
Seller's compliance herewith (provided that Seller or Seller's agent shall be
allowed to accompany Buyer in any visit to the Property Buyer may make for the
purposes of determining such compliance); however, in no event shall such right
give rise to any obligation of Buyer to determine compliance or noncompliance.
8.2 Loss, Destruction and Condemnation.
(a) Definition of Material Damage. For the
purposes of this Section 8.2, damage to the Property is material if (i) the
actual cost of repairing or replacing the damaged portions of the Improvements
on the Property exceeds $250,000.00, or (ii) if it would take longer than
ninety (90) days to perform such repair or replacement using reasonably
diligent efforts, or (iii) if any lessee has the right to abate any rent under
its lease as a result of such damage and there is not full rental interruption
coverage with respect thereto available to Buyer through and after the Closing
Date until the date that is ninety (90) days beyond the estimated date of
reconstruction, or (iv) if any lessee has a right to terminate its lease as a
result of such damage.
(b) Effect of Non-Material Damage to
Improvements. If prior to the Closing the Improvements on the Property are
damaged by casualty and such damage is not material, (i) this Agreement may not
be terminated by reason of such casualty (provided that this does not waive
Buyer's other termination rights under this Agreement) and (ii) Seller will, at
Buyer's option, either (a) cause the damaged portion of the Improvements to be
repaired at Seller's sole cost and expense within ninety (90) days after the
date of such damage or (b) reduce the Purchase Price by an amount equal to the
actual, reasonable and necessary cost of repairing or replacing the damaged
portions of the Improvements. Seller will notify Buyer within five (5) days
(but in any event prior to the
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Closing Date) of Seller's receipt of knowledge of any casualty which occurs
after the date of this Agreement and on or prior to the Closing Date.
(c) Effect of Material Damage to Improvements.
If prior to the Closing the Improvements are damaged by casualty and such
damage is material, Seller shall notify Buyer in writing of such casualty as
soon as practicable. Within ten (10) days after the occurrence of such
casualty, Seller will, as soon as is practicable, commence restoration of the
damaged Improvements, and shall complete such restoration in compliance with
all laws and the representations and warranties set forth herein and shall
restore such Improvements their condition prior to the occurrence of the
casualty promptly (but in no event more than ninety (90) days thereafter), and
the Closing Date shall be extended (but in no event by more than ninety (90)
days) until such damaged Improvements are complete. If Seller does not
commence or complete such restoration within such time period, then Buyer may
elect pursuant to a writing delivered to Seller and Escrow Holder to (i)
continue this Agreement, provided, however, that Seller shall assign to Buyer
at the Closing any insurance proceeds to which Seller is entitled with respect
to such damage (in which event the Purchase Price shall be reduced by the
amount of any deductible with respect thereto); (ii) continue this Agreement,
provided, however, that Seller shall reduce the Purchase Price by an amount
equal to the reasonable cost of repairing or replacing the damaged portion(s)
of the Improvements reasonably estimated by Buyer (in which event Seller shall
be entitled to retain any insurance proceeds with respect to such damage), or
(iii) terminate this Agreement, in which case Buyer shall have no further
rights and obligations to the Seller under this Agreement (but Buyer shall
retain its rights and remedies against Seller) and Escrow Holder shall
immediately return the Earnest Money Deposit (with interest thereon) to Buyer.
Buyer's failure to have elected any of these options within the time allotted
therefor shall be deemed to be an election of option (iii).
(d) Definition of Material Taking. For the
purposes of this Section 8.2, a taking or threatened taking by eminent domain
or similar proceedings shall be deemed material if (i) the value of that
portion of the Property to be so taken exceeds $100,000.00, (ii) the portion of
the Property taken includes any access to the Property or any portion of the
parking area; (iii) Buyer determines that the Property so affected is
materially and adversely affected by such taking or threatened taking, (iv) any
lessee has the right to abate any rent under its lease as a result of such
taking or threatened taking, or (v) any lessee has the right to terminate its
lease as a result of such taking or threatened taking.
(e) Effect of Non-Material Taking. If prior to
the Closing there is a taking or threatened taking of a portion of the Property
which is not material, (i) this Agreement may not be terminated and (ii) Seller
will assign to Buyer at the Closing all of Seller's rights in and to any
condemnation award with respect to such non-material taking, and there will be
no reduction in the Purchase Price. Seller will deliver written notice to
Escrow Holder and Buyer within one (1) day after Seller receives notice of or
otherwise becomes aware of any taking or threatened taking affecting the
Property.
(f) Effect of Material Taking. If prior to the
Closing there is a taking or threatened taking of a material portion of the
Property or all of it, Seller shall notify Buyer in writing of such taking or
threatened taking, and within ten (10) days after Buyer's receipt of such
notice, Seller and Buyer shall endeavor to agree upon whether the Property
shall be purchased by Buyer, and any reduction in the Purchase Price, and any
assignment of any condemnation award with respect to such taking. If within
such ten (10)
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day period Buyer and Seller have not reached a mutually acceptable agreement as
to those matters, Buyer within ten (10) days thereafter may elect in writing to
(i) continue this Agreement subject to the taking or threatened taking with an
assignment of all of Seller's rights to condemnation awards, severance damages,
payments-in-lieu thereof or the like; or (ii) terminate this Agreement, in
which case Buyer and Seller shall have no further rights or obligations to one
another under this Agreement, and Escrow Holder shall immediately return the
Earnest Money Deposit (with interest thereon) to Buyer. Buyer's failure to
have elected any of these options within the time period allotted therefor
shall be deemed to be an election of option (ii).
(g) Extension of Outside Closing Date. Upon the
occurrence of any damage to the Property, the Outside Closing Date shall be
extended to the date upon which Seller is required hereunder to have such
damage repaired, but in no event shall any such extension extend the Outside
Closing Date to a date which is more than ninety (90) days after the date of
such damage to the Property.
ARTICLE IX
MAINTENANCE AND OPERATION OF THE PROPERTY; COVENANTS
9.1 Maintenance. In addition to Seller's other
obligations hereunder, Seller shall, upon and after the date of this Agreement
and to and including the Closing Date, at Seller's sole cost and expense,
maintain the Property in the ordinary course of business consistent with past
practice, pay all taxes, assessments, fines, penalties, charges and other
operating expenses, and shall make all repairs, maintenance and replacements of
the Improvements and any Personal Property and otherwise operate the Property
in its ordinary and customary manner, and otherwise in the same manner as
before the making of this Agreement, the same as though Seller were retaining
the Property. Seller shall not make any alterations to the Property without
first receiving Buyer's prior written consent thereto.
9.2 Leases and Other Agreements. Seller shall not, on or
after the date of this Agreement and on or prior to the Closing Date, enter
into any Lease pertaining to the Property except pursuant to the terms and
conditions set forth in this Section 9.2. At any time prior to the Closing
Date, in the event that Seller intends to enter into a lease with respect to
any portion of the Property, Seller shall deliver to Buyer a complete copy of
the proposed lease, financial information as to the proposed lessee (with
credit reports), and copies of all brokerage agreements (or a detailed list of
all brokerage obligations) with respect to such lease. Buyer shall review and
approve or disapprove of such lease within ten (10) days after the receipt of
all of the foregoing materials. If all such materials are delivered to Buyer
on or prior to ten (10) days prior to conclusion of the Review Period, and if
(a) such lease (and any brokerage commissions with respect thereto) was
negotiated by Seller in good faith and is on market terms, (b) the proposed
lessee is creditworthy as determined by Buyer in its reasonable judgment, (c)
the proposed use of the premises under such Lease is compatible with the other
uses in the Property and is not inconsistent with the general leasing policies
of Buyer, as determined by Buyer in its reasonable judgment, and (d) the terms
and conditions of such Lease and any brokerage commissions payable with respect
thereto are otherwise acceptable to Buyer in its reasonable discretion, then
Buyer shall approve such lease and if and when the Closing occurs, Buyer shall
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<PAGE> 28
assume all obligations under such lease to pay for or construct tenant
improvements and shall assume and pay, as and when due, all brokerage
commissions with respect to such lease which commissions were disclosed to and
approved by Buyer. In the event that Buyer does not affirmatively approve in
writing such lease within such ten (10) day period, then Buyer shall be deemed
to have disapproved such lease and as long as this Agreement remains effective
Seller shall not enter into such lease. Seller's sole remedy with respect to
any such disapproval shall be to terminate this Agreement, by written notice to
Buyer not later than five (5) days later the expiration of such ten (10) day
period, in which case the Earnest Money Deposit, with all interest thereon,
shall be refunded to Buyer and this Agreement, and each party's obligations
hereunder, shall terminate. Notwithstanding the foregoing, after the
conclusion of the Review Period, in no event shall Seller enter into any lease
with respect to the Property without Buyer's prior written consent, which will
not be unreasonably withheld or delayed. After the date hereof, without
Buyer's prior written consent (which will not be unreasonably withheld) in no
event shall Seller enter into any agreement or contract with respect to the
Property (other than a lease, which shall be governed by the foregoing
provisions) which is not terminable on thirty (30) days' prior notice (without
premium or penalty).
9.3 Encumbrances. Seller shall not, in between the date
of this Agreement and the Closing Date, mortgage, encumber or suffer to be
encumbered all or any portion of the Property, which encumbrances would survive
the Closing Date, without the prior written consent of Buyer.
9.4 Consents and Notices. Seller and Buyer shall
cooperate with each other and exercise commercially reasonable efforts to
obtain as of the Closing Date, all consents from, and provide all notices to,
any third party and any governmental or regulatory authority which are required
pursuant to any Contract or any applicable laws as a condition to or in
connection with the execution, delivery or performance of this Agreement or
other documents and instruments contemplated thereby.
9.5 Audit Cooperation. Until the date that is one (1)
year after the Closing Date, Seller hereby agrees to cooperate with Buyer in
producing Buyer's audited financial statements for the Property for such
periods as may be requested by Buyer. Such cooperation shall include, without
limitation, the execution and delivery by Seller to Buyer's auditors of such
confirmations and letters as such auditors may reasonably require.
ARTICLE X
MISCELLANEOUS
10.1 Notices. Any notice required or permitted to be
given under this Agreement shall be in writing and personally delivered or sent
by United States mail, registered or certified mail, postage prepaid, return
receipt requested, or by electronic facsimile transmission, or sent by Federal
Express or similar nationally recognized overnight courier service, and
addressed as follows, and shall be deemed to have been given upon the date of
delivery (or refusal to accept delivery) at the address specified below as
indicated on the return receipt or air bill:
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If to Seller: EWING INDUSTRIES-WICHITA WESTGATE
LIMITED PARTNERSHIP
16660 Dallas Parkway, Suite 2200
Dallas, Texas 75248
Attn: S. Joseph Barrett
Fax No.: (972)248-6701
with a copy to: Thompson & Knight, P.C.
1700 Pacific, Suite 3300
Dallas, Texas 75201
Attn: James W. Rose
Fax No.: (214)969-1550
If to Buyer: The PRICE REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
Attn.: Joseph Kornwasser
Fax No.: (213) 937-8175
with a copy to: Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Attn: William R. Lindsay, Esq.
Fax No.: (213) 229-7520
If to Escrow Security Abstract & Title Company
Holder: 434 North Main Street
Wichita, Kansas 67202
Attn: Ms. Judy Cachard
Fax No.: (316) 267-8115
or such other address as either party may from time to time specify in writing
to the other in the manner aforesaid.
10.2 Brokers and Finders. Buyer and Seller each hereby
represents and warrants that no broker was involved in this Agreement or the
transactions contemplated hereby except for Marcus & Millichap, and K&F
Development, whose commissions are to be paid by Seller. In the event of a
claim for a broker's fee, finder's fee, commission or other similar
compensation in connection herewith other than as set forth above, (i) Buyer,
if such claim is based upon any agreement alleged to have been made by Buyer,
hereby agrees to reimburse Seller for any liability, loss, cost, damage or
expense (including reasonable attorneys' and paralegals' fees and costs) which
Seller may sustain or incur by reason of such claim and (ii) Seller, if such
claim is based upon any agreement alleged to have been made by Seller, hereby
agrees to indemnify, defend, protect and hold Buyer harmless against any and
all liability, loss, cost, damage or expense (including reasonable attorneys'
and paralegals' fees and costs) which Buyer may sustain or incur by reason of
such claim. The provisions of this Section 10.2 shall survive the Closing or
earlier termination of this Agreement.
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10.3 Successors and Assigns. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns, except that neither Seller's nor Buyer's
interest under this Agreement may be assigned, encumbered or otherwise
transferred whether voluntarily, involuntarily, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that Buyer may assign, encumber or otherwise transfer Buyer's interest under
this Agreement, without the prior written consent of Seller (which will not be
unreasonably withheld, conditioned or delayed), to any subsidiary or affiliate
of Buyer, provided, however, that such assignment shall not release Buyer from
its obligations under this Agreement. There shall be no third party
beneficiaries to this Agreement.
10.4 Amendments. This Agreement may be amended or
modified only by a written instrument executed by the party asserted to be
bound thereby.
10.5 Continuation and Survival of Indemnities,
Representations, Warranties and Post-Closing Obligations. Except as provided
in the last paragraph of Article VI of this Agreement, all indemnities,
representations and warranties by, and all of the post-closing obligations, if
any, of, the respective parties contained herein or made in writing pursuant to
this Agreement or any other instrument delivered by Seller pursuant hereto are
intended to and shall remain true and correct and binding as of the time of
Closing and shall survive the execution and delivery of this Agreement, the
delivery of the Deed and transfer of title.
10.6 Interpretation. Whenever used herein, the term
"including" shall be deemed to be followed by the words "without limitation."
Words used in the singular number shall include the plural, and vice-versa, and
any gender shall be deemed to include each other gender. The captions and
headings of the Articles and Sections of this Agreement are for convenience of
reference only, and shall not be deemed to define or limit the provisions
hereof.
10.7 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Kansas.
10.8 Merger of Prior Agreements. This Agreement
(including the exhibits hereto) constitutes the entire agreement between the
parties with respect to the purchase and sale of the Property specifically
described herein and supersedes all prior and contemporaneous (whether oral or
written) agreements and understandings between the parties hereto relating to
the specific subject matter hereof.
10.9 Attorneys' Fees. In the event of any action or
proceeding at law or in equity between Buyer and Seller (including an action or
proceeding between Buyer and the trustee or debtor in possession while Seller
is a debtor in a proceeding under the Bankruptcy Code (Title 11 of the United
States Code) or any successor statute to such Code) to enforce or interpret any
provision of this Agreement or to protect or establish any right or remedy of
either Buyer or Seller hereunder, the unsuccessful party to such action or
proceeding shall pay to the prevailing party all costs and expenses, including
without limitation reasonable attorneys' and paralegals' fees and expenses
(including without limitation fees, costs and expenses of experts and
consultants), incurred in such action or proceeding and in any appeal in
connection therewith by such prevailing party, together with all costs of
enforcement and/or collection of any judgment or other relief. If such
prevailing party shall recover judgment in any such action, proceeding or
appeal, such
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costs, expenses and attorneys' and paralegals' and others' fees shall be
included in and as a part of such judgment.
10.10 Notice of Termination. If either Buyer or Seller
elects to terminate this Agreement, it will submit to Escrow Holder and the
other party hereto a notice of termination in duplicate. If Escrow Holder
receives a notice of termination, it is instructed to mail and fax one copy to
the other such party within one (1) business day. If Escrow Holder has not
received a written objection from the other party within five (5) business days
after mailing and faxing the copy, Escrow Holder is to (i) comply with the
instructions contained in the notice of termination, (ii) pay cancellation
charges out of any funds on deposit in this Escrow, (iii) return the Earnest
Money Deposit (and interest thereon) to Buyer, and (iv) cancel this Agreement.
10.11 Specific Performance; Damages. The parties understand
and agree that the Property is unique and for that reason, among others, Buyer
will be irreparably damaged in the event that this Agreement is not
specifically enforced. Accordingly, in the event of any breach or default in
or of this Agreement or any of the warranties, terms or provisions hereof by
Seller, Buyer shall have the right to demand and have specific performance of
this Agreement. The foregoing shall not limit or otherwise diminish the other
remedies available to Buyer at law or equity, including, without limitation,
the right to recover damages, provided, however, that such damages shall be
limited to Buyer's actual out-of-pocket costs in an amount that shall in no
event exceed the sum of One Hundred Fifty Thousand Dollars ($150,000.00).
10.12 Relationship. It is not intended by this Agreement to,
and nothing contained in this Agreement shall, create any partnership, joint
venture, financing arrangement or other agreement between Buyer and Seller. No
term or provision of this Agreement is intended to be, or shall be, for the
benefit of any person, firm, organization or corporation not a party hereto,
and no such other person, firm, organization or corporation shall have any
right or cause of action hereunder.
10.13 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
10.14 Time of the Essence. Time is of the essence in this
Agreement and with respect to all of its terms.
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IN WITNESS WHEREOF, Seller, Buyer, and Escrow Holder have
executed this Agreement as of the date first above written.
BUYER: THE PRICE REIT, INC.
By: /s/ Joseph Kornwasser
-----------------------------
Its: President/CEO
----------------------------
SELLER: EWING INDUSTRIES-WICHITA WESTGATE
LIMITED PARTNERSHIP
By: Ewing Industries II, L.C.,
its general partner
By: /s/ S. Joseph Barrett
-------------------------
S. Joseph Barrett
Its: Vice President
------------------------
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<PAGE> 33
CONSENT OF ESCROW COMPANY
The undersigned Escrow Company agrees to (i) accept the
foregoing Agreement, (ii) be Escrow Holder under the Agreement*, and (iii) be
bound by the Agreement in the performance of its duties as Escrow Holder;
however, the undersigned will have no obligations, liability or responsibility
under (a) this consent or otherwise, unless and until the Agreement, fully
signed by the parties, has been delivered to the undersigned, or (b) any
amendment to the Agreement unless and until the amendment is accepted by the
undersigned in writing.
___________
* As amended by letter dated November 12, 1996 to Lila E. Rogers.
Dated: November 12, 1996
SECURITY ABSTRACT & TITLE COMPANY
By: /s/ Patty L. Sattler
--------------------------------
Patty L. Sattler, Escrow Officer
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SCHEDULE A
LEGAL DESCRIPTION OF THE LAND
Lot 1, The Dugan Centre, Second, an Addition to Wichita, Kansas,
Sedgwich County, Kansas and;
That part of Lot 3, The Dugan Centre, an Addition to Wichita, Kansas,
Sedgwich County, Kansas, described as beginning at the Southeast corner of said
Lot 3; thence north along the east line of said Lot, 221.5 feet to the South
line of said The Dugan Centre Second; thence west along the South line of said
The Dugan Centre Second, 67.4 feet to the Southwest corner thereof; thence
south parallel with the East line of said Lot 3, 215.43 feet to the South line
thereof; thence east along south line of said Lot 3, 67.54 feet to beginning.
Schedule A
<PAGE> 35
SCHEDULE B
KANSAS SPECIAL WARRANTY DEED
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Attention: William R. Lindsay
- --------------------------------------------------------------------------------
KANSAS SPECIAL WARRANTY DEED
THIS INDENTURE is made this ____ day of _____________, 1996,
by EWING INDUSTRIES-WICHITA WESTGATE LIMITED PARTNERSHIP, a Kansas limited
partnership ("Grantor") in favor of THE PRICE REIT, INC., a Maryland
corporation ("Grantee"). Mailing address of Grantee is 145 South Fairfax
Avenue, Fourth Floor, Los Angeles, California 90036.
WITNESSETH, that Grantor, in consideration of the sum of Ten
Dollars ($10.00) and other good and valuable consideration to Grantor duly
paid, the receipt and sufficiency of which are hereby acknowledged, does by
these presents SELL and CONVEY unto Grantee and Grantee's successors and
assigns, the following described property (the "Property"):
(A) That certain real property described in Exhibit A
hereto (the "LAND");
(B) All rights, privileges and easements appurtenant to
and for the benefit of the Land, including, without limitation, all minerals,
oil, gas and other hydrocarbon substances on and under the Land, as well as all
development rights, air rights, water, water rights and water stock relating to
the Land and any other easements, rights-of-way or appurtenances owned by
Seller and used in connection with the beneficial operation, use and enjoyment
of the Land or the Improvements or any other appurtenance, together with all
rights of Seller in and to public and private streets, roads, avenues, alleys
and passageways, sidewalks, driveways, parking areas and areas adjacent thereto
or used in connection therewith (open or proposed, in front of or abutting the
Land), and all rights of Seller in any land lying in the bed of any existing or
proposed street adjacent to the Land, all strips or gores of land adjoining the
Land, and any awards made or to be made and any unpaid award for damage to the
Land by reason of any change of grade of any such street, road, avenue, alley
or passageway;
(C) All improvements and fixtures located or to be
located on the Land, including, without limitation, all buildings and
structures presently located on the Land, all apparatus, equipment and
appliances presently located on the Land and used
Schedule B
<PAGE> 36
in connection with the operation or occupancy thereof, such as heating and air
conditioning systems and facilities used to provide any utility services,
parking services, refrigeration, ventilation, garbage disposal, recreation or
other services thereto, and all landscaping and leasehold improvements of
tenants, if any, which become the property of the owner of the Land (the
"IMPROVEMENTS");
SUBJECT TO only such matters as may be set forth in any title
insurance policy received by Buyer concurrently herewith.
TO HAVE AND TO HOLD the Property with all and singular the
tenements, hereditaments and appurtenances thereto belonging or in any wise
appertaining, unto Grantee and Grantee's successors and assigns, forever,
Grantor hereby covenanting that the Property is free and clear from any
encumbrance done or suffered by Grantor except as set forth above, and that
Grantor will warrant and defend title to the Property unto Grantee and
Grantee's successors and assigns forever against the claims and demands of
persons claiming or to claim the same by, through or under Grantor, except as
set forth above.
IN WITNESS WHEREOF, the Grantor has caused this Deed to be
executed and delivered as of the date first above written.
EWING INDUSTRIES-WICHITA WESTGATE
LIMITED PARTNERSHIP
By: Ewing Industries II, L.C.,
its general partner
By: ________________________________
S. Joseph Barrett
Its: Vice President
Schedule B
<PAGE> 37
SCHEDULE C
ASSIGNMENT AND ASSUMPTION OF LEASE AND RENTS
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Attention: William R. Lindsay
================================================================================
ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
For valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, EWING INDUSTRIES-WICHITA WESTGATE LIMITED PARTNERSHIP, a
Kansas limited partnership ("Assignor"), hereby assigns, sets over, transfers
and delegates to THE PRICE REIT, INC., a Maryland corporation ("Assignee"), all
of the landlord's right, title, interest, claim and estate in and to all
leases, occupancy agreements and similar agreements, together with all
modifications, extensions and renewals thereof, all security therefor, and all
guaranties of any of the foregoing (collectively, the "Leases") which demise
all or an part of, or interest in, the real property more particularly
described on Exhibit A attached hereto and incorporated herein (the "Land"),
together with all income, receipts, fund and revenues of any kind whatsoever
payable under the Leases or otherwise with respect to the Land, whether
heretofore accrued or hereafter arising.
Assignee hereby assumes all of Assignor's obligations under or with
respect to the Leases described on Exhibit B attached hereto, which obligations
arise out of and relate to the period commencing on the date hereof. Assignor
hereby agrees to indemnify, defend, protect and hold Assignee harmless from and
against any and all loss, claim, obligation, cost or expense (including without
limitation reasonable attorneys fees) relating to or in connection with any
obligations of the landlord under the Leases, which obligations arise out of or
relate to the period prior to the date hereof.
If any litigation between Assignor and Assignee arises out of the
obligations of the parties under this Assignment or concerning the meaning or
interpretation of any provision contained herein, the losing party shall pay
the prevailing party's costs and expenses of such litigation including, without
limitation, reasonable attorneys' fees. Any such attorneys' fees and other
expenses incurred by either party in enforcing a judgment in its favor under
this Assignment shall be recoverable separately from and in addition to any
other amount included in such judgment, and such attorneys' fees obligation is
intended to
Schedule C
<PAGE> 38
be severable from the other provisions of this Assignment and to survive and
not be merged into any such judgment.
This Assignment may be executed and delivered in any number of
counterparts, each of which so executed and delivered shall be deemed to be an
original and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement
effective as of this ______ day of _______________, 1996.
ASSIGNOR:
EWING INDUSTRIES-WICHITA WESTGATE LIMITED PARTNERSHIP
By: Ewing Industries II, L.C., its general partner
By: _______________________________
S. Joseph Barrett
Its: Vice President
ASSIGNEE:
THE PRICE REIT, INC.
By:________________________________________________
Its:_______________________________________________
Schedule C
<PAGE> 39
EXHIBIT "A" TO ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
LEGAL DESCRIPTION OF PROPERTY
Schedule C
<PAGE> 40
EXHIBIT "B" TO ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
ASSUMED LEASES
Schedule C
<PAGE> 41
SCHEDULED
BILL OF SALE
For valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, EWING INDUSTRIES-WICHITA WESTGATE LIMITED PARTNERSHIP, a
Kansas limited partnership ("Seller"), hereby transfers, conveys and assigns to
THE PRICE REIT, INC., a Maryland corporation ("Buyer"), and its successors and
assigns forever, any and all tangible personal property owned by Seller and
located on or about and used in connection with the real property more
particularly described on Exhibit A attached hereto and made a part hereof (the
"Property") or any improvements thereon, including but not limited to fixtures,
furnishings, furniture, tools machinery and/or equipment, operational
instructions and/or specifications, surveys, drawings, business records and the
personal property listed on any schedule attached hereto.
If any litigation between Seller and Buyer arises out of the
obligations of the parties under this Bill of Sale or concerning the meaning or
interpretation of any provision contained herein, the losing party shall pay
the prevailing party's costs and expenses of such litigation including, without
limitation, reasonable attorneys, fees. Any such attorneys' fees and other
expenses incurred by either party in enforcing a judgment in its favor under
this Bill of Sale shall be recoverable separately from and in addition to any
other amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Bill of Sale and to
survive and not be merged into any such judgment.
IN WITNESS WHEREOF, Seller has caused this instrument to be executed
and delivered as of this ______ day of __________, 1996.
EWING INDUSTRIES-WICHITA WESTGATE LIMITED PARTNERSHIP
By: Ewing Industries II, L.C., its general partner
By: _______________________________
S. Joseph Barrett
Its: Vice President
Schedule D
<PAGE> 42
EXHIBIT "A" TO BILL OF SALE
DESCRIPTION OF PROPERTY
Schedule D
<PAGE> 43
SCHEDULE E
ASSIGNMENT OF CONTRACTS, INTANGIBLE PROPERTY, WARRANTIES AND GUARANTEES
THIS ASSIGNMENT OF CONTRACTS, INTANGIBLE PROPERTY, WARRANTIES AND
GUARANTIES (this "Assignment") is made as of the ___ day of ____________, 1996,
by EWING INDUSTRIES-WICHITA WESTGATE LIMITED PARTNERSHIP, a Kansas limited
partnership ("Assignor"), in favor of THE PRICE REIT, INC., a Maryland
corporation ("Assignee").
RECITALS;
Pursuant to that certain Purchase and Sale Agreement and Escrow
Instructions dated as of November ____, 1996 by and between Assignor, Assignee
and ____________________ Title Insurance Company (the "Agreement"), Assignee
has this day acquired from Assignor certain interests in land, buildings and
improvements more particularly described on Exhibit A attached hereto and made
a part hereof (the "Property"). Capitalized terms not otherwise defined herein
shall have the meanings given them in the Agreement.
In consideration of the acquisition of the Property by Assignee and
other good and valuable consideration, the mutual receipt and legal sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
Assignor hereby assigns, transfers and delegates to Assignee all of
Assignor's right, title and interest in and to the following (collectively, the
"Assigned Property"): (i) any intangible personal property which relates to
and is reasonably required for the operation and functioning of the Land,
Improvements or Personal Property, including without limitation all
transferable licenses and governmental approvals and permits of any nature
relating to the Property or the Improvements or any repairs or renovations to
such Improvements, and (ii) any and all warranties, guaranties, contracts and
other rights owned by Assignor relating to the ownership, operation or
functioning of all or any part of the Property (including without limitation
all third party guarantees and warranties, express or implied, in connection
with the construction of the Improvements and any deposits given by Assignor in
connection with the installation or provision of utility services, to the
extent such deposits have not been returned to Assignor as of the date hereof).
If any litigation between Assignor and Assignee arises out of the
obligations of the parties under this Assignment or concerning the meaning or
interpretation of any provision
Schedule E
<PAGE> 44
contained herein, the losing party shall pay the prevailing party's costs and
expenses of such litigation including, without limitation, reasonable
attorneys, fees. Any such attorneys' fees and other expenses incurred by
either party in enforcing a judgment in its favor under this Assignment shall
be recoverable separately from and in addition to any other amount included in
such judgment, and such attorneys' fees obligation is intended to be severable
from the other provisions of this Assignment and to survive and not be merged
into any such judgment.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment effective as of the date set forth below.
Executed as of the date first above written.
ASSIGNOR:
EWING INDUSTRIES-WICHITA WESTGATE LIMITED PARTNERSHIP
By: Ewing Industries II, L.C., its general partner
By: _______________________________
S. Joseph Barrett
Its: Vice President
Schedule E
<PAGE> 45
EXHIBIT "A" TO ASSIGNMENT OF CONTRACTS, INTANGIBLE
PROPERTY, WARRANTIES AND GUARANTEES
LEGAL DESCRIPTION OF PROPERTY
Schedule E
<PAGE> 46
SCHEDULE F
CERTIFICATION OF NON-FOREIGN STATUS
(FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT)
Internal Revenue Code Section 1445 provides that a transferee
of a United States real property interest must withhold tax if the transferor
is a foreign person. To inform THE PRICE REIT, INC. ("Transferee") that
withholding of tax is not required upon the disposition of a United States real
property interest by the undersigned ("Transferor"), Transferor hereby
certifies and declares as follows:
1. Transferor's U.S. tax identification/social security
number is: _______________________________________;
2. Transferor's principal office address is
_________________________________; and
3. Transferor is not a foreign person (foreign
corporation, foreign partnership, foreign trust, foreign estate or non-
resident alien), as defined in the Internal Revenue Code and Income Tax
Regulations.
Transferor acknowledges that this certification may be
disclosed by Transferee to the Internal Revenue Service and that any false
statement contained in this certification may be punished by fine or
imprisonment or both.
Transferor understands that Transferee is relying on this
certification to determine whether withholding is required by Transferee
pursuant to Internal Revenue Code Section 1445.
Under penalties of perjury, the undersigned signatory declares
that: I have examined this certification, to the best of my knowledge and
belief it is true and complete, and I am duly authorized to execute this
certification on behalf of Transferor.
Dated: _______________________________, 1996
EWING INDUSTRIES-WICHITA WESTGATE
LIMITED PARTNERSHIP
By: Ewing Industries II, L.C., its general partner
By: _______________________________
S. Joseph Barrett
Its: Vice President
Schedule F
<PAGE> 47
SCHEDULE G
TENANT ESTOPPEL CERTIFICATE
THIS TENANT ESTOPPEL CERTIFICATE ("Certificate"), dated as of
_____________, 1996, is executed by ________________________ ("Tenant") in
favor of THE PRICE REIT, INC. ("Buyer").
R E C I T A L S
A. Buyer and EWING INDUSTRIES-WICHITA WESTGATE LIMITED
PARTNERSHIP ("Landlord"), have entered into that certain Purchase and Sale
Agreement and Escrow Instructions, dated as of November ___, 1996 (the
"Purchase Agreement"), whereby Buyer has agreed to purchase, among other
things, the improved real property located in the City of Wichita, County of
___________, State of Kansas, more particularly described on Schedule "A"
attached to the Purchase Agreement (the "Property").
B. Tenant and Landlord have entered into that certain Lease
Agreement, dated as of ________________ (together with all amendments,
modifications, supplements, guarantees and restatements thereof, the "Lease"),
for a portion of the Property.
C. Pursuant to the Lease, Tenant has agreed that upon the request
of Landlord, Tenant would execute and deliver an estoppel certificate
certifying the status of the Lease.
D. In connection with the Purchase Agreement, Landlord has
requested that Tenant execute this Certificate.
NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer as
follows:
AGREEMENT
Section 1. Lease.
Attached hereto as Exhibit "A" is a true, correct, and complete copy
of the Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements. guarantees and restatements thereof:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 2. Leased Premises.
Pursuant to the Lease, Tenant leases those certain Premises (the
"Leased Premises") consisting of approximately ______________________
(______________) rentable square
Schedule G
<PAGE> 48
feet within the Property, as more particularly described in the Lease. In
addition, pursuant to the terms of the Lease, Tenant has the [non-exclusive]
right to use [___________ parking spaces/the parking area] located on the
Property during the term of the Lease. [Cross-out the preceding sentence or
portions thereof if inapplicable.]
Section 3. Full Force of Lease.
The Lease is in full force and effect, has not been terminated, and is
enforceable in accordance with its terms.
Section 4. Complete Agreement
The Lease constitutes the complete agreement between Landlord and
Tenant for the Leased Premises and the Property.
Section 5. Acceptance of Leased Premises.
Tenant has accepted and is currently occupying the Leased Premises.
Section 6. Lease Term.
The term of the Lease commenced on _____________________ and ends on
_______________________, subject to the following options to extend: ___________
________________________________________________________________________________
(If none, please state "None.")
Section 7. Purchase Rights.
Tenant has no option, right of first refusal, right of first offer, or
other right to purchase all or any portion of the Leased Premises or all or any
portion of the Property, except as follows: ____________________________________
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 8. Rights of Tenant.
Except as expressly stated in this Certificate, Tenant:
(a) has no right to renew or extend the term of the Lease;
(b) has no option or other right to purchase all or any part of
the Leased Premises or all or any part of the Property;
(c) has no right, title, or interest in the Leased Premises, other
than as Tenant under the Lease.
Schedule G
<PAGE> 49
Section 9. Rent.
(a) The rent under the Lease is current, and Tenant is not in
default in the performance of any of its obligations under the Lease.
(b) Tenant is currently paying base rent under the Lease in the
amount of ________________________ Dollars ($_________) per month. Tenant has
not received and is not, presently, entitled to any abatement, refunds,
rebates, concessions or forgiveness of rent or other charges, free rent,
partial rent, or credits, offsets or reductions in rent, except as follows:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
(c) Tenant's estimated share of operating expenses, common area
charges, insurance, real estate taxes and administrative and over-head expenses
is ___________ percent (______%) and is currently being paid at the rate of
____________________________________ Dollars ($__________) per month, payable
to ______________________________________________.
(d) There are no existing defenses or offsets against rent due or
to become due under the terms of the Lease, and there presently is no default
or other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Leased Premises, except as
follows:________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 10. Security Deposit.
The amount of Tenant's security deposit held by Landlord under the
Lease is _________________________________ Dollars ($_____________).
Section 11. Prepaid Rent.
The amount of prepaid rent, separate from the security deposit, is
__________________________________ Dollars ($_____________), covering the
period from ________ to ________.
Section 12. Insurance.
All insurance, if any, required to be maintained by Tenant under the
Lease is presently in effect.
Schedule G
<PAGE> 50
Section 13. Pending Actions.
There are no actions, whether voluntary or otherwise, pending against
the Tenant (or any guarantor of the Tenant's obligations under the Lease)
pursuant to the bankruptcy or insolvency laws of the United States or any state
thereof.
Section 14. Landlord's Obligations
As of the date of this Certificate, Landlord has performed all obligations
required of Landlord pursuant to the Lease and no offsets. counterclaims, or
defenses of Tenant under the Lease exist against Landlord. As of the date of
this Certificate, no events have occurred that, with the passage of time or the
giving of notice, would constitute a basis for offsets, counterclaims, or
defenses against the Landlord, except as follows:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
(If none, please state "None.")
Section 15. Assignments by Landlord.
Tenant has received no notice of any assignment, hypothecation or
pledge of the Lease or rentals under the Lease by Landlord.
Section 16. Assignments by Tenant.
Tenant has not sublet or assigned the Leased Premises or the Lease or
any portion thereof to any sublessee or assignee. No one except Tenant and its
employees will occupy the Leased Premises except as permitted under the Lease.
The address for notices to be sent to Tenant is as set forth in the Lease.
Section 17. Environmental Matters.
The operation and use of the Leased Premises does not involve the
generation, treatment, storage, disposal or release into the environment of any
hazardous materials, regulated materials and/or solid waste, except those used
in the ordinary course of operating a retail store or restaurant (if so
permitted by the Lease) or otherwise used in accordance with all applicable
laws.
Section 18. Notification by Tenant.
From the date of this Certificate and continuing the earlier to occur
of (i) December 31, 1996 and (ii) Buyer's acquisition of title to the Property,
Tenant agrees to immediately notify Buyer, in writing, at the following
address, on the occurrence of any event or the discovery of any fact that would
make any representation contained in this Certificate inaccurate:
Schedule G
<PAGE> 51
The PRICE REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
Attn.: Joseph Kornwasser
Fax No.: (213) 937-8175
Tenant makes this Certificate with the knowledge that it will be
relied upon by Buyer in agreeing to purchase the Property. In the event that
Buyer acquires the Property, nothing in this Section 18 shall limit Tenant's
obligations under the Lease.
Tenant his executed this Certificate as of the date first written
above by the person named below, who is duly authorized to do so.
TENANT
____________________________________
By:_________________________________
Name:
Its:
Schedule G
<PAGE> 52
SCHEDULE H
RENT ROLL
Attached.
Schedule H
<PAGE> 53
SCHEDULE I
FORM OF RENT SUPPORT AGREEMENT
Attached.
Schedule I
<PAGE> 1
EXHIBIT 2.2
SALE AND PURCHASE AGREEMENT
THIS AGREEMENT OF PURCHASE AND SALE ("Agreement") is made between
MADISON PROPERTY I, L.P. ("Seller") and PRICE/BAYBROOK, LTD. ("Buyer"), a
Texas limited partnership. CHICAGO TITLE INSURANCE COMPANY ("Escrow Agent")
joins in this Agreement for the purposes set forth below. The effective date
of this Agreement (the "Effective Date") shall be the date on which the last of
the Seller or Buyer sign this Agreement below.
WHEREAS, Seller is the owner of certain real property known as the
Broadmoor Village Shopping Center, consisting of land totaling approximately
6.34 acres in size, which land is more particularly described in Exhibit A
attached hereto, improved with two buildings having approximately 62,000
rentable square feet of space, located at the northeast corner of Centerville
Road and Broadmoor Drive in Dallas, Texas (collectively the "Property").
AND, WHEREAS, Seller has agreed to sell the Property to Buyer, and
Buyer has agreed to purchase the Property from Seller, under all of the terms
set forth herein.
NOW, THEREFORE, for good and valuable consideration, Seller hereby
agrees to sell to Buyer, and Buyer hereby agrees to purchase from Seller, the
Property, together with (i) all minerals, oil, gas and other hydrocarbon
substances on and under the Property, (ii) all development rights, air rights,
water, water rights and water stock relating to the Property, (iii) any other
easements, rights-of-way or appurtenances owned by Seller and used in
connection with the beneficial operation, use and enjoyment of the Property,
(iv) all rights of Seller in and to public and private streets, roads, avenues,
alleys and passageways, sidewalks, driveways, parking areas and areas adjacent
thereto or used in connection therewith (open or proposed, in front of or
abutting the Property), (v) all rights of Seller in any land lying in the bed
of any existing or proposed street adjacent to the Property, (vi) all strips or
gores of land adjoining the Property, (vii) any awards made or to be made and
any unpaid award for damage to the Property by reason of any change of grade of
any such street, road, avenue, alley or passageway, (viii) all improvements and
fixtures located or to be located on the Property, including, without
limitation, all buildings and structures presently located on the Property or
to be located thereon, (ix) all apparatus, equipment and appliances presently
located on the Property and used in connection with the operation or occupancy
thereof, such as heating and air conditioning systems and facilities used to
provide any utility services, parking services, refrigeration, ventilation,
garbage disposal, recreation or other services thereto, (x) all landscaping and
leasehold improvements of tenants, if any, which become the property of the
owner of the Property, (xi) all leases, occupancy agreements and other similar
agreements to which Seller is a party or by which it is bound, including all
modifications, extensions and renewals thereof, and any guarantees of any of
the foregoing, with respect to or demising any part of the Property or the
improvements thereon, (xii) all income, receipts, funds and revenues of any
kind whatsoever payable under the leases or otherwise with respect to all or
any portion of the Property or the improvements thereon, (xiii) all of the
interest of Seller in any intangible personal property which relates to and is
reasonably
<PAGE> 2
required for the operation and functioning of the Property or the improvements
thereon generally, as well as any and all warranties, guarantees, permits,
contracts and other rights owned by Seller relating to the ownership, operation
or functioning of all or any part of the Property (including without limitation
all third party guarantees and warranties, express or implied, in connection
with the construction of the improvements thereon), and (xiv) all personal
property owned by Seller and located at such Property, under all of the
following terms and conditions:
1. Price and Deposit.
1.01 Purchase Price. The purchase price for the Property
(the "Purchase Price") shall be $4,750,000.00.
1.02 Payment. The Purchase Price shall be paid as
follows:
(a) On the Effective Date of this Agreement,
Buyer shall pay an amount of $100,000.00 (the "Deposit") to the Escrow Agent,
which Deposit shall be held by the Escrow Agent in accounts investing solely in
government securities or government insured, as approved by Seller and Buyer.
Any interest earned on the Deposit shall be deemed part of the Deposit and paid
together with the principal portion of the Deposit according to the terms
hereof. The Deposit shall be credited against the Purchase Price, returned to
Buyer or forfeited to Seller in accordance with the terms of this Agreement.
(b) Upon closing under this Agreement, the
Deposit and the remainder of the Purchase Price, subject to closing adjustments
provided herein, shall be paid by wire transfer of funds to Seller's account.
2. Review of Property.
2.01 Property Information. Within 5 business days after
the Effective Date, Seller shall deliver to Buyer, or make available for review
by Buyer, copies of the following documents to the extent in the Seller's
possession or in the possession of the Seller's property manager:
(a) Monthly operating statements in the form
periodically maintained by Seller for the calendar year to date and for the
immediately preceding two calendar years.
(b) The most recent rent roll statement in the
form and with the information maintained by Seller from time to time.
(c) All leases (with any amendments thereto) of
any portions of the Property which are in effect on the Effective Date,
together with all correspondence with tenants and Seller's files related
thereto.
-2-
<PAGE> 3
(d) A survey of the Property prepared for Seller
and dated July, 1996, and any (if any) plans and specifications relating to the
Property.
(e) The bill(s) for real estate taxes and
assessments for the preceding two tax/fiscal years and, if available, for the
current tax/fiscal year.
(f) A copy of an environmental audit prepared for
Seller and dated May, 1994, as well as copies of any other (if any)
environmental audits in Seller's possession.
(g) A copy of an engineering report prepared for
Seller and dated May, 1994, as well as copies of any other (if any) engineering
reports in Seller's possession.
(h) A list of all capital expenditures on the
Property in the preceding two year period.
(i) A redacted copy of the Seller's current
property insurance policy for the Property.
(j) All contracts or agreements for property
management, maintenance, janitorial services, trash removal, landscaping, snow
removal, HVAC maintenance and other ongoing services provided to Seller in
connection with the Property.
(k) A list of any personal property owned by
Seller and located at the Property.
(l) Any certificates of occupancy (if any)
relating to the Property.
Buyer acknowledges and agrees that Buyer shall be
responsible for verifying through Buyer's own due diligence the accuracy and
completeness of all documents and information, including the foregoing,
provided by Seller to Buyer, and any reliance by Buyer on such documents and
information shall be at Buyer's own risk. In addition, Buyer expressly
acknowledges and agrees that Seller shall not be obligated to furnish, nor
shall Buyer be entitled to review or have access to, internal memoranda or
internal work product which are in the possession or control of Seller.
However, the foregoing shall not limit the effectiveness of any representations
or warranties expressly set forth herein.
2.02 Study Period. Buyer shall have a period, commencing
upon the Effective Date and extending for 35 calendar days thereafter (the
"Study Period"), in which to determine in its discretion if Buyer wishes to
purchase the Property. If Buyer shall conclude that it elects to not purchase
the Property, then Buyer shall so notify Seller on or prior to the date on
which the Study Period expires, in which event the Deposit shall be returned to
Buyer and the parties shall have no further liability hereunder (except as may
be expressly provided herein upon termination). In the event Buyer does not so
notify Seller prior to expiration of the Study Period, Buyer shall be
-3-
<PAGE> 4
deemed to have automatically waived its right to terminate this Agreement, and
the parties shall proceed to closing in accordance with the terms of this
Agreement.
2.03 Right of Entry. During the Study Period, Buyer and
its agents shall have the right to enter the Property for the purpose of
examining the environmental, structural and other physical conditions of the
Property. In addition, Buyer shall have the right to interview tenants at the
Property during the Study Period, provided that Buyer notifies Seller in
advance and affords Seller an opportunity to attend such interviews. In
exercising such right of entry, the Buyer agrees to not unreasonably or
materially interfere with the operation of the Property or the rights of
tenants therein. Furthermore, Buyer shall not take any core samples, install
any monitoring wells or undertake any other invasive tests or studies without
the Seller's prior written consent, which consent shall not be unreasonably
withheld or delayed. In all events, Buyer shall fully repair and restore the
Property if any physical damage is caused by the exercise of such rights.
Likewise, Buyer acknowledges and agrees that Seller makes no representations or
warranties of any kind regarding the physical (including environmental and
structural) condition of the Property, except as may be expressly stated herein
(if at all), and Buyer shall rely entirely on Buyer's own examinations and
inspections of the Property in determining whether to purchase the Property.
Buyer hereby indemnifies and holds harmless Seller from and against any and all
liability, losses and damages (whether actual, direct, indirect, incidental or
consequential), suits, claims, actions or other proceedings (including
attorneys' fees), and costs and expenses (including the costs of restoration,
remediation and other similar activities) arising from any damage to property
or injury to person caused during any entry onto the Property by Buyer or any
of its employees, agents, contractors or consultants. The foregoing indemnity
shall survive any termination of this Agreement for a period of 1 year.
2.04 Legal Review Period. After the Effective Date, Buyer
shall have the right to obtain a current survey according to the Buyer's
requirements ("Survey") and a title insurance commitment with legible copies of
all exceptions stated therein ("Title Commitment") with respect to the
Property. On or before a date which is the earlier of (i) 15 calendar days
after the later of Buyer's receipt of the Survey or Buyer's receipt of the
Title Commitment, or (ii) the date on which the Study Period expires, Buyer
shall notify Seller in writing of any defect in title to the Property or of any
other matter which is indicated on the Survey or Title Commitment to which
Buyer objects. If Buyer does so notify Seller of a defect in title or other
matter objectionable to Buyer within the prescribed time, Seller shall have 15
calendar days in which to determine whether to cure the defect or other matter
so objected to by Buyer and to notify Buyer of Seller's decision in this
regard; however, Seller shall not be required or obligated to expend any amount
of money or take any other action to cure such defect or other matter. If
Seller is unable to cure the defect or other matter so objected to by Buyer to
the reasonable satisfaction of Buyer, Buyer shall have the right (i) to waive
such defect or other matter and take title to the Property without any
adjustment in the Purchase Price, or (ii) to terminate this Agreement and
receive a return of the Deposit. In all events, Seller will cause to be paid
off and released any mortgage or deed of trust encumbering title to the
Property at closing, provided that if Seller is unable to obtain a release of
any mortgage or deed of trust through payment of Seller's net proceeds of sale
(and Seller is unable or unwilling to pay any additional amounts necessary to
obtain such release), then Seller shall have the option
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of terminating this Agreement, whereupon the Deposit shall be returned to Buyer
and Seller shall reimburse to Buyer the verifiable out-of-pocket costs
incurred by Buyer in connection with this Agreement up to an amount of
$75,000.00. In the event that Buyer fails to initially notify Seller in
writing of a defect or other objectionable matter within the prescribed time as
described above, or Buyer fails to terminate the Agreement within the
prescribed time upon Seller's failure to cure the defect or other matter to
Buyer's reasonable satisfaction, Buyer shall be deemed to have automatically
waived any objection to the state of title to the Property or to any matter
shown on the Survey and to have agreed to proceed to closing in accordance with
the terms of this Agreement.
3. Covenants, Representations and Warranties.
3.01 Seller's Covenants, Representations and Warranties.
Seller hereby covenants, represents and warrants that to Seller's knowledge:
(a) The documents delivered to Buyer pursuant to
Section 2.01 hereof are true, correct and complete in all material respects
without intentional alteration or omission.
(b) There are not pending any special assessments
or condemnation actions with respect to the Property.
(c) This Agreement has been, and all the
documents to be delivered by Seller to Buyer at closing will be, duly
authorized.
(d) This Agreement, and the transfer of the
Property by Seller, shall not violate any contract, agreement or instrument to
which Seller is a party or by which the Seller or the Property is bound.
(e) Any and all improvements to the Property, and
any services the nonpayment of which could result in the imposition of
mechanics' liens, have been or at closing will have been paid in full.
(f) The Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986.
(g) There are no existing or proposed eminent
domain proceedings with respect to the Property.
(h) There are no actions or proceedings,
including actions or proceedings related to environmental matters, pending
against Seller or with respect to the Property or any tenant at the Property
before any court or administrative agency.
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(i) Seller has received no written notice of, and
has no knowledge of, any violation of any zoning or other land use law or
regulation regarding the physical condition of the Property.
(j) Seller owns the Property in fee simple, free
and clear of all liens and encumbrances except those matters which are of
public record or which are disclosed in writing to Buyer in the Title
Commitment or the Survey, or otherwise disclosed in writing by Seller to Buyer
or independently discovered by Buyer.
(k) Seller has received no written notice of, and
has no knowledge of, any violation of any Environmental Requirements (defined
herein) with respect to the existence, storage, use or other handling of any
Hazardous Materials (defined herein) at the Property. "Environmental
Requirements" shall mean all applicable present statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises and similar items of all governmental agencies,
departments, commissions, boards, bureaus or instrumentalities of the United
States, states and political subdivisions thereof and all applicable judicial
and administrative and regulatory decrees, judgments and orders relating to the
protection of human health or the environment, including, without limitation
all requirements, including but not limited to those pertaining to reporting,
licensing, permitting, investigation and remediation of emissions, discharges,
releases or threatened releases of Hazardous Materials into the air, surface
water, ground water or land. "Hazardous Materials" shall mean (i) any
flammable, explosive or radioactive materials, hazardous wastes, toxic
substances or related materials, including, without limitation, substances
defined as "hazardous substances," "hazardous materials," "toxic substances" or
"solid waste" in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Sec. 9601, et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Toxic
Substances Control Act, 15 U.S.C., Section 2601 et seq., the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., and in
the regulations adopted and publications promulgated pursuant to said laws,
(ii) those substances listed in the United States Department of Transportation
Table (49 C.F.R. 172.101 and amendments thereto) or by the Environmental
Protection Agency (or any successor agency) as hazardous substances (40 C.F.R.
Part 302 and amendments thereto), (iii) those substances defined as "hazardous
wastes," "hazardous substances" or "toxic substances" in any similar federal,
state or local laws or in the regulations adopted and publications promulgated
pursuant to any of the foregoing laws or which otherwise are regulated by any
governmental authority, agency, department, commission, board or
instrumentality of the United States of America, the State of Texas or any
political subdivision thereof, (iv) any pollutant or contaminant or hazardous,
dangerous or toxic chemicals, materials, or substances within the meaning of
any other applicable federal, state, or local law, regulation, ordinance, or
requirement (including consent decrees and administrative orders) relating to
or imposing liability or standards of conduct concerning any hazardous, toxic
or dangerous waste, substance or material, all as amended; (v) petroleum or any
by-products thereof; (vi) any radioactive material, including any source,
special nuclear or by-product material as defined at 42 U.S.C. Sections 2011 et
seq., as amended, and in the regulations adopted and publications promulgated
pursuant to said law; (vii) asbestos in any form or condition; and (viii)
polychlorinated biphenyls.
(l) Seller has no employees.
(m) All trash removal, landscaping, maintenance
and other service contracts and agreements relating to the Property may be
terminated upon advance notice of 30
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days or less, and no such contracts or agreements require the payment of
penalties upon cancellation.
(n) None of the leases with tenants at the
Property require the payment of a security deposit.
(o) No leasing commissions will be payable upon
the exercise by any of the tenants at the Property of an option to renew or
extend the term of its lease.
(p) Seller has received no notice of, and has no
knowledge of, any outstanding violations of any covenants, restrictions or
other agreements affecting title to the Property.
(q) None of the representations or warranties set
forth above is stated in such a manner as to be materially misleading.
Any reference in this Agreement to "knowledge,"
"actual knowledge" or "best of knowledge" of Seller, or the receipt of notices
or other communications by Seller, shall be deemed to mean the actual knowledge
of, or receipt of notice or communication by, Lisa L. Kaufman, whom Seller
represents is the person in the employ of Seller, its affiliates or advisor
having day-to-daymanagement responsibility with respect to the Property. Buyer
acknowledges and agrees that such party nor any other employee or agent of
Seller shall have any duty or obligation under this Agreement or other law to
make any affirmative investigation of the matters covered by the foregoing
provisions in order to determine the accuracy or truthfulness thereof. In
addition, Buyer hereby acknowledges and agrees that except with respect to the
foregoing representations and warranties set forth in this provision above, or
that which may be expressly set forth elsewhere in this Agreement (if at all),
the Property is to be conveyed by Seller to Buyer in "as-is, where-is"
condition without warranty or representation, express or implied, as to zoning,
physical condition, environmental condition, suitability for a particular
purpose or any other matter whatsoever.
3.02 Conditions to Buyer's Closing. The continued
accuracy in all material respects of the representations and warranties set
forth in Section 3.01 above shall be a condition precedent to the Buyer's
obligation to close hereunder. If any representation or warranty set forth in
Section 3.01 above shall prove to be incorrect in any material respect at or
before closing, Buyer may, as its sole remedy on account thereof, terminate
this Agreement and receive a return of its Deposit, in which event the parties
shall have no further liability hereunder, except as may be expressly provided
herein upon termination, and except that if the reason any such representation
or warranty is incorrect is that Seller failed to disclose known defects or
other information necessary for such representation or warranty to have been
correct at the time made, then Buyer shall be entitled to receive a
reimbursement of all of its verifiable out-of-pocket costs incurred in
connection with this Agreement up to an amount of $75,000.00. Absent any such
termination, upon closing hereunder the covenants, representations and
warranties set forth in Section 3.01 above, as modified by the certificate
delivered from Seller to Buyer at closing as described in Section 5.04, as well
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as the covenants contained in the first two sentences of Section 4.02 and the
covenant contained in the first sentence of Section 4.03, shall be deemed
remade as of the date of closing hereunder and shall survive the closing for a
period of six months, provided that such six month period shall be extended to
a period of one year with respect to (and only to) any claim under a covenant,
representation or warranty as to which Seller is notified by Buyer in writing
within such six month period, and further provided that such one year period
shall be extended to the end of the concomitant litigation with respect to any
claim as to which Seller is notified by Buyer in writing within the six month
period and as to which Buyer files suit within one year from the date of
closing. However, notwithstanding anything to the contrary herein, to the
extent that any documents or information regarding the Seller or the Property
are disclosed to Buyer or brought to Buyer's attention prior to closing, either
orally or in writing, and Buyer nevertheless closes on purchase of the
Property, Buyer shall be deemed to have accepted and to have waived any
objection to or claim based on such documents or information. Furthermore,
except with respect to any covenants, representations or warranties which are
expressly to survive closing hereunder, any and all covenants, representations
and warranties contained in this Agreement shall merge in the deed delivered at
closing and shall not survive closing hereunder.
3.03 Buyer's Covenants, Representations and Warranties.
Buyer hereby covenants, represents and warrants that to Buyer's knowledge:
(a) This Agreement has been, and all the
documents to be delivered by Buyer to Seller at closing will be, duly
authorized.
(b) This Agreement, and the acquisition of the
Property by Buyer, shall not violate any contract, agreement or instrument to
which Buyer is a party or by which the Buyer is bound.
3.04 Conditions to Seller's Closing. The continued
accuracy in all material respects of the representations and warranties set
forth in Section 3.03 above shall be a condition precedent to the Seller's
obligation to close hereunder. If any representation or warranty set forth in
Section 3.03 above shall not be correct in any material respect at or before
closing, Seller may terminate this Agreement and retain the Deposit pursuant to
Section 7.02 hereof.
4. Pre-closing Obligations.
4.01 Operations. Between the Effective Date and closing
hereunder, Seller shall continue to repair, maintain and operate the Property
according to the standards under which the Property has been operated prior to
the Effective Date of this Agreement. In the event that after expiration of
the Study Period but before closing hereunder, Seller has actual knowledge for
the first time of the need for any roof, foundation or other structural repair
at the Property, then Seller shall notify Buyer in writing of such fact.
4.02 Actions Affecting Property. Between the Effective
Date and closing hereunder, Seller shall not execute any new leases or lease
amendments without Buyer's prior
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written approval, which approval shall not be unreasonably withheld,
conditioned or delayed. In addition, during the same period, Seller shall not
without the prior written approval of the Buyer execute any documents,
agreements or instruments affecting title to the Property or otherwise allow or
permit the imposition of any liens or other encumbrances which affect title to
the Property (with the understanding that Seller shall not be required to
expend funds in order to prevent the imposition of a lien or encumbrance,
unless the lien or encumbrance is the result of a voluntary act of Seller).
Upon requesting approval of any lease with a prospective tenant or any renewal
agreement with an existing tenant, Seller shall furnish to Buyer copies of (a)
the form lease providing the basis for negotiations with such tenant, (b) the
financial statements of the tenant supplied to Seller, (c) any credit reports
with respect to the tenant obtained by Seller, and (d) a letter of intent or
other statement of the business terms of the proposed lease or other agreement,
including rent, lease term, tenant improvements, leasing commissions and
allowances or concessions. In the event that Buyer fails to respond within 5
business days after any request for approval of a lease or any other document,
then Buyer's approval shall be deemed granted.
4.03 Service Contracts. Between the Effective Date and
closing hereunder, Seller shall not enter into any new landscaping, trash
removal, maintenance or other service contracts or agreements relating to the
Property without the prior written approval of the Buyer. In the event that
Buyer fails to respond within 5 business days after any written request for
approval of a service contract or agreement, then Buyer's approval shall be
deemed granted. At closing, Seller shall assign, and Buyer shall assume, all
landscaping, trash removal, maintenance and other service contracts or
agreements relating to the Property.
4.04 Estoppel Letters. Within 21 days after the Effective
Date of this Agreement, Seller shall request in writing from each of the
tenants at the Property an estoppel letter based on the form of the estoppel
letter previously provided by each such tenant in connection with Seller's
financing of the Property and attached hereto as Exhibit B. Seller shall
deliver to Buyer at or before closing copies of all estoppel certificates so
obtained by Seller. In the event that by the time of closing hereunder, Seller
has not obtained from any tenant at the Property an estoppel certificate
substantially in the form shown in Exhibit B hereto with respect to such
tenant, as modified to reflect accurate information regarding the lease term,
rent and other terms of the respective tenant's lease, or any estoppel so
obtained by Seller states that the Seller is in default under the applicable
tenant's lease, then Buyer shall have the right, as its sole remedy on account
thereof, to terminate this Agreement and receive a return of the Deposit,
whereupon the parties shall have no further liability hereunder (except as may
be expressly provided herein upon termination).
4.05 Marketing of Property. After the Effective Date, and
until closing or earlier termination of this Agreement, Seller shall not enter
into any other contract for sale of the Property unless such contract is
expressly subject to the prior rights of Buyer hereunder.
5. Closing and Settlement.
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5.01 Closing Date. The purchase and sale contemplated
herein shall either close at the office of the Escrow Agent or occur by mailed
escrow closing within 15 calendar days after the expiration of the Study Period
described in Section 2.02 above.
5.02 Deed and Title. At closing, Seller shall deliver to
Buyer a special warranty deed in form reasonably satisfactory to both Seller
and Buyer upon payment of the Purchase Price (subject to closing adjustments
provided herein) to Seller. Title to the Property as conveyed by such deed
shall be subject to (a) liens securing payment of taxes, assessments and other
public charges imposed in connection with the Property but which are not yet
due as of the date of closing, (b) all matters indicated on the Title
Commitment which are not objected to by Buyer in accordance with Section 2.04
above, (c) any zoning, subdivision or other public laws and regulations, and
(d) leases or other occupancy agreements with tenants at the Property disclosed
to Buyer as required by Section 2.01 hereof or executed by Seller after Buyer's
approval or deemed approval pursuant to Section 4.02 hereof (collectively the
"Permitted Encumbrances"). However, in the event that title insurance related
to the Property (subject to exceptions for the Permitted Encumbrances, standard
exceptions, customary requirements for issuance, payment of premiums, and other
customary conditions) is not available to Buyer at closing due to defects in
title to the Property first arising after issuance of the Title Commitment,
then Buyer shall have the right to terminate this Agreement and receive a
return of its Deposit, whereupon the parties shall have no further liability
hereunder.
5.03 Additional Conveyances. At closing, Seller shall
execute and deliver to Buyer, and where appropriate Buyer shall execute and
deliver to Seller, the following documents in the form attached hereto or,
where no form is attached hereto, as reasonably acceptable to the parties:
(a) A bill of sale in the form attached hereto as
Exhibit C.
(b) An assignment by Seller, with an assumption
by Buyer, of (i) all leases disclosed to Buyer affecting the Property, (ii) all
service contracts and agreements disclosed to Buyer relating to the Property,
and (iii) all equipment leases and all warranties and other rights relating to
the Property which are assignable without charge or restriction, in the form
attached hereto as Exhibit D.
(c) Letters to each tenant at the Property
notifying the tenants of the sale of the Property to Buyer.
(d) Evidence, in form satisfactory to the Buyer's
title insurer, of Seller's power and authority to enter into this transaction,
as well as a customary owner's affidavit necessary for the Buyer's title
insurer to issue a title insurance policy to Buyer.
(e) A written certificate stating that all
representations and warranties contained in Section 3.01 above remain, as of
the date of closing, correct in all material respects as when
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first made hereunder or, if not correct, stating the extent to which any such
representations and warranties are not correct, in the form attached hereto as
Exhibit E.
(f) A certificate stating that Seller is not a
"foreign person" for the purposes of Section 1445 of the Internal Revenue Code
of 1986, in the form attached hereto as Exhibit F.
(g) Original copies of all leases (including all
amendments thereto) and, if requested, original copies of all materials
previously delivered or made available to Buyer pursuant to Section 2.01
hereof.
5.04 Possession. Possession of the Property shall be
delivered to the Buyer on the date of closing.
5.05 Prorations. The parties shall adjust and prorate the
following items, as of 11:59 p.m. on the day immediately prior to closing:
(a) All rent, including base rent, minimum rent
and fixed rent (if any), which relates to the months or other applicable
periods up through the month or other applicable period within which the
closing occurs. Seller shall not receive a credit for any rental amounts which
are due and payable prior to closing but not actually paid by the respective
tenant(s). Buyer shall use commercially reasonable efforts to collect such
delinquent amounts after closing and, after application to any amounts due but
unpaid for the period after closing, promptly remit such amounts to Seller.
(b) All amounts payable by tenants at the
Property as periodic estimates of the costs of utilities, insurance,
maintenance, repairs and other operating expenses relating to the months or
other applicable periods up through the month or other applicable period within
which the closing occurs.
(c) All real property taxes, assessments and
other governmental impositions of any kind or nature, including any special
assessments or similar charges, which relate to the tax year or other
applicable period within which the closing occurs. However, notwithstanding
the foregoing, if any taxes or assessments are payable to the applicable
authorities in arrears at the end of the calendar year or other tax period in
which the closing occurs, no proration for such taxes or assessments shall be
made at closing, provided that if any tenants at the Property are required to
pay periodic estimates of such tenants' share of such taxes or assessments,
Seller shall pay to Buyer at closing the periodic payments actually made by
such tenants prior to closing with respect to the calendar year or other tax
period in which the closing occurs.
(d) All fees, costs and expenses under
maintenance, trash removal, janitorial or other service contracts which relate
to the period within which the closing occurs.
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Subject to the requirements of Section 4.02 above,
all leasing commissions and tenant improvement costs arising in connection with
leases, lease amendments or other agreements with tenants which are entered
into by Seller on or after the Effective Date and before closing shall be
assumed and paid by Buyer, with an adjustment of the Purchase Price to be made
at closing in order to credit to Seller any payments of such amounts made by
Seller prior to closing.
The obligations under this section shall survive
closing. In the event that any errors in prorations or adjustments made at
closing are discovered after closing, the parties shall promptly re-adjust the
subject amounts, with such payments to be made between the parties as are
necessary to correct the errors. In all events, the parties shall make such
adjustments, or confirm in writing that no such adjustments are necessary,
within 120 days after the end of the calendar year in which the closing occurs.
5.06 Closing Costs. Upon (but only upon) closing
hereunder, Seller shall reimburse to Buyer (i) the cost to Buyer of obtaining
the Survey, which may be an updated version of the 1996 survey delivered to
Buyer pursuant to Section 2.01 hereof and (ii) the costs to Buyer of the Title
Commitment, including standard rates and premiums, but excluding charges for
coverage as to area and boundaries and any other special premiums or charges
for extraordinary coverages obtained by Buyer. Buyer and Seller shall divide
evenly any recording charges imposed in connection with the delivery and
recordation of a deed for the Property and any escrow charges or other
settlement costs of the transaction. Seller and Buyer shall each pay the costs
of its own counsel.
5.07 Property Exchange. Seller agrees to cooperate at
closing hereunder with Buyer's efforts to complete a tax-free exchange of
property through the Buyer's purchase of the Property. Such cooperation shall
include the signing of documents, as necessary, provided that Seller shall not
be required to take title to any property other than the Property, and further
provided that such cooperation shall be at no cost to Seller. In addition,
Buyer hereby indemnifies Seller from any claims, suits, liabilities and
expenses incurred in any connection with such exchange, which indemnification
shall survive closing hereunder indefinitely.
6. Casualty and Condemnation.
6.01 Substantial Event. Until closing under this
Agreement, Seller will maintain its existing all-risk property damage insurance
on the buildings and improvements on the Property, on a replacement cost basis.
If any improvements on the Property are destroyed or damaged and the cost of
restoration exceeds $250,000, or if restoration after a casualty would take
longer than 120 days, according to bona-fide contractors' estimates, or if any
tenant has the right to terminate its lease as a result of a casualty, or if
condemnation proceedings are commenced against the Property or any part
thereof, between the date hereof and the date of closing, Buyer may terminate
this Agreement and receive a return of its Deposit. However, in the event of
such casualty or condemnation, Buyer shall have the right to elect not to
terminate this
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Agreement, in which case all proceeds of insurance or condemnation awards
payable by reason of such damage or condemnation shall be paid or assigned to
Buyer.
6.02 Insubstantial Event. In the event of damage to the
improvements on the Property with the cost of restoration being $250,000 or
less and the time necessary for restoration being less than 120 days, or if any
improvements on the Property are destroyed or damaged as described in Section
6.01 above but Buyer elects not to terminate the Agreement, then all proceeds
of insurance or condemnation awards payable by reason of such damage or
condemnation shall be paid or assigned to Buyer, and Buyer shall proceed to
closing.
7. Default/Remedies.
7.01 Default by Seller. If Seller breaches or defaults in
any obligation under this Agreement (subject to Section 3.02 hereof), and such
breach or default is not cured within a reasonable time after written notice
from Buyer, then provided Buyer is not in breach or default hereunder, Buyer
shall have, as its sole option and remedy on account thereof, the right to
enforce this Agreement by specific performance. However, in the event of any
such uncured default by Seller, and after making good faith efforts to enforce
this Agreement by specific performance, Buyer is denied the right of specific
performance by order of court or otherwise, then Buyer shall have the right to
terminate this Agreement and receive a return of the Deposit, whereupon Buyer
shall be entitled to receive from Seller a reimbursement of all of its
verifiable out-of-pocket costs incurred in connection with this Agreement up to
an amount of $75,000.00.
7.02 Default by Buyer. If Buyer breaches any covenant,
warranty or representation contained in this Agreement, then provided Seller is
not in breach or default hereunder, Seller shall have the right to retain the
Deposit (in which case the Escrow Agent shall pay the Deposit to Seller), as
Seller's sole remedy and liquidated damages on account of the Buyer's default,
with the parties agreeing that the Seller's actual damages would be difficult
to ascertain and that the Deposit is the parties' best and good faith estimate
of such damages and not a penalty.
8. Provisions Regarding Escrow Agent.
8.01 Administration of Deposit. The Escrow Agent agrees
to hold and apply the Deposit in accordance with the terms and conditions of
this Agreement. The Escrow Agent shall invest the Deposit as directed by the
Buyer.
8.02 Limitation on Liability. The following provisions
shall control with respect to the rights, duties and liabilities of the Escrow
Agent:
(a) The Escrow Agent acts hereunder as a
depository only and is not responsible or liable in any manner whatsoever for
the (i) sufficiency, correctness, genuineness or validity of any written
instrument, notice or evidence of a party's receipt of any instruction or
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notice which is received by the Escrow Agent, or (ii) identity or authority of
any person executing such instruction, notice or evidence.
(b) The Escrow Agent shall have no responsibility
hereunder except for the performance by it in good faith of the acts to be
performed by it hereunder, and the Escrow Agent shall have no liability except
for its own willful misconduct or gross negligence.
(c) The Escrow Agent shall not be responsible for
the solvency or financial stability of any financial institution with which
Escrow Agent is directed to invest funds escrowed hereunder.
(d) The Escrow Agent shall be reimbursed on an
equal basis by Buyer and Seller for any reasonable expenses incurred by the
Escrow Agent arising from a dispute with respect to the amount held in escrow,
including the cost of any legal expenses and court costs incurred by the Escrow
Agent, should the Escrow Agent deem it necessary to retain an attorney with
respect to the disposition of the amount held in escrow.
(e) In the event of a dispute between the parties
hereto with respect to the disposition of the amount held in escrow, the Escrow
Agent shall be entitled, at its own discretion, to deliver such amount to an
appropriate court of law pending resolution of the dispute.
9. Confidentiality. Buyer expressly agrees to protect and hold
in the strictest confidence the transactions contemplated by this Agreement,
the documents and information provided by Seller to Buyer under Section 2.01
hereof or otherwise (except for that which is readily available to the public),
and all negotiations between the parties. Notwithstanding the foregoing, Buyer
shall be permitted to disclose such matters, as appropriate, to its officers,
directors, employees and partners and to its attorney(s), surveyor, title
insurer, broker and accountants, provided that Buyer requires such parties, in
writing, to observe the foregoing covenant regarding confidentiality, and this
section shall not apply to the extent of any information which Buyer determines
in good faith should be disclosed by Buyer pursuant to state or federal
securities laws or the rules of any national securities exchange. Buyer
further agrees that if the transaction contemplated by this Agreement does not
occur for any reason whatsoever, Buyer shall promptly return to Seller all
copies of documents and other written materials related to the transaction
furnished to the Buyer and such other parties under Section 2.01 or otherwise.
The provisions of this section shall survive any termination of this Agreement.
10. Miscellaneous.
10.01 Assignment. Any assignment of this Agreement by
Buyer must meet with Seller's prior written approval. Upon any such assignment
of this Agreement, the original named Buyer herein shall not be released but
shall remain primarily responsible for all duties, obligations and liabilities
of the Buyer hereunder. This Agreement shall inure to the benefit of, and be
binding upon, the successors and assigns of the parties hereto.
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10.02 No Personal Liability. No employee, officer,
director, trustee, partner or affiliate of Seller, or any investment manager or
other agent of Seller, shall be personally liable or responsible for any
duties, obligations or liabilities of the Seller hereunder or in any other
connection with the Property or this transaction. No employee, officer or
director of Buyer shall be personally liable or responsible for any duties,
obligations or liabilities of the Buyer hereunder.
10.03 Applicable Law. This document shall be governed by,
construed and enforced in accordance with the laws of the state in which the
Property is located. The parties agree that the United States District Court
for such state or any court of such state shall have jurisdiction in any
proceeding instituted to enforce this Agreement, and any objections to such
venue are hereby waived.
10.04 Notices. All notices given in connection with this
Agreement shall be effective as of the date personally delivered, the date sent
by confirmed facsimile transmission, one day after the date delivered to
overnight courier, or three days after being mailed by U.S. Mail (postage
prepaid), as the case may be, if sent to the parties at the following
addresses:
Seller's notice address:
c/o ABKB/LaSalle Securities Limited
100 East Pratt Street, Suite 2030
Baltimore, Maryland 21202
Attn: Lisa L. Kaufman
Fax: 410/347-0612
-15-
<PAGE> 16
Buyer's notice address:
145 South Fairfax Avenue, 4th Floor
Los Angelos, CA 90036
Attn: Joseph K. Kornwasser
Fax: 213/937-8175
Escrow Agent's notice address:
1129-20th Street, N.W., Suite 505
Washington, D.C. 20036
Attn: Douglas Mathis
Fax: 202/466-5070
10.05 Entire Agreement. This Agreement contains all
agreements of the parties with respect to the Property and supersedes any prior
discussions, contracts or other agreements with respect thereto. No
modifications to this Agreement or waivers of any rights or benefits provided
herein shall be binding unless signed by the party against whom such
modification or waiver is sought to be enforced.
10.06 Broker. Each of Seller and Buyer represents and
warrants to the other that it has not dealt with any broker or finder in
connection with the transaction contemplated by this Agreement, except for
Marcus & Millichap, to whom Seller shall pay a commission at closing according
to separate agreement. Furthermore, each of Seller and Buyer indemnifies and
holds the other harmless from and against any losses, damages, costs or
expenses (including attorneys' fees) incurred by such other party due to a
breach of the foregoing warranty and representation. The foregoing indemnity
shall survive closing.
10.07 Attorney's Fees. If any action is brought by either
party hereto against the other party, the party in whose favor a final judgment
shall be entered shall be entitled to recover court costs and reasonable
attorneys' fees incurred in connection therewith.
10.08 Perpetuities. If the rule against perpetuities would
invalidate this Agreement or any portion hereof, due to the potential failure
of an interest in property created herein to vest within a particular time,
then notwithstanding anything to the contrary herein, each such interest in
property must vest, if at all, before the passing of 21 years from the date of
this Agreement, or this Agreement shall become null and void upon the
expiration of such 21 year period and the parties shall have no further
liability hereunder.
10.09 Timing. The phrase "business days" as used herein
shall mean the days of Monday through Friday, excepting only federal holidays.
The phrase "calendar days" as used herein shall mean all days of the week,
including all holidays. Time is of the essence of this Agreement.
-16-
<PAGE> 17
10.10 Reporting. Seller agrees to cooperate after closing
hereunder with any reasonable request by Buyer for information which is
necessary or desirable for Buyer to comply with its reporting obligations under
state or federal securities laws or the rules of any national securities
exchange. Such cooperation shall include without limitation the making of any
operating books and records of the Property relating to the three full calendar
years prior to closing, if available, available for review by Buyer's auditors
at Seller's offices upon reasonable advance notice. Such covenant shall
survive closing for a period of one year.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the dates set forth below.
SELLER: MADISON PROPERTY I, L.P.
By: Madison Property Investment Co. L.L.C.,
its sole general partner
Jackie Claylar
____________________________ By: /s/ Lisa L. Kaufman
__________________________________
Witness Name: Lisa L. Kaufman
_________________________
Title: Asst. Vice President
__________________________
Date of execution: 2/20/97
______________________
Jacqueline Clark
____________________________ By: /s/ illegible
__________________________________
Witness Name: illegible
_________________________
Title: Principal
__________________________
Date of execution:______________________
BUYER: PRICE/BAYBROOK, LTD.
By: Price/Texas, Inc., General Partner
Nancy Darr
____________________________ By: /s/ Joseph Karnwasser
__________________________________
Witness Name: Joseph Karnwasser
_________________________
Title: Pres./CEO
__________________________
Date of Execution: 2/18/1997
______________________
-17-
<PAGE> 18
ESCROW AGENT: CHICAGO TITLE INSURANCE
COMPANY
____________________________ By: /s/ Terry A. Arenson
__________________________________
Witness Name: Terry A. Arenson
_________________________
Title: Resident Vice President
__________________________
Date of Execution: 2-20-97
___________________
Attachments
Exhibit A - Plat/Description of Property
Exhibit B - Copies of tenant estoppel certificates
Exhibit C - Bill of Sale
Exhibit D - Assignment Agreement
Exhibit E - Affidavit
Exhibit F - FIRPTA Certificate
-18-
<PAGE> 19
Exhibit A
[PLAT OR DESCRIPTION OF PROPERTY
[Attached]
-19-
<PAGE> 20
Exhibit B
[COPIES OF ESTOPPEL CERTIFICATES]
[Attached]
-20-
<PAGE> 21
Exhibit C
BILL OF SALE
THIS BILL OF SALE is made as of the ____ day of ____________, 1997, by
_____________________________ ("Seller") for benefit of
_______________________________________ ("Buyer").
WHEREAS, on the date hereof, Seller has sold and transferred to Buyer
certain real property known as the "______________________" which is comprised
of a _______ building, parking facilities and other improvements situated on a
parcel of land more particularly described on Exhibit A attached hereto
(collectively the "Property"), which Property is located at
_____________________________ in ______________________, ______________.
AND, WHEREAS, in connection with such sale and transfer of the
Property, Seller has agreed to sell to Buyer, and Buyer has agreed to purchase
from Seller, all personal property of Seller located at the Property.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby sells, transfers
and conveys to Buyer and Buyer's successors and assigns, without recourse, all
rights, title and interest of Seller in and to any and all equipment, fixtures
and personal property (collectively the "Personal Property") which is owned by
Seller and located at the Property, which Personal Property is transferred
hereunder "as-is, where-is" with all faults and without any warranty or
representation as to condition, suitability for a particular purpose or any
other matter whatsoever.
IN WITNESS WHEREOF, the Seller has executed this Bill of Sale as of
the date set forth in the first paragraph above.
SELLER: _____________________________
By: ________________________
____________________________ By: __________________________________
Witness Name:_________________________
Title:__________________________
Attachments
Exhibit A - Description of Property
-21-
<PAGE> 22
Exhibit D
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT ("Assignment") is made as of the ____ day of
______________, 1997, by and between _____________________________ ("Assignor")
and _____________________________ ("Assignee").
WHEREAS, as of the date hereof, Assignee has purchased from Assignor
certain real property known as the "___________________" which is comprised of
a ______ building, parking facilities and other improvements situated on a
parcel of land more particularly described on Exhibit A attached hereto
(collectively the "Property"), which Property is located at
________________________ in __________________, _____________.
AND, WHEREAS, in connection with such purchase and sale of the
Property, Assignor and Assignee enter into this Agreement in order to provide
for the assignment of leases and other interests in the Property.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Assignor hereby assigns and transfers to Assignee all rights,
title and interest of Assignor in and to the following described rights,
property and interests:
(a) All leases (including ground leases), subleases and
other occupancy agreements relating to or affecting the Property, together with
all guarantees of obligations of tenants and other parties under such leases
and agreements, which leases and other agreements are listed in Exhibit B
attached hereto (collectively the "Leases").
(b) All rights, title and interest in and to, and for use
of, any and all trademarks, logos or other trade names used in connection with
the Property (collectively the "Trade Name").
(c) All utility, janitorial, landscaping, trash removal
and other service or other contracts or agreements affecting or related to the
Property, which contracts and other agreements are listed in Exhibit C attached
hereto (collectively the "Service Contracts").
(d) Any and all warranties for work or construction
performed or to be performed in connection with the Property or for machinery
or equipment attached thereto, and any and all permits, licenses and other
similar rights or approvals issued in any connection with the Property, to the
extent assignable and transferable (collectively the "Permits and Warranties").
-22-
<PAGE> 23
2. Assignee hereby accepts the foregoing assignment of the
Leases, Trade Name, Service Contracts, and Warranties and Permits, and Assignee
hereby assumes all the duties and obligations of Assignor to be performed under
the Tenant Leases and the Service Contracts and relating to the period
commencing on and after the date hereof.
3. This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
as of the date set forth in the first paragraph above.
ASSIGNOR: _______________________________
By: _________________________
____________________________ By: __________________________________
Witness Name:_________________________
Title:__________________________
ASSIGNEE: _______________________________
____________________________ By: __________________________________
Witness Name:_________________________
Title:__________________________
Attachments
Exhibit A - Description of Property
Exhibit B - List of Leases
Exhibit C - List of Service Contracts
-23-
<PAGE> 24
Exhibit E
AFFIDAVIT
THIS AFFIDAVIT is made as of the ____ day of ____________, 1997 by
_______________________ ("Seller") for benefit of _______________________
("Buyer").
WITNESSETH, as required by that Sale and Purchase Agreement having an
effective date of _______________ (the "Agreement") pertaining to the purchase
and sale of property known as the "____________________" located at
_________________ in ___________, ______________ (the "Property"), Seller
hereby confirms for the Buyer that all of the representations and warranties
set forth in Section 3.01 of the Agreement remain, as of the date hereof, true
and correct in all material respects, except as may be otherwise identified on
Exhibit A attached hereto.
IN WITNESS WHEREOF, the Seller has executed this Affidavit as of the
date set forth in the first paragraph above.
SELLER: ______________________________
By: ________________________
____________________________ By: __________________________________
Witness Name:_________________________
Title:__________________________
Attachments
Exhibit A - List of Variations
-24-
<PAGE> 25
Exhibit F
FIRPTA CERTIFICATE
WHEREAS, Section 1445 of the Internal Revenue Code provides that a
transferee of a U.S. real property interest must withhold tax if the transferor
is a foreign person. To inform the ___________________________ (the
"Transferee") that withholding of tax is not required upon the disposition of a
U.S. real property interest by _______________________ ("Transferor"), the
undersigned hereby certifies the following on behalf of the said Transferor:
1. The said Transferor is not a foreign corporation, foreign
partnership, foreign trust or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations);
2. Transferor's U.S. employer identification number is
_____________;
3. Transferor's office address is c/o LaSalle Advisors Limited
Partnership, 100 E. Pratt St., Suite 2030, Balto., MD 21202.
Transferor understands that this certification may be disclosed to the
Internal Revenue Service by Transferee. This Certificate is given under
penalty of perjury.
IN WITNESS WHEREOF, the Seller has executed this Certificate as of the
date set forth in the first paragraph above.
TRANSFEROR: ______________________________
By: ________________________
____________________________ By: __________________________________
Witness Name:_________________________
Title:__________________________
-25-
<PAGE> 1
EXHIBIT 2.3
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND
ESCROW INSTRUCTIONS
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND ESCROW
INSTRUCTIONS (the "First Amendment") is made and entered into as of March 18,
1997, by and between Jagee Properties, Inc., a Kansas corporation ("Seller"),
and The Price Reit, Inc., a Maryland corporation ("Original Buyer").
A. Original Buyer and Seller are parties to that certain Purchase
and Sale Agreement and Escrow Instructions dated February 13, 1997 ("Purchase
Agreement"). Buyer has heretofore assigned all of its right, title and interest
in and to the Purchase Agreement to Price/Baybrook, Ltd., a Texas limited
partnership ("Buyer").
B. Buyer and Seller desire to amend the Purchase Agreement as set
forth herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to
legally bind themselves and their respective successors and permitted assigns,
Seller and Buyer do hereby amend the Agreement as follows:
1. The Purchase Price is hereby amended to be, and shall
hereafter be deemed to be, Eight Million Five Hundred Six Thousand Two Hundred
Fifty Dollars ($8,506,250.00).
2. Notwithstanding anything to the contrary set forth in the
Purchase Agreement: (a) all rents and other income with respect to the
Property shall be prorated as of March 1, 1997; (b) in addition to Seller's
other obligations under the Purchase Agreement, Seller shall cause to be paid
at the Closing all rent payable by Bereans from March 1, 1997 to December 15,
1997 as if Bereans had no free rent period, and (c) in addition to Seller's
other obligations under the Purchase Agreement, Seller shall pay at the Closing
certain non-reimbursable expenses. The total credit due to Buyer resulting
from the credits described in the foregoing paragraphs (a) -(c) shall be
$221,250.00.
3. Capitalized terms not otherwise defined herein shall have the
meanings given them in the Purchase Agreement.
4. Except as modified herein, all terms, conditions and covenants
of the Purchase Agreement shall remain in full force and effect. This First
Amendment may be executed in multiple counterparts, all of which when taken
together shall constitute one and the same instrument.
1
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment as of the date first above written.
SELLER:
JAGEE PROPERTIES, INC.
By:___________________________
Its:__________________________
BUYER:
PRICE/BAYBROOK, LTD., a Texas limited
partnership
By: PRICE/TEXAS, INC., its general
partner
By:___________________________
Its:__________________________
2
<PAGE> 3
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
By and Between
JAGEE PROPERTIES, INC.,
a Kansas corporation,
as Seller
THE PRICE REIT, INC.
a Maryland corporation,
as Buyer
and
SAFECO LAND TITLE COMPANY,
as Escrow Holder
February 13, 1997
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE I PROPERTY 1
1.1 Land 1
1.2 Appurtenances 1
1.3 Improvements 1
1.4 Leases and Rents 2
1.5 Personal Property 2
1.6 Intangible Property 2
ARTICLE II ESCROW; PURCHASE PRICE 2
2.1 Opening of Escrow 2
2.2 Purchase Price 3
2.3 Payment of Purchase Price 3
2.4 Earnest Money Deposit 3
2.5 Investment of Deposit 3
2.6 Deposit as Liquidated Damages 3
ARTICLE III TITLE TO PROPERTY 4
3.1 Title 4
3.2 Other Conveyance Documents 4
ARTICLE IV CONDITIONS TO CLOSING 5
A. Buyer's Conditions to Closing 5
4.1 Non-Foreign Status of Seller 5
4.2 Review and Approval of Title and Survey 5
4.3 Review and Approval of Other Matters 5
4.4 Service and Other Contracts 6
4.5 Physical Characteristics of the Property 7
4.6 Governmental Permits, Approvals and Regulations 7
4.7 Representations and Warranties 7
4.8 Impairment of Property 7
4.9 Approval 7
4.10 Objections to Title or Survey 7
4.11 Objections to Property or Other Matters 8
4.12 Tenant Matters 8
4.13 REA Estoppels 9
4.14 Occupancy 9
4.15 Delivery of Documents 9
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
B. Seller's Conditions to Closing 9
4.16 Delivery of Documents and Purchase Price 9
ARTICLE V CLOSING, RECORDING AND TERMINATION 9
5.1 Deposit with Escrow Holder and Escrow Instructions 9
5.2 Closing 9
5.3 Delivery by Seller 10
5.4 Delivery By Buyer 11
5.5 Other Instruments 11
5.6 Prorations 11
5.7 Costs and Expenses 13
5.8 Closing and Recordation 13
5.9 Termination of Agreement 13
ARTICLE VI REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER 14
6.1 Authority 14
6.2 Title 14
6.3 The Leases 14
6.4 No Litigation or Adverse Events 15
6.5 Compliance With Laws 15
6.6 No Defaults in Other Agreements 15
6.7 Eminent Domain 15
6.8 Licenses, Permits, CO's, Zoning, etc. 15
6.9 Taxes and Assessments 15
6.10 Environment 15
6.11 Physical Condition 17
6.12 Employees 17
6.13 Mechanic's Liens 17
6.14 Operating Statements 17
6.15 Disclosure 17
6.16 No Leases of Property or Assets 17
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF BUYER 18
7.1 Representations and Warranties of Buyer 18
ARTICLE VIII POSSESSION, DESTRUCTION AND CONDEMNATION 18
8.1 Possession 18
8.2 Loss, Destruction and Condemnation 18
</TABLE>
iii
<PAGE> 6
<TABLE>
<S> <C>
ARTICLE IX MAINTENANCE AND OPERATION OF THE PROPERTY;
COVENANTS 20
9.1 Maintenance 20
9.2 Leases and Other Agreements 20
9.3 Encumbrances 21
9.4 Consents and Notices 21
9.5 Audit Cooperation 21
ARTICLE X MISCELLANEOUS 21
10.1 Notices 21
10.2 Brokers and Finders 22
10.3 Successors and Assigns 22
10.4 Amendments 23
10.5 Continuation and Survival of Indemnities, Representations,
Warranties and Post-Closing Obligations 23
10.6 Interpretation 23
10.7 Governing Law 23
10.8 Merger of Prior Agreements 23
10.9 Attorneys' Fees 23
10.10 Notice of Termination 23
10.11 Specific Performance; Damages 24
10.12 Relationship 24
10.13 Counterparts 24
10.14 Time of the Essence 24
</TABLE>
iv
<PAGE> 7
INDEX TO SCHEDULES
Schedule A Legal Description of the Land
Schedule B Form of Deed
Schedule C Form of Assignment and Assumption of Leases and Rents
Schedule D Form of Bill of Sale
Schedule E Form of Assignment of Contracts, Intangible Property,
Warranties and Guarantees
Schedule F Form of Non-Foreign Certificate
Schedule G Form of Tenant Estoppel Certificate
Schedule H Rent Roll
Schedule I List of Contracts
v
<PAGE> 8
DEFINITIONS
The following is a list of defined terms used herein and the sections
in which such terms are defined.
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
AGREEMENT INTRODUCTION
APPROVED CONTRACTS 4.4
APPURTENANCES 1.2
ASSIGNMENT OF INTANGIBLE PROPERTY, WARRANTIES AND GUARANTEES 1.6
ASSIGNMENT OF LEASES AND RENTS 1.4
BILL OF SALE 1.5
BUYER INTRODUCTION
BUYER APPROVAL 4.9
CLOSING 5.2
CLOSING DATE 5.2
CODE 4.1
CONTRACTS 4.4
DEED 1.1
EARNEST MONEY DEPOSIT 2.4
ENDORSEMENTS 3.1
ESCROW HOLDER INTRODUCTION
EXTENDED COVERAGE TITLE POLICY 3.1
IMPROVEMENTS 1.3
INTANGIBLE PROPERTY 1.6
LAND 1.1
LEASES 1.4
MAJOR LEASE 4.8
RENT SUPPORT AGREEMENT 4.13
NON-FOREIGN CERTIFICATE 4.1
OUTSIDE CLOSING DATE 5.2
PERSONAL PROPERTY 1.5
PERMITTED EXCEPTIONS 4.10
PHASE I REPORT 4.5
PROPERTY 1.6
PURCHASE PRICE 2.2
REAL PROPERTY 1.6
RENT ROLL 6.3
RENTS 1.4
REVIEW PERIOD 4.11
SELLER INTRODUCTION
STANDARD COVERAGE TITLE POLICY 5.7
SURVEY 4.2(C)
TITLE COMPANY 3.1
TITLE REPORT 4.2(A)
</TABLE>
vi
<PAGE> 9
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS ("AGREEMENT")
is made and entered into as of February ________, 1997, by and between JAGEE
PROPERTIES, INC., a Kansas corporation authorized to do business in Texas under
the name "JaGee Real Properties, Inc." ("SELLER"), THE PRICE REIT, INC., a
Maryland corporation ("BUYER"), and SAFECO LAND TITLE COMPANY ("ESCROW
HOLDER"), with reference to the following facts:
A. Seller is the owner of the Property, as hereinafter defined.
B. Buyer desires to purchase from Seller and Seller desires to
sell to Buyer the Property, all on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the mutual
agreements herein set forth, and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Buyer, and where
appropriate Escrow Holder, agree as follows:
ARTICLE I
PROPERTY
Seller hereby agrees to sell and convey to Buyer, and Buyer hereby
agrees to purchase from Seller, subject to the terms and conditions set forth
herein, the following:
1.1 Land. That certain real property (the "LAND") described in
Schedule A hereto, all of which shall be conveyed to Buyer pursuant to a
special warranty deed in the form of Schedule B hereto (the "DEED");
1.2 Appurtenances. Seller's interest in all rights, privileges
and easements appurtenant to and for the benefit of the Land, including,
without limitation, all minerals, oil, gas and other hydrocarbon substances on
and under the Land, as well as all development rights, air rights, water, water
rights and water stock relating to the Land and any other easements,
rights-of-way or appurtenances owned by Seller and used in connection with the
beneficial operation, use and enjoyment of the Land, the Leases, the Rents, the
Improvements, the Intangible Property, or any other appurtenance, together with
all rights of Seller in and to public and private streets, roads, avenues,
alleys and passageways, sidewalks, driveways, parking areas and areas adjacent
thereto or used in connection therewith (open or proposed, in front of or
abutting the Land), and all rights of Seller in any land lying in the bed of
any existing or proposed street adjacent to the Land, all strips or gores of
land adjoining the Land, and any awards made or to be made and any unpaid award
for damage to the Land by reason of any change of grade of any such street,
road, avenue, alley or passageway (all of which are collectively referred to as
the "APPURTENANCES");
1
<PAGE> 10
1.3 Improvements. All improvements and fixtures owned by Seller
and located or to be located on the Land, including, without limitation, all
buildings and structures owned by Seller and presently located on the Land or
to be located thereon on the Closing Date, all apparatus, equipment and
appliances owned by Seller and presently located on the Land and used in
connection with the operation or occupancy thereof, such as heating and air
conditioning systems and facilities used to provide any utility services,
parking services, refrigeration, ventilation, garbage disposal, recreation or
other services thereto, and Seller's interest in all landscaping and leasehold
improvements of tenants, if any, which become the property of the owner of the
Land (all of which are collectively referred to as the "IMPROVEMENTS");
1.4 Leases and Rents. The landlord's rights under all leases,
occupancy agreements and other similar agreements to which Seller is a party or
by which it is bound, together with all modifications, extensions and renewals
thereof, and any guarantees of any of the foregoing with respect to or demising
any part of the Land, Appurtenances or Improvements (the "LEASES"), all income,
receipts, funds and revenues of any kind whatsoever payable with respect to the
period after the Closing Date (defined below) to Seller under the Leases or
otherwise with respect to all or any portion of the Land, Appurtenances or
Improvements (the "RENTS"), all of which Leases and Rents shall be transferred
and assigned to Buyer pursuant to an instrument in the form of Schedule C
hereto (the "ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS");
1.5 Personal Property. All tangible personal property owned by
Seller and located or to be located on, or situated or to be situated in and
used in connection with, the Land and/or the Improvements ("PERSONAL
PROPERTY"), all of which Personal Property shall be transferred and assigned to
Buyer pursuant to an instrument in the form of Schedule D hereto (the "BILL OF
SALE"); and
1.6 Intangible Property. All of the interest of Seller in (i) any
intangible personal property which relates to and is reasonably required for
the operation and functioning of the Land, Improvements or Personal Property
generally, and (ii) any and all warranties, guarantees, permits, contracts and
other rights owned by Seller relating to the ownership, operation or
functioning of all or any part of the Property, as defined below (including
without limitation all third party guarantees and warranties, express or
implied, in connection with the construction of the Improvements) (all of which
are collectively referred to as the "INTANGIBLE PROPERTY"), all of which shall
be assigned to Buyer pursuant to one or more (as determined by Buyer)
assignments in the form of Schedule E hereto (the "ASSIGNMENT AND ASSUMPTION OF
CONTRACTS, INTANGIBLE PROPERTY, WARRANTIES AND GUARANTEES").
All of the items described in Sections 1.1, 1.2, 1.3, 1.4, 1.5 and 1.6
above are hereinafter collectively referred to as the "PROPERTY." The items
described in Sections 1.1, 1.2, and 1.3 above are hereinafter referred to
collectively as the "REAL PROPERTY."
2
<PAGE> 11
ARTICLE II
ESCROW; PURCHASE PRICE
2.1 Opening of Escrow. Escrow Holder shall open and maintain an
escrow account for this Agreement (the "ESCROW"), which Escrow shall be deemed
to be open on the date (the "OPENING DATE") on which two (2) fully executed
copies of this Agreement and the Earnest Money Deposit, as set forth below, are
delivered to Escrow Holder. Escrow Holder shall promptly give notice to Buyer
and Seller of the Opening Date, which date shall in no event occur later than
three (3) business days after the execution of this Agreement by Buyer and
Seller.
2.2 Purchase Price. The purchase price for the Property shall be
Eight Million Three Hundred Thousand Dollars ($8,300,000.00) (the "PURCHASE
PRICE"). The Purchase Price shall be allocated among Land, Improvements,
Personal Property and Intangible Property as Seller and Buyer shall reasonably
determine.
2.3 Payment of Purchase Price. The Purchase Price shall be paid
by Buyer into the Escrow at the Closing by wire transfer of immediately
available funds in accordance with wiring instructions to be provided by Escrow
Holder; provided, however, that Buyer shall adjust the funds to be wired
pursuant to this Section 2.3 for the following: (i) the amount of credits due
to Buyer, or debits due from Buyer (as the case may be) for prorations
hereunder, and (ii) the amount of the Earnest Money Deposit (hereinafter
defined) plus earnings thereon.
2.4 Earnest Money Deposit. Concurrently with the delivery of two
(2) fully executed copies of this Agreement with Escrow Holder, Buyer shall
deposit with Escrow Holder the sum of One Hundred Thousand Dollars
($100,000.00) (the "EARNEST MONEY DEPOSIT") in the form of a check or wire
transfer. The Earnest Money Deposit shall become nonrefundable after the end
of the Review Period, unless this Agreement terminates other than due to a
default of Buyer hereunder; provided, however, that such Earnest Money Deposit
(i) shall not be released to Seller until the Closing, or until such time as
this Agreement terminates solely due to a default of Buyer hereunder, and (ii)
shall, at such time, be released to Seller only if Seller is not then in
default hereunder.
2.5 Investment of Deposit. Escrow Holder shall place the Earnest
Money Deposit in an interest-bearing account with a bank or savings
association, the deposits of which are federally insured, as Buyer may select.
All interest on the Earnest Money Deposit shall accrue for the benefit of Buyer
until the Closing. Notwithstanding the foregoing, however, in the event of any
default by Buyer hereunder, all interest earned on such account shall accrue to
the benefit of Seller. Seller shall not be responsible for, nor bear the risk
of loss of, the Earnest Money Deposit, and shall not be responsible for the
rate of return thereon.
2.6 Deposit As Liquidated Damages. IF THE SALE OF THE PROPERTY AS
CONTEMPLATED HEREUNDER IS NOT CONSUMMATED SOLELY BECAUSE OF A DEFAULT UNDER
THIS AGREEMENT ON THE PART OF BUYER, ESCROW HOLDER SHALL PROMPTLY PAY OVER TO
SELLER THE EARNEST MONEY DEPOSIT, IF ANY,
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<PAGE> 12
THEN BEING HELD BY ESCROW HOLDER, AND SELLER SHALL RETAIN THE EARNEST MONEY
DEPOSIT AS LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL
DAMAGES IN THE EVENT OF A DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. THEREFORE, BY PLACING THEIR SIGNATURES BELOW, THE
PARTIES EXPRESSLY AGREE AND ACKNOWLEDGE THAT THE EARNEST MONEY DEPOSIT HAS BEEN
AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S
DAMAGES. THEREFORE, IF BUYER BREACHES THIS AGREEMENT AND WRONGFULLY FAILS TO
COMPLETE THE PURCHASE OF THE PROPERTY AS PROVIDED HEREIN, SELLER SHALL BE
ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF THE EARNEST MONEY DEPOSIT. ON
RECEIPT AND RETENTION BY SELLER OF THE EARNEST MONEY DEPOSIT, THIS AGREEMENT
SHALL TERMINATE AND BUYER SHALL HAVE NO FURTHER OBLIGATIONS OR LIABILITY
HEREUNDER, EXCEPT WITH REGARD TO ANY OBLIGATIONS HEREUNDER THAT SURVIVE THE
TERMINATION HEREOF. THE PARTIES FURTHER ACKNOWLEDGE THAT THE EARNEST MONEY
DEPOSIT HAS BEEN AGREED UPON AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER IN THE
EVENT OF A DEFAULT ON THE PART OF BUYER EXCEPT WITH REGARD TO ANY OBLIGATIONS
HEREUNDER THAT SURVIVE THE TERMINATION HEREOF.
<TABLE>
<S> <C>
Seller:
------
Dated: February 13, 1997
-------------------
JAGEE PROPERTIES, INC., a Kansas corporation
By: /s/ RICHARD F. GARVEY
--------------------------------------
Richard F. Garvey, President
Buyer:
-----
THE PRICE REIT, INC.
Dated: February 12, 1997 By: /s/ JERALD FRIEDMAN
------------------- --------------------------------------
Its: SR. EXEC. V.P.
-------------------------------------
</TABLE>
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<PAGE> 13
ARTICLE III
TITLE TO PROPERTY
3.1 Title. At the Closing, Seller shall convey to Buyer fee
simple title to the Real Property, subject to the Permitted Exceptions (defined
below), pursuant to the Deed. In furtherance thereof, Seller shall cause
Safeco Land Title Company, as issuing agent for Chicago Title Insurance Company
(the "TITLE COMPANY"), to issue an Owner's Policy of Title Insurance on the
standard form as promulgated by the Texas Department of Insurance in the full
amount of the Purchase Price, insuring fee simple title to the Land and
Improvements in Buyer, with the survey exception deleted (except for "shortages
in area") at Buyer's expense, subject only to (i) the lien of real property
taxes for the then applicable fiscal year, to the extent not yet due and
payable, (ii) the lien of supplemental taxes imposed by reason of transfer on
or after the Closing, and (iii) the Permitted Exceptions (the "TITLE POLICY").
Notwithstanding anything to the contrary in this Agreement, Seller shall convey
the Appurtenances to Buyer without warranty of title.
3.2 Other Conveyance Documents. At the Closing, Seller shall (i)
assign the Leases and Rents to Buyer pursuant to the Assignment and Assumption
of Leases and Rents; (ii) transfer title to the Personal Property to Buyer
pursuant to the Bill of Sale, and (iii) transfer and assign to Buyer all of
Seller's rights in and to the Intangible Property pursuant to the Assignment of
Contracts, Intangible Property, Warranties and Guarantees; such title and
rights to be free of any liens, encumbrances or interests of third parties
other than the Permitted Exceptions.
ARTICLE IV
CONDITIONS TO CLOSING
A. Buyer's Conditions to Closing.
The complete satisfaction as of the expiration of the Review Period
(or such other date as may be specified herein) with respect to those matters
described in Sections 4.2-4.6 and 4.9-4.10 hereof, and as of the Closing Date
with respect to the balance of the following conditions, is a condition
precedent to Buyer's obligation to purchase the Property:
4.1 Non-Foreign Status of Seller. Seller's execution and delivery
to Buyer, on the Closing Date, of Seller's certificate in the form attached
hereto as Schedule F (the "NON-FOREIGN CERTIFICATE") stating, under penalty of
perjury, that (a) Seller is not a "foreign person" for the purposes of Section
1445 of the Internal Revenue Code of 1986, as amended (the "CODE"), and that
withholding of tax will not be required thereunder, and (b) withholding is not
required under the provisions of any state laws in connection with the
contemplated transfer of the Property by Seller to Buyer.
4.2 Review and Approval of Title and Survey. There shall be no
exceptions to title to the Property other than the Permitted Exceptions. In
connection with Buyer's review of title and related matters, Seller shall, at
its sole cost and expense unless otherwise specified herein,
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<PAGE> 14
and as soon as practicable, but in no event later than fourteen (14) days after
the Opening Date, deliver to Buyer or cause Escrow Holder to deliver to Buyer
the following:
(a) A current commitment for title insurance for the
Property, issued by the Title Company, accompanied by legible record
copies of all of the documents referred to in the Title Report (the
"TITLE REPORT"); and
(b) Copies of all existing easements, covenants,
restrictions, agreements or other documents which affect the ownership
of or title to the Property and which are not disclosed by the Title
Report for the Property, if any, but which are known to Seller and
which would encumber the Property after the closing.
4.3 Review and Approval of Other Matters. In connection with
Buyer's review of other matters, Seller shall deliver to Buyer or cause to be
delivered to Buyer, at Seller's sole cost and expense, within fifteen (15) days
after the Opening Date, true, complete and correct copies of the following
items:
(a) A current survey of the Property in the form of an
Urban Land Survey, Condition II, as outlined by the most recent
edition of the Manual of Practice for Land Surveying in Texas,
certified to Buyer and in a form reasonably required by Buyer
consistent with the standards for a Condition II Survey (the
"SURVEY");
(b) Copies of all soils and hazardous materials reports,
termite reports, roofing reports, engineering studies, topographical
maps, appraisals and other reports, studies, maps and analyses with
respect to the Property, to the extent in Seller's possession;
(c) Copies of all approvals, permits and licenses from
all governmental authorities relating to the Property, to the extent
in Seller's possession;
(d) Copies of all correspondence, documents and
certificates from all governmental authorities with respect to the
Property to the extent in Seller's possession, including, but not
limited to, with respect to the zoning, building and platting status
of the Property;
(e) Copies of all service contracts relating to the
Property to the extent in Seller's possession;
(f) Copies of the real property tax bills, personal
property tax bills and assessed value notices for the Property for the
1996 and 1997 tax years;
(g) Copies of all tenant leases, proposed tenant leases,
rent rolls and sales reports relating to the Property;
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<PAGE> 15
(h) Copies of all plans and construction drawings for all
buildings constructed or to be constructed on the Property and all
permits relating thereto to the extent in Seller's possession; and
(i) Copies of all insurance policies maintained by Seller
with respect to the Property for calendar years 1996 and 1997.
4.4 Service and Other Contracts. Buyer's review and approval, in
its sole and absolute discretion, of all utility contracts, water and sewer
service contracts, service contracts, warranties, permits, soils reports, and
other contracts or documents of any nature relating to the Property or any
portion thereof (the "CONTRACTS"; those Contracts which Buyer approves in
writing prior to the end of the Review Period (and prior to the Closing Date in
the case of contracts not entered into or delivered to the Buyer until after
the expiration of the Review Period) shall be referred to as the "APPROVED
CONTRACTS"). Buyer's remedy if it disapproves any Contract(s) shall be (i) to
the extent such disapproved Contract(s) can be terminated without penalty or
payment, to compel the Seller to terminate such disapproved Contract(s) on or
prior to the Closing, which Seller hereby agrees to do at its sole cost and
expense if so requested by Buyer, or (ii) to the extent Seller cannot terminate
such disapproved Contract(s), Buyer shall have the option, which must be
exercised within ten (10) days of Buyer's receipt of Seller's notice to Buyer
that Seller cannot terminate such disapproved Contract(s), or Closing
(whichever is earlier), (a) to waive Buyer's disapproval of the Contract(s) and
purchase the Property as otherwise contemplated in this Agreement, and Seller
shall convey the Property to Buyer, or (b) to terminate this Agreement by
written notice to Seller and Escrow Holder, whereupon any and all right and
obligations of Buyer and Seller hereunder shall terminate and within five (5)
days after Buyer has provided notice to Escrow Holder, Escrow Holder shall
deliver to Buyer the Earnest Money Deposit, together with interest thereon.
4.5 Physical Characteristics of the Property. Buyer's review and
approval, in its sole and absolute discretion, of (a) an environmental
assessment (which shall, without limiting the scope of the report, contain an
assessment of asbestos and radon affecting the Property) by an environmental
consultant of Buyer's choice and at Buyer's cost (the "PHASE I REPORT"), and
(b) the results of Buyer's physical inspection and testing of the Property, or
any portion thereof (which testing shall be conducted at Buyer's expense, and
may include, but shall not be limited to, testing for the presence of asbestos,
PCBs, as defined below, and other Hazardous Materials, as defined below,
including without limitation the performance of core sampling, drilling and
other intrusive testing outside of the Improvements or inside improvements
without interference with the tenants), of the structural, mechanical,
electrical and other physical or environmental characteristics of the Property,
including any tenant improvements or other construction installed or to be
installed as of the Closing Date. To the extent not prohibited by the Leases,
Seller shall allow Buyer reasonable access to the Property to perform any
physical inspection thereof which Buyer reasonably deems appropriate; provided,
however, that Buyer shall repair any damage caused by such inspections, shall
restore the Property to the condition existing prior to such inspection and
shall indemnify and hold harmless Seller against any loss or claim arising out
of personal injury or physical damage to property directly caused by Buyer or
its agents during any
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<PAGE> 16
such inspection, which obligations shall survive the termination of this
Agreement and shall continue for a period of one year from the date of this
Agreement.
4.6 Governmental Permits, Approvals and Regulations. Buyer shall
have confirmed that all governmental permits and approvals with respect to the
Property relating to the zoning, entitlements, construction, operation, use or
occupancy of the Property or any portion thereof, are in full force and effect.
4.7 Representations and Warranties. All of Seller's
representations and warranties contained herein or made in writing by Seller
shall have been true and correct in all material respects when made and shall
be true and correct in all material respects as of the Closing Date except as
to items which Seller has informed Buyer as provided in Section 4.11., as
though made at, and as of, the Closing Date, and Seller shall have executed and
delivered all documents and complied with all of Seller's covenants and
agreements contained in or made pursuant to this Agreement.
4.8 Impairment of Property. No material adverse change shall have
occurred in the condition or ownership of the Property or any part thereof from
and after the conclusion of the Review Period. As of the Closing no part of
the Property, or any interest of Seller therein, shall be encumbered by any
lien, pledge, security interest, financing or due and unpaid charge, tax or
other imposition (other than Permitted Exceptions and items which will be
removed on or prior to the Closing Date), or damaged and not repaired to
Buyer's satisfaction or taken in condemnation or other like proceeding and no
such proceeding shall be pending or threatened, except as otherwise provided in
Section 8.2 hereof. There shall have occurred no material adverse change in
the financial condition of any tenant under any of the Leases demising five
thousand (5,000) square feet or more of the Improvements (each, a "MAJOR
LEASE") from that reported to Buyer on or prior to the conclusion of the Review
Period, and there shall be no default, or event that with the giving of notice
or the passage of time or both would constitute a default, under any Major
Lease unless such an event of default is disclosed in a Tenant Estoppel that
Buyer approves.
4.9 Approval of Buyer's Board of Directors. This Agreement and
the transactions contemplated hereby shall have been approved by Buyer's board
of directors (the "BUYER APPROVAL") on or before the expiration of the Review
Period.
4.10 Objections to Title or Survey. Buyer shall have until the
expiration of fifteen (15) business days from the later to occur of (i)
delivery of the Title Report and (ii) delivery of the Survey, to notify Escrow
Holder and Seller in writing of Buyer's disapproval of the condition of title.
Buyer shall give Seller and Escrow Holder written notice outlining in detail
any title items objected to and specifying Buyer's desired cure. Seller shall
have five (5) business days after receipt of Buyer's notice to advise Buyer and
Escrow Holder, in writing, as to whether Seller shall cure said objections
prior to the Closing (and should Seller fail to advise Buyer of Seller's
objection within such five (5) business day period, Seller shall be deemed to
have elected to refuse to cure said objections). In the event that Seller
elects not to cure such objections, or
8
<PAGE> 17
elects to cure such objections and fails or refuses to cure said objections,
Buyer shall have the option, which must be exercised within three (3) business
days of Buyer's receipt of Seller's response or deemed response, or Closing
(whichever is earlier), (a) to waive Buyer's objections and purchase the
Property as otherwise contemplated in this Agreement, notwithstanding such
objections, in which event the subject matter of such waived objections shall
be included within Permitted Exceptions, and Seller shall convey the Property
to Buyer, subject to the Permitted Exceptions, or (b) to terminate this
Agreement by written notice to Seller and Escrow Holder, whereupon any and all
right and obligations of Buyer and Seller hereunder shall terminate and within
five (5) days after Buyer has provided notice to Escrow Holder, Escrow Holder
shall deliver to Buyer the Earnest Money Deposit, together with interest
thereon; provided, however, that if Buyer fails to notify Seller and Escrow
Holder in writing, within three (3) business days of Buyer's receipt of
Seller's response or deemed response, as set forth above, then Buyer shall be
deemed to have waived Buyer's objections. All exceptions to title to, and/or
encumbrances against, the Property shown on the Title Report or Survey but not
objected to by Buyer, and those items referred to in items (i) and (ii) of the
second sentence of Section 3.1 hereof, shall be deemed "PERMITTED EXCEPTIONS";
provided, however, that Seller covenants to remove all monetary encumbrances
(other than those with respect to the liens referred to in items (i) and (ii)
of the second sentence of Section 3.1 hereof) affecting the Property or any
portion thereof prior to Closing, and Seller further agrees that no monetary
encumbrances other than the liens referred to in items (i) and (ii) of the
second sentence of Section 3.1 hereof shall be Permitted Exceptions.
4.11 Objections to Property or Other Matters. To the extent Seller
becomes aware that there is a change in any of the matters described in this
Article IV.A, or any such matters first become available or are supplemented
after the date hereof, Seller shall immediately inform Buyer of such change in
circumstances and deliver any such new or supplemental information to Buyer.
If Seller delivers that information to Buyer, Seller shall not be deemed to
have breached any representation or warranty related to the information
provided, but only to the extent of such information provided. Buyer shall
have until March 10, 1997 (the "REVIEW PERIOD"), to notify Seller in writing
either (i) of any objections Buyer has to the physical or financial state of
the Property, to the Phase I environmental report, to any contracts or leases
relating to the Property, to any item delivered (or not delivered) by Seller to
Buyer, or to any other matter covered by this Article IV.A other than Title or
Survey, or to notify Seller that Buyer has been unable to obtain the Buyer
Approval, the Tenant Estoppels or the REA Estoppels provided that Buyer shall
have until the Closing Date to approve the items specified in Sections 4.1, 4.7
and 4.8 hereof, or (ii) that such conditions are either satisfied or waived.
If Buyer delivers written notice to Seller prior to the end of the Review
Period that it elects to terminate this Agreement due to Buyer's uncured
objections, then this Agreement shall terminate and any and all right and
obligations of Buyer and Seller hereunder shall terminate, and within five (5)
days after Buyer provides notice of such termination to Escrow Holder, Escrow
Holder shall pay to Buyer the Earnest Money Deposit, together with interest
thereon. If Buyer does not give notice to Seller of termination due to its
uncured objections prior to the end of the Review Period, Buyer shall be
conclusively deemed to have waived any right to object and all conditions to
Buyer's obligations set forth in this Article IV other than the items specified
in Sections 4.1, 4.7, 4.8 and 4.14.
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4.12 Tenant Matters. Buyer shall have received and approved
written estoppel statements, in substantially the form as that attached hereto
as Schedule G, from each of the tenants under the Major Leases, and tenants
holding leases upon not less than eighty-five percent (85%) of the remaining
gross leasable area in the Property. Each such estoppel statement shall be in
form and substance acceptable to Buyer. Buyer shall have 5 days after the date
of Buyer's receipt of each such "TENANT ESTOPPEL" to notify Seller of any
objection Buyer may have regarding such estoppel, and in the event Buyer fails
to so notify Seller, Buyer shall be deemed to have approved such estoppel.
4.13 REA Estoppels. Buyer shall have received and approved such
written estoppel statements from each holder of a reciprocal easement agreement
affecting the Property as Buyer shall reasonably require. Each such estoppel
statement shall be in form and substance reasonably acceptable to Buyer. Buyer
shall have 5 days after the date of Buyer's receipt of each such "REA Estoppel"
to notify Seller of any objection Buyer may have regarding such estoppel, and
in the event Buyer fails to so notify Seller, Buyer shall be deemed to have
approved such estoppel.
4.14 Delivery of Documents. The due and timely delivery by Seller
of executed documents required by this Agreement, including without limitation
all of the documents and items specified in Section 5.3 below.
The foregoing conditions contained in this Article IV.A (except to the
extent otherwise provided in Article IV.B hereof) are intended solely for the
benefit of, and may be waived by, Buyer.
B. Seller's Conditions to Closing.
The following conditions are conditions precedent to Seller's
obligation to sell the Property:
4.15 Delivery of Documents and Purchase Price. Buyer's due and
timely performance of its obligations under this Agreement and its execution
and delivery of all documents and items to be executed and delivered by Buyer
(including without limitation the Purchase Price) pursuant to this Agreement,
including without limitation all of the documents and items specified in
Section 5.4 below.
The foregoing conditions contained in this Article IV.B are intended
solely for the benefit of Seller (except to the extent otherwise provided in
Article IV.A hereof).
ARTICLE V
CLOSING, RECORDING AND TERMINATION
5.1 Deposit with Escrow Holder and Escrow Instructions. Promptly
after execution of this Agreement, the parties hereto shall deliver two (2)
fully executed copy of this Agreement
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<PAGE> 19
to the Escrow Holder and this instrument shall serve as the escrow instructions
to the Escrow Holder for consummation of the purchase and sale contemplated
hereby. Seller and Buyer agree to execute such additional and supplementary
escrow instructions as may be appropriate to enable the Escrow Holder to comply
with the terms of this Agreement; provided, however, that in the event of any
conflict between the provisions of this Agreement and any supplementary escrow
instructions, the terms of this Agreement shall control.
5.2 Closing.
(a) The Closing Date shall occur no later than March 25,
1997 (the "OUTSIDE CLOSING DATE"). The Closing and the Closing Date
shall not have occurred until the Purchase Price shall have been paid
by Buyer to Escrow Holder as provided herein. The "CLOSING" shall be
deemed to have occurred on the date that all of the events specified
in Section 5.8 of this Agreement shall have occurred. The "CLOSING
DATE" shall be the date on which the Closing occurs.
(b) In the event the Closing does not occur on or before
the Outside Closing Date, subject to any extension to the Outside
Closing Date contemplated by Article VIII hereof, the Escrow Holder
shall, unless it is notified by Buyer to the contrary within five (5)
days after such date, return to the depositor thereof all items (other
than the Earnest Money Deposit, which shall be disbursed in accordance
with Section 2.6 hereof) which may have been deposited with Escrow
Holder hereunder. Any such return shall not, however, relieve either
party hereto of any liability it may have for its wrongful failure to
close. Buyer shall, within five (5) days after the termination of
this Agreement in accordance with the terms hereof, return to Seller
all documents and materials delivered to Buyer hereunder by or on
behalf of Seller.
5.3 Delivery by Seller. At the Closing, Seller shall deposit with
the Escrow Holder, for the benefit of Buyer, or deliver directly to Buyer the
following:
(a) The Deed and the Assignment and Assumption of Leases
and Rents, each duly executed and acknowledged by Seller, in
recordable form, and ready for recordation in the official records of
the jurisdiction in which the Land is located (the "OFFICIAL
RECORDS");
(b) The Bill of Sale duly executed by Seller;
(c) A certificate from the office of the county clerk of
the county in which the Land is located and of the county in which
Seller's principal office is located, together with a certificate from
the Office of the Secretary of State of the State of Texas, each dated
within thirty (30) days after the Closing Date, listing, as of the
date of such certificate, all filings against Seller in said offices
under the Commercial Code of Texas which would be a lien on any of the
Personal Property, or a report from a recognized
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<PAGE> 20
UCC reporting service acceptable to Buyer as to those matters,
together with fully executed termination statements with respect to
such filings;
(d) Originals or copies of any warranties and guaranties
in Seller's possession received by Seller and to be assigned to Buyer,
from any contractors, subcontractors, suppliers or materialmen in
connection with any construction, repairs or alterations of the
Improvements or any tenant improvements;
(e) The Assignment and Assumption of Contracts,
Intangible Property, Warranties and Guarantees, duly executed by
Seller and acknowledged, assigning all of Seller's interest in the
Intangible Property, together with written terminations of any
Contracts which are not Approved Contracts;
(f) Originals or copies of all certificates of occupancy,
licenses and permits for the Improvements in Seller's possession;
(g) All existing as-built plans and specifications for
the Improvements in the possession of Seller;
(h) A closing statement prepared by Escrow Holder in form
and content consistent with this Agreement and otherwise reasonably
satisfactory to Buyer and Seller;
(i) The Non-Foreign Certificate, duly executed by Seller;
and
(j) Complete originals of the Leases with respect to the
Property and copies of all records in Seller's possession, books of
account, ledgers, statements and other business records relating to
the operation of the Property and/or the administration of the Leases,
in whatever mode maintained, including information contained on
computer disks; and
(k) A letter to each Tenant stating that the Property has
been sold, that Buyer is assuming the obligations of the landlord
under the Lease arising after the Closing Date, the amount (if any) of
security deposit and escrow for reimbursable expenses which have been
transferred to and assumed by Buyer, and Buyer's address for purposes
of rent payments and notices (the "TENANT NOTICE LETTERS").
Buyer may waive compliance on Seller's part under any of the foregoing
items by an instrument in writing.
5.4 Delivery By Buyer. Buyer shall execute and deliver to Escrow
Holder, for the benefit of Seller, or directly to Seller;
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(a) The Assignment and Assumption of Leases and Rents,
duly executed and acknowledged by Buyer;
(b) The Assignment and Assumption of Contracts,
Intangible Property, Warranties and Guarantees, duly executed by Buyer;
(c) The Tenant Notice Letter, duly executed by Buyer; and
(d) such other documents and instruments as may be required to
the close the transactions contemplated hereby, which documents and
instruments shall be in form and substance reasonably acceptable to
Buyer. After Buyer's or Escrow Holder's receipt of all of the items
specified in Section 5.3 hereof, after the complete satisfaction or
waiver of all of the conditions precedent to Buyer's obligations
hereunder, and after the expiration of the Review Period, Buyer shall
deliver the Purchase Price to Escrow Holder as provided in Section 2.2
above.
5.5 Other Instruments. Seller and Buyer shall each deposit such
other instruments as are reasonably required by Escrow Holder or otherwise
required to close the escrow and consummate the purchase of the Property in
accordance with the terms hereof.
5.6 Prorations. At Closing, the parties shall prorate (with Buyer
being deemed to be the owner of the Property for the date of the Closing) as of
the date on which the Closing occurs, on the basis of the actual number of days
in the calendar month in which the Closing occurs, the following with respect
to the Property:
(a) Rents. All rents and other receipts actually
received for the month in which the Closing occurs shall be prorated
as of the Closing. Seller shall retain title to all rents and other
receipts attributable to the period of time prior to the Closing Date.
Buyer shall use reasonable efforts after the Closing to collect
delinquent rents for the period up to the Closing; provided, however,
that all collections shall be applied first to periods commencing
after the Closing, and then to periods prior to the Closing.
Percentage Rents (if any) for 1996 shall remain the property of
Seller, and Percentage Rents (if any) for 1997 shall be prorated by
dividing the total Percentage Rents received by 365, with Seller
receiving that per diem amount multiplied by the number of days in
1997 prior to the Closing Date, and Seller's share shall be delivered
to Seller by Buyer within five (5) business days after receipt thereof
by Buyer. All security deposits collected under the Leases shall be
transferred to and assumed by Buyer.
(b) Pass-Through Charges. Seller represents to Buyer
that Seller currently collects from each tenant under the Leases the
following categories of expenses (each category billed separately to
each tenant), as more fully described in each Lease (collectively, the
"PASS-THROUGH EXPENSES"):
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(i) Real estate taxes, recurring assessments,
improvement lien assessments, and personal property taxes on
all or portions of the Property (the "TAXES");
(ii) General public liability, casualty, and
certain other types of insurance (the "INSURANCE"); and
(iii) Utilities (including gas, water, sewer,
electricity, telephone and other utilities supplied to the
Property), expenses related to Contracts, and certain other
expenses incurred in connection with the management,
maintenance and repair of the Property (the "CAM EXPENSES").
Seller shall remain liable for all Pass-Through Expenses for
1996, and shall reconcile the actual expenses incurred for Pass-
Through Expenses for 1996 with the amounts received from each tenant.
If Seller has collected from tenants more than the actual Pass-
Through Expenses for 1996, then Seller shall deliver such excess to
Buyer at Closing (or as soon thereafter as those expenses are
reconciled). If the actual Pass-Through Expenses for 1996 are greater
than the amounts collected by Seller, then Seller shall retain the
right to recover the deficiency from the tenants of the Property in
accordance with the terms of the respective leases, and Buyer shall
reasonably cooperate with Seller in that regard (but shall not be
required to incur any expense in those efforts).
Each category of Pass-Through Expense for 1997 shall be
prorated in the manner set forth below. Except in regard to Taxes
(which is addressed in subsection (c) below), Seller shall remain
liable for all Pass-Through Expenses for 1997 attributable to periods
of time prior to the Closing Date. If, for any category of
Pass-Through Expenses, Seller has collected from tenants more than the
actual Pass-Through Expenses incurred for or attributable to the
period of time in 1997 up to (but not including) the Closing Date,
then Seller shall deliver such excess to Buyer at Closing. If, for
any category, the actual Pass-Through Expenses for 1997 up to (but not
including) the Closing Date are greater than the amounts collected by
Seller, then (subject to the requirements of the last sentence of
subsection (c) below) Seller shall retain the right to recover the
deficiency from the tenants of the Property in accordance with the
terms of the respective leases, and Buyer shall reasonably cooperate
with Seller in that regard (but shall not be required to incur any
expense in those efforts).
(c) Taxes. Real estate taxes, recurring assessments,
improvement lien assessments, and personal property Taxes, if any, on
all or any portion of the Property, based on the regular and
supplemental tax bills for the calendar year in which the Closing
occurs (or, if such tax bill has not been issued as of the date of
Closing the regular and supplemental tax bill for the calendar year
preceding that in which the Closing occurs) shall be prorated as of
the Closing. If any supplemental real estate taxes are levied for any
period preceding the Closing, the parties will, immediately after the
Closing or the issuance of the supplemental real estate tax bill
(whichever last occurs), prorate between themselves, in cash, without
interest and to the date of the Closing Date, the supplemental real
estate taxes
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shown by such bill. The Taxes having been prorated, the Buyer shall
assume the obligation to pay all Taxes for 1997. Seller may retain
from any amounts collected from tenants the portion of taxes for which
it is responsible, and shall deliver to Buyer at Closing any excess
amounts. If the amounts collected by Seller are insufficient to pay
for Seller's share of taxes for 1997, then (subject to the last
sentence of this subsection) Seller shall retain the right to recover
the deficiency from the tenants of the Property in accordance with the
terms of the respective leases, and Buyer shall reasonably cooperate
with Seller in that regard (but shall not be required to incur any
expense in those efforts). Before Seller may initiate collection
action against a tenant on any deficiency to which it is entitled
under subsections (b) or (c) of this Section 5.5, Seller shall give
Buyer written notice of the deficiency and shall give Buyer a
reasonable period of time (not less than 90 days, unless that delay
would unreasonably jeopardize collection) to collect the deficiency
from the tenant, and Buyer shall use reasonable efforts in collecting
the deficiency.
(d) Utilities. All utilities, including gas, water,
sewer, electricity, telephone and other utilities supplied to the
Property shall be read as of the Closing Date. Seller shall pay,
prior to the Closing Date, all such amounts for which a bill has been
received or for which payment is otherwise due prior to the Closing
Date, and Buyer shall be credited, and Seller shall be debited, with
an amount equal to all utility charges for the period from the date
such bills were issued or such payments were due until the Closing
Date. Seller shall be credited for the amount of any deposits made by
Seller for utility services which have not been refunded to Seller and
which are assigned to Buyer on or prior to the Closing Date.
(e) Service Contracts. Amounts payable under Approved
Contracts shall be prorated on an accrual basis. Seller shall pay,
prior to the Closing Date, all such amounts for which a bill has been
received or for which payment is otherwise due prior to the Closing
Date, and Buyer shall be credited, and Seller shall be debited, with
an amount equal to all amounts accrued under the Approved Contracts
from the date such bills were issued or such payments were due until
the Closing Date. Seller shall deliver to Escrow, for the benefit of
Buyer, evidence of the cancellation or termination of all Contracts
other than Approved Contracts, and Seller shall be responsible for all
such cancellation costs.
(f) Other Items. All other proratable items, including
without limitation licenses and permits and other income from, and
expenses associated with, the Property shall be prorated between Buyer
and Seller as of the Closing.
Buyer and Seller's obligation to prorate shall survive the Closing for
a period of two (2) years (unless within such time Buyer or Seller makes a
claim against the other party to this Agreement with respect to such obligation
to prorate, in which case such obligation shall survive without limitation),
and Buyer and Seller shall use good faith efforts to conclude prorations with
respect to percentage Rent and common area maintenance charges as soon as
practicable after the determination of the amounts thereof.
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5.7 Costs and Expenses. Seller and Buyer shall each bear and pay
one-half (1/2) of the fees of Escrow Holder. Seller shall pay for the cost of
the Survey, the cost of a standard coverage title policy in the full amount of
the Purchase Price insuring fee simple title to the Land and Improvements in
Buyer (the "STANDARD COVERAGE TITLE POLICY"), all legal fees and costs incurred
by Seller, and other fees and charges which are typically borne by sellers in
Richardson, Texas. Buyer shall pay for the amount of the difference in cost
between the Standard Coverage Title Policy and the Extended Coverage Title
Policy, the cost of the Endorsements, its out-of-pocket expenses, all due
diligence, all legal fees and costs incurred by Buyer in connection herewith,
and other fees and charges which are typically borne by buyers in Richardson,
Texas. The cost of any recordation fees and documentary or other transfer
taxes applicable with respect to the sale of the Real Property, all sales tax,
if any, applicable with respect to the sale of the Personal Property and/or the
Intangible Property, and any other fees and charges shall be borne by Seller
and Buyer as such fees and charges are typically borne by buyers and sellers in
Richardson, Texas.
5.8 Closing and Recordation. Provided that Escrow Holder has
received all of the items required to be delivered pursuant to this Article V
(or a waiver from the party for whose benefit such item is being delivered) and
that it has not received prior written notice from Buyer that Buyer has elected
to terminate its rights and obligations hereunder pursuant to Article IV,
Article VIII and/or Section 5.9, and provided that Buyer has received either
the Extended Coverage Title Policy or the irrevocable commitment of Title
Company to provide it with the Extended Coverage Title Policy immediately after
recordation of the Deed, Escrow Holder is authorized and instructed (a) with
respect to the Property, to cause the Title Company to record the documents
delivered to the Escrow Holder in accordance with recording instructions set
forth in a letter to be delivered to Escrow Holder and Title Company by Buyer
(or if no such letter is received prior to the Closing, in accordance with
customary practice), (b) to deliver those other documents and instruments
delivered into Escrow to the party for whose benefit such documents or
instruments were made and (c) to deliver the Purchase Price, as adjusted
pursuant to Section 5.6 hereof upon receiving confirmation of recording of the
Deed.
5.9 Termination of Agreement.
(a) Failure of Buyer's Conditions. If any one or more of
the conditions to Buyer's obligations, as set forth in Article IV.A,
Section 5.3 or elsewhere in this Agreement, is not either fully
performed, satisfied or waived in writing (or deemed waived as
provided herein) on or before the Closing Date or such earlier date as
provided elsewhere herein, then Buyer may elect, by written notice as
provided in Section 10.10 hereof, to terminate this Agreement, in
which case neither party shall have any further obligation to the
other, except for those which survive the termination of this
Agreement. Nothing in this paragraph shall be construed to limit any
of Buyer's rights or remedies at law or equity in the event of a
default by Seller.
(b) Failure of Seller's Conditions. If any one or more
of the conditions to Seller's obligations, as set forth in Article
IV.B, Section 5.4 or elsewhere in this
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Agreement, is not either fully performed, satisfied or waived in
writing (or deemed waived as provided herein) on or before the Closing
Date or such earlier date as provided elsewhere herein, then Seller
may elect, by written notice as provided in Section 10.10 hereof, to
terminate this Agreement and neither party shall have any further
obligation to the other, except for those which survive the
termination of this Agreement.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
As an inducement to Buyer to enter into this Agreement and the
consummation of the transaction contemplated hereby, Seller hereby represents
and warrants to and agrees with Buyer both as of the date hereof and again as
of the Closing Date, and as of all dates and times in between (except as
specifically provided to the contrary herein), as set forth below. As used
herein and elsewhere in this Agreement, the term "Seller's actual knowledge"
shall mean the actual knowledge of each of Richard F. Garvey and Bedford
Burgher, without any duty of investigation of any kind. Seller hereby
represents and warrants that the foregoing persons are the persons employed by
Seller or Seller's manager with executive, managerial or daily supervisory
responsibility with respect to the Property.
6.1 Authority. Seller is duly organized and validly existing
under the laws of the jurisdiction of its organization, is duly qualified to
conduct business and own real property in the State of Texas, and has all
requisite power to own the Property and to carry on its business related to the
Property as presently conducted. The execution, delivery and performance of
this Agreement and all other agreements contemplated hereby has been or will be
duly and validly authorized by all necessary action of Seller and the Agreement
and all other agreements contemplated thereby are and will be valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors' rights and general principles of
equity.
6.2 Title. Seller holds fee simple title to the Property, and to
Seller's actual knowledge, such fee simple title is free and clear of all
liens, encumbrances, security interests, charges, adverse claims and other
exceptions to title, except for the Leases, Contracts, matters of record,
matters disclosed by the Survey and the matters to be disclosed in the Title
Report.
6.3 The Leases. A list of the current Leases is set forth in the
rent roll attached hereto as Schedule H (the "RENT ROLL"). The Rent Roll is
true, complete and correct in all respects and except for the Leases set forth
in the Rent Roll, the Contracts described in Exhibit "I" attached to this
Agreement, matters of record, matters disclosed by the Survey and the matters
to be disclosed in the Title Report, there are no other leases, licenses or
other agreements affecting the occupancy of the Property. With respect to each
Lease: (i) to Seller's actual knowledge, the Lease is in full force and effect,
and constitutes the valid and binding legal obligation of Seller and the
respective tenant, enforceable against each of them in accordance with its
terms; (ii) except as indicated on the Rent Roll, there are no understandings,
oral or written, between
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the parties to the Lease which in any manner vary the obligations or rights of
either party; (iii) except as indicated on the Rent Roll, there is no default
by Seller under the Lease, and to Seller's actual knowledge, by the tenant
under the Lease; and (iv) no rent or additional rent under the Lease has been
paid for more than thirty (30) days in advance of its due date.
6.4 No Litigation or Adverse Events. Other than the bankruptcy
proceedings of Color Tile Supermart, Inc., Seller has received no written
notice of, and to Seller's actual knowledge, there are no, pending or
threatened investigations, actions, suits, proceedings or claims against or
affecting Seller, the Property, or any tenant (as it relates to the Property)
at law or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, agency, or instrumentality,
domestic or foreign. Seller has received no written notice of, and to Seller's
actual knowledge, there are no, pending or threatened investigations, actions,
suits, proceedings or claims against or affecting any adjacent property at law
or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, agency, or instrumentality,
domestic or foreign which, if adversely decided, would have a materially
negative impact on the value of the Property.
6.5 Compliance with Laws. Seller has not received any written
notice that Seller is not in compliance in all material respects with all
applicable laws, ordinances, rules and regulations (including without
limitation those relating to zoning and the Americans With Disabilities Act)
applicable to the ownership or operation of the Property. Seller has not
received from any insurance company or Board of Fire Underwriters any written
notice, which remains uncured, of any defect or inadequacy in connection with
the Property or its operation.
6.6 No Defaults in Other Agreements. To Seller's actual
knowledge, neither Seller nor any other party is in material default under any
Contract affecting the Property, and no event exists which, with the passage of
time or the giving of notice or both, will become a material default thereunder
on the part of the Seller or any other party thereto. To Seller's actual
knowledge, Seller is in compliance in all material respects with the terms and
provisions of the covenants, conditions, restrictions, rights-of-way or
easements affecting the Property.
6.7 Eminent Domain. To Seller's actual knowledge, there is no
existing or proposed or threatened eminent domain or similar proceeding, or
private purchase in lieu of such a proceeding which would affect the Property
in any material way.
6.8 Environment. (i) Seller has no actual knowledge of, and has
received no written notice that, Seller has engaged in any operations or
activities upon, or any use or occupancy of the Property, or any portion
thereof, for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of any Hazardous Materials (whether legal or illegal, accidental or
intentional) on, under, in or about the Property, or transported any Hazardous
Materials to, from or across the Property, except in all cases in material
compliance with Environmental Requirements and only in the course of legitimate
business operations at the Property (which shall not include any business
primarily or substantially devoted to the handling, manufacture, treatment,
storage, use, generation, release, discharge, refining, dumping or disposal of
Hazardous Materials); (ii) to Seller's actual knowledge, no tenant, occupant or
user of the Property, nor any other person, has engaged in or
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permitted any operations or activities upon, or any use or occupancy of the
Property, or any portion thereof, for the purpose of or in any material way
involving the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of any Hazardous Materials
(whether legal or illegal, accidental or intentional) on, under, in or about
the Property, or transported any Hazardous Materials to, from or across the
Property, except in all cases in material compliance with Environmental
Requirements and only in the course of legitimate business operations at the
Property (which shall not include any business primarily or substantially
devoted to the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of Hazardous Materials);
(iii) to Seller's actual knowledge, no Hazardous Materials are presently
constructed, deposited, stored, or otherwise located on, under, in or about the
Property except in all cases in material compliance with Environmental
Requirements and only in the course of legitimate business operations at the
Property (which shall not include any business primarily or substantially
devoted to the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of Hazardous Materials); (iv)
to Seller's actual knowledge, no Hazardous Materials have migrated from the
Property upon or beneath other properties; and (v) to Seller's actual
knowledge, no Hazardous Materials have migrated or threaten to migrate from
other properties upon, about or beneath the Property.
As used herein:
"ENVIRONMENTAL REQUIREMENTS" shall mean all applicable present
statutes, regulations, rules, ordinances, codes, licenses, permits, orders,
approvals, plans, authorizations, concessions, franchises and similar items, of
all governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof and all applicable judicial and administrative and regulatory decrees,
judgments and orders relating to the protection of human health or the
environment, including, without limitation: (i) all requirements, including
but not limited to those pertaining to reporting, licensing, permitting,
investigation and remediation of emissions, discharges, releases or threatened
releases of "Hazardous Materials," chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes whether
solid, liquid or gaseous in nature, into the air, surface water, ground water
or land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of chemical substances,
pollutants, contaminants or hazardous or toxic substances, materials, or
wastes, whether solid, liquid or gaseous in nature; and (ii) all requirements
pertaining to the protection of the health and safety of employees or the
public.
"HAZARDOUS MATERIALS" shall mean (i) any flammable, explosive or
radioactive materials, hazardous wastes, toxic substances or related materials
including, without limitation, substances defined as "hazardous substances,"
"hazardous materials," "toxic substances" or "solid waste" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sec. 9601, et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq.; the Toxic Substances Control Act, 15 U.S.C.,
Section 2601 et seq.; the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6901 et seq.; and in the regulations adopted and publications
promulgated pursuant to said laws; (ii) those substances listed in the United
States Department of Transportation Table (49 C.F.R. 172.101 and
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amendments thereto) or by the Environmental Protection Agency (or any successor
agency) as hazardous substances (40 C.F.R. Part 302 and amendments thereto);
(iii) those substances defined as "hazardous wastes," "hazardous substances" or
"toxic substances" in any similar federal, state or local laws or in the
regulations adopted and publications promulgated pursuant to any of the
foregoing laws or which otherwise are regulated by any governmental authority,
agency, department, commission, board or instrumentality of the United States
of America, the State of Kansas or any political subdivision thereof, (iv) any
pollutant or contaminant or hazardous, dangerous or toxic chemicals, materials,
or substances within the meaning of any other applicable federal, state, or
local law, regulation, ordinance, or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended; (v) petroleum or any by-products thereof; (vi) any
radioactive material, including any source, special nuclear or by-product
material as defined at 42 U.S.C. Sections 2011 et seq., as amended, and in the
regulations adopted and publications promulgated pursuant to said law; (vii)
asbestos in any form or condition; and (viii) polychlorinated biphenyls.
6.9 Mechanic's Liens. All bills and claims for labor performed
and materials furnished to or for the benefit of the Property currently due and
contracted for by Seller have been paid in full or will be paid prior to
Closing in the ordinary course of business, and at the Closing there will not
be, and to Seller's actual knowledge there are not presently, any mechanic's or
materialmen's liens (whether or not perfected) on or affecting the Property as
a result of labor performed or materials furnished and contracted for by the
Seller.
6.10 Operating Statements. To Seller's actual knowledge the
financial statements delivered by Seller to Buyer fairly present the profit or
loss from the management and operation of the Property for the periods covered
thereby and, in all material respects, accurately reflect all rents and other
gross receipts, and all amounts paid by Seller for electricity, water, sewer,
other utility services, insurance, fuel, maintenance and repairs (whether
capitalized or expensed), real estate taxes, payroll and payroll taxes and all
other operating and other expenses associated with the Property.
6.11 No Leases of Property or Assets. Except as may be disclosed in
the Contracts delivered to the Buyer, no material portion of the Personal
Property or fixtures with respect to the Property (other than fixtures owned or
installed by tenants) is leased by the Seller as lessee.
The representations and warranties set forth in this Article VI shall
survive the execution and delivery of this Agreement, the delivery of the Deed
and transfer of title to the Property for a period of eighteen (18) months from
the Closing Date (unless within such time Buyer makes a specific written claim
against Seller with respect to such representation or warranty, in which case
such representation or warranty, as to the specific claim made, shall survive
without limitation).
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
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7.1 Representations and Warranties of Buyer. Buyer hereby
represents and warrants to Seller as follows: Buyer is a corporation duly
organized under the laws of the State of Maryland; subject to receipt of the
Buyer Approval, this Agreement and all documents executed by Buyer which are to
be delivered to Seller at the Closing are and as of the Closing Date will be
duly authorized, executed and delivered by Buyer, and are and as of the Closing
Date will be legal, valid and binding obligations of Buyer, and do not and as
of the Closing Date will not violate any provisions of any agreement or
judicial order to which Buyer is a party or to which it is subject.
ARTICLE VIII
POSSESSION, DESTRUCTION AND CONDEMNATION
8.1 Possession. Possession of the Property shall be delivered to
Buyer on the Closing Date, subject to the Permitted Exceptions and the Leases
described on the Rent Roll or otherwise approved by Seller. Without limiting
any other provisions of this Agreement, Seller shall afford authorized
representatives of Buyer reasonable access to the Property for the purposes of
determining Seller's compliance herewith (provided that Seller or Seller's
agent shall be allowed to accompany Buyer in any visit to the Property Buyer
may make for the purposes of determining such compliance); however, in no event
shall such right give rise to any obligation of Buyer to determine compliance
or noncompliance.
8.2 Loss, Destruction and Condemnation.
(a) Definition of Material Damage. For the purposes of
this Section 8.2, damage to the Property is material if (i) the actual
cost of repairing or replacing the damaged portions of the
Improvements on the Property exceeds $100,000.00, or (ii) if it would
take longer than sixty (60) days to perform such repair or replacement
using reasonably diligent efforts, or (iii) if any lessee has the
right to abate any rent under its lease as a result of such damage and
there is not full rental interruption coverage with respect thereto
available to Buyer through and after the Closing Date until the date
that is sixty (60) days beyond the estimated date of reconstruction,
or (iv) if any lessee has a right to terminate its lease as a result
of such damage.
(b) Effect of Non-Material Damage to Improvements. If
prior to the Closing the Improvements on the Property are damaged by
casualty and such damage is not material, (i) this Agreement may not
be terminated by reason of such casualty (provided that this does not
waive Buyer's other termination rights under this Agreement) and (ii)
Seller will, at Buyer's option, either (a) cause the damaged portion
of the Improvements to be repaired at Seller's sole cost and expense
within sixty (60) days after the date of such damage or (b) reduce the
Purchase Price by an amount equal to the actual, reasonable and
necessary cost of repairing or replacing the damaged portions of the
Improvements. Seller will notify Buyer within five (5) days (but in
any event prior to the Closing Date) of Seller's receipt of knowledge
of any casualty which occurs after the date of this Agreement and on
or prior to the Closing Date.
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(c) Effect of Material Damage to Improvements. If prior
to the Closing the Improvements are damaged by casualty and such
damage is material, Seller shall notify Buyer in writing of such
casualty as soon as practicable. Within ten (10) days after the
occurrence of such casualty, Seller will as soon as is practicable,
commence restoration of the damaged Improvements, and shall complete
such restoration in compliance with all laws and the representations
and warranties set forth herein and shall restore such Improvements
their condition prior to the occurrence of the casualty promptly (but
in no event more than sixty (60) days thereafter), and the Closing
Date shall be extended (but in no event by more than sixty (60) days)
until such damaged Improvements are complete; provided, however, if
Seller's mortgagee does not release portions of the insurance proceeds
attributable to such casualty to Seller, then Seller may terminate
this Agreement by written notice to Buyer, in which event the Earnest
Money Deposit shall be returned to Buyer and neither party shall have
any further obligation to the other, except those that expressly
survive the termination of this Agreement. If Seller does not
commence or complete such restoration within such time period, then
Buyer may elect pursuant to a writing delivered to Seller and Escrow
Holder to (i) continue this Agreement, provided, however, that Seller
shall assign to Buyer at the Closing any insurance proceeds to which
Seller is entitled with respect to such damage (in which event the
Purchase Price shall be reduced by the amount of any deductible with
respect thereto); or (ii) terminate this Agreement, in which case
Buyer shall have no further rights and obligations to the Seller under
this Agreement (but Buyer shall retain its rights and remedies against
Seller) and Escrow Holder shall immediately return the Earnest Money
Deposit (with interest thereon) to Buyer. Buyer's failure to have
elected any of these options within the time allotted therefor shall
be deemed to be an election of option (ii).
(d) Definition of Material Taking. For the purposes of
this Section 8.2, a taking or threatened taking by eminent domain or
similar proceedings shall be deemed material if (i) the value of that
portion of the Property to be so taken exceeds $100,000.00, (ii) the
portion of the Property taken includes any material access to the
Property or any material portion of the parking area (and a material
portion includes, without limitation, any taking which would cause the
parking ratio to fall below the minimum ratio required by applicable
law or any Lease); (iii) Buyer determines that the Property so
affected is materially and adversely affected by such taking or
threatened taking, (iv) any lessee has the right to abate any rent
under its lease as a result of such taking or threatened taking, or
(v) any lessee has the right to terminate its lease as a result of
such taking or threatened taking.
(e) Effect of Non-Material Taking. If prior to the
Closing there is a taking or threatened taking of a portion of the
Property which is not material, (i) this Agreement may not be
terminated and (ii) Seller will assign to Buyer at the Closing all of
Seller's rights in and to any condemnation award with respect to such
non-material taking, and there will be no reduction in the Purchase
Price. Seller will deliver written notice to Escrow Holder and Buyer
within one (1) day after Seller receives notice of or otherwise
becomes aware of any taking or threatened taking affecting the
Property.
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(f) Effect of Material Taking. If prior to the Closing
there is a taking or threatened taking of a material portion of the
Property or all of it, Seller shall notify Buyer in writing of such
taking or threatened taking, and within ten (10) days after Buyer's
receipt of such notice, Seller and Buyer shall endeavor to agree upon
whether the Property shall be purchased by Buyer, and any reduction in
the Purchase Price, and any assignment of any condemnation award with
respect to such taking. If within such ten (10) day period Buyer and
Seller have not reached a mutually acceptable agreement as to those
matters, Buyer within ten (10) days thereafter may elect in writing to
(i) continue this Agreement subject to the taking or threatened taking
with an assignment of all of Seller's rights to condemnation awards,
severance damages, payments-in-lieu thereof or the like; or (ii)
terminate this Agreement, in which case Buyer and Seller shall have no
further rights or obligations to one another under this Agreement
except for those which expressly survive the termination of this
Agreement, and Escrow Holder shall immediately return the Earnest
Money Deposit (with interest thereon) to Buyer. Buyer's failure to
have elected any of these options within the time period allotted
therefor shall be deemed to be an election of option (ii).
(g) Extension of Outside Closing Date. Upon the
occurrence of any damage to the Property, the Outside Closing Date
shall be extended to the date upon which Seller is required hereunder
to have such damage repaired, but in no event shall any such extension
extend the Outside Closing Date to a date which is more than sixty
(60) days after the date of such damage to the Property.
ARTICLE IX
MAINTENANCE AND OPERATION OF THE PROPERTY;
COVENANTS
9.1 Maintenance. In addition to Seller's other obligations
hereunder, Seller shall, upon and after the date of this Agreement and to and
including the Closing Date, at Seller's sole cost and expense, maintain the
Property in the ordinary course of business consistent with past practice, pay
all taxes, assessments, fines, penalties, charges and other operating expenses,
and shall make all repairs, maintenance and replacements of the Improvements
and any Personal Property and otherwise operate the Property in its ordinary
and customary manner, and otherwise in the same manner as before the making of
this Agreement, the same as though Seller were retaining the Property. Seller
shall not make any material alterations to the Property without first receiving
Buyer's prior written consent thereto except as required by the Leases or
applicable law.
9.2 Leases and Other Agreements. Seller shall not, on or after
the date of this Agreement and on or prior to the Closing Date, enter into any
Lease pertaining to the Property except pursuant to the terms and conditions
set forth in this Section 9.2. At any time prior to the Closing Date, in the
event that Seller intends to enter into a lease with respect to any portion of
the Property, Seller shall deliver to Buyer a complete copy of the proposed
lease, financial information as to the proposed lessee (with credit reports),
and copies of all brokerage agreements (or a detailed list of all brokerage
obligations) with respect to such lease. Buyer shall review and
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approve or disapprove of such lease within ten (10) days after the receipt of
all of the foregoing materials. If all such materials are delivered to Buyer
on or prior to ten (10) days prior to conclusion of the Review Period, and if
(a) such lease (and any brokerage commissions with respect thereto) was
negotiated by Seller in good faith and is on market terms, (b) the proposed
lessee is creditworthy as determined by Buyer in its reasonable judgment, (c)
the proposed use of the premises under such Lease is compatible with the other
uses in the Property and is not inconsistent with the general leasing policies
of Buyer, as determined by Buyer in its reasonable judgment, and (d) the terms
and conditions of such Lease and any brokerage commissions payable with respect
thereto are otherwise acceptable to Buyer in its reasonable discretion, then
Buyer shall approve such lease and if and when the Closing occurs, Buyer shall
assume all obligations under such lease to pay for or construct tenant
improvements and shall assume and pay, as and when due, all brokerage
commissions with respect to such lease which commissions were disclosed to and
approved by Buyer. In the event that Buyer does not affirmatively approve in
writing such lease within such ten (10) day period, then Buyer shall be deemed
to have disapproved such lease and as long as this Agreement remains effective
Seller shall not enter into such lease. Seller's sole remedy with respect to
any such disapproval shall be to terminate this Agreement, by written notice to
Buyer not later than five (5) days later the expiration of such ten (10) day
period, in which case the Earnest Money Deposit, with all interest thereon,
shall be refunded to Buyer and this Agreement, and each party's obligations
hereunder, shall terminate. Notwithstanding the foregoing, after the
conclusion of the Review Period, in no event shall Seller enter into any lease
with respect to the Property without Buyer's prior written consent, which will
not be unreasonably withheld or delayed. After the date hereof, without
Buyer's prior written consent (which will not be unreasonably withheld), in no
event shall Seller enter into any agreement or contract with respect to the
Property (other than a lease, which shall be governed by the foregoing
provisions) which is not terminable on thirty (30) days' prior notice (without
premium or penalty).
9.3 Encumbrances. Seller shall not, in between the date of this
Agreement and the Closing Date, mortgage, encumber or suffer to be encumbered
all or any portion of the Property, which encumbrances would survive the
Closing Date, without the prior written consent of Buyer.
9.4 Consents and Notices. Seller and Buyer shall cooperate with
each other and exercise commercially reasonable efforts to obtain as of the
Closing Date, all consents from, and provide all notices to, any third party
and any governmental or regulatory authority which are required pursuant to any
Contract or any applicable laws as a condition to or in connection with the
execution, delivery or performance of this Agreement or other documents and
instruments contemplated thereby.
9.5 Audit Cooperation. Until the date that is one (1) year after
the Closing Date, Seller hereby agrees to cooperate with Buyer in producing
Buyer's audited financial statements for the Property for such periods as may
be requested by Buyer. Such cooperation shall include, without limitation, the
execution and delivery by Seller to Buyer's auditors of such confirmations and
letters as such auditors may reasonably require.
24
<PAGE> 33
9.6 Access to Information. Seller shall provide to Buyer access
to Buyer's records and information regarding the Property (other than
attorney-client privileged information and information relating to other offers
to purchase the Property or financing of the Property), which Buyer may review
and make copies of at Buyer's expense. Buyer may contact Seller's insurance
agent and tenants of the Property directly to obtain information regarding the
Property.
ARTICLE X
MISCELLANEOUS
10.1 Notices. Any notice required or permitted to be given under
this Agreement shall be in writing and personally delivered or sent by United
States mail, registered or certified mail, postage prepaid, return receipt
requested, or by electronic facsimile transmission, or sent by Federal Express
or similar nationally recognized overnight courier service, and addressed as
follows, and shall be deemed to have been given upon the date of delivery (or
refusal to accept delivery) at the address specified below as indicated on the
return receipt or air bill:
If to Seller: JaGee Properties, Inc.
3228 Camp Bowie Boulevard
Fort Worth, Texas 76102
Attn: Richard F. Garvey, President
Fax No.: (817) 335-1905
with a copy to: Broude, Nelson & Harrington, P.C.
307 West 7th Street, Suite 1000
Fort Worth, Texas 76102
Attn: Steven M. Smith
Fax No.: (817) 335-1603
If to Buyer: The PRICE REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
Attn.: Joseph Kornwasser
Fax No.: (213) 937-8175
with a copy to: The PRICE REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
Attn.: Gerald Friedman
Fax No.: (213) 937-8175
25
<PAGE> 34
with a copy to: Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attn: William R. Lindsay, Esq.
Fax No.: (213) 229-7520
If to Escrow
Holder: Safeco Land Title Company
777 Main Street
Suite C-10
Fort Worth, Texas 76102
Attn: Barbara Hutson
Fax No.: (214) 445-5044
or such other address as either party may from time to time specify in writing
to the other in the manner aforesaid.
10.2 Brokers and Finders. Buyer and Seller each hereby represents
and warrants that no broker was involved in this Agreement or the transactions
contemplated hereby except for Ranchview Investments, Inc. and Cushman &
Wakefield of Texas, Inc., whose commissions are to be paid by Seller if and
only if the Closing occurs and Seller receives the Purchase Price. In the
event of a claim for a broker's fee, finder's fee, commission or other similar
compensation in connection herewith other than as set forth above, (i) Buyer,
if such claim is based upon any agreement alleged to have been made by Buyer,
hereby agrees to indemnify, defend, protect and hold Seller harmless against
any and all liability, loss, cost, damage or expense (including reasonably
attorneys' and paralegals' fees and costs) which Seller may sustain or incur by
reason of such claim and (ii) Seller, if such claim is based upon any agreement
alleged to have been made by Seller, hereby agrees to indemnify, defend,
protect and hold Buyer harmless against any and all liability, loss, cost,
damage or expense (including reasonable attorneys' and paralegals' fees and
costs) which Buyer may sustain or incur by reason of such claim. The
provisions of this Section 10.2 shall survive the Closing or earlier
termination of this Agreement.
10.3 Successors and Assigns. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns, except that neither Seller's nor Buyer's interest under this
Agreement may be assigned, encumbered or otherwise transferred whether
voluntarily, involuntarily, by operation of law or otherwise, without the prior
written consent of the other; provided, however, that Buyer may assign,
encumber or otherwise transfer Buyer's interest under this Agreement, without
the prior written consent of Seller (which will not be unreasonably withheld,
conditioned or delayed), to any subsidiary or affiliate of Buyer, provided,
however, that such assignment shall not release Buyer from its obligations
under this Agreement or any obligations of the purchaser created under any
agreements executed in connection with this Agreement. There shall be no third
party beneficiaries to this Agreement.
26
<PAGE> 35
10.4 Amendments. This Agreement may be amended or modified only by
a written instrument executed by the party or parties asserted to be bound
thereby.
10.5 Continuation and Survival of Indemnities, Representations,
Warranties and Post-Closing Obligations. Except as provided in the last
paragraph of Article VI of this Agreement, all indemnities, representations and
warranties by, and all of the post-closing obligations, if any, of, the
respective parties contained herein or made in writing pursuant to this
Agreement or any other instrument delivered by Seller or Buyer pursuant hereto
are intended to and shall remain true and correct and binding as of the time of
Closing and shall survive the execution and delivery of this Agreement, the
delivery of the Deed and transfer of title.
10.6 Interpretation. Whenever used herein, the term "including"
shall be deemed to be followed by the words "without limitation." Words used in
the singular number shall include the plural, and vice-versa, and any gender
shall be deemed to include each other gender. The captions and headings of the
Articles and Sections of this Agreement are for convenience of reference only,
and shall not be deemed to define or limit the provisions hereof.
10.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
10.8 Merger of Prior Agreements. This Agreement (including the
exhibits hereto) constitutes the entire agreement between the parties with
respect to the purchase and sale of the Property specifically described herein
and supersedes all prior and contemporaneous (whether oral or written)
agreements and understandings between the parties hereto relating to the
specific subject matter hereof.
10.9 Attorneys' Fees. In the event of any action or proceeding at
law or in equity between Buyer and Seller (including an action or proceeding
between Buyer and the trustee or debtor in possession while Seller is a debtor
in a proceeding under the Bankruptcy Code (Title 11 of the United States Code)
or any successor statute to such Code) to enforce or interpret any provision of
this Agreement or to protect or establish any right or remedy of either Buyer
or Seller hereunder, the unsuccessful party to such action or proceeding shall
pay to the prevailing party all costs and expenses, including without
limitation reasonable attorneys' and paralegals' fees and expenses (including
without limitation fees, costs and expenses of experts and consultants),
incurred in such action or proceeding and in any appeal in connection therewith
by such prevailing party, together with all costs of enforcement and/or
collection of any judgment or other relief. If such prevailing party shall
recover judgment in any such action, proceeding or appeal, such costs, expenses
and attorneys' and paralegals' and others' fees shall be included in and as a
part of such judgment.
10.10 Notice of Termination. If either Buyer or Seller elects to
terminate this Agreement, it will submit to Escrow Holder and the other party
hereto a notice of termination in duplicate. If Escrow Holder receives a
notice of termination, it is instructed to mail and fax one copy to the other
such party within one (1) business day. If Escrow Holder has not received
27
<PAGE> 36
a written objection from the other party within five (5) business days after
mailing and faxing the copy, Escrow Holder is to (i) comply with the
instructions contained in the notice of termination, (ii) pay cancellation
charges out of any funds on deposit in this Escrow, (iii) return the Earnest
Money Deposit (and interest thereon) to Buyer, and (iv) cancel this Agreement.
10.11 Specific Performance; Damages. The parties understand and
agree that the Property is unique and for that reason, among others, Buyer will
be irreparably damaged in the event that this Agreement is not specifically
enforced. Accordingly, in the event of any breach or default in or of this
Agreement or any of the warranties, terms or provisions hereof by Seller, Buyer
shall have the right to demand and have specific performance of this Agreement.
The foregoing shall not limit or otherwise diminish the other remedies
available to Buyer at law or equity, including, without limitation, the right
to recover damages.
10.12 Relationship. It is not intended by this Agreement to, and
nothing contained in this Agreement shall, create any partnership, joint
venture, financing arrangement or other agreement between Buyer and Seller. No
term or provision of this Agreement is intended to be, or shall be, for the
benefit of any person, firm, organization or corporation not a party hereto,
and no such other person, firm, organization or corporation shall have any
right or cause of action hereunder.
10.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
10.14 Time of the Essence. Time is of the essence in this Agreement
and with respect to all of its terms.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
28
<PAGE> 37
IN WITNESS WHEREOF, Seller, Buyer, and Escrow Holder have executed
this Agreement as of the date first above written.
BUYER: THE PRICE REIT, INC.
By: /s/ JERALD FRIEDMAN
--------------------------------------
Printed Name: JERALD FRIEDMAN
----------------------------
Title: SR. EXEC. V.P.
-----------------------------------
SELLER: JAGEE PROPERTIES, INC.
By: /s/ RICHARD GARVEY
--------------------------------------
Richard Garvey, President
29
<PAGE> 38
CONSENT OF ESCROW COMPANY
The undersigned Escrow Company agrees to (i) accept the foregoing
Agreement, (ii) be Escrow Holder under the Agreement, and (iii) be bound by the
Agreement in the performance of its duties as Escrow Holder; however, the
undersigned will have no obligations, liability or responsibility under (a)
this consent or otherwise, unless and until the Agreement, fully signed by the
parties, has been delivered to the undersigned, or (b) any amendment to the
Agreement materially affecting undersigned's obligations thereunder unless and
until the amendment is accepted by the undersigned in writing.
Dated: ___________________
SAFECO LAND TITLE COMPANY
By: _____________________________________
Escrow Officer
30
<PAGE> 39
SCHEDULE A
LEGAL DESCRIPTION OF THE LAND
The land described as Tract 1 below, save and except the land described as
Tract 2.
TRACT ONE
Being part of LOT 1, of K-Mart Plaza, an Addition to the City of Richardson,
Dallas County, Texas according to the Map thereof recorded in Volume 93244,
Page 249, of the Map records of Dallas County, Texas; and being more
particularly described by metes and bounds as follows:
Being a tract of land situated in the William Hughes Survey, Abstract No. 573,
Dallas County, Texas, and being in the City of Richardson, Texas, and being a
part of that tract of land conveyed to Blanchard Hand, Owens and Reynolds by
deed dated May 6, 1968, said tract being more particularly described as follows:
BEGINNING at a point in the North line of Campbell Road (140 ft. R.O.W.) said
point being North 89 degrees 38 minutes West a distance of 879.10 feet from the
Westline of the Alma Road (60 ft. R.O.W.), said point also being the Southwest
corner of K-Mart Plaza, an Addition to the City of Richardson, Texas;
THENCE North 0 degrees 36 minutes East a distance of 505.60 feet to an iron rod
for a corner;
THENCE in a Northeasterly direction with a circular curve to the left having a
central angle of 18 degrees 46 minutes 35 seconds and a radius of 1,255.87
feet, a distance of 411.56 feet to a point for a corner;
THENCE South 89 degrees 38 minutes East a distance of 502.3 feet to an iron rod
for a corner;
THENCE South 0 degrees 36 minutes West a distance of 515.0 feet along the West
line of Alma Road to an iron rod for a corner;
THENCE North 89 degrees 38 minutes West a distance of 164.74 feet to an iron
rod for a corner;
THENCE South 0 degrees 36 minutes West a distance of 150.0 feet to an iron rod
for a corner;
THENCE North 89 degrees 38 minutes West a distance of 714.36 feet along the
North line of Campbell Road to the POINT OF BEGINNING and containing 12.058
acres of land, more or less.
<PAGE> 40
TRACT TWO
BEING a parcel of land in the William Hughes Survey, Abs. No. 573 and being a
part of Lot 1, K-MART PLAZA, an addition to the City of Richardson, Texas, as
shown by plat recorded in Volume 71238, Page 2505, and later in Volume 93244,
Page 0249, Deed Records of Dallas County, Texas, and being more particularly
described as follows:
COMMENCING at a 5/8 inch iron rod found in the north line of Campbell Road (a
140 foot right-of-way) said point being the most southerly southeast corner of
said Lot 1, K-MART PLAZA and also being the southwest corner of Lot 2, K-MART
PLAZA as recorded in Volume 71238, Page 2511, Deed Records, Dallas County,
Texas;
THENCE North 00 deg. 50 min. 12 sec. East a distance of 150.00 feet to a 1/2
inch iron rod found for the southeasterly inside corner, of said Lot 1, K-MART
PLAZA, and also being the northwest corner of said Lot 2, K-MART PLAZA;
THENCE South 89 deg. 23 min. 48 sec. East along the North lineof said Lot 2,
K-Mart Plaza, a distance of 10.18' to an iron rod set for the most southerly,
southwest corner hereof and being the POINT OF BEGINNING;
THENCE North 00 deg. 36 min. 12 sec. a distance of 34.24 feet to a PK nail set
for an inside corner;
THENCE North 83 deg. 23 min. 48 sec. West a distance of 27.79 feet to a PK nail
set for the most southerly southwest corner hereof;
THENCE North 00 deg. 36 min. 12 sec. East a distance of 60.70 feet to an "X"
out set for the northwest corner hereof;
THENCE South 89 deg. 23 min. 48 sec. East a distance of 182.80 feet to an "X"
out for the northeast corner hereof and being in the new dedicated right-of-way
line of Alamo Road (a variable width right-of-way) as shown in the plat recorded
in Volume 71238, Page 2505;
THENCE South 00 deg. 52 min. 13 sec. West along the west line of Alamo Road a
distance of 94.94 feet to a P.K. nail found for the southwest corner hereof, and
also being the northeast corner of said Lot 2 K-MART PLAZA;
THENCE North 89 deg. 23 min. 48 sec. West a distance of 154.57 feet to the
POINT OF BEGINNING and containing 16,383 square feet or 0.3761 acres of land.
<PAGE> 41
SCHEDULE B
TEXAS SPECIAL WARRANTY DEED
FORM SUBJECT TO COMMENTS FROM LOCAL COUNSEL
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attention: William R. Lindsay
================================================================================
TEXAS SPECIAL WARRANTY DEED
THIS Special Warranty Deed (this "DEED") is made this ____ day of
_____________, 1997, by JAGEE PROPERTIES, INC., a Kansas corporation authorized
to do business in the State of Texas under the name "JaGee Real Properties,
Inc." ("Grantor") in favor of THE PRICE REIT, INC., a Maryland corporation
("Grantee"). Mailing address of Grantee is 145 South Fairfax Avenue, Fourth
Floor, Los Angeles, California 90036.
WITNESSETH, that Grantor, in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration to Grantor duly paid, the
receipt and sufficiency of which are hereby acknowledged, does by these
presents GRANT, BARGAIN, SELL and CONVEY unto Grantee and Grantee's successors
and assigns, the following described property (the "Property"):
(A) That certain real property described in Exhibit A
hereto (the "LAND"); and
(B) All improvements and fixtures owned by Seller and
located or to be located on the Land, including, without limitation, all
buildings and structures presently owned by Seller and located on the Land, all
apparatus, equipment and appliances owned by Seller and presently located on
the Land and used in connection with the operation or occupancy thereof, such
as heating and air conditioning systems and facilities used to provide any
utility services, parking services, refrigeration, ventilation, garbage
disposal, recreation or other services thereto, and Seller's interest in all
landscaping and leasehold improvements of tenants, if any, which become the
property of the owner of the Land (the "IMPROVEMENTS");
SUBJECT TO only such matters as may be set forth in any title
insurance policy received by Buyer concurrently herewith (the "PERMITTED
EXCEPTIONS"). Taxes having been prorated, Grantee assumes the obligation to
pay all ad valorem taxes and assessments for 1997.
TO HAVE AND TO HOLD the Property with all and singular the tenements,
hereditaments and appurtenances thereto belonging or in any wise appertaining,
unto Grantee and
<PAGE> 42
Grantee's successors and assigns, forever, Grantor hereby covenanting that the
Property is free and clear from any encumbrance done or suffered by Grantor
except as set forth above, and that Grantor will warrant and defend title to
the Property unto Grantee and Grantee's successors and assigns forever against
the claims and demands of persons claiming or to claim the same by, through or
under Grantor, but not otherwise, subject to the Permitted Exceptions.
For the same consideration, Grantor grants, bargains, sells and
conveys to Grantee, without any warranty of title, either express or implied,
all of Seller's interest in all rights, privileges and easements appurtenant to
and for the benefit of the Land, including, without limitation, all minerals,
oil, gas and other hydrocarbon substances on and under the Land, as well as all
development rights, air rights, water, water rights and water stock relating to
the Land and any other easements, rights-of-way or appurtenances owned by
Seller and used in connection with the beneficial operation, use and enjoyment
of the Land or the Improvements or any other appurtenance, together with all
rights of Seller in and to public and private streets, roads, avenues, alleys
and passageways, sidewalks, driveways, parking areas and areas adjacent thereto
or used in connection therewith (open or proposed, in front of or abutting the
Land), and all rights of Seller in any land lying in the bed of any existing or
proposed street adjacent to the Land, all strips or gores of land adjoining the
Land, and any awards made or to be made and any unpaid award for damage to the
Land by reason of any change of grade of any such street, road, avenue, alley
or passageway.
IN WITNESS WHEREOF, the Grantor has caused this Deed to be executed
and delivered as of the date first above written.
JAGEE PROPERTIES, INC.
By:______________________________________
Richard F. Garvey, President
STATE OF TEXAS Section
Section
COUNTY OF ___________ Section
This instrument was acknowledged before me on ___________, 1997, by
Richard F. Garvey, President of JaGee Properties, Inc., a Kansas corporation
authorized to do business in Texas under the name "JaGee Real Properties,
Inc.", on behalf of said corporation.
[ SEAL ]
__________________________________________
Notary Public, State of Texas
My Commission Expires: ___________________
<PAGE> 43
SCHEDULE C
ASSIGNMENT AND ASSUMPTION OF LEASE AND RENTS
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attention: William R. Lindsay
================================================================================
ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
For valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, JAGEE PROPERTIES, INC., a Kansas corporation authorized to
do business in the State of Texas under the name "JaGee Real Properties, Inc."
("Assignor"), hereby assigns, sets over, transfers and delegates to THE PRICE
REIT, INC., a Maryland corporation ("Assignee"), all of the landlord's right,
title, interest, claim and estate in and to all leases, occupancy agreements
and similar agreements, together with all modifications, extensions and
renewals thereof, all security therefor, and all guaranties of any of the
foregoing (collectively, the "Leases") which demise all or an part of, or
interest in, the real property more particularly described on Exhibit A
attached hereto and incorporated herein (the "Land"), together with all income,
receipts, funds and revenues of any kind whatsoever payable on or after the
date of this Assignment to Assignor under the Leases or otherwise with respect
to the Land (the "RENTS").
Assignee hereby assumes all of Assignor's obligations under or with
respect to the Leases described on Exhibit B attached hereto, which obligations
arise out of and relate to the period commencing on the date hereof. Assignee
hereby agrees to indemnify, defend, protect and hold Assignee harmless from and
against any and all loss, claim, obligation, cost or expense (including without
limitation reasonable attorneys fees) relating to or in connection with any
obligations of the landlord under the Leases, which obligations arise out of
and relate to the period commencing on or after the date hereof. Assignor
hereby agrees to indemnify, defend, protect and hold Assignee harmless from and
against any and all loss, claim, obligation, cost or expense (including without
limitation reasonable attorneys fees) relating to or in connection with any
obligations of the landlord under the Leases, which obligations arise out of or
relate to the period prior to the date hereof.
If any litigation between Assignor and Assignee arises out of the
obligations of the parties under this Assignment or concerning the meaning or
interpretation of any provision contained herein, the losing party shall pay
the prevailing party's costs and expenses of such litigation including, without
limitation, reasonable attorneys' fees. Any such attorneys' fees and other
expenses incurred by either party in enforcing a judgment in its favor under
this Assignment shall be recoverable separately from and in addition to any
other amount included in such judgment,
<PAGE> 44
and such attorneys' fees obligation is intended to be severable from the other
provisions of this Assignment and to survive and not be merged into any such
judgment.
This Assignment may be executed and delivered in any number of
counterparts, each of which so executed and delivered shall be deemed to be an
original and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement
effective as of this ______ day of _______________, 1997.
ASSIGNOR:
JAGEE PROPERTIES, INC.
By: ______________________________
Richard F. Garvey, President
ASSIGNEE:
THE PRICE REIT, INC.
By:_______________________
Its:
<PAGE> 45
SCHEDULE D
BILL OF SALE
For valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, JAGEE PROPERTIES, INC., a Kansas corporation authorized to
do business in the State of Texas under the name "JaGee Real Properties, Inc."
("Seller"), hereby transfers, conveys and assigns to THE PRICE REIT, INC., a
Maryland corporation ("Buyer"), and its successors and assigns forever, any and
all tangible personal property owned by Seller and located on or about and used
in connection with the real property more particularly described on Exhibit A
attached hereto and made a part hereof (the "Property") or any improvements
thereon, including but not limited to fixtures, furnishings, furniture, tools
machinery and/or equipment, operational instructions and/or specifications,
surveys, drawings, business records and the personal property listed on any
schedule attached hereto.
If any litigation between Seller and Buyer arises out of the
obligations of the parties under this Bill of Sale or concerning the meaning or
interpretation of any provision contained herein, the losing party shall pay
the prevailing party's costs and expenses of such litigation including, without
limitation, reasonable attorneys, fees. Any such attorneys' fees and other
expenses incurred by either party in enforcing a judgment in its favor under
this Bill of Sale shall be recoverable separately from and in addition to any
other amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Bill of Sale and to
survive and not be merged into any such judgment.
IN WITNESS WHEREOF, Seller has caused this instrument to be executed
and delivered as of this ______ day of __________, 1997.
JAGEE PROPERTIES, INC.
By:______________________________________
Richard F. Garvey, President
<PAGE> 46
SCHEDULE E
ASSIGNMENT OF CONTRACTS, INTANGIBLE PROPERTY,
WARRANTIES AND GUARANTEES
THIS ASSIGNMENT OF CONTRACTS, INTANGIBLE PROPERTY, WARRANTIES AND
GUARANTIES (this "Assignment") is made as of the day of , 1997, by JAGEE
PROPERTIES, INC., a Kansas corporation authorized to do business in the State
of Texas under the name "JaGee Real Properties, Inc." ("Assignor"), in favor of
THE PRICE REIT, INC., a Maryland corporation ("Assignee").
RECITALS;
Pursuant to that certain Purchase and Sale Agreement and Escrow
Instructions dated as of February _____________________, 1997 by and between
Assignor, Assignee and Safeco Land Title Company (the "Agreement"), Assignee
has this day acquired from Assignor certain interests in land, buildings and
improvements more particularly described on Exhibit A attached hereto and made
a part hereof (the "Property"). Capitalized terms not otherwise defined herein
shall have the meanings given them in the Agreement.
In consideration of the acquisition of the Property by Assignee and
other good and valuable consideration, the mutual receipt and legal sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
Assignor hereby assigns, transfers and delegates to Assignee all of
Assignor's right, title and interest in and to the following (collectively, the
"Assigned Property"): (i) any intangible personal property which relates to
and is reasonably required for the operation and functioning of the Land,
Improvements or Personal Property, including without limitation all
transferable licenses and governmental approvals and permits of any nature
relating to the Property or the Improvements or any repairs or renovations to
such Improvements, and (ii) any and all warranties, guaranties, contracts and
other rights owned by Assignor relating to the ownership, operation or
functioning of all or any part of the Property (including without limitation
all third party guarantees and warranties, express or implied, in connection
with the construction of the Improvements and any deposits given by Assignor in
connection with the installation or provision of utility services, to the
extent such deposits have not been returned to Assignor as of the date hereof).
Assignee hereby assumes all of Assignor's obligations under or with respect to
the Contracts described on Exhibit B attached hereto, which obligations arise
out of and relate to the period commencing on the date hereof.
If any litigation between Assignor and Assignee arises out of the
obligations of the parties under this Assignment or concerning the meaning or
interpretation of any provision contained herein, the losing party shall pay
the prevailing party's costs and expenses of such litigation including, without
limitation, reasonable attorneys, fees. Any such attorneys' fees and other
expenses incurred by either party in enforcing a judgment in its favor under
this Assignment shall be recoverable separately from and in addition to any
other amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Assignment and to
survive and not be merged into any such judgment.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment effective as of the date set forth below.
ASSIGNOR:
JAGEE PROPERTIES, INC.
By:____________________________________
Richard F. Garvey, President
<PAGE> 47
SCHEDULE F
CERTIFICATION OF NON-FOREIGN STATUS
(Foreign Investment in Real Property Tax Act)
Internal Revenue Code Section 1445 provides that a transferee of a
United States real property interest must withhold tax if the transferor is a
foreign person. To inform THE PRICE REIT, INC. ("Transferee") that withholding
of tax is not required upon the disposition of a United States real property
interest by the undersigned ("Transferor"), Transferor hereby certifies and
declares as follows:
1. Transferor's U.S. tax identification/social security number
is: ______________________________________________________________;
2. Transferor's principal office address is 3228 Camp Bowie
Boulevard, Fort Worth, Texas 76102; and
3. Transferor is not a foreign person (foreign corporation,
foreign partnership, foreign trust, foreign estate or non-resident alien), as
defined in the Internal Revenue Code and Income Tax Regulations.
Transferor acknowledges that this certification may be disclosed by
Transferee to the Internal Revenue Service and that any false statement
contained in this certification may be punished by fine or imprisonment or
both.
Transferor understands that Transferee is relying on this
certification to determine whether withholding is required by Transferee
pursuant to Internal Revenue Code Section 1445.
Under penalties of perjury, the undersigned signatory declares that:
I have examined this certification, to the best of my knowledge and belief it
is true and complete, and I am duly authorized to execute this certification on
behalf of Transferor.
Dated: __________________, 1997
JAGEE PROPERTIES, INC.
By:____________________________________
Its:
<PAGE> 48
SCHEDULE G
TENANT ESTOPPEL CERTIFICATE
THIS TENANT ESTOPPEL CERTIFICATE ("Certificate"), dated as of
_____________, 1997, is executed by ________________________ ("Tenant") in
favor of THE PRICE REIT, INC. ("Buyer").
R E C I T A L S
A. Buyer and JAGEE PROPERTIES, INC. ("Landlord"), have entered
into that certain Purchase and Sale Agreement and Escrow Instructions, dated as
of February ___, 1997 (the "Purchase Agreement"), whereby Buyer has agreed to
purchase, among other things, the improved real property located in the City of
Richardson, State of Texas, more particularly described on Schedule "A"
attached to the Purchase Agreement (the "Property").
B. Tenant and Landlord have entered into that certain Lease
Agreement, dated as of ________________ (together with all amendments,
modifications, supplements, guarantees and restatements thereof, the "Lease"),
for a portion of the Property.
C. Pursuant to the Lease, Tenant has agreed that upon the request
of Landlord, Tenant would execute and deliver an estoppel certificate
certifying the status of the Lease.
D. In connection with the Purchase Agreement, Landlord has
requested that Tenant execute this Certificate.
NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer as
follows:
AGREEMENT
Section 1. Lease.
Attached hereto as Exhibit "A" is a true, correct, and complete copy
of the Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements. guarantees and restatements thereof:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 2. Leased Premises.
Pursuant to the Lease, Tenant leases those certain Premises (the
"Leased Premises") consisting of approximately ______________________
(______________) rentable square feet within the Property, as more particularly
described in the Lease. In addition, pursuant to the terms of the Lease,
Tenant has the [non-exclusive] right to use [___________ parking spaces/the
<PAGE> 49
parking area] located on the Property during the term of the Lease. [Cross-out
the preceding sentence or portions thereof if inapplicable.]
Section 3. Full Force of Lease.
The Lease is in full force and effect, has not been terminated, and is
enforceable in accordance with its terms.
Section 4. Complete Agreement
The Lease constitutes the complete agreement between Landlord and
Tenant for the Leased Premises and the Property.
Section 5. Acceptance of Leased Premises.
Tenant has accepted and is currently occupying the Leased Premises.
Section 6. Lease Term.
The term of the Lease commenced on _____________________ and ends on
_______________________, subject to the following options to extend:
________________________________________________________________________________
(If none, please state "None.")
Section 7. Purchase Rights.
Tenant has no option, right of first refusal, right of first offer, or
other right to purchase all or any portion of the Leased Premises or all or any
portion of the Property, except as follows:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 8. Rights of Tenant.
Except as expressly stated in this Certificate, Tenant:
(a) has no right to renew or extend the term of the Lease;
(b) has no option or other right to purchase all or any part of
the Leased Premises or all or any part of the Property;
(c) has no right, title, or interest in the Leased Premises, other
than as Tenant under the Lease.
Section 9. Rent.
<PAGE> 50
(a) The rent under the Lease is current, and Tenant is not in
default in the performance of any of its obligations under the Lease.
(b) Tenant is currently paying base rent under the Lease in the
amount of ________________________ Dollars ($_________) per month. Tenant has
not received and is not, presently, entitled to any abatement, refunds,
rebates, concessions or forgiveness of rent or other charges, free rent,
partial rent, or credits, offsets or reductions in rent, except as follows:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
(c) Tenant's estimated share of operating expenses, common area
charges, insurance, real estate taxes and administrative and over-head expenses
is ___________ percent (______%) and is currently being paid at the rate of
____________________________________ Dollars ($__________) per month, payable
to ______________________________________________.
(d) There are no existing defenses or offsets against rent due or
to become due under the terms of the Lease, and there presently is no default
or other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Leased Premises, except as follows:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 10. Security Deposit.
The amount of Tenant's security deposit held by Landlord under the
Lease is _________________________________ Dollars ($_____________).
Section 11. Prepaid Rent.
The amount of prepaid rent, separate from the security deposit, is
__________________________________ Dollars ($_____________), covering the
period from ________ to ________.
Section 12. Insurance.
All insurance, if any, required to be maintained by Tenant under the
Lease is presently in effect.
Section 13. Pending Actions.
There are no actions, whether voluntary or otherwise, pending against
the Tenant (or any guarantor of the Tenant's obligations under the Lease)
pursuant to the bankruptcy or insolvency laws of the United States or any state
thereof.
<PAGE> 51
Section 14. Landlord's Obligations
As of the date of this Certificate, Landlord has performed all
obligations required of Landlord pursuant to the Lease and no offsets.
counterclaims, or defenses of Tenant under the Lease exist against Landlord.
As of the date of this Certificate, no events have occurred that, with the
passage of time or the giving of notice, would constitute a basis for offsets,
counterclaims, or defenses against the Landlord, except as follows:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
(If none, please state "None.")
Section 15. Assignments by Landlord.
Tenant has received no notice of any assignment, hypothecation or
pledge of the Lease or rentals under the Lease by Landlord.
Section 16. Assignments by Tenant.
Tenant has not sublet or assigned the Leased Premises or the Lease or
any portion thereof to any sublessee or assignee. No one except Tenant and its
employees will occupy the Leased Premises except as permitted under the Lease.
The address for notices to be sent to Tenant is as set forth in the Lease.
Section 17. Environmental Matters.
The operation and use of the Leased Premises does not involve the
generation, treatment, storage, disposal or release into the environment of any
hazardous materials, regulated materials and/or solid waste, except those used
in the ordinary course of operating a retail store or restaurant (if so
permitted by the Lease) or otherwise used in accordance with all applicable
laws.
Section 18. Notification by Tenant.
From the date of this Certificate and continuing until the earlier to
occur of (i) March 31, 1997 and (ii) Buyer's acquisition of title to the
Property, Tenant agrees to immediately notify Buyer, in writing, at the
following address, on the occurrence of any event or the discovery of any fact
that would make any representation contained in this Certificate inaccurate:
The PRICE REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
Attn.: Joseph Kornwasser
Fax No.: (213) 937-8175
<PAGE> 52
Tenant makes this Certificate with the knowledge that it will be
relied upon by Buyer in agreeing to purchase the Property. In the event that
Buyer acquires the Property, nothing in this Section 18 shall limit Tenant's
obligations under the Lease.
Tenant his executed this Certificate as of the date first written
above by the person named below, who is duly authorized to do so.
TENANT
__________________________________
By:_______________________________
Name:
Its:
<PAGE> 53
SCHEDULE H
RENT ROLL
Attached.
SCHEDULE H
<PAGE> 54
<TABLE>
<CAPTION>
RICHARDSON PLAZA SHOPPING CENTER
LEASE SYNOPSIS
===================================================================================================================================
TENANT SIZE TERM RENT OPTIONS PERCENTAGE COMMENCEMENT TENANT
(IN SQUARE RENT DATE REIMBURSEMENTS
FEET)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OfficeMax, Inc. 30,676 15 years yrs 1-15 @ $268,415 yrs 16-20 @ $283,753 none 11/1/96 Tenant pays all
yrs 21-25 @ $299,091 taxes, insurance,
yrs 26-30 @ $314,492 and CAM
- -----------------------------------------------------------------------------------------------------------------------------------
North Hydraulics, Inc. 23,700 10 years yrs 1-2 @ $130,350 yrs 11-15 @ $177,250 3.5% 9/19/94 Tenant pays all
yrs 3-5 @ $154,050 yrs 16-20 @ $189,600 taxes, insurance,
yrs 6-7 @ $165,900 and CAM (CAM has
yrs 8-10 @ $171,825 a not-to-exceed
figure that
adjusts annually)
- -----------------------------------------------------------------------------------------------------------------------------------
Bally's Fitness Center 29,322 15 years yrs 1-5 @ $205,254 yrs 16-20 @ $278,559 none 7/15/94 Tenant pays all
yrs 6-10 @ $227,246 yrs 21-25 @ $307,881 taxes, insurance,
yrs 11-15 @ $249,237 and CAM
- -----------------------------------------------------------------------------------------------------------------------------------
Standex International 20,000 10 years yrs 1-5 @ $150,000 yrs 11-13 @ $180,000 none 2/1/97 Tenant pays all
Corp. d/b/a Berean yrs 6-10 @ $165,000 taxes, insurance
Stores and CAM
- -----------------------------------------------------------------------------------------------------------------------------------
Color Tile Supermart, 4,731 20 years yrs 1-10 @ $25,200 yrs 21-25 @ .5 CPI 4% 5/23/80 Free-standing
Inc. yrs 11-20 @ $30,000 yrs 26-30 @ .5 CPI building; Tenant
pays all costs
- -----------------------------------------------------------------------------------------------------------------------------------
McDonalds Corporation 2,975 20 years yrs 1-5 @ $42,500 yrs 21-25 @ $59,895 none 4/1/94 Ground lease;
yrs 6-10 @ $45,000 yrs 26-30 @ $65,884 Tenant pays all
yrs 11-15 @ $49,500 yrs 31-35 @ $72,473 costs
yrs 16-20 @ $54,450 yrs 36-40 @ $79,720
- -----------------------------------------------------------------------------------------------------------------------------------
Grandy's, Inc. d/b/a 4,175 20 years yrs 1-20 @ $70,500 yrs 21-25 @ $70,500 5% 1/1/84 Free-standing
Grandy's Country + .5 CPI building; Tenant
Cookin' yrs 26-30 @ $70,500 pays all costs
+ .5 CPI
===================================================================================================================================
Reference should be made to each lease for exact terms of renewal options,
calculation of percentage rent, reimbursement, and other matters.
</TABLE>
<PAGE> 55
EXHIBIT I
Listing of monthly service providers (noncontracted) for Richardson Plaza:
Mr. Sweeper
P.O. Box 560048
Dallas, Texas 75356
(214) 688-4444
Contact: Dave Franklin
Williams Landscape Service
P.O. Box 230
Allen, Texas 75013-0004
(214) 727-6153
Contact: David Williams
<PAGE> 1
EXHIBIT 2.4
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE ("AGREEMENT") is made and entered
into as of the Effective Date (as hereinafter defined) between OAK CREEK
PARTNERS, LTD., a Texas limited partnership ("SELLER"), and PRICE/BAYBROOK,
LTD., a Texas limited partnership ("PURCHASER"), upon the following terms and
conditions:
RECITALS
A. Seller is the owner of certain property known as the Cityplace
Market located in the Cityplace Development, Dallas, Dallas County, Texas;
B. Seller desires to sell, transfer and convey such property
according to the provisions set forth below; and
C. Purchaser desires to purchase such property according to the
provisions set forth below.
AGREEMENTS
In consideration of the premises and the mutual representations,
covenants, undertakings and agreements contained below, Seller and Purchaser
represent, covenant, undertake and agree as follows:
SECTION 1. AGREEMENT TO SELL. Seller hereby agrees to sell to
Purchaser, and Purchaser hereby agrees to purchase from Seller, for the
Purchase Price (as hereinafter defined) on and subject to the terms and
conditions set forth in this Agreement, all of Seller's right, title and
interest in and to the following:
1.1 Land. That certain real property (the "LAND") described in
Exhibit "A" hereto;
1.2 Appurtenances. All rights, privileges and easements
appurtenant to and for the benefit of the Land, if any, including, without
limitation, all minerals, oil, gas and other hydrocarbon substances on and
under the Land, as well as all development rights, air rights, water, water
rights and water stock relating to the Land and any other easements,
rights-of-way or appurtenances owned by Seller and used in connection with the
beneficial operation, use and enjoyment of the Land, the Leases, the Rents, the
Improvements, the Intangible Property, or any other appurtenance, together with
all rights of Seller in and to public and private streets, roads, avenues,
alleys and passageways, sidewalks, driveways, parking areas and areas adjacent
thereto or used in connection therewith (open or proposed, in front of or
abutting the Land), and all rights of Seller in any land lying in the bed of
any existing or proposed street adjacent to the Land, all strips or gores of
land adjoining the Land, and any awards made or to be made and any unpaid award
for damage to the Land by reason of any change of grade of any such street,
road, avenue, alley or passageway (all of which are collectively referred to as
the "APPURTENANCES");
<PAGE> 2
1.3 Improvements. All improvements and fixtures located or to be
located on the Land, including, without limitation, all buildings and
structures presently located on the Land or to be located thereon on the
Closing Date, all apparatus, equipment and appliances presently located on the
Land and permanently affixed thereto and used in connection with the operation
or occupancy thereof, such as heating and air conditioning systems and
facilities used to provide any utility services, parking services,
refrigeration, ventilation, garbage disposal, recreation or other services
thereto, and all landscaping and leasehold improvements of tenants, if any,
which are permanently affixed to the Land and therefore constitute property of
the owner of the Land (all of which are collectively referred to as the
"IMPROVEMENTS");
1.4 Leases and Rents. All leases, occupancy agreements and other
similar agreements to which Seller is a party or by which it is bound as
identified on Exhibit "B" attached hereto with respect to or demising any part
of the Land, Appurtenances or Improvements, together with all modifications,
extensions and renewals thereof, and any guarantees of any of the foregoing
(the "LEASES"), all income, receipts, funds and revenues of any kind whatsoever
payable under the Leases or otherwise with respect to all or any portion of the
Land, Appurtenances or Improvements (the "RENTS");
1.5 Personal Property. All tangible personal property, if any,
located or to be located on, or situated or to be situated in and used in
connection with, the Land and/or the Improvements ("PERSONAL PROPERTY"), and
all of which Personal Property shall be transferred and assigned to Purchaser
pursuant to an instrument in the form of Exhibit "C" hereto (the "BILL OF
SALE");
1.6 Intangible Property. All of the interest of Seller in (i) any
intangible personal property which relates to and is reasonably required for
the operation and functioning of the Land, Improvements or Personal Property
generally; provided, however, Purchaser's use of the name "Cityplace Market"
shall be controlled by the provisions of Section 1.7 below, and (ii) to the
extent assignable, any and all warranties, guarantees, permits, contracts and
other rights owned by Seller relating to the ownership, operation or
functioning of all or any part of the Property, as defined below (including
without limitation all third party guarantees and warranties, express or
implied, in connection with the construction of the Improvements) (all of which
are collectively referred to as the "INTANGIBLE PROPERTY"), and all of which
shall be assigned to Purchaser pursuant to the Bill of Sale; and
1.7 Tradename License. A nonexclusive, irrevocable and
transferable license ("LICENSE") to use the name "CITYPLACE MARKET" and similar
names and related logos in connection with the ownership and operation of the
Property; provided, however, (i) Purchaser acknowledges that Seller is the
developer of the overall Cityplace project in Dallas, Texas, and in conjunction
therewith, owns and will continue to have exclusive ownership of certain
rights, titles and interests in and to the name "Cityplace" and related logos
("CITYPLACE TRADENAME"); (ii) the grant of the License shall in no way grant
any rights to any person or entity in and to the Cityplace Tradename other than
to own, operate, promote, market and conduct business with respect to the Land
and Improvements under the name "CITYPLACE MARKET"; (iii) Purchaser shall not
be entitled to use the tradename "Cityplace" in any other respect or for any
other purpose;
2
<PAGE> 3
and (iv) Seller makes no warranty as to the nature or extent of its ownership
of the Cityplace Tradename and will not be required to defend the License if it
is challenged by third parties (except to the extent that Seller shall have
previously conveyed rights with respect thereto that are inconsistent with the
License).
All of the items described in Sections 1.1, 1.2, 1.3, 1.4, 1.5, 1.6
and 1.7 above are hereinafter collectively referred to as the "PROPERTY." The
items described in Sections 1.1, 1.2, and 1.3 above are hereinafter referred to
collectively as the "REAL PROPERTY."
SECTION 2. PURCHASE PRICE AND EARNEST MONEY.
A. The purchase price ("PURCHASE PRICE") to be paid by Purchaser
to Seller for the Property is EIGHT MILLION SEVEN HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($8,750,000.00).
B. The Purchase Price shall be payable in cash or cash equivalent
at the Closing (as hereinafter defined).
C. Contemporaneously with the execution and delivery of this
Agreement by Purchaser, Purchaser shall deliver to Title Company (as
hereinafter defined) a copy of this Agreement and a certified or cashier's
check or other means of funding acceptable to Seller payable to the order of
Title Company in the amount of ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000.00) ("EARNEST MONEY"), which shall be held in escrow in an
interest-bearing account in accordance with the provisions hereof. All
interest accrued on the Earnest Money shall become a part thereof, and all
further references to the Earnest Money in this Agreement shall include all
such accrued interest. In the event Purchaser does not terminate this
Agreement on or before the expiration of the Review Period (as hereinafter
defined) as provided in Section 4 hereof, the Earnest Money shall become
non-refundable to Purchaser in any event except as expressly provided in
Sections 15 and 17B hereof. Delivery of the Earnest Money as specified above
shall be a condition precedent to any of Seller's obligations under this
Agreement. If the transaction contemplated hereby is consummated in accordance
with the terms and provisions hereof, the Earnest Money shall be applied to the
Purchase Price at the Closing. If the transaction is not so consummated, the
Earnest Money shall be held and delivered by the Title Company as hereinafter
provided.
SECTION 3. TITLE COMMITMENT AND SURVEY; ASSUMPTION OF
OBLIGATIONS RUNNING WITH LAND.
A. Within twenty-one (21) days after the Effective Date, Seller,
at Seller's sole cost and expense (except as set forth below), shall deliver or
cause to be delivered to Purchaser the following:
1. Owner's Commitment for Title Insurance ("TITLE
COMMITMENT") issued by Chicago Title Insurance Company, through its authorized
agent, Republic Title of Texas, Inc., 300 Crescent Court, Suite 100, Dallas,
Texas 75201 ("TITLE COMPANY"), which Title
3
<PAGE> 4
Commitment shall set forth the status of the title of the Land and shall show
all encumbrances and other matters, if any, relating to the Land; and
2. A legible copy of all documents referred to in the
Title Commitment, including but not limited to plats, reservations,
restrictions, and easements.
B. Within twenty-one (21) days after the Effective Date, Seller
shall deliver to Purchaser a new or updated survey of the Land and Improvements
dated no earlier than six (6) months prior to the Effective Date, prepared by
Kimley-Horn Associates, Inc., certified to Purchaser and Title Company, showing
all Improvements and all easements and encroachments shown by the Title
Commitment as affecting the Land ("SURVEY"). If the Closing occurs and
Purchaser performs all of its obligations hereunder, Seller shall pay for the
cost of the Survey. If the Closing does not occur hereunder for any reason
other than a default by Seller (whether as a result of a default by Purchaser
or a termination by Purchaser pursuant to an express right hereunder) then
Purchaser shall be solely responsible for the cost of the Survey. If Purchaser
terminates this Agreement pursuant to an express right hereunder to terminate
entitling Purchaser to a return of Earnest Money, the cost of the Survey
(unless such cost has theretofore been paid by Purchaser) shall be retained
from the Earnest Money by Title Company and Title Company shall make such
payment from such retained amounts.
C. Purchaser may notify Seller of any Objections ("OBJECTIONS")
to any defects, exceptions, reservations, limitations or other matters
contained in, related to or shown by the Title Commitment and/or Survey within
fifteen (15) days after receipt of all of the Title Commitment, legible copies
of the exceptions referred to therein, and Survey by Purchaser. Seller may
(but shall not be obligated to) cure Purchaser's Objections, and in no event
shall Seller be required to incur any cost or liability in connection
therewith; provided, however, that Seller shall, at its sole cost and expense,
remove all liens securing an obligation to repay borrowed money. If Seller
does not remove or otherwise resolve such Objections to Purchaser's
satisfaction within fifteen (15) days after receipt of Purchaser's Objections
("CURE PERIOD"), then Purchaser shall have the right to choose one of the
following, as its sole and exclusive remedy: (i) close escrow subject to any
such Objections, without any change in Purchaser's obligations under this
Agreement and with no reduction in the Purchase Price or (ii) terminate this
Agreement and recover the Earnest Money by sending written notice thereof to
Seller on or before three (3) days after expiration of the Cure Period,
whereupon neither party shall have any further rights or obligations. In the
event of either election, Purchaser shall have waived any right of action
against Seller in connection with such Objections. If Purchaser does not
notify Seller of any such Objections within fifteen (15) days after receipt of
the Title Commitment and Survey, Purchaser shall be deemed to have waived
Purchaser's rights under this Section and all such defects, exceptions,
reservations, limitations and other matters identified in the Title Commitment
and/or Survey shall be deemed acceptable to Purchaser. If Purchaser sends
notice of Objections, but does not exercise its right to terminate this
Agreement as provided in clause (ii) above and send the written notice thereof
to Seller within the time period described in clause (ii) above, then Purchaser
shall be deemed to have elected its remedies in clause (i) above. Any
easements, restrictions, claims, rights-of-way, encroachments or other
encumbrances or other matters whatsoever affecting the Property as shown in the
Title Commitment and/or Survey
4
<PAGE> 5
which are either not objected to by Purchaser, or that are objected to but not
cured by Seller and subsequently waived by Purchaser pursuant to this Section,
shall, together with all municipal and other governmental zoning laws,
regulations and ordinances, if any, be deemed "PERMITTED ENCUMBRANCES."
D. Reference is hereby made to that certain Cost Sharing Contract
dated January 30, 1995 and recorded in Volume 95020, Page 5137 of the Deed
Records of Dallas County, Texas concerning the sharing of costs relative to
the median within Haskell Avenue, as affected by that certain Agreement by
Operator Benefiting Owner of 10.931 Acre Tract recorded in Volume 96012, Page
3503 of the Deed Records of Dallas County, Texas (collectively the "COST
SHARING AGREEMENT"). If the Closing occurs hereunder and the Cost Sharing
Agreement is a Permitted Encumbrance, Purchaser shall assume Seller's
obligations as the "Operator" under the Cost Sharing Agreement, as more
particularly described therein arising on and after, and relating to the period
after, the Closing. At the Closing, Purchaser shall enter in an Assumption of
Cost Sharing Agreement ("ASSUMPTION OF COST SHARING AGREEMENT") in form and
substance reasonably satisfactory to Seller and Purchaser, confirming
Purchaser's assumption of Seller's obligations as "Operator" under the Cost
Sharing Agreement.
E. Purchaser acknowledges that the Property is subject to the
terms and conditions of that certain Operation and Easement Agreement dated
December 17, 1992, and recorded in Volume 92247, Page 6039, of the Deed Records
of Dallas County, Texas (as amended, the "OPERATION AND EASEMENT AGREEMENT")
concerning certain reciprocal rights and obligations with respect to the
Property and the adjacent property owned by Dayton Hudson Corporation. If the
transaction hereunder closes and the Operating and Easement Agreement is a
Permitted Encumbrance, then, in such event (i) Purchaser, as the owner of the
Property, shall be subject to the reimbursement and other obligations as a
"Party" under the Operation and Easement Agreement with respect to the Property
with respect to the period commencing upon the Closing, (ii) Purchaser agrees
that Purchaser shall assume all obligations of Seller as the "Developer" under
the Operation and Easement Agreement, which obligations arise after and relate
to the period after the Closing, and (iii) at the Closing, Purchaser shall
execute an agreement ("CONFIRMATION OF OEA OBLIGATIONS"), in form and substance
reasonably satisfactory to Seller and Purchaser, confirming Purchaser's
obligations as the owner of the Property under the Operation and Easement
Agreement and Purchaser's assumption of the obligations of Developer under the
Operation and Easement Agreement.
SECTION 4. CONDITIONS TO PERFORMANCE.
A. Purchaser's Review Period. In the event that the Purchaser is
not satisfied in Purchaser's discretion with each of the following conditions
set forth in this Section 4.A. (collectively, the "CONDITIONS"), Purchaser
shall have the option at any time before the expiration of thirty (30) days
after the Effective Date ("REVIEW PERIOD") to choose one of the following as
its sole and exclusive remedy: (i) terminate this Agreement by sending written
notice thereof to Seller prior to expiration of the Review Period, and on such
termination, Purchaser shall be entitled to the return of the Earnest Money
(less any amounts withheld pursuant to Section 3B) and neither party hereto
shall have any further rights or obligations
5
<PAGE> 6
hereunder, or (ii) elect to waive any of the Conditions and consummate this
transaction, but with no change in any of Purchaser's obligations hereunder and
with no reduction in the Purchase Price. In the event Purchaser does not
terminate this Agreement on or before the expiration of the Review Period as
specified in this Section, the Earnest Money shall become non-refundable to
Purchaser in any event except as expressly provided in Sections 15 and 17B.
4.1 Review and Approval of Title and Survey. There shall be no
exceptions to title to the Property other than the Permitted Encumbrances.
4.2 Review and Approval of Other Matters. In connection with
Purchaser's review of other matters, Seller shall deliver to Purchaser, within
fifteen (15) business days after the date of this Agreement, true, complete and
correct copies of the following items, to the extent in Seller's or Seller's
manager's possession and relevant to Seller's development and leasing of the
Property:
(a) A copy of a Report of Phase I Environmental Site
Assessment Update dated June 1, 1994, and prepared by Law Engineering, Inc.,
along with a copy of the Phase I Environmental Site Assessment referenced
therein ("PHASE I ASSESSMENT") with respect to the Property, Seller hereby
acknowledging to Purchaser that the Phase I Assessment is the only
environmental report obtained by Seller concerning the Property;
(b) Copies of subdivision maps and condominium plans, if
any;
(c) Copies of all approvals, permits and licenses
relating to the Property, if any;
(d) Copies of all correspondence, documents and
certificates from appropriate governmental authorities relating to the zoning,
building and platting status of the Property, if any;
(e) Copies of any service contracts relating to the
Property;
(f) Copies of the real property and personal property tax
bills for the Property for the previous two (2) years;
(g) Copies of all tenant leases and proposed tenant
leases, if any, on the Property;
(h) Copies of all plans and construction drawings for all
buildings constructed or to be constructed on the Property; and
(i) Copies of all insurance policies maintained by Seller
with respect to the Property within the last two (2) years, which policies may
be in the form of umbrella policies maintained by or on behalf of Seller on
various properties, including the Property.
6
<PAGE> 7
4.3 Service and Other Contracts. Purchaser's review and approval,
in its sole and absolute discretion, of all utility contracts, water and sewer
service contracts, service contracts, warranties, permits, soils reports, and
other contracts or documents of any nature relating to the Property or any
portion thereof (the "CONTRACTS"; those Contracts which Purchaser approves in
writing prior to the end of the Review Period (and prior to the Closing Date in
the case of contracts not entered into or delivered to the Purchaser until
after the expiration of the Review Period) shall be referred to as the
"APPROVED CONTRACTS"). Purchaser's sole remedies if it disapproves any
Contract(s) shall be (i) to the extent such disapproved Contract(s) can be
terminated, to request that Seller terminate such disapproved Contract(s) at
the Closing, which Seller hereby agrees to do at the sole cost and expense of
Purchaser if so requested by Purchaser, or (ii) to the extent Seller cannot
terminate such disapproved Contract(s), Purchaser shall have the option, which
must be exercised within ten (10) days of Purchaser's receipt of Seller's
notice to Purchaser that Seller cannot terminate such disapproved Contract(s)
but in no event beyond the conclusion of the Review Period, (a) to waive
Purchaser's disapproval of the Contract(s) and purchase the Property as
otherwise in this Agreement, and Seller shall convey the Property to Purchaser,
or (b) to terminate this Agreement by written notice to Seller and Title
Company, any and all right and obligations of Purchaser and Seller hereunder
shall thereupon terminate.
4.4 Governmental Permits, Approvals and Regulations. Purchaser
shall have confirmed that all governmental permits and approvals with respect
to the Property relating to the zoning, entitlements, construction, operation,
use or occupancy of the Property or any portion thereof, are in full force and
effect.
4.5 Approval of Purchaser's Board of Directors. This Agreement
and the transactions contemplated hereby shall have been approved by
Purchaser's board of directors (the "PURCHASER APPROVAL").
4.6 Tenant Matters. Purchaser shall have received and approved
written estoppel statements, in substantially the form as that attached hereto
as Exhibit "D," from each of the tenants under any Lease demising 5,000 or more
square feet of the Improvements, and tenants holding Leases upon not less than
eighty-five percent (85%) of the remaining gross leasable area in the Property.
Each such estoppel statement shall be in form and substance reasonably
acceptable to Purchaser. Purchaser acknowledges the existence of a default
under the Lease to Stuart Stores, Inc. resulting from the filing of a
bankruptcy proceeding ("STUART'S BANKRUPTCY") by Stuart Stores, Inc. and its
parent company, Petrie Stores, Inc. Purchaser agrees that it will not object
to the form of estoppel received from Stuart Stores, Inc. regarding its Lease
to the extent, and solely to the extent, of any disclaimers contained in such
estoppel related to the Stuart's Bankruptcy.
4.7 OEA Estoppels. Purchaser shall have received and approved a
written estoppel statement from Dayton Hudson Corporation related to the
Operation and Easement Agreement ("OEA ESTOPPEL") substantially in the form of
Exhibit "E" attached hereto. Such estoppel statement shall be in form and
substance reasonably acceptable to Purchaser.
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4.8 Representations and Warranties. All of Seller's
representations and warranties contained in Section 11 shall be true and
correct in all material respects as of the Closing Date.
4.9 Seller's Obligations. Seller shall not be in default of any
material obligations under any of the Leases or other material agreements
relating to the ownership and operation of the Property at the time of Closing.
B. Seller's Conditions to Closing.
The following conditions are conditions precedent to Seller's
obligation to sell the Property:
Delivery of Documents and Purchase Price. Purchaser's due and timely
execution and delivery of all documents and items to be executed and delivered
by Purchaser (including without limitation the Purchase Price) pursuant to this
Agreement, including without limitation all of the documents and items
specified in Section 5.B.2 below.
SECTION 5. CLOSING.
A. The Closing ("CLOSING") of the sale of the Property by Seller
to Purchaser shall occur in the office of the Title Company, 300 Crescent
Court, Suite 100, Dallas, Texas 75201, on the date which is fifteen (15) days
after the expiration of the Review Period, but in no event later than April 1,
1997 ("CLOSING DATE").
B. At the Closing, all of the following shall occur, all of which
shall be deemed concurrent conditions:
1. Seller, at Seller's sole cost and expense, shall
deliver or cause to be delivered to Purchaser the following:
a. A Special Warranty Deed ("DEED"), in form and
substance identical to that attached hereto as EXHIBIT "F" and by this
reference made a part hereof, fully executed and acknowledged by Seller,
conveying to Purchaser title to the Property, subject to the Permitted
Encumbrances.
b. A TLTA Owner Policy of Title Insurance,
together with such endorsements as may be available under applicable Texas
title insurance regulations ("OWNER POLICY") issued by Title Company to
Purchaser in the amount of the Purchase Price insuring that, after the
completion of the Closing, Purchaser is the owner of indefeasible fee simple
title to the Property, subject to the Permitted Encumbrances and the standard
printed exclusions and exceptions included in a Texas Standard Form Owner
Policy of Title Insurance, but with the survey exception as to areas and
boundaries limited to "shortages in area."
c. Assignment and Assumption of Leases and
Contracts ("ASSIGNMENT AND ASSUMPTION OF LEASES AND CONTRACTS"), in form and
substance identical to that attached
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hereto as EXHIBIT "G," and by this reference made a part hereof, fully executed
and acknowledged by Seller, conveying to Purchaser the Leases and Contracts.
d. Evidence reasonably satisfactory to Purchaser
and the Title Company that the person executing the closing documents on behalf
of Seller has full right, power, and authority to do so.
e. Tenant Notice Letters ("TENANT NOTICE
LETTERS") to be sent to each tenant under the Leases ("TENANT") (i) notifying
such Tenants of the change in ownership with respect to the Property, (ii)
instructing such Tenants to perform all future obligations under the Leases to
Purchaser and (iii) advising the Tenants of the transfer to Purchaser of
applicable prepaid rent, security or cleaning deposits, and acknowledging
Purchaser's future responsibility for the same.
f. The Bill of Sale duly executed by Seller.
g. Originals or copies of any assignable
warranties and guaranties received by Seller and to be assigned to Purchaser,
from any contractors, subcontractors, suppliers or materialmen in connection
with any construction, repairs or alterations of the Improvements or any tenant
improvements.
h. Originals or copies of all certificates of
occupancy for the Improvements.
i. All existing as-built plans and
specifications, if any, for the Improvements in the possession of Seller or its
manager.
j. A closing statement prepared by Title Company
in form and content consistent with this Agreement and otherwise reasonably
satisfactory to Purchaser and Seller.
k. Seller's executed certificate in the form
attached hereto as EXHIBIT "H" (the "NON-FOREIGN CERTIFICATE") stating, under
penalty of perjury, that (i) Seller is not a "foreign person" for the purposes
of Section 1445 of the Internal Revenue Code of 1986, as amended (the "CODE"),
and that withholding of tax will not be required thereunder, and (ii)
withholding is not required under the provisions of any state laws in
connection with the contemplated transfer of the Property by Seller to
Purchaser.
l. Complete originals of the Leases with respect
to the Property and, to the extent in Seller's or its manager's possession,
copies of all records, books of account, ledgers, statements and other business
records relating to the ownership and operation of the Property and/or the
administration of the Leases, in whatever mode maintained, including
information contained on computer disks.
2. Purchaser, at Purchaser's sole cost and expense,
shall deliver or cause to be delivered to Seller the following:
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a. A certified or cashier's check or such other
means of funding acceptable to Seller, payable to the order of Seller in an
amount of money equal to the Purchase Price less the Earnest Money (which shall
be applied to the Purchase Price).
b. The Assignment and Assumption of Leases and
Contracts executed and delivered by Purchaser.
c. The Assumption of Cost Sharing Agreement
executed and delivered by Purchaser.
d. The Confirmation of OEA Obligations executed
and delivered by Purchaser.
e. The Tenant Notice Letters executed and
delivered by Purchaser.
f. Evidence reasonably satisfactory to Seller
and the Title Company that the person executing the closing documents on behalf
of Purchaser has full right, power, and authority to do so.
g. Such other and further documents as may be
reasonably required by Seller or Title Company duly executed by Purchaser.
3. Seller and Purchaser shall each pay their respective
attorneys' fees and one-half (1/2) of the escrow and closing fees of the Title
Company. Seller shall pay for the cost of the Survey (except as provided in
Section 3.B above), the Title Policy, the cost of any recordation fees and
documentary or other transfer taxes, if any, applicable with respect to the
sale of the Real Property (excluding, however, any recordation fees or other
expenses associated with Purchaser's financing of the purchase of the
Property), all sales tax, if any, applicable with respect to the sale of the
Personal Property and/or the Intangible Property, and other fees and charges
which are typically borne by sellers in Dallas, Texas. Purchaser shall pay for
its out-of-pocket expenses, all due diligence, all legal fees and costs
incurred by Purchaser in connection herewith, and other fees and charges which
are typically borne by Purchasers in Dallas, Texas.
C. Ad valorem and other taxes and assessments relating to the
Property for the year in which the Closing occurs ("TAXES") shall be prorated
between Seller and Purchaser as of the Closing Date, based on the latest rate
applied to the latest assessed valuation for the Property, with Seller to bear
the economic burden of all such Taxes for the period prior to but excluding the
Closing Date and with Purchaser to bear the economic burden of all such Taxes
for all periods on and after the Closing Date. As soon as the actual amount of
Taxes on the Property for such year is known, Seller and Purchaser shall, to
the extent the amount of actual Taxes differs from the amount estimated at
Closing and upon the request of either party, recalculate the proration of such
Taxes between Seller and Purchaser in the same manner specified above but based
on the actual amount of Taxes for such year. Upon such recalculation,
Purchaser shall pay to Seller, or Seller shall pay to Purchaser, as the case
may be, a sufficient amount of money so that when added to or subtracted from
the preliminary pro-rated amounts for each party
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determined at Closing, Seller shall have paid for those Taxes applicable to the
Property prior to and including the Closing Date and Purchaser shall have paid
for those Taxes applicable to the Property after the Closing Date. Subject to
the pro-ration obligations under this Section, Purchaser shall assume and pay
all ad valorem and similar taxes and assessments relating to the Property for
the year in which the Closing occurs and all subsequent years, and shall
indemnify and hold Seller harmless from and against the same. The provisions
hereof shall survive the Closing.
D. All rentals actually received for the month in which the
Closing occurs shall be prorated as of the Closing Date, with Seller to obtain
the economic benefit of all such rentals for all periods prior to but excluding
the Closing Date and with Purchaser to obtain the economic benefit of all such
rentals for all periods on and after the Closing Date. Claims for any
delinquent rent and other sums which are owing to Seller by the Tenants of the
Property for periods prior to the Closing Date ("DELINQUENT RENTS") shall be
owned and retained by Seller and Seller shall be entitled to collect all of
same subject to the provisions hereof. Purchaser agrees to pay any Delinquent
Rents (or Seller's pro rata share thereof to the extent such Delinquent Rents
are applicable to the month during which the Closing occurred) to Seller if,
and when, any such sums are received by Purchaser, after application of any of
such sums to delinquencies which occur after the Closing and after deduction of
Purchaser's reasonable and actual cost to collect. Purchaser agrees to use
reasonable efforts to collect Delinquent Rents, but nothing contained herein
shall operate to require Purchaser to institute a lawsuit to recover any such
Delinquent Rents or to terminate any Lease; provided, however, that if, after
six (6) months following the Closing Date, Purchaser is unsuccessful in
collecting such Delinquent Rents, Seller may do so and Purchaser shall
cooperate in Seller's collection efforts; provided, further, that Seller shall
not be permitted to terminate any Lease in connection with such collection
efforts. The provisions hereof shall survive the Closing.
E. Charges for utilities, if any, serving the Property shall be
determined as of the Closing Date, and Seller shall be responsible for all
utility charges up to but excluding the Closing and Purchaser shall be
responsible for all utility charges for the period on and after the Closing
Date. Seller shall be responsible for terminating all existing utility
services to the Property on or before the Closing Date and shall be solely
responsible for any costs related thereto. Purchaser shall be responsible for
establishing all utility services for its own account on the Closing Date or as
soon as possible thereafter and shall be solely responsible for any costs
associated therewith.
F. In general, any and all other items of current revenue and
expenses relating to the Property on the Closing Date shall be prorated as of
the Closing Date.
G. Seller represents that there are no refundable tenant security
deposits provided for under the Leases. Promptly after Closing, Purchaser
shall mail, by first class mail, the Tenant Notice Letters (or at Seller's
option, Seller may so deliver the same) to each Tenant under the Leases.
Purchaser shall provide Seller with copies of all such Tenant Notice Letters
and a certificate of mailing within ten (10) calendar days following Closing.
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H. All utility deposits paid by Seller (power, water, telephone,
sewer, etc.) shall at all times remain the property of Seller and shall be
refunded to Seller by the deposit holder upon the Closing (or within a
reasonable time thereafter), and Purchaser shall cooperate with Seller to
obtain the prompt release of all such deposits to Seller.
I. Upon completion of the Closing, Seller shall deliver to
Purchaser possession of the Property, subject to the Permitted Encumbrances and
the rights of all Tenants under the Leases.
J. All reimbursable expenses shall be reconciled at Closing, such
that if Seller has collected sums in excess of its reimbursable expenses under
the Leases, Seller shall pay such excess to Purchaser. In the event that such
reconciliation shows that Seller has collected less than its incurred
reimbursable expenses under the Leases, Purchaser shall remit the excess (to
the extent, and only to the extent, that such excess is actually collected by
Purchaser, with all payments on arrearages to be applied first to the period
after the Closing Date) to Seller not later than the expiration of three months
after the conclusion of the twelve-month period then in progress with respect
to the budgeting of such expenses under the Leases. Purchaser shall use all
reasonable efforts to collect such amounts and to the extent it is unable to
collect such amounts within six (6) months after delinquency, Seller may do so
(including, through the institution of legal proceedings) and Purchaser shall
cooperate (at no cost to Purchaser) in Seller's collection efforts; provided,
however, Seller shall not be permitted to terminate any Lease in connection
with such collection efforts.
K. Amounts payable under Approved Contracts shall be prorated on
an accrual basis. Seller shall pay, prior to the Closing Date, all such amounts
for which a bill has been received or for which payment is otherwise due prior
to the Closing Date, and Purchaser shall be credited, and Seller shall be
debited, with an amount equal to all amounts accrued under the Approved
Contracts from the date such bills were issued or such payments were due until
the Closing Date. Seller shall deliver to Escrow, for the benefit of Purchaser,
evidence of the cancellation or termination of all Contracts other than
Approved Contracts, and Seller shall be responsible for all such cancellation
costs.
L. All improvement lien assessments, if any, shall be paid in
full by Seller at Closing.
Purchaser and Seller's obligation to prorate shall survive the Closing
for a period of one (1) year (unless within such time Purchaser or Seller makes
a claim against the other party to this Agreement with respect to such
obligation to prorate, in which case such obligation shall survive without
limitation with respect to such claim), and Purchaser and Seller shall use good
faith efforts to conclude prorations with respect to percentage Rent and common
area maintenance charges as soon as practicable after the determination of the
amounts thereof. Seller agrees to complete a reconciliation of the Rent and
common area maintenance changes under all Leases for 1996 and agrees to furnish
a copy of same to Purchaser at Closing.
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Provided that Title Company has received all of the items required to
be delivered pursuant to this Agreement (or a waiver from the party for whose
benefit such item is being delivered) and that it has not received prior
written notice from Purchaser that Purchaser has elected to terminate its
rights and obligations hereunder pursuant to Section 15 and provided that
Purchaser has received either the Title Policy or the irrevocable commitment of
Title Company to provide it with the Title Policy immediately after recordation
of the Deed, Title Company is authorized and instructed (a) with respect to the
Property, to record the documents delivered to the Title Company in accordance
with recording instructions set forth in a letter to be delivered to Title
Company by Purchaser (or if no such letter is received prior to the Closing, in
accordance with customary practice), (b) to deliver those other documents and
instruments delivered to the Title Company to the party for whose benefit such
documents or instruments were made, and (c) to deliver the Purchase Price, as
adjusted for prorations pursuant hereto, upon receiving confirmation of
recording of the Deed.
SECTION 6. AS-IS SALE.
A. Except as expressly set forth to the contrary herein, and
except for any representation or warranty of Seller contained herein, Purchaser
expressly acknowledges that Purchaser is relying on its own inspection of the
Property to determine if the Property is acceptable to Purchaser and that the
Property is being sold and accepted AS-IS, WHERE-IS, and Seller makes no
representations or warranties with respect to the physical condition or any
other aspect of the Property, including, without limitation, (i) the structural
integrity of any Improvements on the Property, (ii) the manner, construction,
condition, and state of repair or lack of repair of any of such Improvements,
(iii) the conformity of the Improvements to any plans or specifications for the
Property, including but not limited to any plans and specifications that may
have been or which may be provided to Purchaser, (iv) the conformity of the
Property to past, current or future applicable zoning or building code
requirements or the compliance with any other laws, rules, ordinances, or
regulations of any government or other body, (v) the financial earning capacity
or history or expense history of the operation of the Property, (vi) the nature
and extent of any right-of-way, lease, lien, encumbrance, license, reservation
or other condition affecting title, (vii) the existence of soil instability,
past soil repairs, soil additions or conditions of soil fill, susceptibility to
landslides, sufficiency of undershoring, sufficiency of drainage, (viii)
whether the Property is located wholly or partially in a flood plain or a flood
hazard boundary or similar area, (ix) the existence or non-existence of
asbestos, underground or above ground storage tanks, hazardous waste or other
toxic or hazardous materials of any kind or any other environmental condition
or whether the Property is in compliance with applicable laws, rules and
regulations, (x) the Property's investment potential or resale at any future
date, at a profit or otherwise, (xi) any tax consequences of ownership of the
Property or (xii) any other matter whatsoever affecting the stability,
integrity, other condition or status of the land or any buildings or
improvements situated on all or part of the Property (collectively, the
"PROPERTY CONDITIONS"), and PURCHASER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY AND ALL ACTUAL OR POTENTIAL RIGHTS PURCHASER MIGHT HAVE REGARDING
ANY FORM OF WARRANTY, EXPRESS OR IMPLIED OR ARISING BY OPERATION OF LAW,
INCLUDING, BUT IN NO WAY LIMITED TO ANY WARRANTY OF CONDITION, HABITABILITY,
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MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE RELATING TO THE PROPERTY,
ITS IMPROVEMENTS OR THE PROPERTY CONDITIONS, SUCH WAIVER BEING ABSOLUTE,
COMPLETE, TOTAL AND UNLIMITED IN ANY WAY. Seller acknowledges that the
foregoing waiver is not a waiver of a statutory or common law cause of action
by Purchaser with regard to any environmental conditions affecting the
Property.
B. Except as otherwise set forth in this Agreement, any and all
information related to the Property and provided to Purchaser by Seller
("INFORMATION"), shall be delivered without any representation or warranty as
to the completeness or accuracy of the data or other information contained
therein, and all such Information is furnished to Purchaser solely as a
courtesy, and Seller has neither verified the accuracy of any statements or
other information contained therein, the method used to compile such
Information nor the qualifications of the persons preparing such Information.
The Information is provided on an AS-IS-WHERE-IS BASIS, AND PURCHASER EXPRESSLY
ACKNOWLEDGES THAT, IN CONSIDERATION OF THE AGREEMENTS OF SELLER HEREIN, SELLER
MAKES NO REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW,
INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY OF CONDITION,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE AS TO THE INFORMATION.
All such Information shall be held by Purchaser in strict confidence, and,
without limitation, without Seller's prior written consent, Purchaser: (i)
shall not divulge to any third party any of the Information and shall not use
the Information in Purchaser's business prior to the Closing, except in each
case in connection with the evaluation of the acquisition of the Property; (ii)
shall ensure that the Information is disclosed only to such of Purchaser's
officers, directors, employees, consultants, attorneys, accountants, agents,
contractors, investors and lenders, as have actual need for the Information in
evaluating the Property; (iii) shall act diligently to prevent any further
disclosure of the Information; and (iv) shall, if the Closing does not occur,
promptly return to Seller (without keeping copies) all Information.
Notwithstanding the foregoing, to the extent Purchaser believes in its good
faith judgment that any disclosure is advisable under applicable federal or
state securities laws or rules governing the New York Stock Exchange, then
Purchaser shall be permitted to make such disclosure of the Information in
satisfaction of such laws or rules.
C. Notwithstanding anything herein to the contrary, all of the
terms and provisions of this Section 6 shall survive the Closing.
SECTION 7. AGENTS. Purchaser and Seller hereby agree that
Thomas Salanty of Cushman & Wakefield ("SALANTY") and Larry Leon of Leon &
Associates ("LEON") (collectively, the "BROKERS") are the brokers involved in
connection with the sale of the Property to Purchaser. Seller agrees to pay to
Brokers a total aggregate commission of two percent (2%) of the Purchase Price
("COMMISSION") at Closing if and only if the Closing occurs and all funding has
occurred hereunder, such Commission to be split equally between the Brokers.
Purchaser agrees that if any claims should be made for commissions allegedly
arising from the execution of this Agreement or any sale of the Property to
Purchaser by any broker other than Brokers by reason of any acts of Purchaser,
Purchaser will protect, defend, indemnify and hold Seller harmless from and
against any and all loss, liabilities and expenses in connection
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<PAGE> 15
therewith. Seller agrees that if any claims should be made for commissions
allegedly arising from the execution of this Agreement or any sale of the
Property to Purchaser by any broker other than Brokers by reason of any acts of
Seller, Seller will protect, defend, indemnify and hold Purchaser harmless from
and against any and all loss, liabilities and expenses in connection therewith.
Notwithstanding anything contained herein to the contrary, the Brokers will not
be considered parties to this Agreement and their consent shall not be required
to any amendments hereto. This Section 7 shall not inure to the benefit of any
person or entity or be enforceable by any person or entity, other than
Purchaser or Seller.
SECTION 8. PURCHASER'S INSPECTION.
A. Seller agrees to give Purchaser the opportunity to fully and
diligently and thoroughly inspect the Property as set forth in Section 8B
below, and Purchaser will conduct such inspections and tests as Purchaser deems
advisable in Purchaser's discretion to fully evaluate and analyze the Property
and all Property Conditions.
B. Until the end of the Review Period set forth above, Purchaser
and its agents and employees, at Purchaser's sole risk and expense, shall have
the right to enter upon the Property during normal business hours for testing,
surveying, engineering and other reasonable inspection purposes ("TESTS");
provided, however, with respect to any environmental review, all such testing
shall be limited to non-intrusive "Phase I Level" type tests. Purchaser shall
not be permitted to conduct intrusive "Phase II Level" testing or any sampling
of any material or media, including soil, surface water, or ground water,
unless Seller, in Seller's reasonable discretion, has approved in writing such
testing and sampling, the specific scope of work therefor and the consultant
performing such work. All such activities shall be conducted in such a fashion
so as not to interfere with the rights or property of any Tenants or others
with any possessory interest in any part of any portion of the Property.
PURCHASER HEREBY AGREES TO AND SHALL INDEMNIFY, DEFEND, PROTECT AND HOLD SELLER
HARMLESS OF, FROM AND AGAINST ANY AND ALL LIABILITIES, SUITS, CLAIMS, LOSSES,
CAUSES OF ACTION, LIENS, FINES, PENALTIES, COSTS AND EXPENSES, INCLUDING,
WITHOUT LIMITATION, COURT COSTS, REASONABLE ATTORNEYS' FEES AND COSTS, AND
DAMAGES SUSTAINED BY OR ASSERTED AGAINST SELLER OR THE PROPERTY (COLLECTIVELY
"CLAIMS"), BY REASON OF INJURY TO OR DEATH OF ANY PERSON OR PHYSICAL DAMAGE TO
OR THEFT OF ANY PROPERTY, OR MECHANICS' AND MATERIALMEN'S LIENS, CAUSED BY
PURCHASER OR ITS AGENTS AS A RESULT OF OR ARISING OUT OF OR IN CONNECTION WITH
ANY INSPECTIONS OR EXAMINATIONS CONDUCTED BY PURCHASER OR ITS CONTRACTORS OR
AGENTS.
C. Purchaser or Purchaser's Consultants (as hereinafter defined)
shall only enter the Property upon submitting to Seller certificates of
insurance evidencing the following coverages: (i) Worker's Compensation
Insurance in an amount not less than the applicable statutory limits, with a
waiver of subrogation in favor of Seller and Cityplace Company, (ii)
Comprehensive Automobile Liability Insurance in an amount not less than
$500,000 combined single limit, and (iii) Commercial General Liability
Insurance covering Purchaser's operations on the Property
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<PAGE> 16
in an amount of not less than $2,000,000 per occurrence. The Comprehensive
Automobile Liability Insurance and the Commercial General Liability Insurance
shall include Seller and Cityplace Company as additional insureds and state
that such insurance is primary as regards any other insurance carried by Seller
or Cityplace Company. In addition, any agent or contractor of Purchaser who
will perform any environmental, engineering or other inspections or tests at
the Property ("PURCHASER'S CONSULTANT") may only enter onto the Property on a
date and time specified by Seller in writing and, if required by Seller, in the
presence of Seller's personnel or under the supervision of Seller's
consultants. Purchaser must use its best efforts to insure that Purchaser,
Purchaser's employees and Purchaser's Consultants do not disclose the existence
or terms of this Agreement prior to the Closing to any third parties, including
tenants or others with a possessory interest in all or any portion of the
Property or to any of Seller's contractors or agents at the Property, except to
the extent Purchaser is legally required to do so or otherwise in accordance
with the provisions of Section 6.B of this Agreement.
SECTION 9. NOTICES.
A. Any notice required or permitted to be given hereunder by one
party to the other shall be in writing and the same shall be given and shall be
deemed to have been served and given if (i) delivered in person to the address
set forth hereinbelow for the party to whom the notice is given, (ii) delivered
in person at the Closing (if such party is present at the Closing), (iii)
placed in the United States mail, return receipt requested, addressed to such
party at the address hereinafter specified, (iv) deposited into the custody of
Federal Express Corporation to be sent by Federal Express Overnight Delivery or
other reputable overnight carrier for next day delivery, addressed to such
party at the address hereinafter specified, or (v) telecopied by facsimile
transmission to such party at the telecopy number listed below, provided that
such transmission is electronically confirmed on the date of such transmission.
B. The address of Seller for all purposes under this Agreement
and for all notices hereunder shall be:
Oak Creek Partners, Ltd.
c/o Cityplace Company
2828 Routh Street, Suite 440
Dallas, Texas 75201
Attention: Roger C. Gault
Telecopy: (214) 220-3126
Telephone: (214) 740-7640
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with a copy to:
David M. Mellina, Esq.
Kelly, Hart & Hallman, P.C.
201 Main Street, Suite 2500
Fort Worth, Texas 76102
Telecopy: (817) 878-9280
Telephone: (817) 878-3538
C. The address of Purchaser for all purposes under this Agreement
and for all notices hereunder shall be:
The Price REIT, Inc.
145 South Fairfax Avenue, 4th Floor
Los Angeles, CA 90036
Attention: Jerald Friedman
Telecopy: (213) 937-8175
Telephone: (213) 937-8200
D. From time to time either party may designate another address
within the 48 contiguous states of the United States of America for all
purposes of this Agreement by giving the other party not less than thirty (30)
days' advance written notice of such change of address in accordance with the
provisions hereof.
SECTION 10. ENTIRE AGREEMENT.
This Agreement (including the exhibits hereto) contains the entire
agreement between Seller and Purchaser, and no oral statements or prior written
matter not specifically incorporated herein shall be of any force and effect.
No variation, modification, or changes hereof shall be binding on either party
hereto unless set forth in a document executed by such parties or a duly
authorized agent, officer or representative thereof.
SECTION 11. REPRESENTATIONS.
As an inducement to Purchaser to enter into this Agreement and the
consummation of the transaction contemplated hereby, Seller hereby represents
and warrants to and agrees with Purchaser both as of the date hereof and again
as of the Closing Date, and as of all dates and times in between (except as
specifically provided to the contrary herein), as set forth below. As used
herein and elsewhere in this Agreement, the term "Seller's actual knowledge"
shall mean the actual knowledge of each of Messrs. Roger Gault and Mark
Copeland, without any duty of investigation of any kind. Seller hereby
represents and warrants that the foregoing persons are the persons employed by
Seller or Seller's manager with executive, managerial or daily supervisory
responsibility with respect to the Property.
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11.1 Authority. Seller is duly organized and validly existing
under the laws of the jurisdiction of its organization, is duly qualified to
conduct business and own real property in the State of Texas, and has all
requisite power to own all of its properties and assets and to carry on its
business as presently conducted. The execution, delivery and performance of
this Agreement and all other agreements contemplated hereby has been duly and
validly authorized by all necessary action of Seller and the Agreement and all
other agreements contemplated thereby are and will be valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors' rights and general principles of
equity.
11.2 Title. Seller holds fee simple title to the Property, and to
Seller's actual knowledge, such fee simple title is free and clear of all
liens, encumbrances, security interests, charges, adverse claims and other
exceptions to title, except for the Leases, Contracts, matters of record,
matters disclosed by the Survey and the Permitted Encumbrances.
11.3 The Leases. A list of the current Leases is set forth in the
rent roll attached hereto as Exhibit "B" (the "RENT ROLL"). The Rent Roll is
true, complete and correct in all respects and except for the Leases set forth
in the Rent Roll, there are no other leases, licenses or other agreements
affecting the occupancy of the Property. With respect to each Lease: (i) the
Lease is in full force and effect, and constitutes the valid and binding legal
obligation of Seller and the respective tenant, enforceable against each of
them in accordance with its terms; (ii) there are no understandings, oral or
written, between the parties to the Lease which in any manner vary the
obligations or rights of either party; (iii) except as indicated on the Rent
Roll and except for any defaults precipitated by the Stuart's Bankruptcy, there
is no default by Seller under the Lease and to Seller's actual knowledge, by
the tenant under the Lease; and (iv) no rent or additional rent under the Lease
has been paid for more than thirty (30) days in advance of its due date.
11.4 No Litigation or Adverse Events. Except for the Stuart's
Bankruptcy, Seller has received no written notice of, and to Seller's actual
knowledge, there are no, pending or threatened investigations, actions, suits,
proceedings or claims against or affecting Seller, the Property, or any tenant,
at law or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, agency, or instrumentality,
domestic or foreign.
11.5 Compliance with Laws. Seller has received no notice of
noncompliance by Seller in any material respect with any applicable laws,
ordinances, rules and regulations (including without limitation those relating
to zoning and the Americans With Disabilities Act) applicable to the ownership
or operation of the Property. Seller has not received from any insurance
company or Board of Fire Underwriters any notice, which remains uncured, of any
defect or inadequacy in connection with the Property or its operation.
11.6 No Defaults in Other Agreements. Seller has received no notice
that Seller or any other party is in material default under any Contract
affecting the Property, or that an event exists which, with the passage of time
or the giving of notice or both, will become a material
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<PAGE> 19
default thereunder on the part of the Seller or any other party thereto.
Seller has received no notice that Seller is in noncompliance in any material
respect with the terms and provisions of the covenants, conditions,
restrictions, rights-of-way or easements affecting the Property.
11.7 Eminent Domain. Seller has received no notice concerning any
existing or proposed or threatened eminent domain or similar proceeding, or
private purchase in lieu of such a proceeding which would affect the Property
in any material way.
11.8 Licenses, Permits, CO's, Zoning, etc. Seller has received no
notice that any permits, certificates of occupancy, or any other notices,
licenses, permits, certificates and authority required as of the date hereof
and as of the Closing Date in connection with the use or occupancy of the
Property have not been obtained or are not in full force and effect and in good
standing.
11.9 Environment. (i) To Seller's actual knowledge and except as
set forth in the Phase I Assessment, none of Seller, any predecessor in
interest or any tenant of the Property has engaged in any operations or
activities upon, or any use or occupancy of the Property, or any portion
thereof, for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of any Hazardous Materials on, under, in or about the Property, or
transported any Hazardous Materials to, from or across the Property, except in
all cases in compliance with Environmental Requirements and only in the course
of legitimate business operations at the Property (which shall not include any
business primarily or substantially devoted to the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of Hazardous Materials); and (ii) Seller has no actual knowledge of
any material inaccuracies or errors contained in the Phase I Assessment.
As used herein:
"ENVIRONMENTAL REQUIREMENTS" shall mean all applicable present
statutes, regulations, rules, ordinances, codes, licenses, permits, orders,
approvals, plans, authorizations, concessions, franchises and similar items, of
all governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof and all applicable judicial and administrative and regulatory decrees,
judgments and orders relating to the protection of human health or the
environment, including, without limitation: (i) all requirements, including but
not limited to those pertaining to reporting, licensing, permitting,
investigation and remediation of emissions, discharges, releases or threatened
releases of "Hazardous Materials," chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether
solid, liquid or gaseous in nature, into the air, surface water, ground water
or land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of chemical substances,
pollutants, contaminants or hazardous or toxic substances, materials, or
wastes, whether solid, liquid or gaseous in nature; and (ii) all requirements
pertaining to the protection of the health and safety of employees or the
public.
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<PAGE> 20
"HAZARDOUS MATERIALS" shall mean (i) any flammable, explosive or
radioactive materials, hazardous wastes, toxic substances or related materials
including, without limitation, substances defined as "hazardous substances,"
"hazardous materials," "toxic substances" or "solid waste" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sec. 9601, et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq.; the Toxic Substances Control Act, 15 U.S.C.,
Section 2601 et seq.; the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6901 et seq.; and in the regulations adopted and publications
promulgated pursuant to said laws; (ii) those substances listed in the United
States Department of Transportation Table (49 C.F.R. 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) as
hazardous substances (40 C.F.R. Part 302 and amendments thereto); (iii) those
substances defined as "hazardous wastes," "hazardous substances" or "toxic
substances" in any similar federal, state or local laws or in the regulations
adopted and publications promulgated pursuant to any of the foregoing laws or
which otherwise are regulated by any governmental authority, agency,
department, commission, board or instrumentality of the United States of
America, the State of Texas or any political subdivision thereof, (iv) any
pollutant or contaminant or hazardous, dangerous or toxic chemicals, materials,
or substances within the meaning of any other applicable federal, state, or
local law, regulation, ordinance, or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended; (v) petroleum or any by-products thereof; (vi) any
radioactive material, including any source, special nuclear or by-product
material as defined at 42 U.S.C. Sections 2011 et seq., as amended, and in the
regulations adopted and publications promulgated pursuant to said law; (vii)
asbestos in any form or condition; and (viii) polychlorinated biphenyls.
11.10 Physical Condition. Seller has not received any notice: (i)
of any material structural defects in the Improvements located on or at the
Property; and (ii) that the Improvements and Personal Property (including
without limitation plumbing equipment, HVAC, electric wiring and fixtures, gas
distribution system, water and sewage systems, and security systems) are not in
good working order and condition, except for defects or required repairs that
are not material.
11.11 Mechanic's Liens. To Seller's actual knowledge, all bills and
claims for labor performed and materials furnished to or for the benefit of the
Property currently due and contracted for by Seller or its manager have been
paid in full, and except for that certain mechanics lien filed by Mustang
Masonry, Inc. on January 15, 1997 and relating to construction on that portion
of the Improvements leased to the Ross Dress for Less Store, Seller has
received no notice of any mechanic's or materialmen's liens (whether or not
perfected) on or affecting the Property as a result of labor performed or
materials furnished and contracted for by the Partnership or its manager.
11.12 Operating Statements. To Seller's actual knowledge, the 1996
operating statements and rent roll delivered by Seller to Purchaser fairly
present the profit or loss from the management and operation of the Property
for the periods covered thereby and, in all material respects, accurately
reflect all rents and other gross receipts, and all amounts paid by
20
<PAGE> 21
Seller for electricity, water, sewer, other utility services, insurance, fuel,
maintenance and repairs (whether capitalized or expensed), real estate taxes,
payroll and payroll taxes and all other operating and other expenses associated
with the Property.
11.13 Disclosure. No representation or warranty of Seller in this
Agreement, or any information, statement or certificate furnished or to be
furnished by Seller or at Seller's direction pursuant to this Agreement,
contains or shall contain any materially untrue statement of a material fact or
omits or shall omit to state a material fact necessary to make the statements
contained therein not misleading.
The representations and warranties set forth in this Section 11 shall
survive the execution and delivery of this Agreement, the delivery of the Deed
and transfer of title to the Property, until the date that is one (1) year
after the Closing Date; provided however, that in the event Purchaser makes a
written claim against Seller with respect to any representation or warranty
prior to the date which is one (1) year after the Closing Date, then such
representation or warranty shall survive without limitation as to such written
claim.
Purchaser hereby represents and warrants to Seller as follows:
a. Purchaser is a limited partnership duly organized
under the laws of the State of Texas; subject to receipt of the Purchaser
Approval, this Agreement and all documents executed by Purchaser which are to
be delivered to Seller at the Closing are and as of the Closing Date will be
duly authorized, executed and delivered by Purchaser, and are and as of the
Closing Date will be legal, valid and binding obligations of Purchaser and
enforceable against Purchaser in accordance with their terms, and do not and as
of the Closing Date will not violate any provisions of any agreement or
judicial order to which Purchaser is a party or to which it is subject.
b. Purchaser will or will cause to be conducted such
inspections and tests as Purchaser may deem advisable in Purchaser's discretion
to fully evaluate and analyze the Property and all Property Conditions, and
shall have satisfied itself therewith if Purchaser proceeds to Closing.
SECTION 12. ASSIGNS. This Agreement shall inure to the benefit
of and be binding on the parties hereto and their respective legal
representatives, successors, and assigns. Purchaser may assign its rights under
this Agreement without the prior written consent of Seller to any subsidiary or
wholly-owned affiliate of Purchaser. No such assignment shall relieve
Purchaser of its obligations hereunder.
SECTION 13. TIME FOR EXECUTION AND EFFECTIVE DATE.
If Purchaser has not executed and returned a fully executed copy of
this Agreement to Seller, and a copy of this Agreement along with the Earnest
Money to Title Company, by 5:00 p.m. on the day which is seven (7) days after
Seller's execution of this Agreement as specified beneath Seller's signature
below, this Agreement shall be null and void. The date on which this
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<PAGE> 22
Agreement is executed by the last to sign of the Seller and Purchaser shall be
the "EFFECTIVE DATE" of this Agreement.
SECTION 14. TIME OF THE ESSENCE. Time is of the essence of this
Agreement.
SECTION 15. DESTRUCTION, DAMAGE, OR TAKING PRIOR TO CLOSING. If
the Property or any portion thereof is materially damaged or destroyed by fire
or other casualty or by a partial taking under the provisions of eminent domain
prior to the Closing and the Property is not substantially restored by the
Closing Date, Purchaser shall have the option of: (i) closing this transaction
as provided herein (with no reduction in the Purchase Price), in which event
Seller shall assign to Purchaser at Closing all insurance or condemnation
proceeds, if any, or (ii) rescinding this Agreement by giving Seller written
notice thereof within ten (10) days from the date Purchaser receives notice of
such damage or taking, in which event this Agreement shall be deemed null and
void and the parties hereto shall have no further obligations to or recourse
against each other either under this Agreement or otherwise and the Earnest
Money shall be returned to Purchaser.
For the purposes of this Section 15, damage to the Property is
material if (i) the actual cost of repairing or replacing the damaged portions
of the Improvements on the Property exceeds $250,000.00, or (ii) if it would
take longer than ninety (90) days to perform such repair or replacement using
reasonably diligent efforts, or (iii) if any lessee has the right to abate any
rent under its lease as a result of such damage and there is not full rental
interruption coverage with respect thereto available to Purchaser through and
after the Closing Date until the date that is ninety (90) days beyond the
estimated date of reconstruction, or (iv) if any lessee has a right to
terminate its lease as a result of such damage.
For the purposes of this Section 15, a taking or threatened taking by
eminent domain or similar proceedings shall be deemed material if (i) the value
of that portion of the Property to be so taken exceeds $500,000.00, (ii) the
portion of the Property taken includes any access to the Property or any
portion of the parking area; (iii) Purchaser determines that the Property so
affected is materially and adversely affected by such taking or threatened
taking, (iv) any lessee has the right to abate any rent under its lease as a
result of such taking or threatened taking, or (v) any lessee has the right to
terminate its lease as a result of such taking or threatened taking or any
material parking or access is taken.
SECTION 16. MAINTENANCE AND OPERATION OF THE PROPERTY; COVENANTS.
16.1 Maintenance. In addition to Seller's other obligations
hereunder, Seller shall, upon and after the date of this Agreement and to and
including the Closing Date, at Seller's sole cost and expense, maintain the
Property in the ordinary course of business consistent with past practice, pay
all taxes, assessments, fines, penalties, charges and other operating expenses,
and shall make all repairs, maintenance and replacements of the Improvements
and any Personal Property and otherwise operate the Property in its ordinary
and customary manner, and otherwise in the same manner as before the making of
this Agreement, the same as though Seller were retaining the Property. From
and after the Review Period through the Closing Date,
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<PAGE> 23
Seller shall not make any material alterations to the Property without first
receiving Purchaser's prior written consent thereto.
16.2 Leases. After the conclusion of the Review Period, in no
event shall Seller enter into any lease with respect to the Property without
Purchaser's prior written consent, which will not be unreasonably withheld or
delayed. After the date hereof and until the conclusion of the Review Period,
Seller shall notify Purchaser of any proposed new leases of any portion of the
Property; provided, however, Purchaser shall not have the right to approve or
disapprove of any such proposed new lease; except as set forth in the first
sentence hereof.
16.3 New Agreements. After the date hereof and until the
conclusion of the Review Period, Seller shall notify Purchaser of any proposed
new and material agreements affecting the ownership or operation of the
Property which are not terminable upon thirty (30) days notice or less ("NEW
AGREEMENTS"); provided, however, Purchaser shall not have the right to approve
or disapprove of any such proposed New Agreement. After the conclusion of the
Review Period, in no event shall Seller enter into any New Agreement without
Purchaser's prior written consent, which consent shall not be unreasonably
withheld or delayed.
16.4 Encumbrances. Seller shall not, from the conclusion of the
Review Period through the Closing Date, mortgage, encumber or suffer to be
encumbered all or any portion of the Property, which encumbrances would survive
the Closing Date, without the prior written consent of Purchaser.
16.5 Consents and Notices. Seller and Purchaser shall cooperate
with each other and exercise commercially reasonable efforts to obtain as of
the Closing Date, all consents from, and provide all notices to, any third
party and any governmental or regulatory authority which are required pursuant
to any Contract or any applicable laws as a condition to or in connection with
the execution, delivery or performance of this Agreement or other documents and
instruments contemplated thereby.
16.6 Property Files. Seller covenants and agrees, from and after
the Effective Date until the Closing Date, to make available to Purchaser or
its representatives for inspection at its offices (upon reasonable advance
notice and during normal business hours) all files maintained by Seller and
relating to the Property.
16.7 Audit Cooperation. Until the date that is one (1) year after
the Closing Date, Seller hereby agrees to cooperate with Purchaser in producing
Purchaser's audited financial statements for the Property for such periods as
may be requested by Purchaser. Such cooperation shall include, without
limitation, the execution and delivery by Seller to Purchaser's auditors of
such confirmations and letters as such auditors may reasonably require, all at
the cost and expense of Purchaser.
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<PAGE> 24
SECTION 17. TERMINATION, DEFAULT AND REMEDIES.
A. If Purchaser fails or refuses to consummate the purchase of
the Property pursuant to this Agreement at the Closing, notwithstanding the
fulfillment of all conditions precedent thereto, or fails to perform any of
Purchaser's other obligations hereunder either prior to or at the Closing for
any reason other than termination of this Agreement by Purchaser pursuant to a
right so to terminate expressly set forth in this Agreement or Seller's failure
to perform Seller's obligations under this Agreement, then Seller shall have
the right to terminate this Agreement by giving written notice thereof to
Purchaser prior to or at the Closing, whereupon neither party hereto shall have
any further rights or obligations hereunder, and Title Company shall deliver
the Earnest Money to Seller as liquidated damages, free of any claims by
Purchaser or any other person with respect thereto. It is agreed that the
Earnest Money to which the Seller is entitled under a termination above is a
reasonable forecast of just compensation for the harm that would be caused by
Purchaser's breach, and that the harm that would be caused by such breach is
one that is incapable or very difficult of accurate estimation.
Notwithstanding the forgoing, Seller may pursue all rights and remedies
available at law or in equity against Purchaser with respect to (i) Purchaser's
obligations under the specific indemnification and insurance provisions
provided for in this Agreement, (ii) express post-Closing obligations under
this Agreement and (iii) all obligations under the various closing documents
executed at Closing, such remedies to be as additional remedies and not in lieu
of the foregoing liquidated damages remedy.
B. If Seller fails or refuses to consummate the sale of the
Property pursuant to this Agreement at the Closing or fails to perform any of
Seller's other obligations hereunder either Prior to or at the Closing for any
reason other than the termination of this Agreement by Seller pursuant to a
right so to terminate expressly set forth in this Agreement or Purchaser's
failure to perform Purchaser's obligations under this Agreement, then
Purchaser, as Purchaser's sole and exclusive remedy, shall have the right to
either (i) enforce specific performance of Seller's obligations under this
Agreement, (ii) terminate this Agreement by giving written notice thereof to
Seller prior to or at the Closing whereupon neither party hereto shall have any
further rights or obligations hereunder, and Title Company shall deliver the
Earnest Money to Purchaser, free of any claims by Seller or any other person
with respect thereto, or (iii) seek damages from Seller for the recovery of any
actual out-of-pocket costs payable to third parties in connection with its
investigation of the Property; provided, however, Purchaser must be able to
provide evidence substantiating these costs and Purchaser's recovery of these
costs will in no event exceed $100,000.00. Except as set forth in Subsection
17(B)(iii), in no event shall Purchaser have any claim against Seller for
damages.
C. In the event either Seller or Purchaser becomes entitled to
the Earnest Money upon cancellation of this Agreement in accordance with its
terms, Purchaser and Seller covenant and agree to deliver a letter of
instruction to the Title Company directing disbursement of the Earnest Money to
the party entitled thereto.
SECTION 18. TERMINOLOGY. The captions beside the section numbers
of this Agreement are for reference only and shall not modify or affect this
Agreement in any manner whatsoever.
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<PAGE> 25
Wherever required by the context, any gender shall include any other gender,
the singular shall include the plural, and the plural shall include the
singular.
SECTION 19. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas.
SECTION 20. PERFORMANCE OF AGREEMENT. The obligations under the
terms of the Agreement are performable in Dallas County, Texas, and any and all
payments under the terms of the Agreement are to be made in Dallas County,
Texas.
SECTION 21. VENUE. The parties hereto hereby consent that venue
of any action brought under this Agreement shall be in Dallas County, Texas.
SECTION 22. SEVERABILITY. In case any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein.
SECTION 23. RULE OF CONSTRUCTION. The parties acknowledge that
each party and its counsel has reviewed and revised 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.
SECTION 24. ATTORNEY'S FEES. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the
prevailing party or parties shall be entitled to reasonable attorney's fees,
costs and necessary disbursements in addition to any other relief to which such
party or parties may be entitled.
SECTION 25. BUSINESS DAYS. If the Closing Date or the day for
performance of any act required under this Agreement falls on a Saturday,
Sunday or legal holiday, then the Closing Date or the day for such performance,
as the case may be, shall be the next following regular business day.
SECTION 26. COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall, for all purposes, be deemed an
original, but which together shall constitute one and same instrument.
SECTION 27. WAIVER. The waiver by any party of a breach of any
provision of this Agreement shall not be deemed a continuing waiver or a waiver
of any subsequent breach whether of the same or another provision of this
Agreement.
SECTION 28. CONTINUATION AND SURVIVAL OF INDEMNITIES,
REPRESENTATIONS, WARRANTIES AND POST-CLOSING OBLIGATIONS. Except as provided
in the last paragraph of Section 11 hereof
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<PAGE> 26
relating to the survival of representations and warranties, all indemnities,
representations and warranties by, and all of the post-closing obligations, if
any, of, the respective parties contained herein or made in writing pursuant to
this Agreement or any other instrument delivered by Seller pursuant hereto are
intended to and shall remain true and correct and binding as of the time of
Closing and shall survive the execution and delivery of this Agreement, the
delivery of the Deed and transfer of title.
SECTION 29. ENVIRONMENTAL MATTER. Seller hereby discloses to
Purchaser the existence of certain environmental conditions affecting real
property owned by Seller and located to the Northeast of the Property on the
north side of Haskell Avenue (the "OTHER PROPERTY"). Seller is currently
investigating environmental conditions affecting the Other Property, including
the possible remediation of environmental conditions thereon. Seller hereby
discloses such matter to Purchaser; however, such matter and the effect thereof
are specifically excluded from any representation or warranty given by Seller
to Purchaser hereunder. In the course of investigating the environmental
condition affecting the Other Property, Seller may desire, in the future, to
install monitoring wells or other similar devices on property located in the
vicinity of the Other Property, including, without limitation, the Property.
In that regard, Purchaser agrees that it shall cooperate in Seller's efforts to
investigate such environmental condition and to the extent reasonably
necessary, Purchaser agrees that Seller or its agents may install a monitoring
well or similar device on the Property at some time in the future; provided,
however, that the installation of such wells or other devices is at the sole
cost and expense of Seller, and such well or other devices will not
unreasonably interfere with Purchaser's operation and use of the Property or
restrict access to any parking located on the Property; and provided further
that Seller shall indemnify, defend, protect and hold Purchaser and its
successors and assigns harmless from and against any and all losses, damages,
costs, liabilities, causes of action, claims, obligations or expenses sustained
by or asserted against Purchaser arising out of or relating to Seller's entry
and activities on the Property for such purposes (and said indemnification
shall survive the Closing of the transactions contemplated hereby).
IN WITNESS WHEREOF, this Agreement is hereby executed as of the
Effective Date.
PURCHASER:
PRICE/BAYBROOK, LTD., a Texas limited
partnership
By: PRICE/TEXAS, INC., a Texas corporation,
its general partner
By: /s/ Jerald Friedman
------------------------------------
Name: Jerald Friedman
----------------------------------
Title: Senior Executive Vice President
---------------------------------
26
<PAGE> 27
SELLER:
OAK CREEK PARTNERS, LTD., a Texas
limited partnership
By: Cityplace Company, a Texas corporation,
as agent for the Managing General
Partner, Hampstead Associates, Inc.
By: /s/ Neal Sleeper
----------------------------------
Neal Sleeper, President
Date Executed: 2-24-1997
-----------------------
27
<PAGE> 28
By its execution below, Title Company acknowledges receipt of the Earnest Money
described in this Agreement, and agrees to hold and deliver the same and
perform its other duties pursuant to the provisions of this Agreement.
TITLE COMPANY:
REPUBLIC TITLE OF TEXAS, INC.,
a Texas corporation
By: /s/ Jeanne Riegland
-----------------------------------
Name: Jeanne Riegland
---------------------------------
Title: Senior Vice President
--------------------------------
Date Executed: February 26, 1997
------------------------
28
<PAGE> 29
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
<PAGE> 30
EXHIBIT "B"
LIST OF LEASES
<TABLE>
<CAPTION>
Rentable Square
---------------
Tenant Date of Lease Feet (Approx.)
------ ------------- --------------
<S> <C> <C>
OfficeMax, Inc. November 12, 1994 23,500
Stuart's November 1, 1995 8,000
Payless Shoesource November 1, 1995 4,000
Radio Shack November 1, 1995 2,200
MacFrugal's April 1, 1996 18,007
Ross Dress for Less Ocotber 15, 1996 28,160
</TABLE>
<PAGE> 31
EXHIBIT "C"
BILL OF SALE, ASSIGNMENT OF INTANGIBLE PROPERTY, WARRANTIES AND GUARANTIES
THIS BILL OF SALE, ASSIGNMENT OF INTANGIBLE PROPERTY, WARRANTIES AND
GUARANTIES IS MADE and entered into effective as of the ____ day of
_____________, 1997, by and between OAK CREEK PARTNERS, LTD., a Texas limited
partnership ("SELLER"), and PRICE/BAYBROOK, LTD., a Texas limited partnership
("PURCHASER").
WHEREAS, Seller is conveying to Purchaser certain real property ("REAL
PROPERTY") in Cityplace Development, Dallas County, Texas, more particularly
described on EXHIBIT "A" attached hereto and incorporated herein by reference,
together with all improvements thereon ("IMPROVEMENTS"); and
WHEREAS, Seller desires to assign to Purchaser certain personal
property and intangible property rights relating to the Real Property and
Improvements.
NOW, THEREFORE, Seller, for and in consideration of Ten Dollars
($10.00) and other good and valuable consideration in hand paid to Seller by
Purchaser, does hereby grant, sell, assign, transfer, convey and deliver to
Purchaser the following:
(i) all of Sellers' right, title and interest in and to the
personal property owned by Seller and relating to the Real Property as
described on EXHIBIT "B" attached hereto ("PERSONAL PROPERTY");
(ii) to the extent the same are assignable by Seller to Purchaser,
all of Seller's right, title, and interest, if any, in and to (i) all
warranties and guaranties currently in force and effect relating to
the ownership, operation or functioning of all or any part of the Real
Property or Improvements (including, without limitation, all third
party guarantees and warranties, express or implied in connection with
the installation or provision of utility services, to the extent such
deposits have not been returned to Seller as of the date hereof), (ii)
all licenses, permits or similar documents relating to the Real
Property and the Improvements, and (iii) all plans, drawings,
specifications, surveys, engineering reports and other technical
descriptions of the Real Property and/or the Improvements; and
(iii) a nonexclusive, irrevocable and transferable license
("LICENSE") to use the name "Cityplace Market" and similar names and
logos in connection with the ownership and operation of the Real
Property and the Improvements; provided, however, (x) Purchaser
acknowledges that Seller is the developer of the overall Cityplace
project in Dallas, Texas, and in conjunction therewith, owns and will
continue to have exclusive ownership of certain rights, titles and
interests in and to the name "Cityplace" and related logos ("CITYPLACE
TRADENAME"); (xx) the grant of the License shall in no way grant any
rights to any person or entity in and to the Cityplace Tradename other
than to own, operate,
<PAGE> 32
promote, market and conduct business with respect to the Real Property
and Improvements under the name "Villas at Cityplace"; (iii) Purchaser
shall not be entitled to use the tradename "Cityplace" in any other
respect or for any other purpose; and (iv) Seller makes no warranty as
to the nature or extent of its ownership of the Cityplace Tradename
and will not be required to defend the License if it is challenged by
third parties (except to the extent that Seller shall have previously
granted rights with respect thereto that are inconsistent with the
License) (the property rights described in clauses (ii) and (iii) are
collectively called the "INTANGIBLE PROPERTY").
This Bill of Sale is executed by Seller and accepted by Purchaser
subject to all of the "PERMITTED EXCEPTIONS" as defined in that certain Special
Warranty Deed of even date herewith from Seller to Purchaser relating to the
conveyance of the Real Property.
This is a final and exclusive expression of the agreement of Seller
and Purchaser, and no course of dealing or usage of trade or course of
performance shall be relevant to explain or supplement any term expressed in
this Bill of Sale.
To have and to hold the Personal Property and Intangible Property unto
Purchaser, its legal representatives and assigns forever.
If any litigation between Seller and Purchaser arises out of the
obligations of the parties under this Agreement or concerning the meaning or
interpretation of any provision contained herein, the losing party shall pay
the prevailing party's costs and expenses of such litigation including, without
limitation, reasonable attorneys' fees. Any such attorneys' fees and other
expenses incurred by either party in enforcing a judgment in its favor under
this Agreement shall be recoverable separately from and in addition to any
other amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Agreement and to
survive and not be merged into any such judgment.
EXCEPT AS OTHERWISE PROVIDED IN THAT AGREEMENT OF PURCHASE AND SALE
DATED FEBRUARY ___, 1997 BETWEEN SELLER AND PURCHASER, THE CONVEYANCE OF THE
PERSONAL PROPERTY AND INTANGIBLE PROPERTY IS MADE ON AN AS-IS, WHERE-IS BASIS,
AND PURCHASER EXPRESSLY ACKNOWLEDGES THAT, IN CONSIDERATION OF THE AGREEMENTS
OF SELLER HEREIN, SELLER MAKES NO REPRESENTATION, EXPRESS OR IMPLIED, ARISING
BY OPERATION OF LAW, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF CONDITION,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.
<PAGE> 33
EXECUTED as of the date first hereinabove written.
SELLER:
OAK CREEK PARTNERS, LTD., a Texas
limited partnership
By: Cityplace Company, a Texas corporation,
as agent for the Managing General Partner,
Hampstead Associates, Inc.
By:____________________________________________
Neal Sleeper, President
PURCHASER:
PRICE/BAYBROOK, LTD., a Texas limited
partnership
By:____________________________________________
THE STATE OF TEXAS Section
Section
COUNTY OF DALLAS Section
This instrument was acknowledged before me on the ___________ day of
___________, 1997, by Neal Sleeper, President of Cityplace Company, a Texas
corporation, as agent for Hampstead Associates, Inc., the Managing General
Partner of Oak Creek Partners, Ltd., a Texas limited partnership, on behalf of
said limited partnership.
_______________________________________________
Notary Public, State of Texas
_______________________________________________
Notary's Typed or Printed Name
My Commission Expires:
<PAGE> 34
THE STATE OF TEXAS Section
Section
COUNTY OF DALLAS Section
This instrument was acknowledged before me on the __________ day of
____________________, 1997, by _____________________________, ______
_______________________ of Price/Texas, Inc., a Texas corporation, general
partner of Price/Baybrook, Ltd., a Texas limited partnership, on behalf of said
partnership.
_______________________________________________
Notary Public, State of Texas
_______________________________________________
Notary's Typed or Printed Name
My Commission Expires:_________________________
<PAGE> 35
EXHIBIT "D"
FORM OF TENANT ESTOPPEL CERTIFICATE
THIS TENANT ESTOPPEL CERTIFICATE ("Certificate"), dated as of
_______________, 1997, is executed by ____________________________________ __
("Tenant") in favor of PRICE/BAYBROOK, LTD., a Texas limited partnership
("Purchaser").
RECITALS
A. Purchaser and OAK CREEK PARTNERS, LTD. ("Landlord") have
entered into that certain Agreement of Purchase and Sale dated as of _
_______________, 1997 (the "Purchase Agreement"), whereby Purchaser has agreed
to purchase, among other things, the improved real property located in the City
of Dallas, County of Dallas, State of Texas, more particularly described on
Schedule "A" attached to the Purchase Agreement (the "Property").
B. Tenant and Landlord have entered into that certain Lease
Agreement, dated as of _____________________________ (together with all
amendments, modifications, supplements, guarantees and restatements thereof,
the "Lease"), for a portion of the Property.
C. Pursuant to the Lease, Tenant has agreed that upon the request
of Landlord, Tenant would execute and deliver an estoppel certificate
certifying the status of the Lease.
D. In connection with the Purchase Agreement, Landlord has
requested that Tenant execute this Certificate.
NOW, THEREFORE, Tenant certifies, warrants, and represents to
Purchaser as follows:
AGREEMENT
Section 1. Lease.
Attached hereto as Exhibit "A" is a true, correct, and complete copy
of the Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements, guarantees and restatements thereof:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 2. Leased Premises.
Pursuant to the Lease, Tenant leases those certain Premises (the
"Leased Premises") consisting of approximately _____________________ (_ _____ )
rentable square feet within the Property, as more particularly described in the
Lease. In addition, pursuant to the terms of the Lease, Tenant has the
[non-exclusive] right to use [______________________ parking spaces/the parking
area]
<PAGE> 36
located on the Property during the term of the Lease. [Cross-out the preceding
sentence or portions thereof if inapplicable.]
Section 3. Full Force of Lease.
The Lease is in full force and effect, has not been terminated, and is
enforceable in accordance with its terms.
Section 4. Complete Agreement.
The Lease constitutes the complete agreement between Landlord and
Tenant for the Leased Premises and the Property.
Section 5. Acceptance of Leased Premises.
Tenant has accepted and is currently occupying the Leased Premises.
Section 6. Lease Term.
The term of the Lease commenced on ______________________________ and
ends on_________________________, subject to the following options to extend:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 7. Purchase Rights.
Tenant has no option, right of first refusal, right of first offer, or
other right to purchase all or any portion of the Leased Premises or all or any
portion of the Property.
Section 8. Rights of Tenant.
Except as expressly stated in this Certificate, Tenant:
(a) has no right to renew or extend the term of the Lease;
(b) has no option or other right to purchase all or any part of
the Leased Premises or all or any part of the Property;
(c) has no right, title, or interest in the Leased Premises, other
than as Tenant under the Lease.
Section 9. Rent.
(a) The rent under the Lease is current, and Tenant is not in
default in the performance of any of its obligations under the Lease.
<PAGE> 37
(b) Tenant is currently paying base rent under the Lease in the
amount of ____________________________________________ Dollars ($_____________)
per month. Tenant has not received and is not, presently, entitled to any
abatement, refunds, rebates, concessions or forgiveness of rent or other
charges, free rent, partial rent, or credits, offsets or reductions in rent.
(c) Tenant's estimated share of operating expenses, common area
charges, insurance, real estate taxes and administrative and over-head
expenses is ________ percent (___%) and is currently being paid at the rate of
_______________________________________ Dollars ($_______________) per month,
payable to ____________________________________.
(d) There are no existing defenses or offsets against rent due or
to become due under the terms of the Lease, and there presently is no default
or other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Leased Premises, except as follows:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 10. Security Deposit.
No security deposit is held by Landlord under the Lease.
Section 11. Prepaid Rent.
Landlord has not received any prepaid rent.
Section 12. Insurance.
All insurance, if any, required to be maintained by Tenant under the
Lease is presently in effect.
Section 13. Pending Actions.
There are no actions, whether voluntary or otherwise, pending against
the Tenant (or any guarantor of the Tenant's obligations under the Lease)
pursuant to the bankruptcy or insolvency laws of the United States or any state
thereof.
Section 14. Landlord's Obligations.
As of the date of this Certificate, Landlord has performed all
obligations required of Landlord pursuant to the Lease and no offsets,
counterclaims, or defenses of Tenant under the Lease exist against Landlord.
As of the date of this Certificate, no events have occurred that, with the
passage of time or the giving of notice, would constitute a basis for offsets,
counterclaims, or defenses against the Landlord, except as follows:
________________________________________________________________________________
(If none, please state "None.")
<PAGE> 38
Section 15. Assignments by Landlord.
Tenant has received no notice of any assignment, hypothecation or
pledge of the Lease or rentals under the Lease by Landlord.
Section 16. Assignments by Tenant.
Tenant has not sublet or assigned the Leased Premises or the Lease or
any portion thereof to any sublessee or assignee. No one except Tenant and its
employees will occupy the Leased Premises except as permitted under the Lease.
The address for notices to be sent to Tenant is as set forth in the Lease.
Section 17. Environmental Matters.
The operation and use of the Leased Premises does not involve the
generation, treatment, storage, disposal or release into the environment of any
hazardous materials, regulated materials and/or solid waste, except those used
in the ordinary course of operating a retail store (if so permitted by the
Lease) or otherwise used in accordance with all applicable laws.
Section 18. Notification by Tenant.
From the date of this Certificate and continuing the earlier to occur
of (i) March 31, 1997, and (ii) Purchaser's acquisition of title to the
Property, Tenant agrees to immediately notify Purchaser, in writing, at the
following address, on the occurrence of any event or the discovery of any fact
that would make any representation contained in this Certificate inaccurate:
The PRICE REIT, Inc.
145 South Fairfax Avenue, Fourth Floor
Los Angeles, CA 90036
Attention: Joseph Kornwasser
Fax No. (213) 937-8175
Tenant makes this Certificate with the knowledge that it will be
relied upon by Purchaser in agreeing to purchase the Property. In the event
that Purchaser acquires the Property, nothing in this Section 18 shall limit
Tenant's obligations under the Lease.
Tenant has executed this Certificate as of the date first written
above by the person below, who is duly authorized to do so.
TENANT
By:_______________________________________
Name:_____________________________________
Its:______________________________________
<PAGE> 39
EXHIBIT "E"
FORM OF OEA STATEMENT
ESTOPPEL CERTIFICATE
The PRICE REIT, Inc.
145 South Fairfax Avenue, 4th Floor
Los Angeles, CA 90036
Attention: Joseph Kornwasser
Re: Target No. 875 - Cityplace Market, Dallas
Ladies and Gentlemen:
Reference is made to that certain Operation and Easement Agreement
(the "OEA") by and between DAYTON HUDSON CORPORATION, a Minnesota corporation
("Target"), and OAK CREEK PARTNERS, LTD., a Texas limited partnership
("Developer"), dated December 17, 1992 and filed for record in Volume 92247,
Page 6039, Deed Records, Dallas County, Texas.
Target, as a party to and in accordance with Section 6.3 of the OEA,
hereby certifies that, as of the date hereof and to the best of the
undersigned's knowledge:
1. Target has no knowledge of any default by Developer under the
OEA, or state of facts which with the passing of time or
notice would constitute a default by Developer under the OEA;
2. The OEA has not been assigned, modified or amended in any way
by Target, other than the following:
a. Letter agreement regarding shopping center signage,
dated December 15, 1992 (copy attached);
b. Letter from Oak Creek Partners, Ltd., dated December
28, 1993, regarding Developer's address change;
c. First Amendment to Operation and Easement Agreement
dated July 20, 1994 between Target and Developer; and
d. Second Amendment to Operation and Easement Agreement
dated October 4, 1995 between Target and Developer.
3. The OEA is in full force and effect.
<PAGE> 40
4. Target has approved the plans and specifications for the
construction of all existing improvements situated on the
Developer Tract as defined in the OEA.
Dated: _________, 1997 DAYTON HUDSON CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
<PAGE> 41
EXHIBIT "F"
SPECIAL WARRANTY DEED
THE STATE OF TEXAS Section
Section KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF DALLAS Section
OAK CREEK PARTNERS, LTD., a Texas limited partnership ("GRANTOR"), for
and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00) cash and
other good and valuable consideration to it paid by PRICE/BAYBROOK, LTD., a
Texas limited partnership ("GRANTEE"), whose mailing address is
_______________________________, the receipt and sufficiency of which are
hereby acknowledged and confessed, has GRANTED, BARGAINED, SOLD, and CONVEYED,
and by these presents does GRANT, BARGAIN, SELL, and CONVEY unto the Grantee
that certain land ("LAND") described in EXHIBIT "A" hereto, together with all
improvements thereon and all rights and appurtenances appertaining thereto
(herein collectively called the "PROPERTY").
This conveyance is given and accepted subject to the "Permitted
Encumbrances" (as defined in that certain Agreement of Purchase and Sale
between Grantor and Grantee dated February __, 1997), and all municipal or
other governmental zoning laws, regulations and ordinances, if any, affecting
the herein-described Property (herein collectively referred to as the
"PERMITTED EXCEPTIONS").
TO HAVE AND TO HOLD the Property together with all and singular the
rights and appurtenances thereto in anywise belonging unto Grantee, its legal
representatives, successors, and assigns forever; and Grantor does hereby bind
itself, its legal representatives, successors, and assigns to WARRANT AND
FOREVER DEFEND all and singular the Property, subject to the Permitted
Exceptions, unto Grantee, its legal representatives, successors, and assigns,
against every person whomsoever lawfully claiming or to claim the same or any
part thereof by, through, or under Grantor, but not otherwise.
Executed to be effective as of the ______ day of_______________, 1997.
<PAGE> 42
GRANTOR:
OAK CREEK PARTNERS, LTD., a Texas
limited partnership
By: Cityplace Company, a Texas corporation,
as agent for the Managing General
Partner, Hampstead Associates, Inc.
By:_________________________________________
Neal Sleeper, President
THE STATE OF _________________________ Section
Section
COUNTY OF ____________________________ Section
This instrument was acknowledged before me on the _________ day of
______________________, 1997, by Neal Sleeper, President of Cityplace Company,
a Texas corporation, as agent for Hampstead Associates, Inc., the Managing
General Partner of Oak Creek Partners, Ltd., a Texas limited partnership, on
behalf of said limited partnership.
____________________________________________
Notary Public, State of_____________________
____________________________________________
Notary's Typed or Printed Name
My Commission Expires:______________________
<PAGE> 43
EXHIBIT "G"
ASSIGNMENT AND ASSUMPTION OF LEASES AND CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND CONTRACTS IS MADE and
entered into this __________ day of ____________________________, 1997, by and
between OAK CREEK PARTNERS, LTD., a(n) Texas limited partnership ("SELLER"),
and PRICE/BAYBROOK, LTD., a Texas limited partnership ("PURCHASER").
WHEREAS, Seller is conveying to Purchaser certain real property ("REAL
PROPERTY") in the Cityplace Development, Dallas, Texas, more particularly
described on EXHIBIT "A" attached hereto and incorporated herein by reference;
and
WHEREAS, Seller desires to assign to Purchaser certain rights and
interests relating to the Real Property.
NOW, THEREFORE, Seller, for and in consideration of Ten Dollars
($10.00) and other good and valuable consideration in hand paid to Seller by
Purchaser, does hereby grant, sell, assign, transfer, convey and deliver to
Purchaser the following:
1. All of Seller's right, title and interest, as landlord, under
all tenant leases and/or other agreements demising space in and to the Real
Property ("LEASES").
2. All contracts or agreements relating to the Real Property
listed on EXHIBIT "C" attached hereto, but only to the extent assignable
("CONTRACTS");
The herein-described Leases and Contracts are collectively referred to as the
"PROPERTY."
Purchaser hereby agrees to assume all of Seller's duties and
obligations under the Leases described on EXHIBIT "B" attached hereto and
Contracts which arise on or after and relate to the period commencing on the
date hereof, and to indemnify, protect, defend and hold Seller harmless from
all such duties and obligations.
Seller hereby agrees to remain liable for all of Seller's duties and
obligations under the Leases and Contract arising prior to the date hereof or
related to the period prior to the date hereof and to indemnify, protect,
defend and hold Purchaser harmless from all such duties and obligations arising
prior to the date hereof.
This Assignment of Leases and Contracts is executed by Seller and
accepted by Purchaser subject to any and all terms and conditions contained in
the Leases and Contracts and all of the "PERMITTED ENCUMBRANCES" as defined in
that certain Special Warranty Deed of even date herewith from Seller to
Purchaser relating to the conveyance of the Real Property.
<PAGE> 44
This is a final and exclusive expression of the agreement of Seller
and Purchaser, and no course of dealing or usage of trade or course of
performance shall be relevant to explain or supplement any term expressed in
this Assignment and Assumption of Leases and Contracts.
To have and to hold the Property unto Purchaser, its legal
representatives and assigns forever [; and Seller does hereby bind itself, its
legal representatives and assigns to WARRANT AND FOREVER DEFEND all and
singular the Property, subject to the Permitted Encumbrances, unto Purchaser,
its legal representatives, successors, and assigns, against every person
whomsoever lawfully claiming or to claim the same or any part thereof by,
through, or under Seller but not otherwise.]
EXECUTED as of the date first hereinabove written.
SELLER:
OAK CREEK PARTNERS, LTD., a Texas
limited partnership
By: Cityplace Company, a Texas corporation,
as agent for the Managing General Partner,
Hampstead Associates, Inc.
By:___________________________________
Roger C. Gault, AIA, Vice President
PURCHASER:
PRICE/BAYBROOK, LTD., a Texas limited
partnership
By: PRICE/TEXAS, INC., a Texas
corporation, its general partner
By:___________________________________
Name:_________________________________
Title:________________________________
<PAGE> 45
THE STATE OF _________________________ Section
Section
COUNTY OF ____________________________ Section
This instrument was acknowledged before me on the __________ day of
_____________________, 1997, by Roger C. Gault, AIA, Vice President of
Cityplace Company, a Texas corporation, as agent for Hampstead Associates,
Inc., the Managing General Partner of Oak Creek Partners, Ltd., a Texas limited
partnership, on behalf of said limited partnership.
________________________________________________
Notary Public, State of ________________________
________________________________________________
Notary's Typed or Printed Name
My Commission Expires:__________________________
THE STATE OF _________________________ Section
Section
COUNTY OF ____________________________ Section
This instrument was acknowledged before me on the __________ day of
____________________, 1997, by _____________________________, ______
_______________________ of Price/Texas, Inc., a Texas corporation, general
partner of Price/Baybrook, Ltd., a Texas limited partnership, on behalf of said
partnership.
________________________________________________
Notary Public, State of ________________________
________________________________________________
Notary's Typed or Printed Name
My Commission Expires:__________________________
<PAGE> 46
EXHIBIT "H"
FORM OF NON-FOREIGN CERTIFICATE
CERTIFICATION OF NON-FOREIGN STATUS
(Foreign Investment in Real Property Tax Act)
Internal Revenue Code Section 1445 provides that a transferee of a
United States real property interest must withhold tax if the transferor is a
foreign person. To inform PRICE/BAYBROOK, LTD. ("Transferee") that withholding
of tax is not required upon the disposition of a United States real property
interest by the undersigned ("Transferor"), Transferor hereby certifies and
declares as follows:
1. Transferor's U.S. tax identification/social security number is:
___________________
2. Transferor's principal office address is
________________________________________; and
3. Transferor is not a foreign person (foreign corporation,
foreign partnership, foreign trust, foreign estate or non-resident alien), as
defined in the Internal Revenue Code and Income Tax Regulations.
Transferor acknowledges that this certification may be disclosed by
Transferee to the Internal Revenue Service and that any false statement
contained in this certification may be punished by fine or imprisonment or
both.
Transferor understands that Transferee is relying on this
certification to determine whether withholding is required by Transferee
pursuant to Internal Revenue Code Section 1445.
Under penalties of perjury, the undersigned signatory declares that:
I have examined this certification, to the best of my knowledge and belief it
is true and complete, and I am duly authorized to execute this certification on
behalf of Transferor.
Dated: _______________________, 1997
SIGNATURE BLOCK
<PAGE> 1
EXHIBIT 2.5
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
By and Between
MaxVest Associates, Limited Partnership, a Georgia limited partnership,
as Seller
THE PRICE REIT, INC.
a Maryland corporation,
as Buyer
and
Chicago Title Insurance Company, as Escrow Holder
February 5, 1997
<PAGE> 2
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I PROPERTY...............................................................1
1.1 LAND 1
1.2 APPURTENANCES 1
1.3 IMPROVEMENTS 2
1.4 LEASES AND RENTS 2
1.5 PERSONAL PROPERTY 2
1.6 INTANGIBLE PROPERTY 2
ARTICLE II PURCHASE PRICE........................................................2
2.1 PURCHASE PRICE 2
2.2 PAYMENT OF PURCHASE PRICE 3
2.3 EARNEST MONEY DEPOSIT 3
2.4 INVESTMENT OF DEPOSIT 3
2.5 DEPOSIT AS LIQUIDATED DAMAGES 3
ARTICLE III TITLE TO PROPERTY....................................................4
3.1 TITLE 4
3.2 OTHER CONVEYANCE DOCUMENTS 4
ARTICLE IV CONDITIONS TO CLOSING.................................................5
A. BUYER'S CONDITIONS TO CLOSING 5
4.1 NON-FOREIGN STATUS OF SELLER 5
4.2 REVIEW AND APPROVAL OF TITLE AND SURVEY 5
4.3 REVIEW AND APPROVAL OF OTHER MATTERS 6
4.4 SERVICE AND OTHER CONTRACTS 7
4.5 PHYSICAL CHARACTERISTICS OF THE PROPERTY 7
4.6 GOVERNMENTAL PERMITS, APPROVALS AND REGULATIONS 8
4.7 REPRESENTATIONS AND WARRANTIES 8
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
4.8 IMPAIRMENT OF PROPERTY 8
4.9 APPROVAL 8
4.10 OBJECTIONS TO PROPERTY OR OTHER MATTERS 8
4.11 TENANT MATTERS 9
4.12 REA ESTOPPELS 9
4.13 SUBDIVISION 9
4.14 DELIVERY OF DOCUMENTS 9
B. SELLER'S CONDITIONS TO CLOSING 9
4.15 DELIVERY OF DOCUMENTS AND PURCHASE PRICE 10
4.16 SUBDIVISION 10
ARTICLE V CLOSING, RECORDING AND TERMINATION....................................10
5.1 DEPOSIT WITH ESCROW HOLDER AND ESCROW INSTRUCTIONS 10
5.2 CLOSING 10
5.3 DELIVERY BY SELLER 10
5.4 DELIVERY BY BUYER 12
5.5 OTHER INSTRUMENTS 12
5.6 PRORATIONS 12
5.7 COSTS AND EXPENSES 14
5.8 CLOSING AND RECORDATION 14
5.9 TERMINATION OF AGREEMENT 14
5.10 SECURITY DEPOSITS 15
ARTICLE VI REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER..................15
6.1 AUTHORITY 15
6.2 TITLE 15
6.3 THE LEASES 15
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
6.4 NO LITIGATION OR ADVERSE EVENTS 16
6.5 COMPLIANCE WITH LAWS 16
6.6 NO DEFAULTS IN OTHER AGREEMENTS 16
6.7 EMINENT DOMAIN 16
6.8 PERMITS, CO'S, ZONING, ETC. 16
6.9 TAXES AND ASSESSMENTS 16
6.10 ENVIRONMENT 16
6.11 PHYSICAL CONDITION 18
6.12 EMPLOYEES 18
6.13 MECHANIC'S LIENS 18
6.14 OPERATING STATEMENTS 18
6.15 DISCLOSURE 18
6.16 NO LEASES OF PROPERTY OR ASSETS 19
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF BUYER.............................19
7.1 REPRESENTATIONS AND WARRANTIES OF BUYER 19
ARTICLE VIII POSSESSION, DESTRUCTION AND CONDEMNATION...........................20
8.1 POSSESSION 20
8.2 LOSS, DESTRUCTION AND CONDEMNATION 20
ARTICLE IX MAINTENANCE AND OPERATION OF THE PROPERTY; COVENANTS.................22
9.1 MAINTENANCE 22
9.2 LEASES AND OTHER AGREEMENTS 22
9.3 ENCUMBRANCES 23
9.4 CONSENTS AND NOTICES 23
9.5 AUDIT COOPERATION 23
ARTICLE X MISCELLANEOUS.........................................................23
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
10.1 NOTICES 23
10.2 BROKERS AND FINDERS 24
10.3 SUCCESSORS AND ASSIGNS 24
10.4 AMENDMENTS 25
10.5 CONTINUATION AND SURVIVAL OF INDEMNITIES, REPRESENTATIONS,
WARRANTIES AND POST-CLOSING OBLIGATIONS 25
10.6 INTERPRETATION 25
10.7 GOVERNING LAW 25
10.8 MERGER OF PRIOR AGREEMENTS 25
10.9 ATTORNEYS' FEES 25
10.10 NOTICE OF TERMINATION 25
10.11 SPECIFIC PERFORMANCE; DAMAGES 26
10.12 RELATIONSHIP 26
10.13 COUNTERPARTS 26
10.14 TIME OF THE ESSENCE 26
10.15 NO WAIVER 26
10.16 SATURDAYS, SUNDAYS, LEGAL HOLIDAYS 26
10.17 OFFER AND ACCEPTANCE; EFFECTIVE DATE 26
10.18 CONFIDENTIALITY 27
</TABLE>
iv
<PAGE> 6
INDEX TO SCHEDULES
<TABLE>
<CAPTION>
<S> <C>
Schedule A Legal Description of the Land
Schedule B Form of Deed
Schedule C Form of Assignment and Assumption of Leases and Rents
Schedule D Form of Bill of Sale
Schedule E Form of Assignment of Contracts, Intangible Property, Warranties and
Guarantees
Schedule F Form of Non-Foreign Certificate
Schedule G Form of Tenant Estoppel Certificate
Schedule H Rent Roll
</TABLE>
i
<PAGE> 7
DEFINITIONS
The following is a list of defined terms used herein and the
sections in which such terms are defined.
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
AGREEMENT INTRODUCTION
APPROVED CONTRACTS 4.4
APPURTENANCES 1.2
ASSIGNMENT OF INTANGIBLE PROPERTY,
WARRANTIES AND GUARANTEES 1.6
ASSIGNMENT OF LEASES AND RENTS 1.4
BILL OF SALE 1.5
BUYER INTRODUCTION
BUYER APPROVAL 4.9
CLOSING 5.2
CLOSING DATE 5.2
CODE 4.1
CONTRACTS 4.4
DEED 1.1
EARNEST MONEY DEPOSIT 2.3
ESCROW HOLDER INTRODUCTION
IMPROVEMENTS 1.3
INTANGIBLE PROPERTY 1.6
LAND 1.1
LEASES 1.4
MAJOR LEASE 4.8
NON-FOREIGN CERTIFICATE 4.1
OUTSIDE CLOSING DATE 5.2
PERSONAL PROPERTY 1.5
PERMITTED EXCEPTIONS 4.2
PHASE I REPORT 4.5
PROPERTY 1.6
PURCHASE PRICE 2.1
REAL PROPERTY 1.6
RENT ROLL 6.3
RENTS 1.4
REVIEW PERIOD 4.10
SELLER INTRODUCTION
SURVEY 4.2
TITLE COMPANY 3.1
TITLE POLICY 3.1
TITLE REPORT 4.2
</TABLE>
ii
<PAGE> 8
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
("AGREEMENT") is made and entered into as of February 5, 1997, by and between
MAXVEST ASSOCIATES, LIMITED PARTNERSHIP, a Georgia limited partnership
("SELLER"), THE PRICE REIT, INC., a Maryland corporation ("BUYER"), and Chicago
Title Insurance Company ("ESCROW HOLDER"), with reference to the following
facts:
A. Seller is the owner of the Property, as hereinafter
defined.
B. Buyer desires to purchase from Seller and Seller
desires to sell to Buyer the Property, all on the terms and conditions set forth
herein.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the
mutual agreements herein set forth, and other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Seller and Buyer, and
where appropriate Escrow Holder, agree as follows:
ARTICLE I
PROPERTY
Seller hereby agrees to sell and convey to Buyer, and Buyer
hereby agrees to purchase from Seller, subject to the terms and conditions set
forth herein, the following:
1.1 Land. That certain real property (the "LAND") described in
Schedule A hereto, less the portion thereof representing the outparcel to be
subdivided from the Land pursuant to Section 4.13 hereof, all of which shall be
conveyed to Buyer pursuant to a deed in the form of Schedule B hereto (the
"DEED");
1.2 Appurtenances. All rights, privileges and easements
appurtenant to and for the benefit of the Land, including, without limitation,
all minerals, oil, gas and other hydrocarbon substances on and under the Land,
as well as all development rights, air rights, water, water rights and water
stock relating to the Land and any other easements, rights-of-way or
appurtenances owned by Seller and used in connection with the beneficial
operation, use and enjoyment of the Land, the Leases, the Rents, the
Improvements, the Intangible Property, or any other appurtenance, together with
all rights of Seller in and to public and private streets, roads, avenues,
alleys and passageways, sidewalks, driveways, parking areas and areas adjacent
thereto or used in connection therewith (open or proposed, in front of or
abutting the Land), and all rights of Seller in any land lying in the bed of any
existing or proposed street adjacent to the Land, all strips or gores of land
adjoining the Land, and any awards made or to be made and any unpaid award for
damage to the Land by reason of any change of grade of any such street, road,
avenue, alley or passageway (all of which are collectively referred to as the
"APPURTENANCES");
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1.3 Improvements. All improvements and fixtures located or to
be located on the Land, including, without limitation, all buildings and
structures presently located on the Land or to be located thereon on the Closing
Date, all apparatus, equipment and appliances owned by Seller and presently
located on the Land and used in connection with the operation or occupancy
thereof, such as heating and air conditioning systems and facilities used to
provide any utility services, parking services, refrigeration, ventilation,
garbage disposal, recreation or other services thereto, and all landscaping and
leasehold improvements which are the property of the owner of the Land, if any
(all of which are collectively referred to as the "IMPROVEMENTS");
1.4 Leases and Rents. All leases, occupancy agreements and
other similar agreements to which Seller is a party or by which it is bound,
together with all modifications, extensions and renewals thereof, and any
guarantees of any of the foregoing with respect to or demising any part of the
Land, Appurtenances or Improvements (the "LEASES"), all income, receipts, funds
and revenues of any kind whatsoever payable under the Leases or otherwise with
respect to all or any portion of the Land, Appurtenances or Improvements (the
"RENTS"), all of which Leases and Rents shall be transferred and assigned to
Buyer pursuant to an instrument in the form of Schedule C hereto (the
"ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS");
1.5 Personal Property. All tangible personal property owned by
Seller and located or to be located on, or situated or to be situated in and
used in connection with, the Land and/or the Improvements ("PERSONAL PROPERTY"),
and all of which Personal Property shall be transferred and assigned to Buyer
pursuant to an instrument in the form of Schedule D hereto (the "BILL OF SALE");
and
1.6 Intangible Property. All of the interest of Seller in (i)
any intangible personal property which relates to and is reasonably required for
the operation and functioning of the Land, Improvements or Personal Property
generally, and (ii) any and all warranties, guarantees, permits, contracts and
other rights owned by Seller relating to the ownership, operation or functioning
of all or any part of the Property, as defined below (including without
limitation all third party guarantees and warranties, express or implied, in
connection with the construction of the Improvements) (all of which are
collectively referred to as the "INTANGIBLE PROPERTY"), and all of which, to the
extent assignable, shall be assigned to Buyer pursuant to one or more (as
determined by Buyer) assignments in the form of Schedule E hereto (the
"ASSIGNMENT OF CONTRACTS, INTANGIBLE PROPERTY, WARRANTIES AND GUARANTEES").
All of the items described in Sections 1.1, 1.2, 1.3, 1.4, 1.5
and 1.6 above are hereinafter collectively referred to as the "PROPERTY." The
items described in Sections 1.1, 1.2, and 1.3 above are hereinafter referred to
collectively as the "REAL PROPERTY."
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. The purchase price for the Property shall
be Four Million Nine Hundred Seventy-Five Thousand Dollars ($4,975,000.00) (the
"PURCHASE PRICE"). The Purchase Price shall be allocated among Land,
Improvements and Personal Property as Buyer shall reasonably determine.
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2.2 Payment of Purchase Price. The Purchase Price shall be
paid by Buyer into the escrow for this Agreement to be maintained by Escrow
Holder ("ESCROW") at the Closing by wire transfer of immediately available funds
in accordance with wiring instructions to be provided by Escrow Holder;
provided, however, that Buyer shall adjust the funds to be wired pursuant to
this Section 2.2 for the following: (i) the amount of credits due to Buyer, or
debits due from Buyer (as the case may be) for prorations hereunder, and (ii)
the amount of the Earnest Money Deposit (hereinafter defined) plus earnings
thereon.
2.3 Earnest Money Deposit. Concurrently with the delivery of
one (1) fully executed copy of this Agreement to Escrow Holder, Buyer shall
deposit with Escrow Holder the sum of One Hundred Thousand Dollars ($100,000.00)
(the "EARNEST MONEY DEPOSIT") in the form of a check or wire transfer. The
Earnest Money Deposit shall become nonrefundable after the end of the Review
Period, unless this Agreement terminates other than due to a default of Buyer
hereunder.
2.4 Investment of Deposit. Escrow Holder shall place the
Earnest Money Deposit in an interest-bearing account with a bank or savings
association, the deposits of which are federally insured, as Buyer may select.
All interest on the Earnest Money Deposit shall accrue for the benefit of Buyer
until the Closing. Notwithstanding the foregoing, however, in the event of any
default by Buyer hereunder, all interest earned on such account shall accrue to
the benefit of Seller. Seller shall not be responsible for, nor bear the risk of
loss of, the Earnest Money Deposit, and shall not be responsible for the rate of
return thereon.
2.5 Deposit As Liquidated Damages. IF THE SALE OF THE PROPERTY
AS CONTEMPLATED HEREUNDER IS NOT CONSUMMATED SOLELY BECAUSE OF A DEFAULT UNDER
THIS AGREEMENT ON THE PART OF BUYER, ESCROW HOLDER SHALL PROMPTLY PAY OVER TO
SELLER THE EARNEST MONEY DEPOSIT, IF ANY, THEN BEING HELD BY ESCROW HOLDER, AND
SELLER SHALL RETAIN THE EARNEST MONEY DEPOSIT AS LIQUIDATED DAMAGES. THE PARTIES
ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT THE PURCHASE AND SALE OF
THE PROPERTY IS NOT CONSUMMATED AS CONTEMPLATED HEREIN AS A RESULT OF A DEFAULT
BY BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE,
BY PLACING THEIR SIGNATURES BELOW, THE PARTIES EXPRESSLY AGREE AND ACKNOWLEDGE
THAT THE EARNEST MONEY DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE
PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES IN SUCH EVENT. THEREFORE, IF
BUYER BREACHES THIS AGREEMENT AND WRONGFULLY FAILS TO COMPLETE THE PURCHASE OF
THE PROPERTY AS PROVIDED HEREIN, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES
IN THE AMOUNT OF THE EARNEST MONEY DEPOSIT. ON RECEIPT AND RETENTION BY SELLER
OF THE EARNEST MONEY DEPOSIT, THIS AGREEMENT SHALL TERMINATE AND BUYER SHALL
HAVE NO FURTHER OBLIGATIONS OR LIABILITY HEREUNDER, EXCEPT IN CONNECTION WITH
ANY INDEMNITY WHICH, BY ITS TERMS, SURVIVES ANY TERMINATION OF THIS AGREEMENT.
THE PARTIES FURTHER ACKNOWLEDGE THAT THE EARNEST MONEY DEPOSIT HAS BEEN AGREED
UPON AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT BUYER WRONGFULLY
FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY AS PROVIDED HEREIN. IN NO EVENT,
HOWEVER, SHALL THE
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FOREGOING PROVISIONS LIMIT THE DAMAGES RECOVERABLE BY SELLER
FROM BUYER DUE TO BUYER'S OBLIGATION TO INDEMNIFY SELLER IN ACCORDANCE WITH THIS
AGREEMENT OR DUE TO A BREACH OF ANY REPRESENTATION, WARRANTY, COVENANT OR
AGREEMENT WHICH SURVIVES THE CLOSING UNDER THE TERMS OF THIS AGREEMENT.
Seller:
Dated:_______________________
MAXVEST ASSOCIATES, LIMITED
PARTNERSHIP, a Georgia limited
partnership
By: Theta Corp.,
its general partner
By:_______________________
Its:______________________
Buyer:
THE PRICE REIT, INC.
Dated:_______________________ By:__________________________
Its:_________________________
ARTICLE III
TITLE TO PROPERTY
3.1 Title. At the Closing, Seller shall convey to Buyer
marketable and insurable fee simple title to the Property pursuant to the Deed.
In furtherance thereof, Seller shall cause Escrow Holder, in its capacity title
company (the "TITLE COMPANY") to issue an ALTA extended coverage Owner's Policy
of Title Insurance (Form B, Rev. 10/17/70), (the "TITLE POLICY"), together with
such endorsements thereto as Buyer may request, in the full amount of the
Purchase Price, insuring fee simple title to the Real Property in Buyer, subject
only to (i) the lien of real property taxes for the then applicable fiscal year,
to the extent not yet due and payable, (ii) the lien of supplemental taxes
imposed by reason of transfer on or after the Closing, (iii) the Leases, and
(iv) the Permitted Exceptions.
3.2 Other Conveyance Documents. At the Closing, Seller shall
(i) assign the Leases and Rents to Buyer pursuant to the Assignment and
Assumption of Leases and Rents; (ii) transfer title to the Personal Property to
Buyer pursuant to the Bill of Sale, and (iii) transfer and assign to Buyer all
of Seller's rights in and to the Intangible Property pursuant to the Assignment
of Contracts, Intangible Property, Warranties and
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Guarantees; such title and rights to be free of any liens, encumbrances or
interests of third parties other than the Permitted Exceptions.
ARTICLE IV
CONDITIONS TO CLOSING
A. Buyer's Conditions to Closing.
The complete satisfaction as of the expiration of the Review
Period (or such other date as may be specified herein) with respect to those
matters described in Sections 4.2-4.6 and 4.9-4.10 hereof, and as of the Closing
Date with respect to the balance of the following conditions, is a condition
precedent to Buyer's obligation to purchase the Property:
4.1 Non-Foreign Status of Seller. Seller's execution and
delivery to Buyer, on the Closing Date, of Seller's certificate in the form
attached hereto as Schedule F (the "NON-FOREIGN Certificate") stating, under
penalty of perjury, that (a) Seller is not a "foreign person" for the purposes
of Section 1445 of the Internal Revenue Code of 1986, as amended (the "CODE"),
and that withholding of tax will not be required thereunder, and (b) withholding
is not required under the provisions of any state laws in connection with the
contemplated transfer of the Property by Seller to Buyer (or, if such
withholding is required, authorizing such withholding).
4.2 Review and Approval of Title and Survey. In connection
with Buyer's review of title and related matters, Seller shall, at its sole cost
and expense and as soon as practicable, but in no event later than ten (10) days
after the date of this Agreement, deliver to Buyer or cause Escrow Holder to
deliver to Buyer a current extended coverage commitment (ALTA Form 1970) for
title insurance for the Property issued by the Title Company (the "TITLE
REPORT"), accompanied by legible record copies of all of the documents referred
to in the Title Report, together with all restrictions, agreements or other
documents which affect or will affect the ownership of or title to the Property
and which are not disclosed by the Title Report for the Property, if any, but
which are known to Seller. Buyer shall arrange, at its sole cost and expense,
for the preparation of a current ALTA survey of the Property, certified to Buyer
in a form reasonably required by Buyer (the "SURVEY"). Buyer shall have until
the expiration of thirty (30) business days from the delivery of the Title
Report to notify Escrow Holder and Seller in writing of Buyer's disapproval of
the condition of title. Buyer shall give Seller and Escrow Holder written notice
outlining in detail any title items objected to and specifying Buyer's desired
cure. Seller shall have ten (10) business days after receipt of Buyer's notice
to advise Buyer and Escrow Holder, in writing, as to whether Seller shall cure
said objections prior to the Closing (and should Seller fail to advise Buyer of
Seller's objection within such ten (10) business day period, Seller shall be
deemed to have elected to refuse to cure said objections). In the event that
Seller elects not to cure such objections, or elects to cure such objections and
fails or refuses to cure said objections, Buyer shall have the option, which
must be exercised within 10 days of Buyer's receipt of Seller's response or
deemed response, or Closing (whichever is earlier), (a) to waive Buyer's
objections and purchase the Property as otherwise contemplated in this
Agreement, notwithstanding such objections, in which event the subject matter of
such waived objections shall be included within Permitted Exceptions, and Seller
shall convey the Property to Buyer, subject to the Permitted Exceptions, or (b)
to terminate this Agreement
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by written notice to Seller and Escrow Holder, whereupon any and all right and
obligations of Buyer and Seller hereunder shall terminate (other than any such
obligations which, by their express terms, survive any termination of this
Agreement) and within five (5) days after Buyer has provided notice to Escrow
Holder, Escrow Holder shall deliver to Buyer the Earnest Money Deposit, together
with interest thereon. All exceptions to title to, and/or encumbrances against,
the Property shown on the Title Report or Survey or otherwise provided to Buyer
by Seller as hereinabove described but not objected to by Buyer within the time
period provided herein, and those items referred to in items (i) and (ii) and
(iii) of the second sentence of Section 3.1 hereof, and the covenants,
conditions and restrictions referred to in Section 4.13 hereof, shall be deemed
"PERMITTED EXCEPTIONS"; provided, however, that Seller covenants to remove all
monetary encumbrances (other than those with respect to the liens referred to in
items (i) and (ii) of the second sentence of Section 3.1 hereof) affecting the
Property or any portion thereof prior to Closing, and Seller further agrees that
no monetary encumbrances other than the liens referred to in items (i) and (ii)
of the second sentence of Section 3.1 hereof shall be Permitted Exceptions.
4.3 Review and Approval of Other Matters. In connection with
Buyer's review of other matters, Seller shall deliver or otherwise make
available to Buyer, within ten (10) days after the date of this Agreement, true,
complete and correct copies of the following items, to the extent in Seller's or
Seller's manager's possession:
(a) Copies of all soils and hazardous materials
reports, termite reports, engineering studies, topographical
maps, appraisals and other reports, studies, and maps with
respect to the Property (other than materials related to
matters among the partners in Seller);
(b) Copies of subdivision maps relating to the Land;
(c) Copies of all approvals and permits relating to
Seller's development and ownership of the Real Property and
copies of all governmental approvals and permits otherwise
respecting the Real Property;
(d) Copies of all correspondence with tenants pursuant
to the terms of or otherwise relating to their leases relating
to the construction, permitting or entitlement of the Real
Property, and copies of documents and certificates from
appropriate governmental authorities relating to the zoning,
building and platting status of the Real Property;
(e) A description of existing and proposed local
improvements affecting the Property, including assessment
levels;
(f) Copies of all service contracts relating to the
Property;
(g) Copies of the real property and personal property
tax bills for the Property for the period of Seller's
ownership;
(h) Copies of all tenant leases and proposed tenant
leases on the Property;
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(i) Copies of all plans and construction drawings for
all buildings constructed or to be constructed on the
Property; and
(j) Copies of all insurance policies maintained by
Seller with respect to the Property for the period of Seller's
ownership.
Buyer agrees to keep all information relating to the Property
provided to it by Seller or obtained by Buyer in the course of its review and
inspection of the Property pursuant to this Agreement confidential until Closing
has occurred, subject to Section 10.18 hereof; provided, however, that such
information may be disclosed as required by law, or to Buyer's agents,
attorneys, employees or consultants who are assisting Buyer with its inspection
and evaluation of the Property, to Buyer's existing or prospective lenders or
joint venture partners, and to the extent required by any subpoena issued by any
court of competent jurisdiction or by governmental or administrative body. The
obligations of Buyer under this Section 4.3 shall survive any termination of
this Agreement.
4.4 Service and Other Contracts. Buyer's review and approval,
in its sole and absolute discretion, of all utility contracts, water and sewer
service contracts, service contracts, warranties, permits, soils reports, and
other contracts or documents of any nature relating to the Property or any
portion thereof (the "CONTRACTS"; those Contracts which Buyer does not
disapprove in writing prior to the end of the Review Period (and prior to the
Closing Date in the case of contracts not entered into or delivered to the Buyer
until after the expiration of the Review Period) shall be referred to as the
"APPROVED CONTRACTS"). Buyer's remedy if it disapproves any Contract(s) shall be
(i) to the extent such disapproved Contract(s) can be terminated, to compel the
Seller to terminate such disapproved Contract(s) on or prior to the Closing by
advising Seller of such requests at the time Buyer disapproves of any such
Contract, which Seller hereby agrees to do at its sole cost and expense if so
requested by Buyer, or (ii) to the extent Seller cannot terminate such
disapproved Contract(s), Buyer shall have the option, which must be exercised
within ten (10) days of Buyer's receipt of Seller's notice to Buyer that Seller
cannot terminate such disapproved Contract(s), or Closing (whichever is
earlier), (a) to waive Buyer's disapproval of the Contract(s) and purchase the
Property as otherwise contemplated in this Agreement, and Seller shall convey
the Property to Buyer, or (b) to terminate this Agreement by written notice to
Seller and Escrow Holder, whereupon any and all right and obligations of Buyer
and Seller hereunder shall terminate (other than such obligations which, by
their express terms, survive any termination of this Agreement) and within five
(5) days after Buyer has provided notice to Escrow Holder, Escrow Holder shall
deliver to Buyer the Earnest Money Deposit, together with interest thereon.
4.5 Physical Characteristics of the Property. Buyer's review
and approval, in its sole and absolute discretion, of (a) an environmental
assessment (which shall, without limiting the scope of the report, contain an
assessment of asbestos and radon affecting the Property) by an environmental
consultant of Buyer's choice and at Buyer's cost (the "PHASE I REPORT"), and (b)
the results of Buyer's physical inspection and testing of the Property, or any
portion thereof (which testing shall be conducted at Buyer's expense, and may
include, but shall not be limited to, testing for the presence of asbestos,
PCBs, as defined below, and other Hazardous Materials, as defined below,
including without limitation the performance of core sampling, drilling and
other intrusive testing), of the structural, mechanical, electrical and other
physical or environmental characteristics of the Property, including any tenant
improvements or other construction installed or to be installed as of the
Closing Date. To the extent not prohibited by the Leases, Seller shall
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allow Buyer reasonable access to the Property to perform any physical inspection
thereof which Buyer reasonably deems appropriate. Buyer shall notify Seller in
advance and coordinate the timing of any visits to the Property with Seller so
as to minimize disruption of the on-going operation of the Property. Buyer shall
pay all costs incurred in making any tests, surveys, analyses, and
investigations of the Property and shall indemnify and hold Seller harmless from
and against any and all liens which may arise as a result of the activities of
Buyer or its agents, representatives, or designees on the Property, and against
any and all claims for death or injury to persons or for physical damage to the
Real Property arising out of or as a result of Buyer or its agents,
representatives or designees going upon the Property pursuant to the provisions
of this Section or otherwise.
4.6 Governmental Permits, Approvals and Regulations. Buyer
shall have confirmed that all governmental permits and approvals with respect to
the Property relating to the zoning, entitlements, construction, operation, use
or occupancy of the Property or any portion thereof, are in full force and
effect.
4.7 Representations and Warranties. All of Seller's
representations and warranties contained herein or made in writing by Seller
shall have been true and correct in all material respects when made and shall be
true and correct in all material respects as of the Closing Date, as though made
at, and as of, the Closing Date, and Seller shall have executed and delivered
all documents and complied with all of Seller's covenants and agreements
contained in or made pursuant to this Agreement.
4.8 Impairment of Property. No material adverse change shall
have occurred in the condition or ownership of the Property or any part thereof
from and after the conclusion of the Review Period. As of the Closing no part of
the Property, or any interest of Seller therein, shall be encumbered by any
lien, pledge, security interest, financing or due and unpaid charge, tax or
other imposition (other than Permitted Exceptions and items which will be
removed on or prior to the Closing Date), or materially damaged as described in
Section 8.2 and not repaired to Buyer's satisfaction or taken in any material
respect in condemnation or other like proceeding and no such proceeding shall be
pending or threatened, except as otherwise provided in Section 8.2 hereof. There
shall have occurred no material adverse change in the financial condition of any
tenant under any of the Leases demising five thousand (5,000) square feet or
more of the Improvements (each, a "MAJOR LEASE"), and there shall be no material
default, or event that with the giving of notice or the passage of time or both
would constitute a material default, under any Major Lease or any event that
with the giving of notice or the passage of time or both would allow any party
to any Major Lease to terminate such Lease, with or without notice.
4.9 Approval of Buyer's Board of Directors. This Agreement and
the transactions contemplated hereby shall have been approved by Buyer's board
of directors (the "BUYER APPROVAL") on or before the date that is forty-five
(45) days after the date hereof.
4.10 Objections to Property or Other Matters. To the extent
there is a change in any of the matters described in this Article IV.A, or any
such matters first become available or are supplemented after the date hereof,
Seller shall promptly inform Buyer of such change in circumstances upon becoming
aware thereof and deliver any such new or supplemental information to Buyer.
Buyer shall have until the date that is forty-five (45) business days after the
date of the full execution and delivery of this Agreement (the "REVIEW PERIOD"),
to notify Seller of any objections Buyer has to the physical or
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financial state of the Property, to the Phase I environmental report, to any
contracts or leases relating to the Property, to any item delivered (or not
delivered) by Seller to Buyer, or to any other matter covered by this Article
IV.A other than Title or Survey; provided that Buyer shall have until the
Closing Date to approve the items specified in Sections 4.1, 4.8, 4.11 and 4.12
hereof. If Buyer shall object as provided herein, then this Agreement shall
terminate and any and all right and obligations of Buyer and Seller hereunder
shall terminate (other than any obligations which, by their express terms,
survive any termination of this Agreement), and within five (5) days after Buyer
provides notice of such termination to Escrow Holder, Escrow Holder shall pay to
Buyer the Earnest Money Deposit, together with interest thereon. If Buyer does
not give notice to Seller of its objections prior to the end of the Review
Period, Buyer shall be conclusively deemed to have waived any right to object to
such matters and to terminate this Agreement due to Buyer's disapproval thereof.
4.11 Tenant Matters. Buyer shall have received and approved
written estoppel statements, in substantially the form as that attached hereto
as Schedule G, from each of the tenants under the Major Leases, and tenants
holding leases upon not less than eighty-five percent (85%) of the remaining
gross leasable area in the Property. Each such estoppel statement shall be in
form and substance acceptable to Buyer. Buyer shall have 5 days after the date
of Buyer's receipt of each estoppel to notify Seller of any objection Buyer may
have regarding such estoppel, and in the event Buyer fails to so notify Seller,
Buyer shall be deemed to have approved such estoppel.
4.12 REA Estoppels. Buyer shall have received and approved
such written estoppel statements from each party to any reciprocal easement
agreement affecting the Property as Buyer shall reasonably require. Each such
estoppel statement shall be in form and substance reasonably acceptable to
Buyer. Buyer shall have 5 days after the date of Buyer's receipt of each such
estoppel to notify Seller of any objection Buyer may have regarding such
estoppel, and in the event Buyer fails to so notify Seller, Buyer shall be
deemed to have approved such estoppel.
4.13 Subdivision. Buyer shall have approved the subdivision of
the Land pursuant to which an outparcel shall be separated from the Land, Buyer
shall have received a revised survey of the Land and such outparcel in form and
substance acceptable to Buyer, such subdivision shall have been completed, and
recorded covenants, conditions and restrictions in form and substance acceptable
to Buyer shall have been recorded against the remainder of the Land and such
outparcel.
4.14 Delivery of Documents. The due and timely delivery by
Seller of executed documents required by this Agreement, including without
limitation all of the documents and items specified in Section 5.3 below.
The foregoing conditions contained in this Article IV.A
(except to the extent otherwise provided in Article IV.B hereof) are intended
solely for the benefit of, and may be waived by, Buyer.
B. Seller's Conditions to Closing.
The following conditions are conditions precedent to Seller's
obligation to sell the Property:
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4.15 Delivery of Documents and Purchase Price. Buyer's due and
timely execution and delivery of all documents and items to be executed and
delivered by Buyer (including without limitation the Purchase Price) pursuant to
this Agreement, including without limitation all of the documents and items
specified in Section 5.4 below.
4.16 Subdivision. The condition precedent to Buyer's
obligations hereunder set forth in Section 4.13 hereof shall have been
satisfied.
The foregoing conditions contained in this Article IV.B are
intended solely for the benefit of Seller (except to the extent otherwise
provided in Article IV.A hereof).
ARTICLE V
CLOSING, RECORDING AND TERMINATION
5.1 Deposit with Escrow Holder and Escrow Instructions.
Promptly after execution of this Agreement, the parties hereto shall deliver one
(1) fully executed copy of this Agreement to the Escrow Holder and this
instrument shall serve as the escrow instructions to the Escrow Holder for
consummation of the purchase and sale contemplated hereby. Seller and Buyer
agree to execute such additional and supplementary escrow instructions as may be
appropriate to enable the Escrow Holder to comply with the terms of this
Agreement; provided, however, that in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall control.
5.2 Closing. (a) The Closing Date shall occur no later than
the date (the "OUTSIDE CLOSING DATE") which is forty-five (45) days after the
conclusion of the Review Period. The Closing and the Closing Date shall not have
occurred until the Purchase Price shall have been paid by Buyer to Escrow Holder
as provided herein. The "CLOSING" shall be deemed to have occurred on the date
that all of the events specified in Section 5.8 of this Agreement shall have
occurred. The "CLOSING DATE" shall be the date on which the Closing occurs.
(b) In the event the Closing does not occur on
or before the Outside Closing Date, subject to any extension to the Outside
Closing Date contemplated by Article VIII hereof, the Escrow Holder shall,
unless it is notified by Buyer to the contrary within five (5) days after such
date, return to the depositor thereof all items which may have been deposited
with Escrow Holder hereunder (not including the Earnest Money Deposit, if Seller
has prior to such date alleged in writing to Buyer and Escrow Holder that Seller
is entitled to the Earnest Money Deposit pursuant to the terms hereof). Any such
return shall not, however, relieve either party hereto of any liability it may
have for its wrongful failure to close. Buyer shall, within five (5) days after
the termination of this Agreement in accordance with the terms hereof, return to
Seller all documents and materials delivered to Buyer hereunder by or on behalf
of Seller.
5.3 Delivery by Seller. At the Closing, Seller shall deposit
with the Escrow Holder, for the benefit of Buyer, or deliver directly to Buyer
the following:
(a) The Deed and the Assignment and Assumption of
Leases and Rents, each duly executed and acknowledged by
Seller, in recordable form, and ready for recordation in the
official records
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of the jurisdiction in which the Land is located (the
"OFFICIAL RECORDS");
(b) The Bill of Sale duly executed by Seller;
(c) A certificate from the office of the county clerk
of the county in which the Land is located and of the county
in which Seller's principal office is located, a certificate
from the Office of the Secretary of State of the State of
North Carolina, or other appropriate evidence of all filings
against Seller under the Commercial Code of North Carolina
which would be a lien on any of the Personal Property, any
such evidence being dated within ten (10) days prior to the
Closing Date, together with fully executed termination
statements with respect to such filings;
(d) originals or copies of any warranties and
guaranties received by Seller and to be assigned to Buyer,
from any contractors, subcontractors, suppliers or materialmen
in connection with any construction, repairs or alterations of
the Improvements or any tenant improvements;
(e) The Assignment of Contracts, Intangible Property,
Warranties and Guarantees, duly executed by Seller and
acknowledged, assigning all of Seller's interest in the
Intangible Property, together with written terminations of any
Contracts which are not Approved Contracts;
(f) Originals or copies of all certificates of
occupancy and permits for the Improvements;
(g) All existing as-built plans and specifications for
the Improvements in the possession of Seller or its manager;
(h) A closing statement prepared by Escrow Holder in
form and content consistent with this Agreement and otherwise
reasonably satisfactory to Buyer and Seller;
(i) The Non-Foreign Certificate, duly executed by
Seller;
(j) Complete originals of the Leases with respect to
the Property and copies of all records, books of account,
ledgers, statements and other business records relating to the
ownership and operation of the Property and/or the
administration of the Leases, in whatever mode maintained,
including information contained on computer disks; and
(k) A letter to each tenant, in form and substance
acceptable to Buyer, advising such tenant that the Property
has been sold to Buyer.
Buyer may waive compliance on Seller's part under any of the
foregoing items by an instrument in writing.
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5.4 Delivery By Buyer. Buyer shall execute and deliver to
Escrow Holder, for the benefit of Seller, or directly to Seller the Assignment
and Assumption of Leases and Rents, a closing statement, and such other
documents and instruments as may be required to the close the transactions
contemplated hereby, which documents and instruments shall be in form and
substance reasonably acceptable to Buyer. On the Closing Date, after Buyer's or
Escrow Holder's receipt of all of the items specified in Section 5.3 hereof,
after the complete satisfaction of all of the conditions precedent to Buyer's
obligations hereunder, and after the expiration of the Review Period, Buyer
shall deliver the Purchase Price to Escrow Holder as provided in Section 2.2
above.
5.5 Other Instruments. Seller and Buyer shall each deposit
such other instruments as are reasonably required by Escrow Holder or otherwise
required to close the escrow and consummate the purchase of the Property in
accordance with the terms hereof.
5.6 Prorations. At Closing, the parties shall prorate (with
Buyer being deemed to be the owner of the Property for the date of the Closing)
as of the date on which the Closing occurs, based on the actual number of days
elapsed in the calendar month in which the Closing Date occurs, the following
with respect to the Property:
(a) Rents. All rents and other receipts collected by
Seller for the month in which the Closing occurs shall be
prorated as of the Closing. Delinquent rentals shall be
prorated between Buyer and Seller, but not until they are
actually collected by Buyer. Buyer shall use reasonable
efforts after the Closing to collect delinquent rents for the
period up to the Closing; provided, however, that all
collections shall be applied first to periods commencing after
the Closing, and then to periods prior to the Closing.
Percentage Rents (if any) shall be prorated by Buyer
reasonably promptly after receipt thereof by Buyer.
(b) Common Area Maintenance Charges. All reimbursable
expenses shall be reconciled at Closing, such that if Seller
has collected sums in excess of its reimbursable expenses
under the Leases, Seller shall pay such excess to Buyer. In
the event that such reconciliation shows that Seller has
collected less than its incurred reimbursable expenses under
the Leases, Buyer shall remit the excess (to the extent, and
only to the extent, that such excess is actually collected by
Buyer, with all payments on arrearages to be applied first to
the period after the Closing Date) to Seller not later than
the expiration of three months after the conclusion of the
twelve-month period then in progress with respect to the
budgeting of such expenses under the Leases.
(c) Taxes. Real estate taxes, recurring assessments,
and personal property taxes, if any, on all or any portion of
the Property (exlcusive of the portion of the Land subdivided
into an outparcel pursuant to Section 4.13 hereof), based on
the regular and supplemental tax bills for the tax or
assessment year in which the Closing occurs (or, if such tax
bill has not been issued as of the date of Closing the regular
and supplemental tax bill for the tax or assessment year
preceding that in which the Closing occurs, with such increase
thereto as Buyer reasonably estimates will occur) shall
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be prorated as of the Closing. Should such proration be based
on a tax bill for the preceding tax or assessment year, and
should such proration prove to be inaccurate upon receipt of
the tax bill for the Property for the tax or assessment year
of Closing, either Seller or Buyer may demand a payment from
the other correcting such misapportionment. If any
supplemental real estate taxes are levied for any period
preceding the Closing, the parties will, promptly after the
Closing or the issuance of the supplemental real estate tax
bill (whichever last occurs), prorate between themselves, in
cash, without interest and to the date of the Closing Date,
the supplemental real estate taxes shown by such bill.
(d) Utilities. All utilities, including gas, water,
sewer, electricity, telephone and other utilities supplied to
the Property shall be read as of the Closing Date, to the
extent possible. Seller shall pay, prior to the Closing Date,
all such amounts for which a bill has been received or for
which payment is otherwise due prior to the Closing Date, and
Buyer shall be credited, and Seller shall be debited, with an
amount equal to all utility charges for the period from the
date covered by such bills until the Closing Date. Seller
shall be credited for the amount of any deposits made by
Seller for utility services which have not been refunded to
Seller and which are assigned to Buyer on or prior to the
Closing Date.
(e) Service Contracts. Amounts payable under Approved
Contracts shall be prorated on an accrual basis. Seller shall
pay, prior to the Closing Date, all such amounts for which a
bill has been received or for which payment is otherwise due
prior to the Closing Date, and Buyer shall be credited, and
Seller shall be debited, with an amount equal to all amounts
accrued under the Approved Contracts from the date covered by
such bills until the Closing Date. Seller shall deliver to
Escrow, for the benefit of Buyer, evidence of the cancellation
or termination of all Contracts other than Approved Contracts,
and Seller shall be responsible for all such cancellation
costs.
(f) Improvement Lien Assessments. All improvement
lien assessments shall be paid in full by Seller at Closing.
(g) Other Items. All other proratable items, including
without limitation other income from, and expenses associated
with, the Property shall be prorated between Buyer and Seller
as of the Closing.
In the event accurate prorations and other adjustments cannot be made at Closing
because current bills or statements or other information is not obtainable, the
parties shall prorate on the best available information, subject to adjustment
as soon after the Closing as the actual amounts to be prorated are determined.
Buyer and Seller's obligation to prorate shall survive the Closing for a period
of one (1) year (unless within such time Buyer or Seller makes a claim against
the other party to this Agreement with respect to such obligation to prorate,
in which case such obligation shall survive without limitation), and Buyer and
Seller shall use good faith efforts to conclude prorations with respect to
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percentage Rent, taxes, and common area maintenance charges as soon as
practicable after the determination of the amounts thereof. From and after
Closing, each party shall afford to the other reasonable access to any
information in its possession concerning the operations of the Property
(including the right to copy the same at the expense of the party desiring the
copy) for the purposes of ascertaining post-closing adjustments, tax
examinations or audits, or other similar purposes.
5.7 Costs and Expenses. Seller and Buyer shall each bear and
pay one-half (1/2) of the fees of Escrow Holder. Seller shall pay all premiums
for the Title Policy (not including the costs of any special endorsements
thereto requested by Buyer), all legal fees and costs incurred by Seller, the
cost of any recordation fees and documentary or other transfer taxes applicable
with respect to the sale of the Real Property, all sales tax, if any, applicable
with respect to the sale of the Personal Property and/or the Intangible
Property, and other fees and charges which are typically borne by sellers in
Greensboro, North Carolina. Buyer shall pay for the Survey, the Phase I Report,
its out-of-pocket expenses, all due diligence, all legal fees and costs incurred
by Buyer in connection herewith, and other fees and charges which are typically
borne by buyers in Greensboro, North Carolina.
5.8 Closing and Recordation. Provided that Escrow Holder has
received all of the items required to be delivered pursuant to this Article V
(or a waiver from the party for whose benefit such item is being delivered) and
that it has not received prior written notice from Buyer that Buyer has elected
to terminate its rights and obligations hereunder pursuant to Article IV,
Article VIII and/or Section 5.9, and provided that Buyer has received either the
Title Policy or the irrevocable commitment of Title Company to provide it with
the Title Policy immediately after recordation of the Deed, Escrow Holder is
authorized and instructed (a) with respect to the Property, to cause the Title
Company to record the documents delivered to the Escrow Holder in accordance
with recording instructions set forth in a letter to be delivered to Escrow
Holder and Title Company by Buyer (or if no such letter is received prior to the
Closing, in accordance with customary practice), (b) to deliver those other
documents and instruments delivered into Escrow to the party for whose benefit
such documents or instruments were made and (c) to deliver the Purchase Price,
as adjusted pursuant to Section 5.6 hereof, upon receiving confirmation of
recording of the Deed.
5.9 Termination of Agreement.
(a) Failure of Buyer's Conditions. If any one or more of the
conditions to Buyer's obligations, as set forth in Article IV.A, Section 5.3 or
elsewhere in this Agreement, is not either fully performed, satisfied or waived
in writing (or deemed waived as provided herein) on or before the Closing Date
or such earlier date as provided elsewhere herein, then Buyer may elect, by
written notice as provided in Section 10.10 hereof, to terminate this Agreement,
in which case neither party shall have any further obligation to the other
(other than any obligations which, by their express terms, survive any
termination of this Agreement). Nothing in this paragraph shall be construed to
limit any of Buyer's rights or remedies at law or equity in the event of a
default by Seller. Upon termination of this Agreement by Buyer pursuant to any
provision providing Buyer a right of termination, Buyer shall return to Seller
all materials previously provided by Seller to Buyer and, except in the case of
Buyer's termination due to Seller's default, Buyer shall deliver to Seller
copies of all reports and studies and obtained by Buyer from third party
consultants with respect to the Property.
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(b) Failure of Seller's Conditions. If any one or more of the
conditions to Seller's obligations, as set forth in Article IV.B, Section 5.4 or
elsewhere in this Agreement, is not either fully performed, satisfied or waived
in writing (or deemed waived as provided herein) on or before the Closing Date
or such earlier date as provided elsewhere herein, then Seller may elect, by
written notice as provided in Section 10.10 hereof, to terminate this Agreement
and neither party shall have any further obligation to the other (other than any
obligations which, by their express terms, survive any termination of this
Agreement).
5.10 Security Deposits. Seller shall pay over to Buyer at
Closing or grant to Buyer a credit against the Purchase Price in an amount equal
to the aggregate of the tenants' security and other deposits and prepaid rents
under the Leases, including all accrued interest thereon to the extent that the
tenants may be entitled to receive such amounts in connection with the refund of
any such deposit or prepaid rent. Buyer shall indemnify Seller for any claim by
any tenant under a lease to the extent, and solely to the extent, that such
claim relates to Buyer's wrongful failure to refund a security deposit to such
tenant, which security deposit was delivered by Seller to Buyer pursuant hereto.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
SELLER
As an inducement to Buyer to enter into this Agreement and the
consummation of the transaction contemplated hereby, Seller hereby represents
and warrants to and agrees with Buyer as of the date hereof, as set forth below.
As used herein and elsewhere in this Agreement, the term "SELLER'S ACTUAL
KNOWLEDGE" shall mean the actual knowledge of each of Messrs. Richard E. Buckley
and Stephen R. Shuler, after review of the written files of Seller and Seller's
manager with respect to the Property. Seller hereby represents and warrants that
the foregoing persons are the persons employed by Seller or Seller's manager
with executive, managerial or daily supervisory responsibility with respect to
the Property.
6.1 Authority. Seller is duly organized and validly existing
under the laws of the jurisdiction of its organization, is duly qualified to
conduct business and own real property in the State of North Carolina, and has
all requisite power to own all of its properties and assets and to carry on its
business as presently conducted. The execution, delivery and performance of this
Agreement and all other agreements contemplated hereby has been duly and validly
authorized by all necessary action of Seller and the Agreement and all other
agreements contemplated thereby are and will be valid and binding obligations of
Seller.
6.2 Title. Seller holds fee simple title to the Property, and
to Seller's actual knowledge, such fee simple title is free and clear of all
liens, encumbrances, security interests, charges, adverse claims and other
exceptions to title, except for the Leases, Contracts, matters of record,
matters that would be disclosed by a current and accurate survey, and the
Permitted Exceptions.
6.3 The Leases. A list of the current Leases is set forth in
the rent roll attached hereto as Schedule H (the "RENT ROLL"). The Rent Roll is
true, complete and correct in all respects as of the date thereof and except for
the Leases set forth in the Rent Roll, there
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are no other leases, licenses or other agreements granting any party any right
of occupancy of the Property. With respect to each Lease: (i) the Lease is in
full force and effect, and constitutes the valid and binding legal obligation of
Seller; (ii) there are no understandings, oral or written, between the parties
to the Lease which in any manner vary the obligations or rights of either party
except as set forth in the copies of such Lease and related written materials
provided by Seller to Buyer pursuant to this Agreement; (iii) except as
indicated on the Rent Roll, there is no default by Seller under the Lease and to
Seller's actual knowledge, by the tenant under the Lease; and (iv) no rent or
additional rent under the Lease has been paid for more than thirty (30) days in
advance of its due date.
6.4 No Litigation or Adverse Events. Seller has received no
written notice of, and to Seller's actual knowledge, there are no, pending or
threatened investigations, actions, suits, proceedings or claims against or
affecting Seller, the Property, any tenant or relating to the zoning,
environmental condition or use of any adjacent property, at law or in equity or
before or by any federal, state, municipal or other governmental department,
commission, board, agency, or instrumentality, domestic or foreign.
6.5 Compliance with Laws. Seller has not received any notice
or claim of any violations of applicable laws, ordinances, rules and regulations
(including without limitation those relating to zoning and the Americans With
Disabilities Act) applicable to the ownership or operation of the Property.
Seller has not received from any insurance company or Board of Fire Underwriters
any notice, which remains uncured, of any defect or inadequacy in connection
with the Property or its operation.
6.6 No Defaults in Other Agreements. To Seller's actual
knowledge, neither Seller nor any other party is in material default under any
Contract affecting the Property, and no event exists which, with the passage of
time or the giving of notice or both, will become a material default thereunder
on the part of the Seller or any other party thereto. To Seller's actual
knowledge, Seller is in compliance in all material respects with the terms and
provisions of the covenants, conditions, restrictions, rights-of-way or
easements affecting the Property.
6.7 Eminent Domain. To Seller's actual knowledge, there is no
existing or proposed or threatened eminent domain or similar proceeding, or
private purchase in lieu of such a proceeding which would affect the Property in
any material way.
6.8 Permits, CO's, Zoning, etc. To Seller's actual knowledge,
all permits, certificates of occupancy, and all other notices, permits,
certificates and authority required as of the date hereof in connection with
Seller's ownership and operation of the Property or the use or occupancy thereof
have been obtained and are in full force and effect and in good standing.
6.9 Taxes and Assessments. To Seller's actual knowledge, all
real property taxes, and all Seller's personal property taxes, relating to the
Property, excepting those for the current tax year which are not yet overdue
(i.e., which are still payable without interest or penalty), have been paid in
full. To Seller's actual knowledge, there is no existing or proposed assessment
that has or may become a lien on the Property.
6.10 Environment. (i) Seller has not engaged in any operations
or activities upon, or any use or occupancy of the Property, or any portion
thereof, for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of any Hazardous
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Materials (whether legal or illegal, accidental or intentional) on, under, in or
about the Property, or transported any Hazardous Materials to, from or across
the Property, except in all cases in material compliance with Environmental
Requirements and only in the course of legitimate business operations at the
Property (which shall not include any business primarily or substantially
devoted to the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of Hazardous Materials); (ii)
to Seller's actual knowledge, no tenant, occupant or user of the Property, nor
any other person, has engaged in or permitted any operations or activities upon,
or any use or occupancy of the Property, or any portion thereof, for the purpose
of or in any material way involving the handling, manufacture, treatment,
storage, use, generation, release, discharge, refining, dumping or disposal of
any Hazardous Materials (whether legal or illegal, accidental or intentional)
on, under, in or about the Property, or transported any Hazardous Materials to,
from or across the Property, except in all cases in material compliance with
Environmental Requirements and only in the course of legitimate business
operations at the Property (which shall not include any business primarily or
substantially devoted to the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of Hazardous
Materials); (iii) to Seller's actual knowledge, based upon a review of Seller's
written files with respect to the Property and upon a Phase I environmental site
assessment of the Property prepared by Law Engineering, Inc. and dated November,
1994, and without further independent investigation, no Hazardous Materials are
presently constructed, deposited, stored, or otherwise located on, under, in or
about the Property except in all cases in material compliance with Environmental
Requirements and only in the course of legitimate business operations at the
Property (which shall not include any business primarily or substantially
devoted to the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of Hazardous Materials); (iv)
to Seller's actual knowledge, based upon a review of Seller's written files with
respect to the Property and upon a Phase I environmental site assessment of the
Property prepared by Law Engineering, Inc. and dated November, 1994, and without
further independent investigation, no Hazardous Materials have migrated from the
Property upon or beneath other properties; and (v) to Seller's actual knowledge,
based upon a review of Seller's written files with respect to the Property and
upon a Phase I environmental site assessment of the Property prepared by Law
Engineering, Inc. and dated November, 1994, and without further independent
investigation, no Hazardous Materials have migrated or threaten to migrate from
other properties upon, about or beneath the Property.
As used herein:
"ENVIRONMENTAL REQUIREMENTS" shall mean all applicable present
statutes, regulations, rules, ordinances, codes, licenses, permits, orders,
approvals, plans, authorizations, concessions, franchises and similar items, of
all governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof and all applicable judicial and administrative and regulatory decrees,
judgments and orders relating to the protection of human health or the
environment, including, without limitation: (i) all requirements, including but
not limited to those pertaining to reporting, licensing, permitting,
investigation and remediation of emissions, discharges, releases or threatened
releases of "Hazardous Materials," chemical substances, pollutants, contaminants
or hazardous or toxic substances, materials or wastes whether solid, liquid or
gaseous in nature, into the air, surface water, ground water or land, or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of chemical substances, pollutants, contaminants
or hazardous or toxic substances, materials, or wastes, whether solid, liquid or
gaseous in nature; and (ii) all requirements pertaining to the protection of the
health and safety of employees or the public.
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"HAZARDOUS MATERIALS" shall mean (i) any flammable, explosive
or radioactive materials, hazardous wastes, toxic substances or materials
including, without limitation, substances defined as "hazardous substances,"
"hazardous materials," "toxic substances" or "solid waste" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sec. 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq.; the Toxic Substances Control Act, 15 U.S.C., Section 2601
et seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
6901 et seq.; and in the regulations adopted and publications promulgated
pursuant to said laws; (ii) those substances listed in the United States
Department of Transportation Table (49 C.F.R. 172.101 and amendments thereto) or
by the Environmental Protection Agency (or any successor agency) as hazardous
substances (40 C.F.R. Part 302 and amendments thereto); (iii) those substances
defined as "hazardous wastes," "hazardous substances" or "toxic substances" in
any similar federal, state or local laws or in the regulations adopted and
publications promulgated pursuant to any of the foregoing laws or which
otherwise are regulated by any governmental authority, agency, department,
commission, board or instrumentality of the United States of America, the State
of North Carolina or any political subdivision thereof, (iv) any pollutant or
contaminant or hazardous, dangerous or toxic chemicals, materials, or substances
within the meaning of any other applicable federal, state, or local law,
regulation, ordinance, or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, all
as amended; (v) petroleum or any by-products thereof; (vi) any radioactive
material, including any source, special nuclear or by-product material as
defined at 42 U.S.C. Sections 2011 et seq., as amended, and in the regulations
adopted and publications promulgated pursuant to said law; (vii) asbestos in any
form or condition; and (viii) polychlorinated biphenyls.
6.11 Physical Condition. To Seller's actual knowledge: (i)
there are no material structural defects in the Improvements located on or at
the Property; and (ii) the Improvements and Personal Property (including without
limitation plumbing equipment, HVAC, electric wiring and fixtures, gas
distribution system, water and sewage systems, and security systems) are in good
working order and condition, except for defects or required repairs that are not
material.
6.12 Employees. Seller has no employees.
6.13 Mechanic's Liens. All bills and claims for labor
performed and materials furnished to or for the benefit of the Property
currently due and contracted for by Seller or its manager have been paid in
full, and there are no mechanic's or materialmen's liens (whether or not
perfected) on or affecting the Property as a result of labor performed or
materials furnished and contracted for by the Seller or its manager.
6.14 Operating Statements. The financial statements delivered
by Seller to Buyer fairly present the profit or loss from the management and
operation of the Property for the periods covered thereby and, in all material
respects, accurately reflect all rents and other gross receipts, and all amounts
paid by Seller for electricity, water, sewer, other utility services, insurance,
fuel, maintenance and repairs (whether capitalized or expensed), real estate
taxes, payroll and payroll taxes and all other operating and other expenses
associated with the Property.
6.15 Disclosure. The information contained in the
representations contained herein do not contain any material misstatement or
omission. To Seller's actual knowledge, there are no material misstatements of
fact set forth in the documents and materials provided
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to Buyer pursuant to Section 4.3(a). Seller has delivered or made available to
Buyer complete copies of all written materials described in Sections 4.3(b)-(j)
which are in Seller's or its manager's possession.
6.16 No Leases of Property or Assets. No material portion of
the Personal Property or fixtures with respect to the Property (other than
fixtures owned or installed by tenants) is leased by the Seller as lessee.
Seller shall promptly notify Buyer, in writing, of any event
or condition known to Seller which occurs prior to Closing and which causes a
material change in the facts relating to, or the truth of, the above
representations and warranties. At the Closing, Seller shall reaffirm and
restate such representations and warranties, subject to disclosure of any
changes in facts or circumstances which may have occurred since the date hereof.
The representations and warranties set forth in this Article VI (and in any
certificate delivered by Seller at Closing) shall survive the execution and
delivery of this Agreement, the delivery of the Deed and transfer of title to
the Property, until the date that is one (1) year after the Closing Date;
provided however, that in the event Buyer makes a written claim against Seller
with respect to any representation or warranty prior to the date which is one
(1) year after the Closing Date, then such representation or warranty shall
survive without limitation as to such written claim. Notwithstanding anything to
the contrary provided in this Agreement, in the event Buyer shall have actual
knowledge as of the time of Closing that any of Seller's representations or
warranties are false or misleading, but shall elect to proceed to close this
transaction notwithstanding such false or misleading representation or warranty,
Buyer shall be deemed to have waived any claim it may have against Seller with
respect to such misrepresentation or breach of warranty unless such
misrepresentation or breach of warranty was intentional.
Except as expressly set forth in this Article VI, Seller makes
no representations or warranties, express or implied, regarding the condition of
the Property, the presence or absence of Hazardous Materials on or emanating
from the Property, the compliance by the Property with any applicable
governmental requirement, or any other aspect of the Property. By execution
hereof, Buyer agrees that neither Seller nor Seller's agents or representatives
have made, and Buyer has not relied upon, any representation or warranty of any
kind which is not herein expressly set forth or provided for, and Buyer shall
acquire the Property in its condition as of the date of Closing, "as is,"
subject to the terms and conditions of this Agreement and to the express
representations and warranties made by Seller herein.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
7.1 Representations and Warranties of Buyer. Buyer hereby
represents and warrants to Seller as follows: Buyer is a corporation duly
organized under the laws of the State of Maryland; subject to receipt of the
Buyer Approval, this Agreement and all documents executed by Buyer which are to
be delivered to Seller at the Closing are and as of the Closing Date will be
duly authorized, executed and delivered by Buyer, and are and as of the Closing
Date will be legal, valid and binding obligations of Buyer, and do not and as of
the Closing Date will not violate any provisions of any agreement or judicial
order to which Buyer is a party or to which it is subject.
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ARTICLE VIII
POSSESSION, DESTRUCTION AND CONDEMNATION
8.1 Possession. Possession of the Property shall be delivered
to Buyer on the Closing Date, subject to the Leases described on the Rent Roll
or otherwise approved by Seller. Without limiting any other provisions of this
Agreement, Seller shall afford authorized representatives of Buyer reasonable
access to the Property for the purposes of determining Seller's compliance
herewith (provided that Seller or Seller's agent shall be allowed to accompany
Buyer in any visit to the Property Buyer may make for the purposes of
determining such compliance); however, in no event shall such right give rise to
any obligation of Buyer to determine compliance or noncompliance.
8.2 Loss, Destruction and Condemnation.
(a) Definition of Material Damage. For the purposes
of this Section 8.2, damage to the Property is material if (i) the actual cost
of repairing or replacing the damaged portions of the Improvements on the
Property exceeds $100,000.00, or (ii) if it would take longer than ninety (90)
days to perform such repair or replacement using reasonably diligent efforts, or
(iii) if any lessee has the right to abate any rent under its lease as a result
of such damage and there is not full rental interruption coverage with respect
thereto available to Buyer through and after the Closing Date until the date
that is ninety (90) days beyond the estimated date of reconstruction, or (iv) if
any lessee has a right to terminate its lease as a result of such damage.
(b) Effect of Non-Material Damage to Improvements.
If prior to the Closing the Improvements on the Property are damaged by casualty
and such damage is not material, (i) this Agreement may not be terminated by
reason of such casualty (provided that this does not waive Buyer's other
termination rights under this Agreement) and (ii) Seller will, at Buyer's
option, either (a) cause the damaged portion of the Improvements to be repaired
at Seller's sole cost and expense within ninety (90) days after the date of such
damage or (b) pay to Buyer all insurance proceeds (and the amount of any
applicable deductible) theretofore actually received by Seller and, in addition,
assign, transfer and set over to Buyer all of Seller's right, title and interest
in and to any insurance claims or insurance proceeds that may thereafter be made
for any such damage or destruction, except that any loss of rent insurance shall
be prorated as of the date of Closing. Seller will notify Buyer within five (5)
days (but in any event prior to the Closing Date) of Seller's receipt of
knowledge of any casualty which occurs after the date of this Agreement and on
or prior to the Closing Date.
(c) Effect of Material Damage to Improvements.
If prior to the Closing the Improvements are damaged by casualty and such damage
is material, Seller shall notify Buyer in writing of such casualty as soon as
practicable. Within ten (10) days after the occurrence of such casualty, Seller
will, as soon as is practicable, commence restoration of the damaged
Improvements, and shall complete such restoration in compliance with all laws
and the representations and warranties set forth herein and shall restore such
Improvements their condition prior to the occurrence of the casualty promptly
(but in no event more than ninety (90) days thereafter), and the Closing Date
shall be extended (but in no event by more than ninety (90) days) until such
damaged Improvements are complete. If Seller does not commence or complete such
restoration within such time period, then Buyer may elect pursuant to a writing
delivered to Seller and
20
<PAGE> 28
Escrow Holder to (i) continue this Agreement, provided, however, that Seller
shall assign to Buyer at the Closing any insurance proceeds to which Seller is
entitled with respect to such damage except that any loss of rent proceeds shall
be prorated as of the date of Closing (in which event the Purchase Price shall
be reduced by the amount of any deductible with respect thereto); (ii) terminate
this Agreement, in which case Buyer shall have no further rights and obligations
to the Seller under this Agreement (except for such rights and obligations that,
by the express terms hereof, survive any termination of this Agreement) (but
Buyer shall retain its rights and remedies against Seller) and Escrow Holder
shall immediately return the Earnest Money Deposit (with interest thereon) to
Buyer. Buyer's failure to have elected any of these options within the time
allotted therefor shall be deemed to be an election of option (ii).
(d) Definition of Material Taking. For the purposes
of this Section 8.2, a taking or threatened taking by eminent domain or similar
proceedings shall be deemed material if (i) the value of that portion of the
Property to be so taken exceeds $100,000.00, (ii) the portion of the Property
taken materially impairs access to the Property or materially and adversely
affects the parking area; (iii) any lessee has the right to abate any rent under
its lease as a result of such taking or threatened taking, or (iv) any lessee
has the right to terminate its lease as a result of such taking or threatened
taking.
(e) Effect of Non-Material Taking. If prior to the
Closing there is a taking or threatened taking of a portion of the Property
which is not material, (i) this Agreement may not be terminated and (ii) Seller
will assign to Buyer at the Closing all of Seller's rights in and to any
condemnation award with respect to such non-material taking, and there will be
no reduction in the Purchase Price. Seller will deliver written notice to Escrow
Holder and Buyer within one (1) day after Seller receives notice of or otherwise
becomes aware of any taking or threatened taking affecting the Property.
(f) Effect of Material Taking. If prior to the
Closing there is a taking or threatened taking of a material portion of the
Property or all of it, Seller shall notify Buyer in writing of such taking or
threatened taking, and within ten (10) days after Buyer's receipt of such
notice, Seller and Buyer shall endeavor to agree upon whether the Property shall
be purchased by Buyer, and any reduction in the Purchase Price, and any
assignment of any condemnation award with respect to such taking. If within such
ten (10) day period Buyer and Seller have not reached a mutually acceptable
agreement as to those matters, Buyer within ten (10) days thereafter may elect
in writing to (i) continue this Agreement subject to the taking or threatened
taking with an assignment of all of Seller's rights to condemnation awards,
severance damages, payments-in-lieu thereof or the like; or (ii) terminate this
Agreement, in which case Buyer and Seller shall have no further rights or
obligations to one another under this Agreement (except for such rights and
obligations that, by the express terms hereof, survive any termination of this
Agreement), and Escrow Holder shall immediately return the Earnest Money Deposit
(with interest thereon) to Buyer. Buyer's failure to have elected any of these
options within the time period allotted therefor shall be deemed to be an
election of option (ii).
(g) Extension of Outside Closing Date. Upon the
occurrence of any damage to the Property which Seller is obligated to repair and
restore in accordance with the terms of this Agreement, the Outside Closing Date
shall be extended to the date upon which Seller is required hereunder to have
such damage repaired, but in no event shall any such extension extend the
Outside Closing Date to a date which is more than ninety (90) days after the
date of such damage to the Property.
21
<PAGE> 29
ARTICLE IX
MAINTENANCE AND OPERATION OF THE PROPERTY;
COVENANTS
9.1 Maintenance. In addition to Seller's other obligations
hereunder, Seller shall, upon and after the date of this Agreement and to and
including the Closing Date, at Seller's sole cost and expense, maintain the
Property in the ordinary course of business consistent with past practice, pay
all taxes, assessments, fines, penalties, charges and other operating expenses,
and shall make all repairs, maintenance and replacements of the Improvements and
any Personal Property and otherwise operate the Property in its ordinary and
customary manner, and otherwise in the same manner as before the making of this
Agreement, the same as though Seller were retaining the Property. Seller shall
not make any alterations to the Property without first receiving Buyer's prior
written consent thereto, except to the extent required by applicable
governmental laws, ordinances or regulations.
9.2 Leases and Other Agreements. Seller shall not, on or after
the date of this Agreement and on or prior to the Closing Date, enter into any
Lease pertaining to the Property except pursuant to the terms and conditions set
forth in this Section 9.2. At any time prior to the Closing Date, in the event
that Seller intends to enter into a lease with respect to any portion of the
Property, Seller shall deliver to Buyer a complete copy of the proposed lease,
financial information as to the proposed lessee (with credit reports), and
copies of all brokerage agreements (or a detailed list of all brokerage
obligations) with respect to such lease. Buyer shall review and approve or
disapprove of such lease within ten (10) days after the receipt of all of the
foregoing materials. If all such materials are delivered to Buyer on or prior to
ten (10) days prior to conclusion of the Review Period, and if (a) such lease
(and any brokerage commissions with respect thereto) was negotiated by Seller in
good faith and is on market terms, (b) the proposed lessee is creditworthy as
determined by Buyer in its reasonable judgment, (c) the proposed use of the
premises under such Lease is compatible with the other uses in the Property and
is not inconsistent with the general leasing policies of Buyer, as determined by
Buyer in its reasonable judgment, and (d) the terms and conditions of such Lease
and any brokerage commissions payable with respect thereto are otherwise
acceptable to Buyer in its reasonable discretion, then Buyer shall approve such
lease and if and when the Closing occurs, Buyer shall assume all obligations
under such lease to pay for or construct tenant improvements and shall assume
and pay, as and when due, all brokerage commissions with respect to such lease
which commissions were disclosed to and approved by Buyer. In the event that
Buyer does not affirmatively approve in writing such lease within such ten (10)
day period, then Buyer shall be deemed to have disapproved such lease and as
long as this Agreement remains effective Seller shall not enter into such lease.
Seller's sole remedy with respect to any such disapproval shall be to terminate
this Agreement, by written notice to Buyer not later than five (5) days later
the expiration of such ten (10) day period, in which case the Earnest Money
Deposit, with all interest thereon, shall be refunded to Buyer and this
Agreement, and each party's obligations hereunder, shall terminate (except for
such rights and obligations that, by the express terms hereof, survive any
termination of this Agreement). Notwithstanding the foregoing, after the
conclusion of the Review Period, in no event shall Seller enter into any lease
with respect to the Property without Buyer's prior written consent, which will
not be unreasonably withheld or delayed. After the date hereof, without Buyer's
prior written consent (which will not be unreasonably withheld) in
22
<PAGE> 30
no event shall Seller enter into any agreement or contract with respect to
the Property (other than a lease, which shall be governed by the foregoing
provisions and other than any agreement which is a Permitted Exception) which is
not terminable on thirty (30) days' prior notice (without premium or penalty).
9.3 Encumbrances. Seller shall not, after the date of this
Agreement and prior to the Closing Date, mortgage, encumber or suffer to be
encumbered all or any portion of the Property, which encumbrances would survive
the Closing Date, without the prior written consent of Buyer.
9.4 Consents and Notices. Seller and Buyer shall cooperate
with each other and exercise commercially reasonable efforts to obtain as of the
Closing Date, all consents from, and provide all notices to, any third party and
any governmental or regulatory authority which are required pursuant to any
Contract or any applicable laws as a condition to or in connection with the
execution, delivery or performance of this Agreement or other documents and
instruments contemplated thereby.
9.5 Audit Cooperation. Until the date that is one (1) year
after the Closing Date, Seller hereby agrees to cooperate with Buyer in
producing Buyer's audited financial statements for the Property for such periods
as may be requested by Buyer. Such cooperation shall include, without
limitation, the execution and delivery by Seller to Buyer's auditors of such
confirmations and letters as such auditors may reasonably require.
ARTICLE X
MISCELLANEOUS
10.1 Notices. Any notice required or permitted to be given
under this Agreement shall be in writing and personally delivered or sent by
United States mail, registered or certified mail, postage prepaid, return
receipt requested, or by electronic facsimile transmission (followed by a copy
mailed or delivered as otherwise provided herein), or sent by Federal Express or
similar nationally recognized overnight courier service, and addressed as
follows, and shall be deemed to have been given upon the date of delivery (or
refusal to accept delivery) at the address specified below as indicated on the
return receipt or air bill, or on the date of facsimile transmission if
delivered in such manner:
If to Seller: Maxvest Associates, Limited Partnership
------------
c/o James Doran Company
1051-H Johnnie Dodds Boulevard
Mt. Pleasant, South Carolina 29464
Attention: Mr. Bob Doran
Fax No.: 803-849-6765
with a copy to: Buckley Shuler Properties, Inc.
4244 International Parkway, Suite 134
Atlanta, Georgia 30354
Attention: Mr. Richard E. Buckley
Fax No.: 404-361-4831
23
<PAGE> 31
Andrew C. Williams, Esq.
Minkin & Snyder
Suite 1100
3060 Peachtree Road
Atlanta, Georgia 30305
Fax No.: 404-233-5824
If to Buyer: The PRICE REIT, Inc.
-----------
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
Attn.: Joseph Kornwasser
Fax No.: (213) 937-8175
with a copy to: Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attn: William R. Lindsay, Esq.
Fax No.: (213) 229-7520
If to Escrow Holder: Chicago Title Insurance Company
------------------- 230 N. Elm Street, Suite 1775
Greensboro, NC 27401
Attn: Al Gardiner
Fax No.: (910) 379-7913
or such other address as either party may from time to time specify in writing
to the other in the manner aforesaid.
10.2 Brokers and Finders. Buyer and Seller each hereby
represents and warrants that no broker was involved in this Agreement or the
transactions contemplated hereby except for Majors & Majors Realtors, Marcus &
Millichap, and K&F Development, each of whose commissions are to be paid by
Seller pursuant to a separate agreement between Seller and said brokers. In the
event of a claim for a broker's fee, finder's fee, commission or other similar
compensation in connection herewith other than as set forth above, (i) Buyer, if
such claim is based upon any agreement alleged to have been made by Buyer,
hereby agrees to reimburse Seller for any liability, loss, cost, damage or
expense (including reasonable attorneys' and paralegals' fees and costs) which
Seller may sustain or incur by reason of such claim and (ii) Seller, if such
claim is based upon any agreement alleged to have been made by Seller, hereby
agrees to indemnify, defend, protect and hold Buyer harmless against any and all
liability, loss, cost, damage or expense (including reasonable attorneys' and
paralegals' fees and costs) which Buyer may sustain or incur by reason of such
claim. The provisions of this Section 10.2 shall survive the Closing or earlier
termination of this Agreement.
10.3 Successors and Assigns. This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns, except that neither Seller's nor Buyer's interest under
this Agreement may be assigned, encumbered or otherwise transferred whether
voluntarily, involuntarily, by operation of
24
<PAGE> 32
law or otherwise, without the prior written consent of the other; provided,
however, that Buyer may assign, encumber or otherwise transfer Buyer's interest
under this Agreement, without the prior written consent of Seller (which will
not be unreasonably withheld, conditioned or delayed), to any subsidiary or
affiliate of Buyer, provided, however, that such assignment shall not release
Buyer from its obligations under this Agreement. There shall be no third party
beneficiaries to this Agreement.
10.4 Amendments. This Agreement may be amended or modified
only by a written instrument executed by the party asserted to be bound thereby.
10.5 Continuation and Survival of Indemnities,
Representations, Warranties and Post-Closing Obligations. Except as provided in
Section 5.6 hereof or in Article VI of this Agreement, all indemnities,
representations and warranties by, and all of the post-closing obligations, if
any, of, the respective parties contained herein or made in writing pursuant to
this Agreement or any other instrument delivered by Seller pursuant hereto are
intended to and shall survive the execution and delivery of this Agreement, the
delivery of the Deed and transfer of title.
10.6 Interpretation. Whenever used herein, the term
"including" shall be deemed to be followed by the words "without limitation."
Words used in the singular number shall include the plural, and vice-versa, and
any gender shall be deemed to include each other gender. The captions and
headings of the Articles and Sections of this Agreement are for convenience of
reference only, and shall not be deemed to define or limit the provisions
hereof.
10.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina.
10.8 Merger of Prior Agreements. This Agreement (including the
exhibits hereto) constitutes the entire agreement between the parties with
respect to the purchase and sale of the Property specifically described herein
and supersedes all prior and contemporaneous (whether oral or written)
agreements and understandings between the parties hereto relating to the
specific subject matter hereof.
10.9 Attorneys' Fees. In the event of any action or proceeding
at law or in equity between Buyer and Seller (including an action or proceeding
between Buyer and the trustee or debtor in possession while Seller is a debtor
in a proceeding under the Bankruptcy Code (Title 11 of the United States Code)
or any successor statute to such Code) to enforce or interpret any provision of
this Agreement or to protect or establish any right or remedy of either Buyer or
Seller hereunder, the unsuccessful party to such action or proceeding shall pay
to the prevailing party all costs and expenses, including without limitation
reasonable attorneys' and paralegals' fees and expenses (including without
limitation fees, costs and expenses of experts and consultants), incurred in
such action or proceeding and in any appeal in connection therewith by such
prevailing party, together with all costs of enforcement and/or collection of
any judgment or other relief. If such prevailing party shall recover judgment in
any such action, proceeding or appeal, such costs, expenses and attorneys' and
paralegals' and others' fees shall be included in and as a part of such
judgment.
10.10 Notice of Termination. If either Buyer or Seller elects
to terminate this Agreement, it will submit to Escrow Holder and the other party
hereto a notice of termination in duplicate. If Escrow Holder receives a notice
of termination, it is instructed
25
<PAGE> 33
to deliver by Federal Express or similar nationally recognized overnight courier
service and fax one copy to the other such party and such other party's
representatives, as designated in Section 10.1 above, within one (1) business
day. If Escrow Holder has not received a written objection from the other party
within five (5) business days after delivering and faxing the copy, Escrow
Holder is to (i) comply with the instructions contained in the notice of
termination, (ii) pay cancellation charges out of any funds on deposit in this
Escrow, (iii) return the Earnest Money Deposit (and interest thereon) to Buyer,
and (iv) cancel this Agreement.
10.11 Specific Performance; Damages. The parties understand
and agree that the Property is unique and for that reason, among others, Buyer
will be irreparably damaged in the event that this Agreement is not specifically
enforced. Accordingly, in the event of any breach or default in or of this
Agreement or any of the warranties, terms or provisions hereof by Seller, Buyer
shall have the right to demand and have specific performance of this Agreement.
Without limitation of the foregoing, in the event the purchase and sale of the
Property is not consummated due to Seller's wrongful act or failure to close,
Buyer may recover from Seller any out-of-pocket expenses actually incurred by
Purchaser as a result of such default by Seller, and Buyer hereby waives any and
all rights to recover direct or indirect or consequential damages in excess of
such amounts, except in the case of Seller's fraud or intentional
misrepresentation or material omission.
10.12 Relationship. It is not intended by this Agreement to,
and nothing contained in this Agreement shall, create any partnership, joint
venture, financing arrangement or other agreement between Buyer and Seller. No
term or provision of this Agreement is intended to be, or shall be, for the
benefit of any person, firm, organization or corporation not a party hereto, and
no such other person, firm, organization or corporation shall have any right or
cause of action hereunder.
10.13 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
10.14 Time of the Essence. Time is of the essence in this
Agreement and with respect to all of its terms.
10.15 No Waiver. No failure of either party to exercise any
power given either party hereunder or to insist upon strict compliance by the
other party with its obligations hereunder, and no custom or practice of the
parties at variance with the terms hereof shall constitute a waiver of either
party's rights to demand exact compliance with the terms hereof.
10.16 Saturdays, Sundays, Legal Holidays. If the time period
by which any right, option, or election provided under this Agreement must be
exercised or by which any acts or payments required hereunder must be performed
or paid, or by which the Closing must be held, expires on a Saturday, Sunday,
legal or bank holiday, then such time period shall be automatically extended to
the close of business on the next regularly scheduled business day.
10.17 Offer and Acceptance; Effective Date. This Agreement,
when executed on behalf of Seller, shall constitute an offer by Seller to sell
the Property to Buyer on the terms and conditions herein set forth, which offer
shall be open for
26
<PAGE> 34
acceptance by Buyer until 5:00 p.m. on February __, 1997. Acceptance by Buyer
shall be deemed to occur if, and only if, Seller shall have received actual
delivery of at least one (1) unaltered counterpart of this Agreement executed by
Buyer and by Escrow Holder evidencing Escrow Holder's receipt of the Earnest
Money Deposit. If such acceptance is not so received, then and unless the period
for acceptance is extended in writing by Seller, this Agreement and such offer
shall be deemed withdrawn and of no further force and effect. For purposes of
calculation of all time periods within which Seller or Buyer must act or respond
as herein described, the phrase "the date of this Agreement" or other like
phrases shall mean and refer to the date indicated on the first page hereof.
10.18 Confidentiality. The parties hereto acknowledge and
agree that Buyer is a publicly traded entity and subject to certain disclosure
obligations under federal and state securities laws. Therefore, notwithstanding
anything herein to the contrary, express or implied, Buyer may elect, in its
reasonable discretion, to disclose publicly, by press release or by filings with
federal or state authorities or otherwise, such matters relating to this
Agreement, the transactions contemplated hereby or the Property as Buyer may
deem necessary or desirable under federal or state securities laws or the
requirements or guidelines of any national securities exchange upon which
Seller's securities are listed.
IN WITNESS WHEREOF, Seller, Buyer, and Escrow Holder have
executed this Agreement as of the date first above written.
BUYER: THE PRICE REIT, INC.
By: /s/ Joseph Kornwasser
---------------------------------------
Joseph Kornwasser
Its: President and Chief Executive Officer
--------------------------------------
SELLER: MAXVEST ASSOCIATES, LIMITED PARTNERSHIP
By: Theta Corp., its general partner
By: /s/ John H. Dicken
------------------------------
John H. Dicken
Its: Vice President
-----------------------------
27
<PAGE> 35
CONSENT OF ESCROW COMPANY
The undersigned Escrow Company agrees to (i) accept the
foregoing Agreement, (ii) be Escrow Holder under the Agreement, and (iii) be
bound by the Agreement in the performance of its duties as Escrow Holder;
however, the undersigned will have no obligations, liability or responsibility
under (a) this consent or otherwise, unless and until the Agreement, fully
signed by the parties, has been delivered to the undersigned, or (b) any
amendment to the Agreement unless and until the amendment is accepted by the
undersigned in writing.
Dated: February 10, 1997 Chicago Title Insurance Company
By: /s/ Kathy J. Horms
---------------------------
Kathy J. Horms
Its: Commercial Underwriter
--------------------------
28
<PAGE> 36
SCHEDULE A
LEGAL DESCRIPTION OF THE LAND
Schedule A
<PAGE> 37
SCHEDULE B
NORTH CAROLINA SPECIAL WARRANTY DEED
[TO BE REVIEWED BY LOCAL COUNSEL]
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attention: William R. Lindsay
- --------------------------------------------------------------------------------
NORTH CAROLINA SPECIAL WARRANTY DEED
THIS INDENTURE is made this ____ day of _____________, 1997,
by MAXVEST ASSOCIATES, LIMITED PARTNERSHIP, a Georgia limited partnership
("Grantor") in favor of THE PRICE REIT, INC., a Maryland corporation
("Grantee"). Mailing address of Grantee is 145 South Fairfax Avenue, Fourth
Floor, Los Angeles, California 90036.
WITNESSETH, that Grantor, in consideration of the sum of Ten
Dollars ($10.00) and other good and valuable consideration to Grantor duly paid,
the receipt and sufficiency of which are hereby acknowledged, does by these
presents SELL and CONVEY unto Grantee and Grantee's successors and assigns, the
following described property (the "Property"):
(A) That certain real property described in Exhibit A hereto
(the "LAND");
(B) All rights, privileges and easements appurtenant to and
for the benefit of the Land, including, without limitation, all minerals, oil,
gas and other hydrocarbon substances on and under the Land, as well as all
development rights, air rights, water, water rights and water stock relating to
the Land and any other easements, rights-of-way or appurtenances owned by Seller
and used in connection with the beneficial operation, use and enjoyment of the
Land or the Improvements or any other appurtenance, together with all rights of
Seller in and to public and private streets, roads, avenues, alleys and
passageways, sidewalks, driveways, parking areas and areas adjacent thereto or
used in connection therewith (open or proposed, in front of or abutting the
Land), and all rights of Seller in any land lying in the bed of any existing or
proposed street adjacent to the Land, all strips or gores of land adjoining the
Land, and any awards made or to be made and any unpaid award for damage to the
Land by reason of any change of grade of any such street, road, avenue, alley or
passageway;
Schedule B
<PAGE> 38
(C) All improvements and fixtures located or to be located on
the Land, including, without limitation, all buildings and structures presently
located on the Land, all apparatus, equipment and appliances owned by Grantor
presently located on the Land and used in connection with the operation or
occupancy thereof, such as heating and air conditioning systems and facilities
used to provide any utility services, parking services, refrigeration,
ventilation, garbage disposal, recreation or other services thereto, and all
landscaping and leasehold improvements which are the property of Grantor (the
"IMPROVEMENTS");
SUBJECT TO only such matters as may be set forth in Exhibit B
attached hereto and by this reference made a part hereof.
TO HAVE AND TO HOLD the Property with all and singular the
tenements, hereditaments and appurtenances thereto belonging or in any wise
appertaining, unto Grantee and Grantee's successors and assigns, forever,
Grantor hereby covenanting that the Property is free and clear from any
encumbrance done or suffered by Grantor except as set forth above, and that
Grantor will warrant and defend title to the Property unto Grantee and Grantee's
successors and assigns forever against the claims and demands of persons
claiming or to claim the same by, through or under Grantor, except as set forth
above.
IN WITNESS WHEREOF, the Grantor has caused this Deed to be
executed and delivered as of the date first above written.
MAXVEST ASSOCIATES, LIMITED PARTNERSHIP
By: Theta Corp., Its general partner
By: _______________________________
Its:_______________________________
Schedule B
<PAGE> 39
EXHIBIT A
LEGAL DESCRIPTION
Schedule B
<PAGE> 40
EXHIBIT B
INSERT "PERMITTED EXCEPTIONS"
Schedule B
<PAGE> 41
SCHEDULE C
ASSIGNMENT AND ASSUMPTION OF LEASE AND RENTS
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attention: William R. Lindsay
- --------------------------------------------------------------------------------
ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
For valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, MAXVEST ASSOCIATES, LIMITED PARTNERSHIP, a Georgia limited
partnership ("Assignor"), hereby assigns, sets over, transfers and delegates to
THE PRICE REIT, INC., a Maryland corporation ("Assignee"), all of the landlord's
right, title, interest, claim and estate in and to all leases, occupancy
agreements and similar agreements, together with all modifications, extensions
and renewals thereof, all security therefor, and all guaranties of any of the
foregoing (collectively, the "Leases") which demise all or any part of, or
interest in, the real property more particularly described on Exhibit A attached
hereto and incorporated herein (the "Land"), together with all income, receipts,
fund and revenues of any kind whatsoever payable under the Leases or otherwise
with respect to the Land, whether heretofore accrued or hereafter arising.
Assignee hereby assumes all of Assignor's obligations under or with
respect to the Leases described on Exhibit B attached hereto, which obligations
arise out of and relate to the period commencing on the date hereof, and agrees
to indemnify, defend, protect, and hold Assignor harmless from and against any
and all loss, claim, obligation, cost or expense (including without limitation
reasonable attorneys fees) relating to or in connection with any such
obligations of the landlord under the Leases arising out of and relating to the
period commencing on the date hereof. Assignor hereby agrees to indemnify,
defend, protect and hold Assignee harmless from and against any and all loss,
claim, obligation, cost or expense (including without limitation reasonable
attorneys fees) relating to or in connection with any obligations of the
landlord under the Leases, which obligations arise out of or relate to the
period prior to the date hereof.
If any litigation between Assignor and Assignee arises out of the
obligations of the parties under this Assignment or concerning the meaning or
interpretation of any provision contained herein, the losing party shall pay the
prevailing party's costs and expenses of such litigation including, without
limitation, reasonable attorneys' fees. Any such
Schedule C
<PAGE> 42
attorneys' fees and other expenses incurred by either party in enforcing a
judgment in its favor under this Assignment shall be recoverable separately from
and in addition to any other amount included in such judgment, and such
attorneys' fees obligation is intended to be severable from the other provisions
of this Assignment and to survive and not be merged into any such judgment.
This Assignment may be executed and delivered in any number of
counterparts, each of which so executed and delivered shall be deemed to be an
original and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement
effective as of this ______ day of _______________, 1997.
ASSIGNOR:
MAXVEST ASSOCIATES, LIMITED PARTNERSHIP
By: Theta Corp., its general partner
By: _______________________________
Its:________________________________
ASSIGNEE:
THE PRICE REIT, INC.
By:______________________________
Its:_____________________________
Schedule C
<PAGE> 43
EXHIBIT "A" TO ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
LEGAL DESCRIPTION OF PROPERTY
Schedule C
<PAGE> 44
EXHIBIT "B" TO ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
ASSUMED LEASES
Schedule C
<PAGE> 45
SCHEDULE D
BILL OF SALE
For valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, MAXVEST ASSOCIATES, LIMITED PARTNERSHIP, a Georgia limited
partnership ("Seller"), hereby transfers, conveys and assigns to THE PRICE REIT,
INC., a Maryland corporation ("Buyer"), and its successors and assigns forever,
any and all tangible personal property owned by Seller and located on or about
and used in connection with the real property more particularly described on
Exhibit A attached hereto and made a part hereof (the "Property") or any
improvements thereon, including but not limited to fixtures, furnishings,
furniture, tools machinery and/or equipment, operational instructions and/or
specifications, surveys, drawings, business records and the personal property
listed on any schedule attached hereto.
If any litigation between Seller and Buyer arises out of the
obligations of the parties under this Bill of Sale or concerning the meaning or
interpretation of any provision contained herein, the losing party shall pay the
prevailing party's costs and expenses of such litigation including, without
limitation, reasonable attorneys, fees. Any such attorneys' fees and other
expenses incurred by either party in enforcing a judgment in its favor under
this Bill of Sale shall be recoverable separately from and in addition to any
other amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Bill of Sale and to
survive and not be merged into any such judgment.
IN WITNESS WHEREOF, Seller has caused this instrument to be executed
and delivered as of this ______ day of __________, 1997.
MAXVEST ASSOCIATES, LIMITED PARTNERSHIP
By: Theta Corp., its general partner
By: _______________________________
Its:________________________________
Schedule D
<PAGE> 46
EXHIBIT "A" TO BILL OF SALE
DESCRIPTION OF PROPERTY
Schedule D
<PAGE> 47
SCHEDULE E
ASSIGNMENT OF CONTRACTS, INTANGIBLE PROPERTY,
WARRANTIES AND GUARANTEES
THIS ASSIGNMENT OF CONTRACTS, INTANGIBLE PROPERTY, WARRANTIES AND
GUARANTIES (this "Assignment") is made as of the ___ day of ____________, 1997,
by MAXVEST ASSOCIATES, LIMITED PARTNERSHIP, a Georgia limited partnership
("Assignor"), in favor of THE PRICE REIT, INC., a Maryland corporation
("Assignee").
RECITALS;
Pursuant to that certain Purchase and Sale Agreement and Escrow
Instructions dated as of January ____, 1997 by and between Assignor, Assignee
and ____________________ Title Insurance Company (the "Agreement"), Assignee has
this day acquired from Assignor certain interests in land, buildings and
improvements more particularly described on Exhibit A attached hereto and made a
part hereof (the "Property"). Capitalized terms not otherwise defined herein
shall have the meanings given them in the Agreement.
In consideration of the acquisition of the Property by Assignee and
other good and valuable consideration, the mutual receipt and legal sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
Assignor hereby assigns, transfers and delegates to Assignee all of
Assignor's right, title and interest in and to the following (collectively, the
"Assigned Property"): (i) any intangible personal property which relates to and
is reasonably required for the operation and functioning of the Land,
Improvements or Personal Property, including without limitation all transferable
licenses and governmental approvals and permits of any nature relating to the
Property or the Improvements or any repairs or renovations to such Improvements,
and (ii) any and all transferable warranties, guaranties, contracts and other
rights owned by Assignor relating to the ownership, operation or functioning of
all or any part of the Property (including without limitation all third party
guarantees and warranties, express or implied, in connection with the
construction of the Improvements and any deposits given by Assignor in
connection with the installation or provision of utility services, to the extent
such deposits have not been returned to Assignor as of the date hereof).
If any litigation between Assignor and Assignee arises out of the
obligations of the parties under this Assignment or concerning the meaning or
interpretation of any provision
Schedule E
<PAGE> 48
contained herein, the losing party shall pay the prevailing party's costs and
expenses of such litigation including, without limitation, reasonable attorneys,
fees. Any such attorneys' fees and other expenses incurred by either party in
enforcing a judgment in its favor under this Assignment shall be recoverable
separately from and in addition to any other amount included in such judgment,
and such attorneys' fees obligation is intended to be severable from the other
provisions of this Assignment and to survive and not be merged into any such
judgment.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
effective as of the date set forth below.
Executed as of the date first above written.
ASSIGNOR:
MAXVEST ASSOCIATES, LIMITED PARTNERSHIP
By: Theta Corp., its general partner
By: _______________________________
Its:_______________________________
Schedule E
<PAGE> 49
EXHIBIT "A" TO ASSIGNMENT OF CONTRACTS, INTANGIBLE
PROPERTY, WARRANTIES AND GUARANTEES
LEGAL DESCRIPTION OF PROPERTY
Schedule E
<PAGE> 50
SCHEDULE F
CERTIFICATION OF NON-FOREIGN STATUS
(FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT)
Internal Revenue Code Section 1445 provides that a transferee
of a United States real property interest must withhold tax if the transferor is
a foreign person. To inform THE PRICE REIT, INC. ("Transferee") that withholding
of tax is not required upon the disposition of a United States real property
interest by the undersigned ("Transferor"), Transferor hereby certifies and
declares as follows:
1. Transferor's U.S. tax identification/social security number
is: __________________________________;
2. Transferor's principal office address is
__________________________________________; and
3. Transferor is not a foreign person (foreign corporation,
foreign partnership, foreign trust, foreign estate or non-resident alien), as
defined in the Internal Revenue Code and Income Tax Regulations.
Transferor acknowledges that this certification may be
disclosed by Transferee to the Internal Revenue Service and that any false
statement contained in this certification may be punished by fine or
imprisonment or both.
Transferor understands that Transferee is relying on this
certification to determine whether withholding is required by Transferee
pursuant to Internal Revenue Code Section 1445.
Under penalties of perjury, the undersigned signatory declares
that: I have examined this certification, to the best of my knowledge and belief
it is true and complete, and I am duly authorized to execute this certification
on behalf of Transferor.
Dated:_____________________, 1997
MAXVEST ASSOCIATES, LIMITED PARTNERSHIP
By: Theta Corp., its general partner
By: ________________________________
Its:________________________________
Schedule F
<PAGE> 51
SCHEDULE G
TENANT ESTOPPEL CERTIFICATE
THIS TENANT ESTOPPEL CERTIFICATE ("Certificate"), dated as of
_____________, 1997, is executed by ________________________ ("Tenant") in favor
of THE PRICE REIT, INC. ("Buyer").
R E C I T A L S
A. Buyer and MAXVEST ASSOCIATES, LTD. ("Landlord"), have entered into
that certain Purchase and Sale Agreement and Escrow Instructions, dated as of
January ___, 1997 (the "Purchase Agreement"), whereby Buyer has agreed to
purchase, among other things, the improved real property located in the City of
Greensboro, County of ___________, State of North Carolina, more particularly
described on Schedule "A" attached to the Purchase Agreement (the "Property").
B. Tenant and Landlord have entered into that certain Lease Agreement,
dated as of ________________ (together with all amendments, modifications,
supplements, guarantees and restatements thereof, the "Lease"), for a portion of
the Property.
C. Pursuant to the Lease, Tenant has agreed that upon the request of
Landlord, Tenant would execute and deliver an estoppel certificate certifying
the status of the Lease.
D. In connection with the Purchase Agreement, Landlord has requested
that Tenant execute this Certificate.
NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer as
follows:
AGREEMENT
Section 1. Lease.
Attached hereto as Exhibit "A" is a true, correct, and complete copy of
the Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements. guarantees and restatements thereof:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 2. Leased Premises.
Pursuant to the Lease, Tenant leases those certain Premises (the
"Leased Premises") consisting of approximately ______________________
(______________) rentable square
Schedule G
<PAGE> 52
feet within the Property, as more particularly described in the Lease. In
addition, pursuant to the terms of the Lease, Tenant has the [non-exclusive]
right to use [___________ parking spaces/the parking area] located on the
Property during the term of the Lease. [Cross-out the preceding sentence or
portions thereof if inapplicable.]
Section 3. Full Force of Lease.
The Lease is in full force and effect, has not been terminated, and is
enforceable in accordance with its terms.
Section 4. Complete Agreement
The Lease constitutes the complete agreement between Landlord and
Tenant for the Leased Premises and the Property.
Section 5. Acceptance of Leased Premises.
Tenant has accepted and is currently occupying the Leased Premises.
Section 6. Lease Term.
The term of the Lease commenced on _____________________ and ends on
_______________________, subject to the following options to extend:
________________________________________________________________________________
(If none, please state "None.")
Section 7. Purchase Rights.
Tenant has no option, right of first refusal, right of first offer, or
other right to purchase all or any portion of the Leased Premises or all or any
portion of the Property, except as follows:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 8. Rights of Tenant.
Except as expressly stated in this Certificate, Tenant:
(a) has no right to renew or extend the term of the Lease;
(b) has no option or other right to purchase all or any part of
the Leased Premises or all or any part of the Property;
(c) has no right, title, or interest in the Leased Premises, other
than as Tenant under the Lease.
Schedule G
<PAGE> 53
Section 9. Rent.
(a) The rent under the Lease is current, and Tenant is not in
default in the performance of any of its obligations under the Lease.
(b) Tenant is currently paying base rent under the Lease in the amount
of ________________________ Dollars ($_________) per month. Tenant has not
received and is not, presently, entitled to any abatement, refunds, rebates,
concessions or forgiveness of rent or other charges, free rent, partial rent, or
credits, offsets or reductions in rent, except as follows:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
(c) Tenant's estimated share of operating expenses, common area
charges, insurance, real estate taxes and administrative and over-head expenses
is ___________ percent (______%) and is currently being paid at the rate of
____________________________________ Dollars ($__________) per month, payable to
______________________________________________.
(d) There are no existing defenses or offsets against rent due or to
become due under the terms of the Lease, and there presently is no default or
other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Leased Premises, except as
follows:________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
Section 10. Security Deposit.
The amount of Tenant's security deposit held by Landlord under the
Lease is _________________________________ Dollars ($_____________).
Section 11. Prepaid Rent.
The amount of prepaid rent, separate from the security deposit, is
__________________________________ Dollars ($_____________), covering the period
from ________ to ________.
Section 12. Insurance.
All insurance, if any, required to be maintained by Tenant under the
Lease is presently in effect.
Schedule G
<PAGE> 54
Section 13. Pending Actions.
There are no actions, whether voluntary or otherwise, pending against
the Tenant (or any guarantor of the Tenant's obligations under the Lease)
pursuant to the bankruptcy or insolvency laws of the United States or any state
thereof.
Section 14. Landlord's Obligations
As of the date of this Certificate, Landlord has performed all
obligations required of Landlord pursuant to the Lease and no offsets.
counterclaims, or defenses of Tenant under the Lease exist against Landlord. As
of the date of this Certificate, no events have occurred that, with the passage
of time or the giving of notice, would constitute a basis for offsets,
counterclaims, or defenses against the Landlord, except as follows:
________________________________________________________________________________
________________________________________________________________________________
(If none, please state "None.")
(If none, please state "None.")
Section 15. Assignments by Landlord.
Tenant has received no notice of any assignment, hypothecation or
pledge of the Lease or rentals under the Lease by Landlord.
Section 16. Assignments by Tenant.
Tenant has not sublet or assigned the Leased Premises or the Lease or
any portion thereof to any sublessee or assignee. No one except Tenant and its
employees will occupy the Leased Premises except as permitted under the Lease.
The address for notices to be sent to Tenant is as set forth in the Lease.
Section 17. Environmental Matters.
The operation and use of the Leased Premises does not involve the
generation, treatment, storage, disposal or release into the environment of any
hazardous materials, regulated materials and/or solid waste, except those used
in the ordinary course of operating a retail store or restaurant (if so
permitted by the Lease) or otherwise used in accordance with all applicable
laws.
Section 18. Notification by Tenant.
From the date of this Certificate and continuing the earlier to occur
of (i) December 31, 1997 and (ii) Buyer's acquisition of title to the Property,
Tenant agrees to immediately notify Buyer, in writing, at the following address,
on the occurrence of any event or the discovery of any fact that would make any
representation contained in this Certificate inaccurate:
Schedule G
<PAGE> 55
The PRICE REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
Attn.: Joseph Kornwasser
Fax No.: (213) 937-8175
Tenant makes this Certificate with the knowledge that it will be relied
upon by Buyer in agreeing to purchase the Property. In the event that Buyer
acquires the Property, nothing in this Section 18 shall limit Tenant's
obligations under the Lease.
Tenant his executed this Certificate as of the date first written above
by the person named below, who is duly authorized to do so.
TENANT
_________________________________
By:_______________________________
Name:
Its:
Schedule G
<PAGE> 56
SCHEDULE H
RENT ROLL
Attached.
Schedule H
<PAGE> 1
EXHIBIT 2.6
PHASE I
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
DATED
OCTOBER 10, 1996
BY AND BETWEEN
THE PRICE REIT, INC.,
AS BUYER,
AND
LOOP ONE/183, LTD.,
AS SELLER
<PAGE> 2
PHASE I
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS PHASE I PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS ("Agreement") is made and entered into as of October 10, 1996 (the
"Execution Date"), by and between THE PRICE REIT, INC., a Maryland corporation
("Buyer"), and LOOP ONE/183, LTD., a Texas limited partnership ("Seller"), for
the purpose of setting forth the agreement of the parties and of instructing
Heritage Title Company of Austin, Inc. ("Escrow Agent"), with respect to the
transactions contemplated by this Agreement. All capitalized terms used and
not defined in the text of this Agreement shall have the meanings ascribed
thereto on Exhibit "A" attached hereto.
R E C I T A L S
A. Seller is the owner of a fee simple interest in that
certain real property located in the City of Austin, County of Travis, State of
Texas, as more particularly described on Exhibit "B" attached hereto and upon
which Phase I of the shopping center commonly known as the "Arboretum Crossing
Power Center" is being constructed.
B. Seller desires to sell and Buyer desires to purchase
the Property (as hereinafter defined) upon and subject to the terms and
conditions set forth in this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Buyer and Seller
hereby agree, and instruct Escrow Agent, as follows:
1. AGREEMENT TO PURCHASE AND SELL.
Seller agrees to sell, transfer and convey to Buyer, and Buyer
agrees to acquire and purchase from Seller, the Property, upon and subject to
the terms and conditions set forth herein.
<PAGE> 3
2. PURCHASE PRICE.
The Purchase Price shall be determined and payable as follows:
2.1 Deposit.
2.1.1 Initial Deposit. Upon the Opening of Escrow,
Buyer shall deposit into Escrow the Initial Deposit by wire transfer of
immediately available funds payable to the order of Escrow Agent.
2.1.2 Additional Deposit. Upon the later to occur
of the Due Diligence Termination Date and the Board Approval Date, Buyer shall:
(a) deposit into Escrow the Additional Deposit by wire transfer of immediately
available funds payable to the order of Escrow Agent; and (b) either deposit
into Escrow the Letter of Credit or deliver to Seller Buyer's Specific
Performance Notice. If Buyer allows the Due Diligence Termination Date and the
Board Approval Date to pass without terminating this Agreement, but fails to
perform its obligations as set forth in clause (b) of the preceding sentence,
Buyer shall be deemed to have delivered to Seller Buyer's Specific Performance
Notice.
2.1.3 Investment of Deposit. Escrow Agent shall
invest the Deposit in insured money market accounts, certificates of deposit,
United States Treasury Bills or such other instruments as Buyer may instruct
from time to time, provided that such investments are federally issued or
insured and maintained in an account at an institution with offices in Travis
County, Texas, where such account or accounts will be maintained. At the
Closing, the Deposit shall be paid to Seller and credited against the Initial
Purchase Price. In the event the sale of the Property is not consummated for
any reason, then the Deposit shall be held and disbursed in accordance with
this Agreement.
2.2 Initial Purchase Price. Subject to the terms of Section
2.4.1 hereof, at the Closing, Buyer shall pay to Seller the amount by which the
Initial Purchase Price exceeds the Initial Deposit, by wire transfer of
immediately available federal funds, net of all prorations and adjustments as
provided herein.
2.2.1 Buyer's Recourse Obligation. In the event
that less than 100% of the Property is leased pursuant to Qualified Leases as
of the Closing, Buyer shall deliver to Seller at the Closing, an instrument in
form reasonably satisfactory to Seller evidencing Buyer's recourse obligation
to pay Seller the Deferred Purchase Price on the Deferred Payment Date.
Subject to
2
<PAGE> 4
Section 16.5.2, in the event that Buyer's interest in this Agreement is
assigned to another entity on or before the Closing, then, upon such
assignment, The Price REIT, Inc. shall deliver to Seller a guaranty, in a form
approved by Seller (which approval shall not be unreasonably withheld or
delayed), pursuant to which Seller shall guarantee Buyer's recourse obligation
described in this Section 2.2.1.
2.3 Deferred Purchase Price. Subject to the terms of Section
8.1.2 hereof, on the Deferred Payment Date, if any, Buyer shall pay to Seller
the Deferred Purchase Price by wire transfer of federal funds, net of all
prorations and adjustments as provided herein.
2.4 Lease-Up Payments.
2.4.1 Lease-Up Payment. In the event that 95% or
more (but less than 100%) of the Property has been leased pursuant to Qualified
Leases as of the Closing, Seller may elect, by delivering written notice of
such election to Buyer on or before the tenth (10th) Business Day prior to the
Closing, to cause Buyer to pay to Seller at the Closing (in lieu of any future
right to receive the Deferred Purchase Price and the Deferred Lease-Up Payment)
the Lease-Up Payment with respect to the unleased portion of the Property in
addition to the Initial Purchase Price.
2.4.2 Deferred Lease-Up Payment. In the event that
(i) no Lease-Up Payment was paid to Seller at the Closing, (ii) Seller is
entitled to receive the Deferred Purchase Price on the Deferred Payment Date
and (iii) as of the Deferred Payment Date, 95% or more (but less than 100%) of
the Property has been leased pursuant to Qualified Leases, then Seller may
elect, by delivering written notice of such election to Buyer on or before the
tenth (10th) Business Day prior to the Deferred Payment Date, to cause Buyer to
pay to Seller on the Deferred Payment Date the Deferred Lease-Up Payment with
respect to the unleased portion of the Property in addition to the Deferred
Purchase Price.
3. LEASE-UP.
3.1 Seller's Obligation. Seller covenants and agrees that it
shall use good faith, commercially reasonable and diligent efforts (for so long
as this Agreement shall remain in full force and effect and until the Deferred
Payment Date or, if no Deferred Payment Date exists, then until the Closing) to
lease, at Seller's sole cost and expense, those portions of the Property that
remain unleased
3
<PAGE> 5
as of the Execution Date, subject to and in accordance with the terms of this
Article 3.
3.2 Leasing Criteria. Seller covenants and agrees that all
New Leases shall satisfy each of the following leasing criteria (collectively,
the "Leasing Criteria") unless otherwise approved (or deemed to be approved) by
Buyer in accordance with Section 3.3 hereof:
(i) the New Leases shall be in substantially the
same form and substance as the Existing Leases;
(ii) the New Leases shall be to tenants approved
(or deemed approved) by Buyer in accordance with the
terms of Section 3.3 hereof;
(iii) the New Leases shall require tenants to pay
for their full pro rata share of common area
maintenance expenses and taxes in accordance with
industry standards applicable to Comparable
Properties, subject to reasonable exceptions found in
comparable transactions or in one or more of the
Existing Leases;
(iv) the New Leases shall include market-based
percentage rental clauses, but only to the extent
that such clauses are used in leases for comparable
tenants at Comparable Properties or in one or more of
the Existing Leases;
(v) any concessions or "free" or "reduced" rent
offered to prospective tenants shall be reasonable
under the circumstances and within industry standards
for items offered to similar tenants for Comparable
Properties (and in no event shall such concessions be
"back-end loaded"); and
(vi) the base rent and rent escalations under the
New Leases shall be reasonable and within industry
standards for Comparable Properties, provided that
each rent escalation under each New Lease shall be no
less than a ten percent (10%) escalation and shall
occur no less frequently than every fifth (5th) lease
year.
4
<PAGE> 6
3.3 Buyer's Consent. All prospective New Leases shall be
subject to Buyer's prior written consent, which consent shall not be
unreasonably withheld. Notwithstanding anything to the contrary herein, Buyer
shall not withhold its consent to any New Lease that complies with the Leasing
Criteria and is to a pre-approved tenant described in Section 3.4 hereof.
Buyer covenants and agrees to deliver to Seller a written notice of Buyer's
consent or denial of consent to any prospective New Lease on or before the
fifth (5th) Business Day following Buyer's receipt of Seller's written request
therefor which request shall be accompanied by the proposed form of New Lease
together with a reasonably detailed credit report of the proposed tenant. In
the event that Buyer fails to deliver its response to Seller's consent request
within such five (5) Business Day period, then Buyer shall be deemed to have
consented to such request.
3.4 Pre-Approved Tenants. Attached hereto as Exhibit "C" is
a list of the prospective tenants currently under consideration for New Leases,
which prospective tenants are hereby approved by Buyer, provided that such
approval shall not prevent Buyer from reasonably disapproving of any New Lease
to such prospective tenants in accordance with Section 3.3 hereof if such New
Lease does not satisfy the Leasing Criteria.
3.5 Leasing Reports. On or before the fifth (5th) Business
Day following the Opening of Escrow and, on or before the first (1st) day of
each calendar month prior to the Deferred Payment Date (or, if no Deferred
Payment Date exists, then prior to the Closing), Seller shall provide Buyer
with a report describing the progress of all leasing negotiations. Seller
shall promptly deliver copies of all letters of intent, material correspondence
and other material documentation relative to any on-going lease negotiations
and Seller shall promptly respond to any of Buyer's reasonable requests for
explanations with respect to Seller's leasing negotiations or the status of any
prospective New Lease.
4. CONSTRUCTION.
4.1 Seller's Construction Obligations. Seller hereby
covenants and agrees to use commercially reasonable, good faith and diligent
efforts to commence and prosecute the construction of the Improvements in
accordance with (i) the Construction Documents and (ii) the terms of this
Agreement.
4.2 Buyer's Approval and Inspections. In connection with
Seller's construction of the Improvements, Seller shall obtain Buyer's prior
written approval (which approval shall not be unreasonably withheld or delayed)
in
5
<PAGE> 7
connection with any material changes to the Construction Documents or the
identity of the general contractor or construction manager. Upon one (1)
Business Day's advance notice to Seller, Buyer shall have the right to
periodically inspect (or have its representatives periodically inspect) any and
all construction, in order to confirm that the construction is being completed
in accordance with the Construction Documents and the terms of this Agreement,
provided that (i) such inspections do not unreasonably interfere with Seller's
construction efforts and (ii) any such inspections shall be subject to the
indemnification provisions set forth in Section 6.1.1.2 hereof.
4.3 Seller's Indemnification. To the fullest extent
permitted by law, Seller shall indemnify, defend, and hold Buyer and its
employees, agents and representatives, and their respective partners and
affiliates (collectively, the "Indemnified Parties") harmless from and against
any and all claims, damages, losses or expenses (including, without limitation,
reasonable attorneys' fees, charges and disbursements) arising out of or as a
result of the performance of the construction of the Improvements, unless such
claim, damage, loss or expense is the result of Buyer's (or its agents' or
contractors') gross negligence or willful misconduct. Seller shall be notified
within a reasonable period of time after any claim is made against any of the
Indemnified Parties and shall be given such reasonable information and
assistance as Seller may request to perform its obligations as set forth in
this Section 4.3. Notwithstanding the foregoing: (i) Seller's indemnification
obligations under this Section 4.3 relating to the Improvements constructed on
or before the Closing Date shall only apply to claims, damages, losses or
expenses of which Seller has been notified within, on or before the first
anniversary of the Closing Date; and (ii) Seller's indemnification obligations
under this Section 4.3 relating to the Improvements constructed after the
Closing Date and on or before the Deferred Payment Date shall only apply to
claims, damages, losses or expenses of which Seller has been notified within,
on or before the first anniversary of the Deferred Payment Date.
4.4 Seller's Insurance.
4.4.1 Types of Insurance. Seller shall purchase and
maintain, at its sole cost and expense, the following insurance as will protect
it and the Indemnified Parties from the claims set forth below which may arise
out of or as a result of Seller's performance under this Agreement (including
the performance of any contractor or any party directly or indirectly employed
by such contractor, or by any party whose acts they may be liable for):
6
<PAGE> 8
(i) Worker's Compensation/Employer's
Liability/Disability Insurance protecting against (a) claims under worker's
compensation, disability benefits and other similar employee benefit acts which
are applicable to the construction to be performed and (b) claims for damages
because of bodily injury, occupational sickness or disease, or death of it's
employees under any applicable employer's liability law in an amount not less
than $1,000,000;
(ii) Comprehensive Automobile Liability Insurance
protecting against claims for damages because of bodily injury or death of any
person or property damage arising out of ownership, maintenance or use of any
motor vehicle in an amount not less than $1,000,000 Combined Single Limit,
which coverage shall include Employer's Non-Owned and Hired Car Coverage;
(iii) Commercial General Liability Insurance
protecting against (a) claims for damages due to bodily injury or death of any
person other than Seller's employees and (b) claims for damages other than to
the Property itself, due to injury to, or destruction of, tangible property,
including loss of use therefrom, all of which shall be written on an occurrence
form with limits of $1,000,000 Combined Single Limit each occurrence and
$2,000,000 from the aggregate of all occurrences within each policy year per
site, including, without limitation, Comprehensive Form, Premises-Operation,
Explosion, Collapse, Underground Hazard, Products/Completed Operations Hazard,
(two (2) year's extension beyond completion of construction), Blanket
Contractual Coverage (including coverage for the indemnification set forth in
Section 4.3 hereof), Broad Form Property damage, Independent Contractors, and
Personal Injury (with the employees exclusion deleted); and
(iv) Excess (Umbrella) Liability Insurance with
total limits of $10,000,000 each occurrence and in the aggregate per site in
excess of the above noted insurance policies.
4.4.2 Additional Insureds. The insurance policies
described in this Section 4.4 shall name the Buyer as an additional insured.
Buyer agrees that, unless Buyer or its employees, agents, representatives or
affiliates is named as a defendant in an action for a liability or otherwise
suffers a loss covered by the insurance prescribed by this Section 4.4, Buyer
shall not interfere with any adjustment or claim made by Seller in connection
with such insurance.
4.4.3 Insurance Certificates. Promptly following
the Execution Date, Seller shall deliver to Buyer certificates showing the
existence of
7
<PAGE> 9
the policies required under this Section 4.4 and evidence that the insurer is
required to deliver a cancellation notice to Buyer ten (10) Business Days prior
to any cancellation.
4.4.4 Insurance Company Standards. All insurance
policies required under this Section 4.4 shall be maintained with reputable
insurance companies licensed to do business in the State of Texas and rated A:X
or better in the then most recent "Best's Insurance Guide" or which are
otherwise reasonably acceptable to Buyer.
4.5 Waiver of Subrogation. Each policy of insurance procured
pursuant to Section 4.4 hereof shall contain, either (i) a waiver of
subrogation against either party hereto for the negligence of such party or
(ii) a statement that the insurance shall not be invalidated should any insured
waive prior to a loss any or all right of recovery against any party for the
loss described in such insurance policy. Buyer (on behalf of itself and the
other Indemnified Parties) and Seller (on behalf of itself and each contractor,
to the extent Seller has the legal right to bind its contractors) hereby waives
any and all rights of recovery against the other for any loss or damage to the
waiving party or its property or the property of others under its control,
arising from any cause insured against under the insurance policies required to
be carried pursuant to Section 4.4 hereof or under any other policy of
insurance carried by them.
5. OPENING OF ESCROW.
On or before the third (3rd) Business Day after the Execution
Date, Buyer and Seller shall cause a purchase and sale escrow ("Escrow") to be
opened with Escrow Agent (the "Opening of Escrow") by delivery to Escrow Agent
of the following: (i) two (2) fully executed copies of this Agreement and (ii)
the Initial Deposit. Escrow Agent shall promptly deliver to Buyer and Seller
written notice of the date of the Opening of Escrow. This Agreement shall
constitute escrow instructions to Escrow Agent as well as the agreement of the
parties. Escrow Agent is hereby appointed and designated to act as the Escrow
Agent and instructed to deliver, pursuant to the terms of this Agreement, the
documents and funds to be deposited into Escrow as herein provided.
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6. ACTIONS PENDING CLOSING.
6.1 Due Diligence Period.
6.1.1 Due Diligence.
6.1.1.1 Property Documents. On or before
the fifteenth (15th) Business Day after the Opening of Escrow, Seller shall
deliver or cause to be delivered to Buyer, at Seller's sole cost and expense,
at its address set forth in Section 16.3 hereof, true, correct and complete
copies of all of the Construction Documents, the Property Studies and the
Leases. In addition, at all times following the execution of this Agreement,
Seller shall make available at its offices (at the address set forth in Section
16.3 hereof) true correct and complete copies of the Property Records available
for Buyer's review and copying during normal business hours upon one (1)
business days' prior notice.
6.1.1.2 Diligence Tests. At all reasonable
times during the Due Diligence Period, Buyer, its agents and representatives
shall be entitled at Buyer's sole cost and expense to: (i) enter onto the
Property during normal business hours and upon reasonable advance notice to
Seller, to perform any inspections, investigations, studies and tests of the
Property, including, without limitation, physical, structural, mechanical,
architectural, engineering, soils, geotechnical and environmental tests that
Buyer deems reasonable; (ii) cause an environmental assessment of the Property
to be performed, upon reasonable notice to Seller; and (iii) review all
Property Documents and examine and copy any and all books and records
maintained by Seller or its agents relating to the Property (including, without
limitation, all documents relating to utilities, zoning, and the access,
subdivision and appraisal of the Property). Buyer shall indemnify, defend and
hold harmless Seller from all claims (including, without limitation, any claim
for a mechanic's lien or materialman's lien), causes of action, costs, losses,
damages and reasonable attorneys' fees incurred by Seller in connection with or
arising out of any inspections carried on, by or on behalf of Buyer pursuant to
this Section 6.1.1.2; provided, however, that Buyer shall not indemnify Seller
for any claim, loss or cause of action caused by Seller's gross negligence or
willful misconduct or any physical condition existing on the Property prior to
Buyer's entry thereon. The provisions of this Section 6.1.1.2 shall survive
the Closing (and the Deferred Payment Date, if any) or the earlier termination
of this Agreement.
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6.1.2 Termination Right. Buyer shall have the right
at any time on or before the Due Diligence Termination Date to terminate this
Agreement if Buyer determines in its sole and absolute discretion that the
Property is not acceptable to Buyer. In the event that Buyer fails to deliver
a written notice to Seller and Escrow Agent unconditionally waiving its
termination right hereunder on or before the Due Diligence Termination Date,
then (i) Escrow Agent shall return the Initial Deposit to Buyer, (ii) the
parties shall equally share the cancellation charges of Escrow Agent and Title
Company, and (iii) this Agreement shall automatically terminate and be of no
further force or effect and neither party shall have any further rights or
obligations hereunder, other than pursuant to any provision hereof which
expressly survives the termination of this Agreement.
6.2 Title.
6.2.1 Deliveries by Seller. On or before the tenth
(10th) Business Day after the Opening of Escrow, Seller shall deliver or cause
to be delivered to Buyer the following: (a) a Texas form of commitment for an
owner's policy of title insurance (the "PTR") issued by the Title Company,
together with legible copies of all documents referenced as exceptions therein
(the "Underlying Documents"); (b) a current Texas Land Surveyors Category 1A
Condition II land title boundary survey of the Property excluding improvements
(the "Survey"), in form reasonably satisfactory to Buyer and Title Company,
prepared and certified to Buyer, Seller, Title Company, and such other persons
or entities as Buyer may, in its discretion, request, by a surveyor licensed in
the State of Texas, showing any and all matters which Buyer may reasonably
require, including, without limitation, all easements, all roads, all utilities,
the number of parking spaces, access to and from the Land, and drainage ditches,
set-back lines, protrusions, encroachments and encumbrances affecting the same,
and showing that the different parcels of the Property, if any, are contiguous
to each other; and (c) a UCC Search with regard to the Personal Property (the
"UCC Search").
6.2.2 Buyer's Review of Title. Buyer shall have
twenty (20) Business Days after its receipt of all of the Title Documents to
notify Seller and Escrow Agent in writing ("Buyer's Objection Letter") of any
objection which Buyer may have to any matters reported or shown in the Title
Documents (provided, however, that if any updates to the Title Documents are
subsequently received by Buyer which reflect new items not shown on the
original versions thereof other than lien waivers and other similar documents
to be routinely obtained and filed of record from time to time by Seller
throughout the course of
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its construction and any easements, restrictive covenants or other agreements
previously approved by Buyer (to the extent Buyer's approval thereof is
required hereunder), Buyer shall have an additional ten (10) Business Days,
regardless of the Due Diligence Termination Date, following Buyer's receipt of
such update and legible copies of all new documents referenced therein to
notify Seller and Escrow Agent of objections to new items shown on any such
update). Buyer's Objection Letter shall include a description of each specific
objection and Buyer's desired cure for each objection. Matters reported in or
shown by the Title Documents (or any updates thereof) and not objected to by
Buyer as provided above shall be deemed to be "Permitted Exceptions." Seller
shall have no obligation to cure or correct any matter objected to by Buyer,
other than any Liens. However, on or before the twentieth (20th) Business Day
following Seller's receipt of Buyer's Objection Letter, Seller may elect, by
delivering written notice of such election to Buyer and Escrow Agent ("Seller's
Response"), to either remove or, to Buyer's reasonable satisfaction, insure
over any matters objected to in Buyer's Objection Letter. If Seller fails to
provide Seller's Response, it shall not be deemed to be a default by Seller
hereunder, but such failure shall be deemed to be an expression of Seller's
unwillingness or inability to cure the objections set forth in Buyer's
Objection Letter. If Seller fails to remove or satisfactorily insure over any
exceptions or matters objected to by Buyer, then Buyer must elect by delivering
written notice of such election to Seller and Escrow agent on or prior to the
earlier to occur of (i) the twentieth (20th) Business Day following Buyer's
receipt of Seller's Response or (ii) if no Seller Response is received by
Buyer, the twentieth (20th) Business Day following the date on which Seller
shall have been deemed to have responded, as provided above, to: (a) terminate
this Agreement (in which case Escrow Agent shall return the Deposit to Buyer,
the parties shall equally share the cancellation charges of Escrow Agent and
Title Company, and neither party shall thereafter have any rights or
obligations to the other hereunder, other than pursuant to any provision hereof
which expressly survives the termination of this Agreement); (b) discharge, at
the Closing, any objected to liens affecting the Property which secure an
obligation to pay money other than installments of real estate taxes or
assessments not delinquent as of the Closing (collectively, the "Liens") and
deduct from the Purchase Price the amount necessary to do so; (c) extend the
Closing Date to allow Seller a reasonable period of time to remove such
objected to exceptions or matters (if Seller is willing to remove such objected
to exceptions or matters); or (d) proceed to a timely Closing whereupon such
objected to exceptions or matters shall be deemed to be Permitted Exceptions.
In the event that Buyer fails to make such election on a timely basis, then
Buyer shall be deemed to have elected to proceed to a timely Closing in
accordance with the preceding clause (d). Notwithstanding anything to
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the contrary contained herein, Seller shall be required to discharge and remove
any and all Liens and, even though Buyer does not expressly disapprove such
Liens, such Liens shall not be Permitted Exceptions. Notwithstanding anything
to the contrary contained herein, the term "Liens" shall not include Road
District assessment liens to the extent that, pursuant to the Leases, the
Tenants are obligated to reimburse the "landlord" under the Leases the amount
of the assessments secured by such liens, or any portion thereof.
6.2.3 Condition of Title at Closing. At the
Closing, Seller shall sell, transfer and convey to Buyer indefeasible fee
simple title to the Property by a duly executed and acknowledged special
warranty deed in the form of Exhibit "D" attached hereto (the "Deed"), subject
only to the Permitted Exceptions. Except as otherwise expressly provided in
Sections 3.3, 6.2.2 and 11.1 hereof, prior to the Closing, Seller shall not
take any action or commit or suffer any acts which would give rise to a
variance from the current legal description of the Property, or cause the
creation of any exception or encumbrance against or respecting the Property,
without the prior written consent of Buyer, which consent may be withheld in
Buyer's sole and absolute discretion. Nothing in this Section 6.2.3 shall
preclude Buyer from disapproving title matters in accordance with the
provisions of Section 6.2.2 above. Prior to the Closing Date, Seller shall
deliver an "as- built" survey with respect to the Property, which survey shall
be subject to Buyer's review and approval, which approval shall not be withheld
provided that such survey does not reveal any unpermitted encroachment of
improvements on to easement areas or adjacent properties.
6.3 Buyer's Board Approval Contingency. Buyer shall have
until the Board Approval Date to obtain the approval of Buyer's Board of
Directors with respect to the transactions contemplated herein and, in the
event that Buyer does not obtain such approval, Buyer shall have the right to
terminate this Agreement. In the event that Buyer fails to deliver a written
notice to Seller and Escrow Agent unconditionally waiving its termination right
hereunder on or before the Board Approval Date, then (i) Escrow Agent shall
return the Initial Deposit to Buyer, (ii) the parties shall equally share the
cancellation charges of Escrow Agent and Title Company, and (iii) this
Agreement shall automatically terminate and be of no further force or effect
and neither party shall have any further rights or obligations hereunder, other
than pursuant to any provision hereof which expressly survives the termination
of this Agreement.
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7. CONDITIONS PRECEDENT TO CLOSING.
7.1 Buyer's Conditions. At the Closing, the obligation of
Buyer to purchase the Property in accordance with this Agreement is subject to
the following conditions precedent (and conditions concurrent, with respect to
deliveries to be made by the parties at the Closing) (the "Closing
Conditions"), which conditions may be waived, or the time for satisfaction
thereof extended, by Buyer only in a writing executed by Buyer (provided,
however, that (i) Buyer's acceptance of the Deed shall be deemed a waiver of
any unsatisfied conditions regardless of whether Buyer executes a separate
written instrument to that effect at the Closing and (ii) such waiver shall not
affect Buyer's ability to pursue any remedy it may have with respect to any
breach hereunder by Seller to the extent such remedy is expressly provided for
in this Agreement):
7.1.1 Title. At the Closing, Title Company shall be
prepared and committed (which commitment shall be evidenced by the Title
Company's issuance of a final PTR for the Property at the Closing, subject only
to the Permitted Exceptions) to issue to Buyer: (i) a Texas form of owner's
policy of title insurance in favor of Buyer in an amount equal to the Initial
Purchase Price, showing indefeasible fee simple title to the Property vested in
Buyer, with those endorsements reasonably requested by Buyer to the extent
available in Texas, subject only to the Permitted Exceptions (collectively, the
"Owner's Title Policy"); and (ii) an endorsement to the Owner's Title Policy
(the "Deferred Payment Endorsement") to be issued, if applicable, on the
Deferred Payment Date, if any, which Deferred Payment Endorsement shall
increase the amount of title insurance by an amount equal to the Deferred
Purchase Price.
7.1.2 Seller's Due Performance. All of the
representations and warranties of Seller set forth in Section 9 hereof shall be
true and correct as of the Closing Date, subject to Section 9.26 hereof, and
Seller, on or prior to the Closing Date, shall have complied with and/or
performed all of the obligations, covenants and agreements required on the part
of Seller to be complied with or performed pursuant to the terms of this
Agreement (subject to the last sentence of Section 13.2 hereof). On the
Closing Date and subject to Section 9.26 hereof, Seller shall deliver to Buyer
a certificate, in the form of Exhibit "E" attached hereto (the "Seller's
Certificate").
7.1.3 Construction and Physical Condition of the
Real Property. Subject to the provisions of Sections 4 and 12 hereof, the
physical condition of the Real Property shall be substantially the same on the
Closing Date
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as on the Execution Date, except for the completion of construction, ordinary
wear and tear and any damages due to any act of Buyer or Buyer's
representatives. On or before the Closing, Seller shall complete construction
of the Property to be transferred, in accordance with the Construction
Documents and applicable Laws, which completion shall be evidenced by a final
certificate of occupancy and a certificate from Seller's architect and general
contractor stating that the construction of the transferred Improvements has
been completed in accordance with the Construction Documents and applicable
Laws.
7.1.4 Bankruptcy. No action or proceeding shall
have been commenced by or against Seller under the federal bankruptcy code or
any state law for the relief of debtors or for the enforcement of the rights of
creditors and no attachment, execution, lien or levy (other than Liens to be
discharged by Seller prior to Closing) shall have attached to or been issued
with respect to the Property or any portion thereof.
7.1.5 Leases. At the Closing, Seller shall assign
to Buyer all of Seller's rights and remedies under the Leases, including,
without limitation, the right to any security deposits and prepaid rent,
pursuant to an assignment and assumption of leases and security deposits (the
"Assignment of Leases") in the form of Exhibit "F" attached hereto.
7.1.6 Assignment of REA. Subject to the terms of
Section 11.3 hereof, at the Closing, Seller shall assign to Buyer all of
Seller's right, title and interest in, to and under the REA (as and to the
extent that such right, title and interest pertain to or benefit the Property),
pursuant to an assignment of reciprocal easement agreement (an "Assignment of
REA") in the form of Exhibit "G" attached hereto.
7.1.7 Bill of Sale. At the Closing, Seller shall
deliver to Buyer a bill of sale and assignment (the "Bill of Sale and
Assignment"), by which Seller shall transfer to Buyer all of Seller's interest
in the Personal Property and Intangible Property, including, without
limitation, the Property Documents, but excluding the Leases, in each case free
of all liens and encumbrances (other than the Permitted Exceptions), in the
form of Exhibit "H" attached hereto.
7.1.8 Estoppel Certificates.
7.1.8.1 Tenant Estoppels. Seller shall use
its good faith, commercially reasonable and diligent efforts to obtain, no
later than ten
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(10) Business Days prior to the Closing, an estoppel certificate from each
Tenant, which certificate shall be in substantially the same form as Exhibit
"I" attached hereto (each, a "Tenant Estoppel"). Seller shall promptly, upon
its receipt of any and all executed Tenant Estoppels, deliver copies thereof to
Buyer for Buyer's review and approval. Buyer will have an obligation to
approve each executed Tenant Estoppel to the extent the same corresponds to the
substantive terms and provisions contained in the Lease to which it relates and
is otherwise in substantially the same form as Exhibit "I". If Seller has not
received Buyer's written objection to the form and/or content of any executed
Tenant Estoppel on or before the fifth (5th) Business Day following Buyer's
receipt of such Tenant Estoppel, then Buyer shall be deemed to have reviewed
and approved such Tenant Estoppel.
7.1.8.2 Seller Estoppels. Subject to Section
7.1.8.3 hereof, if at the Closing, Seller has failed (after using good faith,
commercially reasonable and diligent efforts) to obtain an executed Tenant
Estoppel from each Tenant, then Seller shall, in lieu of procuring a Tenant
Estoppel from such Tenants, execute and deliver to Buyer not later than two (2)
Business Days prior to the Closing, a substitute estoppel certificate on behalf
of the applicable Tenants in substantially the same form as Exhibit "J"
attached hereto (each, a "Seller Estoppel"). If Seller has not received
Buyer's written objection to the form and/or content of any executed Seller
Estoppel on or before the Closing, then Buyer shall be deemed to have reviewed
and approved such Seller Estoppel.
7.1.8.3 Minimum Estoppel Requirement.
Notwithstanding anything to the contrary herein, at the Closing, Seller shall
deliver to Buyer a Tenant Estoppel from (i) all Credit Tenants and (ii) not
less than eighty percent (80%) (determined on the basis of leasable floor area)
of all Non-Credit Tenants, which Tenant Estoppels shall be approved (or deemed
to be approved) by Buyer in accordance with Section 7.1.8.1 hereof
(hereinafter, the "Minimum Estoppel Requirement"). Seller shall not be in
default under this Section 7.1.8.3, provided that Seller shall have used good
faith, commercially reasonable and diligent efforts to satisfy the Minimum
Estoppel Requirement, however, the satisfaction of the Minimum Estoppel
Requirement shall be a condition to Closing, which may or may not be waived by
Buyer in accordance with Section 7.2.
7.1.8.4 REA Estoppel. Seller shall use its
good faith, commercially reasonable and diligent efforts to obtain, no later
than ten (10) Business Days prior to the Closing, an estoppel certificate,
substantially in
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the form of Exhibit "K" attached hereto, executed by each party to the REA. If
at the Closing, Seller has failed (after using good faith, commercially
reasonable and diligent efforts) to obtain an executed estoppel certificate
from each party to the REA, then Seller shall, in lieu of procuring such
estoppel certificate from such parties, execute and deliver to Buyer not later
than two (2) Business Days prior to the Closing, a substitute estoppel
certificate on behalf of the applicable parties in substantially the same form
as Exhibit "L" attached hereto (the "Seller's REA Estoppel Certificate").
7.1.9 Non-Foreign Affidavit. On or before the
Closing, Seller shall deliver to Buyer a Non-Foreign Affidavit (the
"Non-Foreign Affidavit") in the form of Exhibit "M" attached hereto, executed
by Seller.
7.1.10 No Moratoria. No moratorium, statute,
regulation, ordinance, or federal, state, county or local legislation, or
order, judgment, ruling or decree of any governmental agency or of any court
directed specifically at the Property shall have been enacted, adopted, issued,
entered or pending which would have a material adverse impact on the use of the
Property as a shopping center.
7.1.11 Occupancy. On or before the Closing, at
least 90% of the Property shall have been leased pursuant to Qualified Leases.
Notwithstanding the foregoing, Seller's failure to achieve the required
occupancy rate for Qualified Leases as set forth in this Section 7.1.11, shall
not be deemed to be a breach by Seller of its obligations hereunder so long as
Seller uses its good faith, commercially reasonably and diligent efforts to
lease the Property as required hereunder; provided, however, that Seller's
failure to achieve the requisite occupancy rate as prescribed herein will
nonetheless be a condition to Buyer's performance of its obligations hereunder.
7.2 Failure of Closing Conditions. Subject to Buyer's rights
hereunder, if any of the Closing Conditions have not been fulfilled within the
applicable time periods, Buyer may:
(a) waive the Closing Condition and close in accordance
with this Agreement, without adjustment or abatement of the Purchase Price,
except as otherwise expressly provided herein; or
(b) cure or discharge any Liens in accordance with the
terms of Section 6.2.2 hereof; or
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(c) terminate this Agreement by written notice to Seller
and to Escrow Agent, in which event Escrow Agent shall return the Deposit (to
the extent not theretofore disbursed by Escrow Agent in accordance with the
terms of this Agreement) to Buyer, Seller shall pay for all of the cancellation
charges of Title Company and Escrow Agent, and, to the extent the failure of
any applicable Closing Condition is caused by a Seller default, Buyer shall be
entitled to pursue its rights and remedies pursuant to Section 13.2 hereof.
8. CLOSING.
8.1 Closing Dates.
8.1.1 Closing Date. Subject to the provisions of
this Agreement, the Closing shall take place on the date selected by Buyer in
Buyer's sole and absolute discretion and designated by Buyer in Buyer's Closing
Notice, which date shall be (i) at least thirty (30) days after the date that
Seller receives Buyer's Closing Notice and (ii) during the Closing Period.
Notwithstanding the foregoing, in the event that Buyer fails to deliver Buyer's
Closing Notice to Seller, the Closing shall take place on the last day of the
Closing Period.
8.1.2 Deferred Payment Date. In the event (and only
in the event) that (i) less than 100% of the Property is leased pursuant to
Qualified Leases as of the Closing and (ii) no Lease-Up Payment was made at the
Closing, then, subject to the provisions of this Agreement, Buyer shall be
required to deliver the Deferred Purchase Price to Seller on the earlier to
occur of the following (the "Deferred Payment Date"): (i) the date which is
270 days following the Closing Date or (ii) provided that the Deferred
Substantial Completion Date has occurred, such date as Seller may designate by
giving not less than ten (10) Business Days' written notice of such designation
to Buyer.
8.2 Deliveries by Seller. Not less than two (2) Business
Days prior to the Closing Date (unless otherwise provided herein), Seller, at
its sole cost and expense, shall deliver or cause to be delivered into Escrow
the following documents and instruments, each dated as of the Closing Date, in
addition to the other items and payments required by this Agreement to be
delivered by Seller:
8.2.1 Deed. The original executed and acknowledged
Deed conveying the Property to Buyer or, subject to Section 16.5.2 hereof, its
nominee;
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8.2.2 Non-Foreign Affidavit. The original executed
Non-Foreign Affidavit;
8.2.3 Assignment of Leases. Four (4) original
executed counterparts of the Assignment of Leases;
8.2.4 Assignment of REA. Four (4) original executed
and acknowledged counterparts of the Assignment of REA;
8.2.5 Bill of Sale and Assignment. Four (4)
original executed counterparts of the Bill of Sale and Assignment;
8.2.6 Seller's Certificate. Four (4) original
executed Seller's Certificates;
8.2.7 Proof of Authority. Such proof of Seller's
authority and authorization to enter into this Agreement and the transaction
contemplated hereby, and such proof of the power and authority of the
individual(s) executing or delivering any instruments, documents or
certificates on behalf of Seller to act for and bind Seller as may be
reasonably required by the Title Company; and
8.2.8 Other. Such other documents and instruments,
signed and properly acknowledged by Seller, if appropriate, as may be
reasonably required by the Title Company or otherwise in order to effectuate
the provisions of this Agreement and the Closing of the transactions
contemplated herein.
8.3 Deliveries by Buyer. On or before the Closing, Buyer
shall deliver or cause to be delivered into Escrow the following: (i) the
Initial Purchase Price (and the Lease-Up Payment if Seller elects to receive it
in accordance with Section 2.4.1 hereof) as required pursuant to Section 2
hereof and Buyer's share of prorations and Closing Costs, as provided in
Sections 8.5 and 8.6 hereof, respectively; (ii) four (4) original executed
counterparts of the Assignment of Leases; (iii) four (4) original executed and
acknowledged counterparts of the Assignment of REA; and (iv) such other
documents and instruments, signed and properly acknowledged by Buyer, if
appropriate, as may reasonably be required by Escrow Agent or otherwise in
order to effectuate the provisions of this Agreement and the Closing of the
transactions contemplated herein.
8.4 Actions by Escrow Agent. Provided that Escrow Agent
shall not have received written notice from Buyer or Seller of the failure of
any
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condition to the Closing or of the termination of the Escrow and this
Agreement, when Buyer and Seller have deposited into Escrow the documents and
funds required by this Agreement for the Closing (or upon the Deferred Payment
Date, as applicable), and when Title Company is committed to issue the Owner's
Title Policy and the Deferred Payment Endorsement concurrently with the Closing
(in accordance with Section 7.1.1 hereof), Escrow Agent shall, in the order and
manner herein below indicated, take the following actions:
8.4.1 Recording. Following Title Company's
acknowledgement that it is prepared and committed to issue to Buyer the Owner's
Title Policy and the Deferred Payment Endorsement, cause the Deed (if
applicable) and/or any other documents which the parties hereto may mutually
direct to be recorded in the Official Records and obtain conformed copies
thereof for distribution to Buyer and Seller.
8.4.2 Funds. Upon receipt of confirmation of the
recordation of the Deed (if applicable) and/or such other documents as were
recorded pursuant to Section 8.4.1 hereof, disburse all funds deposited with it
by Buyer as follows:
(a) pursuant to the respective Closing Statement,
retain for Escrow Agent's own account all applicable escrow fees and costs,
disburse to Title Company the fees and expenses incurred in connection with the
issuance of the Owner's Title Policy or the Deferred Payment Endorsement (as
applicable), and disburse to any other persons or entities entitled thereto the
amount of any other Closing Costs;
(b) disburse to Seller an amount equal to the
applicable portion of the Purchase Price, less or plus the net debit or credit
to Seller by reason of the prorations and allocation of respective Closing
Costs provided for in this Section 8. Seller's portion (as provided in Section
8.6 below) of the respective escrow fees, title fees and other respective
Closing Costs shall be paid pursuant to clause (a) above; and
(c) disburse to Buyer any remaining funds in the
possession of Escrow Agent after payments pursuant to (a) and (b) above have
been completed.
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8.4.3 Delivery of Documents. Deliver to Buyer and
Seller each two (2) originals of all documents, other than the Deed and the
Non-Foreign Affidavit, deposited into Escrow.
8.4.4 Title Policy. Cause Title Company to issue to
Buyer the Owner's Title Policy or the Deferred Payment Endorsement (as
applicable), within ten (10) Business Days following the Closing or the
Deferred Payment Date, as the case may be.
8.5 Prorations.
8.5.1 Rentals, revenues, and other income, if any,
from the Property, taxes, assessments, improvement bonds, service or other
contract fees, utility costs, and other expenses affecting the Property shall
be prorated between Buyer and Seller as of the Closing Date based on a 365-day
year. For purposes of calculating prorations, Buyer shall be deemed to be
title holder of the Property, and therefore entitled to the income and
responsible for the expenses, after 12:01 a.m. on the Closing Date.
Notwithstanding the foregoing, with respect to percentage rent under the Leases
assigned to Buyer at the Closing Date, prorations shall be made following the
end of the calendar years in which the Closing occurs so that all percentage
rents received by Buyer with respect to such calendar years shall be prorated
between Buyer and Seller as of the Closing Date. Delinquent rentals as of the
Closing Date shall not be prorated, but when paid to Buyer shall be delivered
by Buyer to Seller (provided that all current rent has then been paid with
respect to such Leases). After the Closing, Buyer shall use commercially
reasonable efforts to collect delinquent rents on behalf of Seller, provided
that with respect to such efforts Seller shall reimburse Buyer for its
reasonable costs and expenses. After the Closing, Seller shall have no right
to proceed in any manner or make any claim against any Tenant for rents that
were delinquent as of the Closing Date. On the Closing Date, Buyer shall
receive as a credit to the Initial Purchase Price an amount equal to the sum
of: (i) security deposits which were paid by Tenants to Seller, (ii) expenses
and other sums owed by Seller to Tenants for work which occurred prior to the
Closing Date and (iii) rentals already received by Seller attributable to
periods after the Closing Date. In the event that Seller is bound by any
agreement (expressed or implied) prior to the Closing requiring Seller or its
successor to pay any leasing commissions or fees in connection with the
post-Closing exercise of any extension or expansion options of Leases in effect
on or before the Closing, then Seller shall be responsible for the payment of
such commissions and/or fees when and if they become due. In no event shall
Seller be liable for any leasing commission and/or fees
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due in connection with brokerage agreements (expressed or implied) entered into
by Buyer after the Closing.
8.5.2 In the event that any dispute arises between
Seller and any Tenant on or before the Closing (other than disputes regarding
the payment of rent, which shall be governed by Section 8.5.1 hereof), then, at
the Closing, the Escrow Agent shall hold back in Escrow from the Initial
Purchase Price to be disbursed to Seller an amount equal to 125% of (i) the
amount claimed by the Tenant to be owed by Seller to the Tenant, its affiliates
or agents or (ii) if such amount is not reasonably ascertainable, the amount
Buyer reasonably determines to be in dispute. Upon the resolution of any
Tenant dispute for which amounts were held in Escrow at Closing, Seller and
Buyer shall promptly instruct the Escrow Agent in writing to disburse the
amounts held in Escrow with respect to such dispute as follows: (i) to Buyer,
the amount, if any, determined to be payable to the Tenant in connection with
such dispute (and Buyer shall be responsible for the payment of such amounts to
the Tenant) and (ii) to Seller, the amount, if any, remaining in Escrow after
any amounts are disbursed in accordance with clause (i). Nothing in this
Section 8.5.2 shall limit Seller's liability to Buyer under Section 15 hereof
for any amounts due to Tenants in excess of escrowed amounts.
8.5.3 All non-delinquent real estate taxes or
assessments on the Property (including, without limitation, Road District
assessment liens) shall be prorated based on the actual current tax bill, but
if such tax bill has not yet been received by Seller by the Closing Date or if
supplemental taxes are assessed after the Closing for the periods prior to the
Closing, the parties shall make any necessary adjustment after the Closing by
cash payment to the party entitled thereto so that Seller shall have borne all
real property taxes, including all supplemental taxes, allocable to the periods
prior to the Closing and Buyer shall bear all real property taxes, including
all supplemental taxes, allocable to the periods from and after the Closing.
If any expenses attributable to the Property and allocable to the periods prior
to the Closing are discovered or billed after the Closing, the parties shall
make any necessary adjustment after the Closing by cash payment to the party
entitled thereto so that Seller shall have borne all expenses allocable to the
periods prior to the Closing and Buyer shall bear all expenses allocable to the
periods from and after the Closing. With respect to the Road District
assessment: (i) Seller and Buyer acknowledge that Seller (or its predecessors)
has/have elected to pay such assessment in installments as permitted by the
Road District; and (ii) to the extent that, pursuant to the Leases, the Tenants
are obligated to reimburse the "landlord" under the Leases the amount of
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such installments, or any portion thereof, Seller shall be responsible for the
payment, at or prior to the Closing, of any installments of such Road District
assessment which have become due and payable on or prior to the Closing Date
(provided that the assessment installment applicable to the year in which the
Closing occurs shall be prorated between Seller and Buyer in accordance with
the provisions of the first sentence of this Section 8.5.3), and Buyer shall
assume, and thereafter be responsible for paying, all installments of the Road
District assessment becoming due subsequent to the Closing Date.
8.5.4 Ten (10) days prior to the Closing and ten
(10) days prior to the Deferred Payment Date, Escrow Agent shall deliver to
each of the parties for their review and approval a preliminary closing
statement (the "Preliminary Closing Statement") based on an income expense
statement prepared by Seller, approved by Buyer (which approval shall not be
unreasonably withheld or delayed), and delivered to Escrow Agent prior to said
date, setting forth (i) the proration amounts allocable to each of the parties
pursuant to this Section 8.5 and (ii) the Closing Costs allocable to each of
the parties pursuant to Section 8.6 hereof. Based on each of the party's
comments, if any, regarding any Preliminary Closing Statement, Escrow Agent
shall revise such Preliminary Closing Statement and deliver a final, signed
version of a closing statement to each of the parties at the Closing or the
Deferred Payment Date, as the case may be (the "Closing Statement").
8.5.5 The provisions of this Section 8.5 shall
survive the Closing and the Deferred Payment Date.
8.6 Closing Costs. Each party shall pay its own costs and
expenses arising in connection with the Closing and the Deferred Payment Date
(including, without limitation, its own attorney and advisor fees), except the
following costs (the "Closing Costs"), which shall be allocated between the
parties, for the Closing and the Deferred Payment Date, as applicable, as
follows:
(i) Seller shall pay any and all documentary
transfer, stamp, sales and other taxes related to the transfer of the Property,
one-half ( 1/2) of Escrow Agent's escrow fees and costs, the cost of the Survey
(if not already paid), the cost of the standard portion of the Owner's Title
Policy (or, as applicable, the cost of the Deferred Payment Endorsement), and
all recording fees.
(ii) Buyer shall pay one-half ( 1/2) of Escrow
Agent's escrow fees and costs, the cost of the modification of the "survey
exception" to the
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Owner's Title Policy, and the cost of all endorsements to the Owner's Title
Policy (other than the Deferred Payment Endorsement).
8.7 Deliveries Outside of Escrow. Seller shall deliver
possession of the Property, subject to the Leases, to Buyer upon the Closing.
Furthermore, Seller hereby covenants and agrees to deliver to Buyer, on or
prior to the Closing, the following items to the extent the same are in Seller
or Seller's agents' possession or control or are readily available to Seller:
8.7.1 Approvals. Originals of the Approvals;
8.7.2 Intangible Property. The Intangible Property,
including, without limitation, the original Property Documents and the original
Leases; and
8.7.3 Personal Property. The Personal Property,
including, without limitation, all keys, pass cards, remote controls, security
codes, computer software and other devices relating to access to the
Improvements.
8.7.4 Notices.
8.7.4.1 Notice to Tenants. A letter for
each Tenant in the form attached hereto as Exhibit "N," duly executed by Seller
and Buyer, dated as of the Closing Date and addressed to the Tenants, informing
such Tenants of the transfer of the Property and the assignment of the Leases
to Buyer together with an instruction to pay all amounts due under the Leases
following the Closing Date to Buyer.
8.7.4.2 Notice to Vendors. A letter for
each of the vendors of the Service Contracts in the form attached hereto as
Exhibit "O," duly executed by Seller, dated as of the Closing Date and
addressed to each Service Contract vendor, informing said vendors of the
assignment of the Service Contracts to Buyer.
9. SELLER'S REPRESENTATIONS AND WARRANTIES.
Subject to the terms of Sections 3 and 4 hereof, Seller
represents and warrants to and agrees with Buyer, as of the Execution Date to
Seller's current, actual knowledge and, subject to Seller's right to supplement
its representations and warranties as herein set forth and except as may
otherwise be dis-
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closed in the Title Documents, the Property Documents or the Leases, as of the
Closing, as follows:
9.1 Title. Seller is the legal and equitable owner of the
Property.
9.2 Leases.
9.2.1 Lease Schedule. The schedule attached hereto
as Exhibit "P" (the "Lease Schedule") is true, correct and complete with
respect to: (i) the Leases now in effect at the Property; (ii) the identities
of the Tenants; (iii) the space to be occupied by the Tenants and the rentable
area thereof; (iv) the commencement and expiration dates of the Leases; (v) the
security and other deposits maintained, if any, with respect to the Leases;
(vi) the current rents; (vii) all contributions to common area maintenance,
operating expenses and insurance under the Leases; and (viii) any and all
advances, concessions, allowances, credits, rebates, offsets or other cases for
relief or adjustment, including, without limitation, any unpaid reimbursements
for Tenant improvements and any "free" or "reduced" rent.
9.2.2 Delivery of Leases. True, correct and
complete copies of all Leases shall be delivered to Buyer in accordance with
Section 6.1.1 hereof.
9.2.3 Security Deposits. Except as set forth on the
Lease Schedule, there are no security deposits held by the landlord under any
of the Leases.
9.2.4 No Pre-paid Rent. No Tenant has paid any rent
for more than one (1) month in advance except as may otherwise be set forth in
the Lease Schedule.
9.2.5 No Broker's Commissions. There will be no
brokerage or other leasing commissions payable in connection with any of the
Leases or any amendments thereto; provided, however, that to the extent, and
only to the extent, that broker commissions may be due in connection with
pre-Closing commitments made by Seller with respect to the post-Closing
exercise of any extension or expansion options that may exist under the Leases,
such commissions, if any, shall be payable by Seller in accordance with Section
8.5.1 hereof.
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9.2.6 No Lease Amendments. Seller shall not extend,
renew or amend any Lease, without Buyer's prior written consent, which consent
shall not be unreasonably withheld. Buyer's consent shall not be required in
connection with any amendments that do not impact the economic terms or have
any material adverse affect on any other terms of any Lease.
9.2.7 Assignment. All of the Leases are assignable
to Buyer in connection with its purchase of the Property without the necessity
for any approval, consent or additional payment.
9.3 REA. The REA is in full force and effect and has not
been assigned, modified, supplemented or amended, except in accordance with the
terms of Section 11.3 hereof. No party to the REA is in default of its
obligations thereunder or would be in default with the giving of notice or
passage of time or both.
9.4 Condition of Property. To Seller's knowledge and subject
to the construction which is underway in accordance with the Construction
Documents, the Real Property constructed to date has been constructed in a good
and workmanlike manner substantially in accordance with the Construction
Documents and is in good condition and repair and free from any defects that
would materially interfere with the use of any portion of the Property for the
purpose for which it is intended.
9.5 Special Assessments or Condemnation. There are not
presently pending (i) any special assessments (other than non- delinquent Road
District assessments) or (ii) condemnation actions against the Property or any
part, and Seller has no knowledge of any threatened, contemplated or pending
special assessments or eminent domain proceedings that would affect the
Property or any part thereof in any way whatsoever.
9.6 Utilities. Seller has no knowledge of any basis on which
access to adequate water, sewer, electric, gas, telephone, drainage and other
utilities would not be available to the Property after the Closing.
9.7 Service Contracts. There are no service, maintenance,
repair, management, leasing, or supply contracts or other contracts (including,
without limitation, janitorial, elevator, equipment, brokerage, and landscaping
agreements) (the "Service Contracts") affecting the Property, oral or written,
other than Service Contracts which are cancelable without cost at the option of
Seller or
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the then owner of the Property upon not more than thirty (30) days' prior
written notice. All of the Service Contracts are assignable to Buyer in
connection with its purchase of the Property without the necessity for any
approval, consent or additional payment. True, correct and complete copies of
all Service Contracts shall be delivered to Buyer in accordance with Section
6.1.1 hereof.
9.8 Employees. There are no employees of Seller employed in
connection with the use, management, maintenance or operation of any portion of
the Property whose employment will continue after the Closing Date. There is
no bargaining unit or union contract relating to any employees of Seller.
9.9 Consents and Releases. Seller has obtained (or will
obtain in due course prior to the Closing) all required consents, releases, and
permissions to convey good and indefeasible title to Buyer.
9.10 Authority. This Agreement and all other documents
delivered prior to or at the Closing (i) have been duly authorized, executed,
and delivered by Seller; (ii) are binding obligations of Seller; (iii) are
collectively sufficient to transfer all of Seller's rights to the Property; and
(iv) do not violate the formation documents of Seller. Seller further
represents that it is a limited partnership duly organized and existing in good
standing under the laws of the State of Texas with its principal place of
business in the State of Texas.
9.11 Bankruptcy. No filing or petition under the United
States Bankruptcy Law or any insolvency laws, or any laws for composition of
indebtedness or for the reorganization of debtors has been filed with regard to
Seller.
9.12 Foreign Investment in Real Property Tax Act. Seller is
not a foreign person within the meaning of 42 USCS Section 1445(f)(3).
9.13 Existing Approvals. To Seller's knowledge, the
documents set forth on Exhibit "Q" attached hereto (collectively, the
"Approvals") are in full force and effect and constitute all necessary or
appropriate certifications, approvals, consents, authorizations, waivers,
licenses, variances, permits, easements and rights of way, including proofs of
dedication, which are required by any governmental authority in connection with
the ownership, development, management, use and maintenance of the Property.
To Seller's knowledge, none of the Approvals has been assigned or encumbered
except to Mortgage Lender. All of the Approvals are transferable to Buyer
without the necessity of any approval or consent or additional pay-
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ment and no such transfer will affect the validity thereof. Seller has no
knowledge of any governmental action to suspend or revoke any of the Approvals.
9.14 Insurance. As of the Execution Date, there will be in
effect such insurance policies as are customarily maintained with respect to
similar properties. All premiums due on such insurance policies will be paid
by Seller and Seller will maintain such insurance policies from the Execution
Date through the Closing Date or earlier termination of this Agreement. Seller
hereby covenants to name Buyer as an additional insured during the period prior
to the Closing; provided, however, that in no event shall Buyer interfere or
participate in any claim made by Seller in connection with such insurance
policies except as expressly provided in Section 12.2 hereof.
9.15 Taxes. Seller will use reasonable efforts to obtain and
deliver to Buyer (as part of the Property Documents pursuant to Section 6.1.1
hereof) true, correct and complete copies of the bills for the real estate
taxes and assessments against the Property for the last three (3) years.
Seller is not prosecuting any appeals of any taxes or assessments affecting the
Property. To Seller's knowledge, except as disclosed herein, there are no
special assessments currently pending against the Property (other than
non-delinquent Road District assessments).
9.16 Litigation. Except as set forth on the schedule
attached hereto as Exhibit "R", there are no actions, suits or proceedings
before any judicial or quasi-judicial body, by any governmental authority or
other third party, pending, or to Seller's knowledge, threatened, against or
affecting all or any portion of the Property and to Seller's knowledge, there
is no basis for any such action. There are no actions, suits or proceedings
pending, contemplated or threatened by Seller in connection with all or any
portion of the Property or Seller's ownership, rights, use, development or
maintenance thereof, including, without limitation, tax reduction proceedings;
and from and after the date hereof, Seller shall not commence or allow to be
commenced on its behalf any action, suit or proceeding with respect to all or
any portion of the Property without the prior written consent of Buyer. No
attachments, execution proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings are pending, or, to
Seller's knowledge, threatened, against Seller. To Seller's knowledge, there
are no outstanding or unpaid judgements affecting the Property.
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9.17 Compliance with Laws. Seller has received no written
notice of, and has no knowledge of, any condition currently or previously
existing on the Property or any portion thereof which may give rise to any
violation of any existing Law applicable to the Property if it were disclosed
to the authorities having jurisdiction over the Property.
9.18 Zoning. Seller has previously provided, or will provide
within five (5) Business Days after the Opening of Escrow, a true and correct
copy of Seller's Site Development Permit issued by the City of Austin with
respect to the improvements Seller is presently constructing on the Property.
To Seller's knowledge, the Land is presently zoned so as to permit (i) the full
and complete construction of the Improvements as contemplated in the
Construction Documents and (ii) the operation of the Shopping Center following
the completion of construction. Seller has no knowledge of any pending or
threatened proceedings to alter or restrict the zoning or other use
restrictions applicable to the Property. Except with respect to the Edwards
Aquifer Recharge Zone and the Northwest Travis County Road District No.3, the
Property is not located in any flood, conservation, historic or other special
district.
9.19 Toxic or Hazardous Materials. Except for any
disclosures set forth in (i) that certain Environmental Site Assessment dated
July 27,1995, prepared by HBC Engineering, Inc. ("Seller's Environmental
Report"), and (ii) any environmental report prepared for Buyer in connection
with its due diligence with respect to the Property, Seller has no knowledge of
(1) the presence of any underground storage tanks at or under the Property, (2)
any Material of Environmental Concern located on or at, or being released to or
from, the Property in quantities sufficient to incur liability, or to require
reporting or remedial work, under any Environmental Law or (3) any
Environmental Claim pending or threatened with regard to the Property. Seller
will construct the Improvements in accordance with the requirements of all
applicable Environmental Laws.
9.20 No Restriction on Access. Seller has no knowledge of
any fact or condition which would prohibit or adversely affect any right of
access to or from the Property from or to the existing highways and roads as
contemplated in the Construction Documents (subject to the customary
requirements of the City of Austin and the Texas Department of Highways and
Transportation) and Seller has no knowledge of any pending or threatened
restriction or denial, governmental or otherwise, with respect to such ingress
and egress.
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9.21 Storm Drainage. To Seller's knowledge, all storm water
flowing from the Property drains either into a public system or onto a
permitted location and through easements for the benefit of the Property.
9.22 Soils; Floods. Except as may be disclosed in (i)
Seller's Environmental Report, (ii) any soils report to be made available for
Buyer's review and examination as part of the Property Documents or (iii) any
soils report prepared for Buyer in connection with its due diligence with
respect to the Property, Seller has no knowledge of any unusual or peculiar
soil conditions at the Property which would preclude the utilization of
construction techniques typically and customarily utilized in the Austin,
Travis County, Texas area for construction of improvements similar in character
to the Improvements. To Seller's knowledge, no part of the Real Property is in
an area identified by any agency or department of the federal, state or local
government as having special flood or mud slide hazards.
9.23 No Conflicts. The execution and delivery of this
Agreement, the consummation of the transactions herein contemplated, and
compliance with the terms of this Agreement will not conflict with, or, with or
without notice or the passage of time or both, result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, deed of
trust, mortgage, loan agreement, or other document, or instrument or agreement,
oral or written, to which Seller is a party or by which Seller or the Property
is bound, or any applicable regulation of any governmental agency, or any
judgment, order or decree of any court having jurisdiction over Seller or all
or any portion of the Property.
9.24 Ownership of Intangible and Personal Property. Seller
is (or will be prior to the Closing) the legal and equitable owner of all of
the Personal Property and Intangible Property necessary to properly operate the
Property as a Shopping Center. As of the Closing, Seller shall own such
Personal Property and Intangible Property free and clear of all options, liens,
claims, encumbrances, covenants, conditions, restrictions, and any other
matters affecting title. Seller has the full right to convey the Personal
Property and the Intangible Property.
9.25 Disclosure. The Property Documents, the Leases and the
Title Documents constitute all of the information and documents, which
specifically concern the Property, of which Seller has knowledge that could
have a material effect on Buyer's decision to purchase the Property.
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9.26 Seller's Right To Supplement; Effect of Incorrectness;
Survival. If, prior to the Closing, Seller becomes aware that any
representation or warranty set forth in this Agreement which was true and
correct on the Execution Date has become incorrect due to changes in conditions
outside of the control of Seller or the discovery by Seller of information of
which Seller was unaware on the Execution Date, the same shall not constitute a
breach by Seller of any of its representations or warranties set forth herein
or be deemed to be a default by Seller in its obligations under this Agreement,
but Seller shall immediately notify Buyer thereof and the representations and
warranties set forth herein which are to be remade and reaffirmed by Seller at
the Closing shall be supplemented by such new information in the Seller's
Certificate. Notwithstanding anything to the contrary herein, if, pursuant to
the preceding sentence, Seller becomes aware that any representation or
warranty set forth in this Agreement which was true and correct on the
Execution Date has become materially incorrect due to changes in conditions or
the discovery of information by Seller of which Seller was unaware on the
Execution Date and notifies Buyer of such fact prior to Closing, and Seller is
unable to alleviate any potential material adverse effect upon Buyer or the
Property by reason thereof prior to Closing, then Buyer shall have the right to
proceed in accordance with Section 7.2 hereof. The representations and
warranties of Seller set forth herein (as the same are to be remade, reaffirmed
and/or supplemented in Seller's Certificate) shall be deemed to be repeated at
and as of the Closing Date without the necessity of a separate certificate with
respect thereto and shall survive the delivery of the Deed and other closing
instruments and documents for a period of one (l) year following the Closing
(such period of time being referred to herein as the "Survival Period").
9.27 Seller's Knowledge. In making the representations and
warranties set forth in this Agreement and/or in any of the closing documents
to be executed and delivered by Seller at Closing, including, if applicable,
any Seller Estoppel and the Seller's REA Estoppel Certificate which may be
executed by Seller at Closing, Seller's representative, Thomas J. Terkel, has
taken the following actions (the "Investigation"), and no other actions: (a)
reviewed all relevant files presently in the physical possession of Seller
relating to the Property and (b) confirmed the accuracy of such representations
and warranties with Jon Andrus and Kris Schuster. Whenever the phrase
"Seller's knowledge" or any similar phrase is used in this Agreement or any
document subsequently executed by Seller in connection with this Agreement
(including Seller's Certificates), the same shall be deemed to mean and refer
to the then current actual knowledge of Thomas J. Terkel after undertaking the
above Investigation, and does not include (nor shall it be deemed to include)
any constructive knowledge or inquiry
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knowledge of Seller beyond that revealed solely by the Investigation. In no
event will the knowledge or information possessed or obtained by Broker or
Financial Advisor (or any agent, employee or representative of Broker or
Financial Advisor) be imputed to Seller. Notwithstanding the foregoing, any
claim for breach of the representations and warranties herein shall be made
against Seller and not against Thomas J. Terkel (or Jon Andrus or Kris Schuster)
personally. Seller represents that Thomas J. Terkel is the person employed by
Seller in an executive or overseeing management capacity who is most familiar
with the condition, construction and leasing of the Property.
9.28 No Other Warranties Or Representations. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THE FORE- GOING
PROVISIONS OF THIS ARTICLE 9 OR ELSEWHERE IN THIS AGREEMENT, OR IN ANY OF THE
WRITTEN CLOSING DOCUMENTS TO BE EXECUTED BY SELLER AT CLOSING, AND THEN ONLY TO
THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE APPLICABLE WRITTEN
CLOSING DOCUMENTS (IT BEING EXPRESSLY UNDERSTOOD AND AGREED THAT NO
REPRESENTATIONS, WARRANTIES OR COVENANTS OF SELLER MAY BE IMPLIED OR INFERRED
BEYOND THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN SUCH WRITTEN CLOSING
DOCUMENTS AND THAT SELLER SHALL NOT BE BOUND BY NOR HELD ACCOUNTABLE FOR ANY
STATEMENTS, ASSURANCES OR OTHER COMMUNICATIONS, WHETHER WRITTEN OR ORAL AND
REGARDLESS OF WHETHER THE SAME MIGHT BE INTERPRETED AS REPRESENTATIONS,
WARRANTIES OR COVENANTS, MADE OR OFFERED BY BROKER OR ANY THIRD PARTY), SELLER
HEREBY SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR
WRITTEN, EXPRESS, IMPLIED OR STATUTORY, PAST, PRESENT OR FUTURE, OF, AS TO, OR
CONCERNING (i) THE NATURE AND CONDITION OF THE PROPERTY, IN- CLUDING, WITHOUT
LIMITATION, THE WATER, SOIL AND GEOLOGY, THE SUITABILITY THEREOF AND OF THE
PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER MAY ELECT TO CONDUCT;
(ii) THE EXISTENCE OF ANY ENVIRONMENTAL HAZARDS OR CONDITIONS (INCLUDING, BUT
NOT LIMITED TO, THE PRESENCE OF ASBESTOS OR OTHER HAZARDOUS MATERIALS), OR
COMPLIANCE WITH APPLICABLE ENVIRONMENTAL LAWS, RULES OR REGULATIONS; (iii) THE
NATURE AND EXTENT OF ANY RIGHT-OF-WAY, EASEMENT, LEASE, POSSESSION, LIEN,
ENCUMBRANCE, LICENSE, RESERVATION, CONDITION OR RESTRICTION; AND/OR (iv) THE
COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY
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LAWS, ORDINANCES OR REGULATIONS OF ANY GOVERNMENTAL ENTITY OR BODY. BUYER
ACKNOWLEDGES AND AGREES THAT IT WILL INSPECT THE PROPERTY. THE SALE OF THE
PROPERTY IS MADE ON AN "AS IS," "WHERE IS" AND "WITH ALL FAULTS" BASIS, AND
BUYER EXPRESSLY ACKNOWLEDGES AND AGREES, FOR THE BENEFIT OF THE SELLER, THAT,
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH ABOVE IN THIS
ARTICLE 9 OR ELSEWHERE IN THIS AGREEMENT, OR IN ANY OF THE WRITTEN CLOSING
DOCUMENTS TO BE EXECUTED BY SELLER AT CLOSING, THE SELLER MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, OR IMPOSED BY STATUTE OR OTHERWISE ARISING
BY OPERATION OF LAW, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF CONDITION,
TITLE (OTHER THAN THE SPECIAL WARRANTY OF TITLE OF SELLER TO BE CONTAINED IN
THE DEED), HABITABILITY, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO THE PROPERTY OR ANY PORTION THEREOF.
ALTHOUGH THE ABOVE DISCLAIMERS, AGREEMENTS, WAIVERS AND OTHER MATTERS SHALL NOT
BE SET FORTH IN THE DEEDS, IT IS EXPRESSLY UNDERSTOOD AND AGREED,
NOTWITHSTANDING ANY PROVISION CONTAINED ELSEWHERE IN THIS AGREEMENT WHICH MIGHT
BE CONSTRUED OTHERWISE, THAT ALL OF THE DISCLAIMERS, AGREEMENTS, WAIVERS AND
OTHER MATTERS SET FORTH IN THIS SECTION SHALL SURVIVE THE CLOSING FOR AN
UNLIMITED PERIOD OF TIME. THE PROVISIONS OF THIS SECTION 9.28 ARE A MATERIAL
INDUCEMENT TO SELLER'S ENTERING INTO THIS AGREEMENT.
10. BUYER'S REPRESENTATIONS AND WARRANTIES.
Buyer represents and warrants to and agrees with Seller as of
the Execution Date and as of the Closing, as follows:
10.1 No Conflicts. The execution and delivery of this
Agreement, the consummation of the transactions herein contemplated, and
compliance with the terms of this Agreement will not conflict with, or, with or
without notice or the passage of time or both, result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, deed of
trust, mortgage, loan agreement, or other document or instrument to which Buyer
is a party or by which Buyer is bound, or any applicable regulation of any
governmental agency,
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or any judgment, order or decree of any court having jurisdiction over Buyer or
all or any portion of the Property.
10.2 Due Organization; Consents. Buyer is a corporation duly
organized and existing in good standing under the laws of the State of Maryland
with its principal place of business in the State of California. Subject to
terms of Section 6.3 hereof, (i) all requisite corporate action has been taken
by Buyer in connection with entering into this Agreement, and will be taken
prior to the Closing in connection with the execution and delivery of the
instruments referenced herein and the consummation of the transactions
contemplated hereby; and (ii) no consent of any partner, shareholder,
beneficiary, creditor, investor, judicial or administrative body, governmental
authority or other party is required in connection herewith which has not been
obtained.
10.3 Buyer's Authority; Validity of Agreements. Subject to
terms of Section 6.3 hereof, (i) Buyer has full right, power and authority to
purchase the Property from Seller as provided in this Agreement and to carry
out its obligations hereunder; (ii) the individual(s) executing this Agreement
and the instruments referenced herein on behalf of Buyer have the legal power,
right and actual authority to bind Buyer to the terms hereof and thereof; and
(iii) this Agreement is and all other documents and instruments to be executed
and delivered by Buyer in connection with this Agreement shall be duly
authorized, executed and delivered by Buyer and shall be valid, binding and
enforceable obligations of Buyer.
10.4 Buyer's Financial Ability to Perform. Buyer either (i)
has assets of $25,000,000.00 or more or (ii) is owned or controlled by a
corporation or other entity with assets of $25,000,000.00 or more.
11. ADDITIONAL COVENANTS OF SELLER.
In addition to the covenants and agreements of Seller set
forth elsewhere in this Agreement, Seller covenants and agrees that, except as
expressly provided herein, between the Execution Date and the Deferred Payment
Date (or, if no Deferred Payment Date exists, then until the Closing):
11.1 Title. Seller shall not directly or indirectly sell,
assign or create any right, title or interest whatsoever in or to the Property,
or create or permit to exist thereon any lien, charge or encumbrance other than
the Permitted Exceptions, or enter into any agreement to do any of the
foregoing, without the
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prior written consent of Buyer, which consent shall not be unreasonably
withheld or delayed, it being understood and agreed that if Buyer does not
provide a written objection to Seller within five (5) Business Days following
Seller's written request to Buyer for approval of any particular proposed
agreement or encumbrance concerning title to the Property, Buyer shall be
deemed to have approved of the particular agreement or encumbrance and Seller
shall be free to execute and/or record the same with the effect that, upon such
recordation, such agreement or encumbrance shall be deemed to be a "Permitted
Exception" hereunder.
11.2 Leases. Seller shall not directly or indirectly enter
into any New Leases (or any renewals, modifications or extensions of any
Leases) except as provided in Article 3 hereof.
11.3 Operating Agreements. Seller shall not directly or
indirectly enter into (i) any operating agreement or reciprocal easement
agreement or (ii) any renewal, amendment, modification, extension, termination
or restatement of the REA, without Buyer's prior written consent, which consent
shall not be unreasonably withheld or delayed, it being understood and agreed
that if Buyer does not provide a written objection to Seller within five (5)
Business Days following Seller's written request to Buyer for approval of any
particular proposed operating or reciprocal easement agreement, or amendment
concerning the Property, Buyer shall be deemed to have approved of the
particular agreement or amendment and Seller shall be free to execute and/or
record the same with the effect that, upon such recordation, such agreement or
amendment shall be deemed to be a "Permitted Exception" hereunder.
11.4 Service, Management and Employment Contracts. Seller
shall not directly or indirectly (i) enter into any new service contracts (or
renewals, modifications or extensions of any Service Contracts) or (ii) enter
into, extend, renew or replace any existing property management or employment
contracts in respect of the Property, without the prior written consent of
Buyer (which consent shall not be unreasonably withheld or delayed, it being
understood and agreed that if Buyer does not provide a written objection to
Seller within five (5) Business Days following Seller's written request to
Buyer for approval of any particular proposed agreement or contract concerning
the Property, Buyer shall be deemed to have approved of the particular
agreement or contract and Seller shall be free to execute the same), unless the
same shall be cancellable without penalty or premium, upon not more than thirty
(30) days' notice from the owner of the Property.
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11.5 No Pre-paid Rent. Seller shall not accept any rent from
any Tenant (or any new tenant under any New Lease) for more than two (2) months
in advance of the payment date in addition to any security deposits required
under any of the Leases.
11.6 No Defaults; Maintenance of Property. Seller shall not
default with respect to the performance of any material obligation relating to
the Property, including, without limitation, the payment of all amounts due and
the performance of all obligations with respect to the Leases, any REA, the
Service Contracts, and any construction or existing indebtedness relating to
the Property. Seller shall operate and maintain the Property in accordance
with Seller's past practice and all applicable Laws, rules and regulations
affecting the Property or any portion thereof.
11.7 Exclusive Negotiations. From and after the Opening of
Escrow and for so long thereafter as this Agreement remains in full force and
effect, Seller shall (i) remove the Property from the market, (ii) cease and
refrain from any and all negotiations with any other prospective optionees or
purchasers of the Property, and (iii) subject to the terms of Section 3 hereof,
advise Buyer of (and keep Buyer fully informed with respect to) any
negotiations with Tenants or potential tenants of the Property.
11.8 Litigation. From and after the date hereof, Seller
shall not commence or allow to be commenced on its behalf any action, suit or
proceeding with respect to all or any portion of the Property without the prior
written consent of Buyer, which consent shall not be unreasonably withheld or
delayed, it being understood and agreed that if Buyer does not provide a
written objection to Seller within five (5) Business Days following Seller's
written request to Buyer for approval of any particular proposed action, suit
or proceeding, Buyer shall be deemed to have approved of the particular action,
suit or proceeding and Seller shall be free to commence the same. In the event
that any proceeding of the character described in Section 9.16 hereof is
initiated prior to the Closing, Seller shall promptly advise Buyer in writing.
Seller hereby agrees to forever indemnify, defend and hold harmless Buyer from
and against any and all loss, cost, damage and expense (including, without
limitation, reasonable attorneys' fees, charges and disbursements) accruing
from any presently pending litigation with respect to the Property.
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11.9 Zoning. Except as expressly approved by Buyer in
writing, Seller shall not seek any change in the zoning of the Real Property
and shall take all actions necessary to maintain the present zoning of the Real
Property.
11.10 Mortgage Lender's Consent. Seller shall use its best
efforts to obtain on or before the thirtieth (30th) day following the Execution
Date, the Mortgage Lender's (i) consent to the execution of this Agreement and
(ii) agreement to sell the Property to Buyer in accordance with the terms of
this Agreement, in the event that the Mortgage Lender forecloses upon the
Property or any portion thereof.
12. RISK OF LOSS.
12.1 Condemnation. If, prior to the Closing, all or any
material portion of the Property is taken by condemnation or eminent domain (or
is the subject of a pending or contemplated taking which has not been
consummated), Seller shall immediately notify Buyer of such fact. In such
event, Buyer shall have the option to terminate this Agreement upon written
notice to Seller given not later than thirty (30) days after Buyer's receipt of
such notice from Seller. Upon such termination, Escrow Agent shall return the
Deposit then held by Escrow Agent to Buyer, the parties shall equally share the
cancellation charges of Escrow Agent and Title Company, and neither party shall
have any further rights or obligations hereunder, other than pursuant to any
provision hereof which expressly survives the termination of this Agreement.
Buyer shall have no right to terminate this Agreement as a result of any
nonmaterial taking of the Property. If Buyer does not elect or has no right to
terminate this Agreement, Seller shall assign and turn over to Buyer at the
Closing, and Buyer shall be entitled to receive and keep, all awards for the
taking by condemnation and Buyer shall be deemed to have accepted the Property
subject to the taking without reduction in the Purchase Price.
12.2 Casualty. Prior to the Closing and notwithstanding the
pendency of this Agreement, the entire risk of loss or damage by earthquake,
flood, landslide, fire, hurricane, tornado or other casualty to the Property
shall be borne and assumed by Seller. If, prior to the Closing any material
part of the Property is damaged or destroyed by earthquake, flood, landslide,
fire, hurricane, tornado or other casualty, Seller shall immediately notify
Buyer of such fact. In such event, Buyer shall have the option to terminate
this Agreement in the same manner as provided in Section 12.1 hereof upon
written notice to Seller given not later than thirty (30) days after receipt of
any such notice from Seller. Buyer
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shall have no right to terminate this Agreement as a result of any nonmaterial
damage or destruction of the Property. If Buyer does not elect or has no right
to terminate this Agreement, Seller shall assign and turn over to Buyer at the
Closing, and Buyer shall be entitled to receive and keep, all insurance
proceeds payable with respect to such damage or destruction (which shall then
be repaired or not at Buyer's option and cost) and Buyer shall receive as a
credit against the Purchase Price an amount equal to the deductible amount with
respect to the insurance and the parties shall proceed to the Closing pursuant
to the terms hereof without modification of the terms of this Agreement. If
Buyer does not elect or has no right to terminate this Agreement by reason of
any casualty, Buyer shall have the right to participate in any adjustment of
the insurance claim.
12.3 Materiality. As used in Sections 12.l and 12.2 hereof,
the term "material" shall mean and refer to any portion of the Property taken
by condemnation or eminent domain or damaged by an uninsured casualty, as the
case may be, valued at $150,000.00 or more, as determined by an independent
contractor mutually selected by Seller and Buyer. As used in Section 12.2
hereof, the term "material" shall mean and refer to any portion of the Property
damaged by an insured casualty valued at $250,000.00 or more, as determined by
an independent contractor mutually selected by Seller and Buyer.
13. REMEDIES.
13.1 Buyer Default.
13.1.1 In the event that (i) Buyer elects to deposit
(and does deposit) the Letter of Credit into Escrow in accordance with Section
2.1.2 hereof, (ii) the Closing fails to occur solely as a result of Buyer's
default and (iii) Escrow Agent receives written notice of such Buyer's default
from Seller ("Seller's Default Notice"), then Escrow Agent shall draw upon the
Letter Credit in an amount equal to the full face amount of the Letter of
Credit, without the need for any approval or consent of Buyer, and regardless
of any potential objection by Buyer, it being expressly agreed and understood
among Seller, Buyer and Escrow Agent that Escrow Agent may conclusively rely
upon Seller's Default Notice in drawing upon the Letter of Credit and that
Buyer's sole remedy in connection with such draw, if Seller's Default Notice is
incorrect, shall be against Seller and not Escrow Agent. Once there has been a
draw upon the Letter of Credit in accordance with the terms hereof, (i) the
full amount of such draw shall be held by Escrow Agent as part of the Deposit
in accordance with Section 13.1.3 hereof and (ii) Escrow Agent shall deliver to
Buyer a copy of
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Seller's Default Notice together with a written notice indicating that there
has been a draw upon the Letter of Credit (collectively, "Escrow's Draw
Deliveries"). In the event that Buyer disputes the alleged Buyer's default
identified in Seller's Default Notice, Buyer shall deliver written notice of
such dispute to Seller and Escrow Agent on or before the fifth (5th) Business
Day following Buyer's receipt of Escrow's Draw Deliveries, in which event
Escrow Agent shall hold the Deposit in Escrow pending the final resolution of
such dispute. If Buyer fails to deliver such written notice within such five
(5) day period, Escrow Agent may distribute the Deposit in accordance with
Section 13.1.3 hereof, without the need for any approval or consent of Buyer,
it being expressly agreed and understood among Seller, Buyer and Escrow Agent
that Buyer's sole remedy in such event, if Seller's Default Notice is
incorrect, shall be against Seller and not Escrow Agent.
13.1.2 In the event that (i) the Closing fails to
occur solely as a result of Buyer's default and (ii) Buyer shall have delivered
to Seller Buyer's Specific Performance Notice in accordance with Section 2.1.2
hereof, then Seller shall have the right to pursue its specific performance
remedy in accordance with Section 13.1.4 hereof, by delivering to Buyer written
notice of its election to pursue specific performance (the "Specific
Performance Election"), within ninety (90) days following the occurrence of
such Buyer's default. In the event that Seller fails to deliver the Specific
Performance Election to Buyer within such ninety (90) day period, then Seller's
sole and exclusive remedy hereunder shall be the receipt of liquidated damages
in accordance with Section 13.1.3 hereof.
13.1.3 IN THE EVENT THAT THE CLOSING FAILS TO OCCUR
SOLELY AS A RESULT OF THE DEFAULT OF BUYER IN THE PERFORMANCE OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND SELLER HAS NOT DELIVERED (OR IS NOT DEEMED
TO HAVE DELIVERED) THE SPECIFIC PERFORMANCE ELECTION TO BUYER, BUYER AND SELLER
AGREE THAT SELLER'S ACTUAL DAMAGES WOULD BE IMPRACTICABLE OR EXTREMELY
DIFFICULT TO FIX. THE PARTIES THEREFORE AGREE THAT IN THE EVENT THAT THE
CLOSING FAILS TO OCCUR SOLELY AS A RESULT OF THE DEFAULT OF BUYER IN THE
PERFORMANCE OF ITS OBLIGATIONS HEREUNDER AND SELLER HAS NOT DELIVERED (OR IS
NOT DEEMED TO HAVE DELIVERED) THE SPECIFIC PERFORMANCE ELECTION TO BUYER,
SELLER, AS SELLER'S SOLE AND EXCLUSIVE REMEDY, IS ENTITLED TO LIQUIDATED
DAMAGES IN THE AMOUNT OF THE DEPOSIT (INCLUDING ANY AND ALL INTEREST AND
DIVIDENDS EARNED THEREON) THEN HELD BY ESCROW AGENT. IN THE EVENT THAT THE
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CLOSING FAILS TO OCCUR SOLELY AS A RESULT OF BUYER'S DEFAULT AND SELLER HAS NOT
DELIVERED (OR IS NOT DEEMED TO HAVE DELIVERED) THE SPECIFIC PERFORMANCE
ELECTION TO BUYER, THEN (1) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
BUYER AND SELLER HEREUNDER AND THE ESCROW CREATED HEREBY SHALL TERMINATE, (2)
ESCROW AGENT SHALL, AND IS HEREBY AUTHORIZED AND INSTRUCTED TO, RETURN PROMPTLY
TO BUYER AND SELLER ALL DOCUMENTS AND INSTRUMENTS TO THE PARTIES WHO DEPOSITED
THE SAME, (3) ESCROW AGENT SHALL DELIVER THE DEPOSIT (INCLUDING ANY AND ALL
INTEREST AND DIVIDENDS EARNED THEREON) THEN HELD BY ESCROW AGENT TO SELLER
PURSUANT TO SELLER'S INSTRUCTIONS, AND THE SAME SHALL BE THE FULL, AGREED AND
LIQUIDATED DAMAGES, AND (4) ALL TITLE AND ESCROW CANCELLATION CHARGES SHALL BE
CHARGED TO BUYER.
SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THIS SECTION 13.1.3, AND BY THEIR INITIALS
IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.
[init.] [init.]
- ---------- ----------
Seller's Initials Buyer's Initials
13.1.4 In the event that (i) Buyer shall have
delivered Buyer's Specific Performance Notice to Seller in accordance with
Section 2.1.2 hereof, (ii) Seller delivers the Specific Performance Election to
Buyer and (iii) the Closing fails to occur solely as a result of Buyer's
default, then Seller shall, as its sole and exclusive remedy, have the right to
seek the specific performance of this Agreement.
13.2 Default by Seller. In the event that the Closing of the
transactions contemplated in this Agreement does not occur by reason of any
default by Seller, then (i) Escrow Agent shall return the Deposit then held by
Escrow Agent to Buyer and (ii) Buyer shall, as its sole remedy, elect to either
(1) terminate this Agreement, in which event Seller shall reimburse Buyer for
its reasonable out-of-pocket expenses (including, without limitation,
reasonable attorneys' fees, charges and disbursements) incurred in connection
with the negotiation of this Agreement and Buyer's due diligence efforts or (2)
seek the specific performance of this Agreement. Notwithstanding anything to
the contrary
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hereunder, Seller shall not be in default with respect to any of its
obligations hereunder unless and until (i) it receives written notice from
Buyer specifying such default and (ii) it fails to cure such default within
five (5) Business Days after receipt of such notice.
13.3 Breach of Representation or Warranty. Notwithstanding
anything to the contrary herein, in the event that (i) Seller is in breach of
any representation or warranty set forth in this Agreement (as opposed to a
situation where there is a change in conditions or the discovery of information
of which Seller was unaware on the Execution Date thereby giving rise to
Seller's ability to supplement its representations and warranties set forth in
this Agreement in accordance with the provisions of Section 9.26 hereof) prior
to Closing and (ii) Buyer discovers or otherwise learns at or prior to Closing
that Seller is in breach of any of its representations and warranties set forth
in this Agreement and nonetheless proceeds to close, then Buyer shall be deemed
to have waived its right to sue Seller for damages for any such breach by
Seller that was known by Buyer at or prior to Closing. In the event that Buyer
discovers a breach of Seller's representations and warranties after the
Closing, then as Buyer's sole and exclusive remedy, Seller shall reimburse
Buyer for (i) the costs incurred by Buyer in connection with the remedy of the
condition giving rise to such breach and (ii) Buyer's actual damages incurred
as a result of such breach. Notwithstanding the foregoing, in the event that
Seller's breach involves fraud or bad faith on the part of Seller nothing
herein shall limit Buyer from pursuing any remedy available to it hereunder, at
law or in equity. The provisions of this Section 13.3 shall survive the
Closing and shall not merge therein.
13.4 Cross-Default. In the event that (i) Buyer or Seller
default under this Agreement and (ii) the Closing (as defined in the Phase II
Purchase Agreement) shall not have already occurred, then such default shall
also be deemed to be a default by such party under the Phase II Purchase
Agreement. In addition, in the event that (i) Buyer or Seller default under
the Phase II Purchase Agreement and (ii) the Closing (as defined in this
Agreement) shall not have already occurred, then such default shall also be
deemed to be a default by such party under this Agreement.
14. BROKERS.
Buyer and Seller each hereby represent, warrant to and agree
with each other that it has not had, and shall not have, any dealings with any
third party to whom the payment of any Commission shall or may become due or
pay-
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able in connection with the transaction contemplated hereby, other than with
the Broker and the Financial Advisor. Seller hereby agrees to pay the Broker a
Commission and the Financial Advisor a financial advisory fee through Escrow
pursuant to separate agreements among the Broker, the Financial Advisor and the
Seller, in connection with the transaction contemplated hereby. Seller shall
indemnify, defend and hold Buyer harmless from and against any and all claims,
losses, damages, costs and expenses (including reasonable attorneys' fees,
charges and disbursements) incurred by Buyer by reason of any breach or
inaccuracy of the representation, warranty and agreement of Seller contained in
this Section 14. Buyer shall indemnify, protect, defend and hold Seller
harmless from and against any and all claims, losses, damages, costs and
expenses (including reasonable attorneys' fees, charges and disbursements)
incurred by Seller by reason of any breach or inaccuracy of the representation,
warranty and agreement of Buyer contained in this Section 14. The provisions
of this Section 14 shall survive the Closing (and the Deferred Payment Date, if
any) or the earlier termination of this Agreement.
15. INDEMNIFICATION.
Buyer hereby agrees to indemnify, defend and hold Seller
harmless from and against any claims, demands, obligations, losses, costs,
damages, liabilities, judgments or expenses (including reasonable attorneys'
fees, charges and disbursements) arising out of or in connection with the
ownership, operation or maintenance of the Property after the Closing. Seller
hereby agrees to indemnify, defend and hold Buyer harmless from and against any
claims, demands, obligations, losses, costs, damages, liabilities, judgments or
expenses (including reasonable attorneys' fees, charges and disbursements)
arising out of or in connection with (i) the ownership, operation or
maintenance of the Property prior to the Closing or (ii) the breach of any
representation, warranty or agreement of Seller set forth in either Section 9
hereof or the Seller's Certificate, to the extent written notice thereof is
delivered to Seller by Buyer during the Survival Period. Each party shall do,
execute and deliver, or shall cause to be done, executed and delivered, all
such further acts and instruments which the other party may reasonably request
in order to more fully effectuate the indemnifications provided for in this
Agreement. The provisions of this Section 15 shall survive the Closing (and
the Deferred Payment Date, if any).
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16. MISCELLANEOUS PROVISIONS.
16.1 Governing Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed and enforced in
accordance with the laws of the State of Texas, without regard to its
principles of conflicts of law.
16.2 Entire Agreement; Modifications; Waiver.
16.2.1 Entire Agreement. This Agreement, including
the exhibits and schedules attached hereto, constitutes the entire agreement
between Buyer and Seller pertaining to the subject matter hereof and supersedes
all prior agreements, understandings, letters of intent, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements, express or implied, made to
either party by the other party in connection with the subject matter hereof
except as specifically set forth herein or in the documents delivered pursuant
hereto or in connection herewith. Without limiting the foregoing, upon the
execution of this Agreement, that certain letter, dated as of April 9, 1996, by
and between Buyer and Seller, shall terminate and be of no further force or
effect.
16.2.2 Modification. No supplement, modification,
waiver or termination of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
16.3 Notices. All notices, consents, requests, reports,
demands or other communications hereunder (collectively, "Notices") shall be in
writing and may be given personally, by registered or certified mail, or by
Federal Express (or other reputable overnight delivery service).
To Buyer: The Price REIT, Inc.
145 S. Fairfax Avenue, 4th Floor
Los Angeles, California 90036
Attention: Mr. Joseph K. Kornwasser
Telephone: (213) 937-8200
Facsimile: (213) 937-8175
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With A Copy To: Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Allan G. Mutchnik, Esq.
Telephone: (213) 687-5391
Facsimile: (213) 687-5600
To Seller: Loop 1/183, Ltd.
c/o Cencor Realty Services, Inc.
106 East Sixth Street, Ste. 200
Austin, Texas 78701
Attention: Thomas J. Terkel
Telephone: (512) 482-8383
Facsimile: (512) 482-9021
With A Copy To: Drenner & Stuart, L.L.P.
301 Congress, Suite 2100
Austin, Texas 78701
Attention: John W. Elliott, Esq.
Telephone: (512) 404-2204
Facsimile: (512) 404-2244
To Escrow Heritage Title Company of Austin, Inc.
98 San Jacinto Boulevard, Ste. 400
Austin, Texas 78701
Attention: Kathy S. Nunn
Telephone: (512) 320-5000
Facsimile: (512) 320-5024
or to such other address or such other person as the addressee party shall have
last designated by notice to the other party. All Notices shall be deemed to
have been given when received.
16.4 Expenses. Subject to the allocation of Closing Costs
provided in Section 8.6 hereof, whether or not the transactions contemplated by
this Agreement shall be consummated, all fees and expenses incurred by any
party hereto in connection with this Agreement shall be borne by such party.
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16.5 Assignment.
16.5.1 Seller's Right to Assign. Seller shall not
have the right, power, or authority to assign or pledge this Agreement (other
than to the Mortgage Lender, subject to the provisions of Section 11.10 hereof)
or any portion of this Agreement, or to delegate any duties or obligations
arising under this Agreement, voluntarily, involuntarily, or by operation of
law, without Buyer's prior written consent.
16.5.2 Buyer's Right to Assign. Buyer may not
assign this Agreement, in whole or in part, without Seller's prior written
consent. Notwithstanding the foregoing, Buyer shall have the right, power and
authority to assign this Agreement or any portion of this Agreement or to
delegate any duties or obligations arising under this Agreement to an entity
owned or controlled by Buyer, without Seller's consent. No assignment or
delegation shall relieve Buyer of its obligations or liabilities under this
Agreement.
16.6 Severability. Any provision or part of this Agreement
which is invalid or unenforceable in any situation in any jurisdiction shall,
as to such situation and such jurisdiction, be ineffective only to the extent
of such invalidity and shall not affect the enforceability of the remaining
provisions hereof or the validity or enforceability of any such provision in
any other situation or in any other jurisdiction.
16.7 Successors and Assigns; Third Parties. Subject to and
without waiver of the provisions of Section 16.5 hereof, all of the rights,
duties, benefits, liabilities and obligations of the parties shall inure to the
benefit of, and be binding upon, their respective successors and assigns.
Except as specifically set forth or referred to herein, nothing herein
expressed or implied is intended or shall be construed to confer upon or give
to any person or entity, other than the parties hereto and their successors or
permitted assigns, any rights or remedies under or by reason of this Agreement.
16.8 Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
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16.9 Headings. The Section headings of this Agreement are
for convenience of reference only and shall not be deemed to modify, explain,
restrict, alter or affect the meaning or interpretation of any provision
hereof.
16.10 Time of Essence. Time shall be of the essence with
respect to all matters contemplated by this Agreement.
16.11 Further Assurances. In addition to the actions recited
herein and contemplated to be performed, executed and/or delivered by Seller
and Buyer, Seller and Buyer agree to perform, execute and/or deliver or cause
to be performed, executed and/or delivered at Closing or after Closing any and
all such further acts, instruments, deeds and assurances as may be reasonably
required to consummate the transactions contemplated hereby.
16.12 Number and Gender. Whenever the singular number is
used, and when required by the context, the same includes the plural, and the
masculine gender includes the feminine and neuter genders.
16.13 Construction. This Agreement shall not be construed
more strictly against one party hereto than against any other party hereto
merely by virtue of the fact that it may have been prepared by counsel for one
of the parties.
16.14 Post-Closing Access to Records. Upon receipt by Seller
of Buyer's reasonable written request at anytime and from time to time within a
period of three (3) years after the last Closing, Seller shall, at Seller's
principal place of business, during Seller's normal business hours, make all of
Seller's records relating to the Property available to Buyer for inspection and
copying (at Buyer's sole cost and expense).
16.15 Exhibits. All exhibits attached hereto are hereby
incorporated by reference as though set out in full herein.
16.16 Attorneys' Fees. In the event that either party hereto
brings an action or proceeding against the other party to enforce or interpret
any of the covenants, conditions, agreements or provisions of this Agreement,
the prevailing party in such action or proceeding shall be entitled to recover
all costs and expenses of such action or proceeding, including, without
limitation, attorneys' fees, charges, disbursements and the fees and costs of
expert witnesses.
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16.17 Business Days. In the event that the date for the
performance of any covenant or obligation under this Agreement shall fall on a
Saturday, Sunday or legal holiday, the date for performance thereof shall be
extended to the next Business Day.
16.18 DPTA Waiver. Buyer hereby waives all rights that it
may have under the Texas Deceptive Trade Practices and Consumer Protection Act
(Section 17.41 et seq. of the Texas Business and Commerce Code), except Section
17.555 thereof. Buyer warrants and represents to Seller that Buyer is not in a
significantly disparate bargaining position, that it is a business consumer
with assets of $5,000,000.00 or more according to its most recent financial
statement prepared in accordance with generally accepted accounting principles
and that Buyer has knowledge and experience in financial and business matters
that enable it to evaluate the merits and risks of a transaction. Buyer
further represents and warrants that it has been represented by legal counsel
of its own selection with respect to the transaction contemplated by this
Agreement and such legal counsel has not been directly or indirectly
identified, suggested or selected by Seller or an agent of Seller; therefore:
WAIVER OF CONSUMER RIGHTS
BUYER WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION
ACT, SECTION 17.41 ET SEQ., TEXAS BUSINESS AND COMMERCE CODE, A LAW THAT GIVES
CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY
OF BUYER'S OWN SELECTION, BUYER VOLUNTARILY CONSENTS TO THIS WAIVER.
16.19 Texas Real Estate License Act. The Texas Real Estate
License Act requires written notice to Buyer that it should have an attorney
examine an abstract of title to the property being purchased or obtain a title
insurance policy. Notice to that effect is, therefore, hereby given by Broker
to Buyer.
16.20 Broker Disclosure. Certain of the principals of Seller
may be affiliated with the Broker and thus may derive benefit from any
brokerage compensation paid to the Broker in connection with this transaction.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
BUYER:
THE PRICE REIT, INC.,
a Maryland corporation
By: /s/ Joseph Kornwasser
--------------------------------
Name: Joseph Kornwasser
Its: Pres./CEO
SELLER:
LOOP 1/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.
Its: General Partner
By: /s/ Thomas J. Terkel
--------------------------
Thomas J. Terkel
Manager
<PAGE> 49
ESCROW AGENT
The undersigned Escrow Agent accepts the foregoing Agreement of Purchase and
Sale and Joint Escrow Instructions and agrees to act as Escrow Agent under this
Agreement in strict accordance with its terms and acknowledges receipt of two
(2) fully executed copies of this Agreement together with the Initial Deposit.
HERITAGE TITLE COMPANY OF AUSTIN, INC.,
a Texas corporation,
By: _____________________________
Name:
Its:
<PAGE> 50
ATTORNEY JOINDER
The undersigned have executed this Agreement in order to satisfy the
waiver requirements set forth in Section 17.42(a)(3) of the Texas Business and
Commerce Code.
COUNSEL FOR SELLER:
DRENNER & STUART, L.L.P.
By: /s/ JOHN W. ELLIOTT
------------------------------
John W. Elliott
Partner
COUNSEL FOR BUYER:
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
By: /s/ ALLAN G. MUTCHNIK
------------------------------
Allan G. Mutchnik
Partner
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LIST OF EXHIBITS
EXHIBIT "A" DEFINITIONS
EXHIBIT "B" LEGAL DESCRIPTION
EXHIBIT "C" PRE-APPROVED TENANTS
EXHIBIT "D" DEED
EXHIBIT "E" SELLER'S CERTIFICATE
EXHIBIT "F" ASSIGNMENT OF LEASES
EXHIBIT "G" ASSIGNMENT OF REA
EXHIBIT "H" BILL OF SALE AND ASSIGNMENT
EXHIBIT "I" TENANT ESTOPPEL CERTIFICATE
EXHIBIT "J" SELLER ESTOPPEL CERTIFICATE
EXHIBIT "K" REA ESTOPPEL CERTIFICATE
EXHIBIT "L" SELLER'S REA ESTOPPEL CERTIFICATE
EXHIBIT "M" NON-FOREIGN AFFIDAVIT
EXHIBIT "N" NOTICE TO TENANTS
EXHIBIT "O" NOTICE TO VENDORS
EXHIBIT "P" LEASE SCHEDULE
EXHIBIT "Q" APPROVALS
EXHIBIT "R" LITIGATION
EXHIBIT "S" LEASE-UP PAYMENT SCHEDULE
EXHIBIT "T" SCHEDULE OF PERSONAL PROPERTY
EXHIBIT "U" SITE PLAN
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EXHIBIT "A"
DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
"Additional Deposit" shall mean the additional sum of ONE HUNDRED
THOUSAND DOLLARS ($100,000.00), together with (i) any and all interest and
dividends earned thereon and (ii) upon delivery of the Letter of Credit into
Escrow, the Letter of Credit and any amounts held by Escrow Agent pursuant to
any draw on the Letter of Credit.
"Agreement" shall have the meaning ascribed thereto in the preamble of
this Agreement.
"Approvals" shall have the meaning ascribed thereto in Section 9.13 of
this Agreement.
"Assignment of Leases" shall have the meaning ascribed thereto in
Section 7.1.5 of this Agreement.
"Assignment of REA" shall have the meaning ascribed thereto in Section
7.1.6 of this Agreement.
"Bill of Sale and Assignment" shall have the meaning ascribed thereto
in Section 7.1.7 of this Agreement.
"Board Approval Date" shall mean November 25, 1996.
"Broker" shall mean The Weitzman Group.
"Business Day" shall mean a day that is not a Saturday, Sunday or
legal holiday.
"Buyer" shall have the meaning ascribed thereto in the preamble of
this Agreement.
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"Buyer's Closing Notice" shall mean a written notice that Buyer
delivers to Seller in accordance with the terms of Section 8.1.1 of this
Agreement, stating the date on which the Closing shall occur.
"Buyer's Objection Letter" shall have the meaning ascribed thereto in
Section 6.2.2 of this Agreement.
"Buyer's Specific Performance Notice" shall mean a written notice of
Buyer's election to grant to Seller the remedy of specific performance in
accordance with the terms of this Agreement.
"Closing" shall mean the recordation of the Deed in the Official
Records.
"Closing Conditions" shall have the meaning ascribed thereto in
Section 7.1 of this Agreement.
"Closing Costs" shall have the meaning ascribed thereto in Section 8.6
of this Agreement.
"Closing Date" shall mean the date upon which the Closing actually
occurs.
"Closing Period" shall mean a period commencing on January 6, 1997 and
ending on the Final Closing Date.
"Closing Statement" shall have the meaning ascribed thereto in Section
8.5 of this Agreement.
"Commission" shall mean any broker's fee, finder's fee, commission or
other similar compensation.
"Comparable Properties" shall mean first-class "power centers" in
Travis County, Texas of a quality that is comparable to the Property following
the completion of construction in accordance with the Construction Documents.
"Construction Documents" shall mean all site plans, plans,
specifications and construction documents relating to the Improvements under
construction or to be constructed at the Property.
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"Credit" shall mean an amount equal to the sum of: (a) the following
amounts, (i) 7.5% of both Scheduled Base Rent and Expense Recoveries for all of
the Non-Credit Tenants leasing space at the Property, to the extent the same
are payable during or attributable to the first twelve (12) months of the lease
term, and (ii) all common area maintenance expenses equal to One Dollar ($1.00)
per square foot of the Property, all ad valorem taxes equal to Two Dollars
($2.00) per square foot of the Property and all property insurance expenses
equal to Twenty-Five Cents ($.25) per square foot of the Property, to the
extent the same are payable during or attributable to the first twelve (12)
months following the Closing Date; (b) a maintenance reserve equal to fifteen
cents ($0.15) per square foot of the Property; and (c) a management fee equal
to two percent (2%) of the gross income of the Property for the first twelve
(12) months of the term of each Qualified Lease.
"Credit Tenants" shall mean Circuit City, Baby Superstore, Cost Plus,
Mikasa, Designer Shoe Warehouse, Just for Feet and any other future Tenant that
has a lease term of at least fifteen (15) years and a net worth of more than
seventy-five million dollars ($75,000,000.00).
"Deed" shall have the meaning ascribed thereto in Section 6.2.3 of
this Agreement.
"Deferred Lease-Up Payment" shall mean (i) the amount obtained by
calculating the Deferred Purchase Price for the unleased portion of the
Property (provided, however, that for the purposes of such calculation the
annual base rent payable with respect to such space shall be deemed to be
eighty percent (80%) of the amount set forth for the subject space on Exhibit
"S" attached hereto) less (ii) an amount equal to $18.00 per each square foot
with respect to which the Deferred Lease-Up Payment is paid.
"Deferred Payment Date" shall have the meaning ascribed thereto in
Section 8.1.2 of this Agreement.
"Deferred Payment Endorsement" shall have the meaning ascribed thereto
in Section 7.1.1 of this Agreement.
"Deferred Purchase Price" shall mean the difference obtained by
subtracting (i) the Initial Purchase Price from (ii) the quotient obtained by
dividing the NOI determined as of the Deferred Payment Date by .10475.
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"Deferred Substantial Completion Date" shall mean the date designated
as the Deferred Payment Date pursuant to a written notice delivered by Seller
to Buyer (which date shall be at least fifteen (15) Business Days after the
date on which Seller delivers such notice); provided, however, that as of the
date on which Seller delivers such notice (i) at least 90% of the buildings to
be constructed on the Property must have been constructed in accordance with
the Construction Documents and leased pursuant to Qualified Leases and (ii)
valid certificates of occupancy must have been issued in connection therewith.
"Deposit" shall mean, collectively, the Initial Deposit and the
Additional Deposit.
"Due Diligence Period" shall mean a period commencing on the Opening
of Escrow and ending on the Due Diligence Termination Date.
"Due Diligence Termination Date" shall mean November 25, 1996.
"Environmental Claim" shall mean any claim, action, cause of action,
investigation or notice (written or oral) by any person or entity alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (i) the manufacture, treatment, processing,
distribution, use, transport, handling, deposit, storage, disposal, leaking or
other presence, or release into the environment of any Material of
Environmental Concern in, at, on, under or about any location, whether or not
owned or operated by Seller or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"Environmental Laws" shall mean all federal, state, local and foreign
laws and regulations relating to pollution or protection of human health or the
environment, including, without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern.
"Escrow" shall have the meaning ascribed thereto in Section 5 of this
Agreement.
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"Escrow Agent" shall have the meaning ascribed thereto in the preamble
of this Agreement.
"Escrow's Draw Deliveries" shall have the meaning ascribed thereto in
Section 13.1.1 of this Agreement.
"Execution Date" shall have the meaning ascribed thereto in the
preamble of this Agreement.
"Existing Leases" shall mean all leases, licenses, tenancies,
concession agreements, subleases, and other occupancy agreements to which
Seller is a party relating to the Property, which were executed on or before
the Execution Date, including, without limitation, all amendments,
modifications and guarantees thereof and options to renew or extend the term
thereof, whether oral or written.
"Expense Recoveries" shall mean all expenses of the Property that are
attributable to the first twelve (12) months of the lease term and would be
properly billed to Tenants by Seller, as the landlord, pursuant to and in
accordance with the Leases; such amount shall be calculated based on One Dollar
($1.00) per square foot for common area maintenance expenses, Two Dollars
($2.00) per square foot for property tax expenses and Twenty-Five Cents ($.25)
per square foot for property insurance expenses.
"Final Closing Date" shall mean April 15, 1997; provided, however,
that if, as of such date (or, if earlier, the date specified in Buyer's Closing
Notice), less than ninety percent (90%) of the Property is leased pursuant to
Qualified Leases, then either party may elect to extend the Final Closing Date
until the earlier to occur of (i) the tenth (10th) Business Day following the
Substantial Completion Date or (ii) October 15, 1997, by delivering written
notice of such extension to the other party not later than April 15, 1997. If
neither party elects to exercise its right to extend the Final Closing Date, or
if either party extends the Final Closing Date but the ninety percent (90%)
Qualified Lease occupancy rate threshold has not been achieved by the date of
the extended Final Closing Date, then, unless the condition set forth in
Section 7.1.11 of this Agreement is waived by both Buyer and Seller, this
Agreement shall terminate pursuant to Section 7.2(c) of this Agreement.
"Financial Advisor" shall mean Texas Commerce Realty Advisors, Inc.
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"Improvements" shall mean all buildings, improvements, structures and
fixtures now or hereafter located on or in the Land, including, without
limitation, those certain buildings and structures being used (or to be used)
for the operation of the Shopping Center.
"Indemnified Parties" shall have the meaning ascribed thereto in
Section 4.3 of this Agreement.
"Initial Deposit" shall mean the sum of ONE HUNDRED THOUSAND DOLLARS
($100,000.00), together with any and all interest and dividends earned thereon.
"Initial Purchase Price" shall mean an amount equal to the quotient
obtained by dividing the NOI determined as of the Closing Date by .10475.
"Intangible Property" shall mean all of that certain intangible
property owned by Seller and used by Seller in connection with the Real
Property and/or the Personal Property, including, without limitation, (i) all
Leases, contract rights, books, records, reports, test results, environmental
assessments, as-built plans, specifications and other similar documents and
materials relating to the use, operation, maintenance, repair, construction or
fabrication of the Real Property or the Personal Property; (ii) Seller's right,
if any, in and to all trademarks and trade names, including, without
limitation, all rights in and to the name "Arboretum Crossing Power Center;"
(iii) all transferable business licenses, architectural, site, landscaping or
other permits, applications, approvals, authorizations and other entitleme- nts
affecting the Real Property; and (iv) all transferable guarantees, warranties
and utility contracts relating to the Real Property.
"Issuer" shall mean National Bank of California.
"Land" shall mean that certain real property located in the City of
Austin, County of Travis, State of Texas, as more particularly described on
Exhibit "B" attached to this Agreement.
"Laws" shall mean all existing laws, rules, regulations, ordinances
and orders of all applicable federal, state, city and other governmental
authorities in effect as of the date of this Agreement.
"Leases" shall mean, collectively, the Existing Leases and the New
Leases.
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"Lease Schedule" shall have the meaning ascribed thereto in Section
9.2.1 of this Agreement.
"Lease-Up Payment" shall mean (i) the amount obtained by calculating
the Initial Purchase Price for the unleased portion of the Property (provided,
however, that for the purposes of such calculation it shall be assumed that the
unleased portion of the Property has been leased pursuant to Qualified Leases
and the annual base rent payable with respect to such space shall be deemed to
be the amount set forth for the subject space on Exhibit "S" attached to this
Agreement) less (ii) an amount equal to $18.00 per each square foot with
respect to which the Lease-Up Payment is paid.
"Leasing Criteria" shall have the meaning ascribed thereto in Section
3.2 of this Agreement.
"Letter of Credit" shall mean an irrevocable, unconditional letter of
credit in an amount equal to Eight Hundred Thousand Dollars ($800,000.00),
issued by Issuer, in favor of Escrow Agent, which letter of credit can be drawn
upon in Los Angeles, California, in accordance with the terms of this
Agreement, by presentation to Issuer of only (i) Escrow Agent's sight draft and
(ii) a sworn, written statement from Escrow Agent stating that Seller has
notified Escrow Agent of Buyer's default and Seller's entitlement to the
Deposit pursuant to the terms of this Agreement.
"Liens" shall have the meaning ascribed thereto in Section 6.2.2 of
this Agreement.
"Materials of Environmental Concern" shall mean chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products.
"Mortgage Lender" shall mean Texas Commerce Bank National Association
and any other party that is the holder of a lien against the Property which
secures a monetary obligation.
"New Leases" shall mean all leases, licenses, tenancies, concession
agreements, subleases, and other occupancy agreements to which Seller is a
party relating to the Property, which were executed after the Execution Date,
including, without limitation, all amendments, modifications and guarantees
thereof and options to renew or extend the term thereof, whether oral or
written.
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"NOI" shall mean an amount equal to the difference between (i) the sum
of the Scheduled Base Rent and all Expense Recoveries with respect to 100% of
the leasable area of the Property (irrespective of whether such space is leased
or such amounts are collected) and (ii) the Credit.
"Non-Credit Tenants" shall mean all Tenants other than the Credit
Tenants.
"Non-Foreign Affidavit" shall have the meaning ascribed thereto in
Section 7.1.9 of this Agreement.
"Notices" shall have the meaning ascribed thereto in Section 16.3 of
this Agreement.
"Official Records" shall mean the Official Public Records of Real
Property of Travis County, Texas.
"Opening of Escrow" shall have the meaning ascribed thereto in Section
5 of this Agreement.
"Owner's Title Policy" shall have the meaning ascribed thereto in
Section 7.1.1 of this Agreement.
"Permitted Exceptions" shall have the meaning ascribed thereto in
Section 6.2.2 of this Agreement.
"Personal Property" shall mean all of that certain tangible personal
property, equipment and supplies owned by Seller and either situated at the
Real Property or used by Seller in connection with the use, operation,
maintenance, construction or repair of the Real Property, including, without
limitation, all personal property described on Exhibit "T" attached to this
Agreement.
"Phase II Purchase Agreement" shall mean that certain Phase II
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of the
Execution Date, by and between Buyer and Seller.
"Preliminary Closing Statement" shall have the meaning ascribed
thereto in Section 8.5 of this Agreement.
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"Property" shall mean, collectively, the Land, the Improvements, the
balance of the Real Property, the Personal Property and the Intangible
Property.
"Property Documents" shall mean, collectively, the Construction
Documents, the Property Studies and the Property Records.
"Property Records" shall mean all files, records, reports, documents,
correspondence and other written materials, which are material to Buyer's
evaluation of the physical and financial condition of the Property to the
extent the same are in the possession or the control of Seller or its agents or
otherwise readily available to Seller.
"Property Studies" shall mean all environmental assessments, studies
and reports, all soils reports and all other studies of the physical condition
of the Real Property prepared by or for Seller.
"PTR" shall have the meaning ascribed thereto in Section 6.2.1 of this
Agreement.
"Purchase Price" shall mean, collectively, the Initial Purchase Price
(and, if applicable, the Lease-Up Payment) and the Deferred Purchase Price
(and, if applicable, the Deferred Lease-Up Payment).
"Qualified Leases" shall mean Leases that satisfy the following
criteria: (i) the Tenant is in possession of, and open for business at, the
premises leased thereunder; (ii) the Tenant has paid at least the first month's
rent payable thereunder; (iii) the Tenant is not in default thereunder beyond
the expiration of any applicable cure period afforded such Tenant under the
terms of its Lease; and (iv) all tenant improvement allowances or other
concessions to be paid to the Tenant in connection with such Lease have
theretofore been paid in full.
"REA" shall mean that certain Reciprocal Easement Agreement, dated as
of April 11, 1996, by and between Seller and Z-K Real Estate, Ltd., a Texas
limited partnership.
"Real Property" shall mean, collectively, (i) the Land, (ii) the
Improvements, (iii) all apparatus, equipment and appliances used in connection
with the operation or occupancy of the Land and the Improvements (such as
heating, air conditioning or mechanical systems and facilities used to provide
any utility services, refrigeration, ventilation, waste disposal or other
services) and now or
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hereafter located on or in the Land or the Improvements, and (iv) all of the
rights, privileges and easements appurtenant to or used in connection with the
Land and the Improvements, including, without limitation, all minerals, oil,
gas and other hydrocarbon substances, all development rights, air rights,
water, water rights, waste water capacity and water stock relating to the Land,
all strips and gores, all of Seller's right, title and interest in and to any
streets, alleys, easements, rights-of-way, public ways, or other rights
appurtenant, adjacent or connected to the Land.
"Scheduled Base Rent" shall mean an amount equal to the annual base
rent payable during the first twelve (12) months of the lease term under
Qualified Leases of any portion of the Property, which amount shall be reduced
by the amount of free rent amortized over the life of the Lease.
"Seller" shall have the meaning ascribed thereto in the preamble of
this Agreement.
"Seller Estoppel" shall have the meaning ascribed thereto in Section
7.1.8.2 of this Agreement.
"Seller's Certificate" shall have the meaning ascribed thereto in
Section 7.1.2 of this Agreement.
"Seller's Default Notice" shall have the meaning ascribed thereto in
Section 13.1.1 of this Agreement.
"Seller's REA Estoppel Certificate" shall have the meaning ascribed
thereto in Section 7.1.8.4 of this Agreement.
"Seller's Response" shall have the meaning ascribed thereto in Section
6.2.2 of this Agreement.
"Service Contracts" shall have the meaning ascribed thereto in Section
9.7 of this Agreement.
"Shopping Center" shall mean the shopping center located (or to be
located) on the Real Property and commonly known as "Arboretum Crossing Power
Center."
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"Specific Performance Election" shall have the meaning ascribed
thereto in Section 13.1.2 of this Agreement.
"Substantial Completion Date" shall mean the date on which (i) at
least 90% of the buildings to be constructed on the Property have been
constructed in accordance with the Construction Documents and leased pursuant
to Qualified Leases and (ii) valid certificates of occupancy have been issued
in connection therewith.
"Suite B" shall mean that portion of the Property, as defined on the
site plan attached to this Agreement as Exhibit "U".
"Suite C" shall mean that portion of the Property, as defined on the
site plan attached to this Agreement as Exhibit "U".
"Suite D" shall mean that portion of the Property, as defined on the
site plan attached to this Agreement as Exhibit "U".
"Survey" shall have the meaning ascribed thereto in Section 6.2.1 of
this Agreement.
"Survival Period" shall have the meaning ascribed thereto in Section
9.26 of this Agreement.
"Tenants" shall mean all of the tenants under the Leases.
"Tenant Estoppels" shall have the meaning ascribed thereto in Section
7.1.8.1 of this Agreement.
"Title Company" shall mean Heritage Title Company of Austin, Inc.
(using Chicago Title Company as its underwriter).
"Title Documents" shall mean, collectively, the PTR, the Underlying
Documents, the Survey and the UCC Search.
"UCC Search" shall have the meaning ascribed thereto in Section 6.2.1
of this Agreement.
"Underlying Documents" shall have the meaning ascribed thereto in
Section 6.2.1 of this Agreement.
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EXHIBIT "B"
LEGAL DESCRIPTION
Lot 1, of ARBORETUM CROSSING, a subdivision in the City of Austin,
Travis County, Texas, according to the map or plat thereof recorded in Volume
96, Pages 296-297, of the Plat Records of Travis County, Texas.
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EXHIBIT "C"
PRE-APPROVED TENANTS
HomePlace
Sports Authority
Office Depot
JC Penny
Office Max
Reading China
Marshalls
Ross
Pets Mart
Petco
Orvis
Computer City
Stein Mart
Tyler's Sporting Goods
Sears Hardware
Service Merchandise
Home Front
Krause's Sofa Factory
David's Bridal
Crown Books
Kinko's
Wolf Camera
Eye Masterrs
American Tourister
Toy Works
Dress Barn
Ultra III
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EXHIBIT "D"
SPECIAL WARRANTY DEED
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF TRAVIS )
THAT LOOP ONE/183, LTD., a Texas limited partnership ("Grantor"), for
TEN DOLLARS ($10.00) and other good and valuable consideration paid to Grantor
by THE PRICE REIT, INC., a Maryland corporation ("Grantee"), the receipt and
sufficiency of which consideration are hereby acknowledged and confessed by
Grantor, has GRANTED, BARGAINED, SOLD, and CONVEYED, and by these presents does
GRANT, BARGAIN, SELL, and CONVEY, unto Grantee, that certain parcel of real
property together with all improvements situated thereon located in Travis
County, Texas, and more particularly described on Exhibit "A", attached hereto
and made a part hereof for all purposes (the "Property").
This Special Warranty Deed (this "Deed") is expressly made subject to
the matters described on Exhibit "B", attached hereto and made a part hereof
for all purposes to the extent, and only to the extent the same are valid and
subsisting and affect all or any part of the Property.
TO HAVE AND TO HOLD the Property, together with all and singular the
rights and appurtenances thereunto in anywise belonging, unto Grantee,
Grantee's successors and assigns, forever; and Grantor does hereby bind
Grantor, Grantor's successors and assigns, to WARRANT and FOREVER DEFEND all
and singular the Property unto Grantee, Grantee's successors and assigns,
against every person whomsoever lawfully claiming or to claim the same or any
part thereof by, through or under Grantor, but not otherwise; subject, however,
to the matters set forth herein.
Grantor warrants payment of all ad valorem taxes on the Property
through calendar year 1995. Such taxes for the current year have been prorated
as of the date of delivery hereof and Grantee assumes and agrees to pay such ad
valorem taxes in full.
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EXECUTED on the date of the acknowledgement set forth below, to be
effective however as of the ___ day of __________, 1996.
Grantee's Address:
The Price REIT, Inc.
145 South Fairfax Avenue, 4th Floor
Los Angeles, California 90036
Attention: Mr. Joseph K. Kornwasser
GRANTOR:
LOOP ONE/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.,
General Partner
By: ________________________________
Thomas J. Terkel
Manager
GRANTEE:
THE PRICE REIT, INC.,
a Maryland corporation
By: ______________________________________
Name:
Its:
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THE STATE OF TEXAS )
)
COUNTY OF TRAVIS )
This instrument was acknowledged before me on the _____ day of
_________, 1996, by _________________________________________________,
____________________________________________________________________ on behalf
of Loop One/183, Ltd., a Texas limited partnership.
(SEAL)
________________________________________
Notary Public in and for
the State of Texas
________________________________________
(Printed Name of Notary)
My commission expires:____________________
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STATE OF CALIFORNIA )
: ss.
COUNTY OF LOS ANGELES )
On the ______ day of ________, 1996, before me, __________________
______________________________________________, personally appeared
____ [ ]personally known to me or [ ]proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
________________________________
(SEAL)
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EXHIBIT "E"
SELLER'S CERTIFICATE
The undersigned hereby certifies as follows:
1. To the knowledge of Loop One/183, Ltd., a Texas limited
partnership ("Seller"), all conditions to the close of escrow which were to be
satisfied or performed by Seller as provided in that certain Phase I Purchase
and Sale Agreement and Joint Escrow Instructions, dated as of ______, 1996 (the
"Purchase Agreement"), by and between Seller and The Price REIT, Inc., a
Maryland corporation ("Buyer"), have either been satisfied, performed or
waived.
2. All representations, covenants, and warranties made in or
pursuant to the Purchase Agreement, by Seller, including, without limitation,
those set forth in Sections 9 and 11 of the Purchase Agreement, are materially
true, accurate, correct and complete as of the date of this certificate.
3. Buyer is entitled to rely on this certificate in connection
with the Closing (as defined in the Purchase Agreement).
Seller has executed this certificate effective as of _____________, 1996.
SELLER:
LOOP ONE/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.,
General Partner
By: ________________________________
Thomas J. Terkel
Manager
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EXHIBIT "F"
ASSIGNMENT OF LEASES AND SECURITY DEPOSITS
THIS ASSIGNMENT OF LEASES AND SECURITY DEPOSITS
("Assignment") is made and entered into as of the _______ day of ______, 1996,
by and between LOOP ONE/183, LTD., a Texas limited partnership ("Assignor"),
and THE PRICE REIT, INC., a Maryland corporation ("Assignee").
R E C I T A L S
_________WHEREAS, Assignor, as landlord, has entered into those certain leases
identified on Exhibit "A" attached hereto and incorporated herein by reference
(collectively, together with all amendments, modifications, supplements,
restatements and guarantees thereof, the "Leases"), for certain property
located in the City of Austin, County of Travis, State of Texas;
WHEREAS, Assignor and Assignee have entered into that certain Phase I
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of ______,
1996 (the "Purchase Agreement"); and
WHEREAS, the Purchase Agreement requires Assignor and Assignee to
execute this Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby
agree as follows:
A G R E E M E N T
1. Assignment and Assumption. From and after the date hereof for
the remainder of the term of each of the Leases, Assignor hereby irrevocably
assigns, sets over, transfers and conveys to Assignee all of Assignor's right,
title and interest in and to (i) the Leases and (ii) all security deposits made
under the Leases (the "Security Deposits"). Subject to the terms and
conditions of the Purchase Agreement, Assignee hereby accepts this Assignment
of the Leases and Security Deposits and the rights granted herein. Assignee
hereby expressly assumes, for itself and its successors, assigns and legal
representatives, the Leases and all of the obligations and liabilities, fixed
and contingent, of Assignor
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thereunder accruing from and after the date hereof with respect to the Leases
(including the obligation to account for the Security Deposits) and agrees to
(a) be fully bound by all of the terms, covenants, agreements, provisions,
conditions, obligations and liability of Assignor thereunder, which accrue from
and after the date hereof, and (b) keep, perform and observe all of the
covenants and conditions contained therein on the part of Assignor to be kept,
performed and observed, from and after the date hereof.
2. General Provisions.
a. Successors. This Assignment shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns.
b. Counterparts. This Assignment may be executed in as
many counterparts as may be deemed necessary and convenient, and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same instrument.
c. Governing Law. This Assignment and the legal
relations of the parties hereto shall be governed by and construed and enforced
in accordance with the laws of the State of Texas, without regard to its
principles of conflicts of law.
F-2
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IN WITNESS WHEREOF, this Assignment was made and executed as of the
date first above written.
ASSIGNOR:
LOOP ONE/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.,
General Partner
By: ________________________________
Thomas J. Terkel
Manager
ASSIGNEE:
THE PRICE REIT, INC.,
a Maryland Corporation
By: ______________________________________
Name:
Its:
F-3
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EXHIBIT "A"
(to Exhibit "F" -- Assignment of Leases)
LIST OF LEASES
[TO BE PROVIDED BY SELLER]
F-4
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EXHIBIT "G"
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Allan G. Mutchnik, Esq.
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
____________________________________________________________________
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
ASSIGNMENT OF RECIPROCAL EASEMENT AGREEMENT
THIS ASSIGNMENT OF RECIPROCAL EASEMENT AGREEMENT ("Assignment") is
made and entered into as of the ____ day of _____, 1996, by and between LOOP
ONE/183, LTD., a Texas limited partnership ("Assignor"), and THE PRICE REIT,
INC., a Maryland corporation ("Assignee").
R E C I T A L S
WHEREAS, Assignor, has entered into that certain Reciprocal Easement
Agreement, dated as of __________ and recorded in the Official Records of
Travis County, Texas, on __________ as Instrument No. ________ (the "REA"), by
and between Assignor and ____________, in connection with certain property
located in the City of Austin, County of Travis, State of Texas as more
particularly described on Exhibit "A" attached hereto (the "Property");
WHEREAS, Assignor and Assignee have entered into that certain Phase I
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of
___________, 1996 (the "Purchase Agreement"); and
WHEREAS, the Purchase Agreement requires Assignor and Assignee to
execute this Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby
agree as follows:
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<PAGE> 75
A G R E E M E N T
1. Assignment and Assumption. From and after the date hereof for
the remainder of the term of the REA, Assignor hereby irrevocably assigns, sets
over, transfers and conveys to Assignee all of Assignor's right, title and
interest in and to the REA as and to the extent that such right, title and
interest pertain to or benefit the Property. Subject to the terms and
conditions of the Purchase Agreement, Assignee hereby accepts this Assignment
of the REA and the rights granted herein. Assignee hereby expressly assumes,
for itself and its successors, assigns and legal representatives, the REA and
all of the obligations and liabilities, fixed and contingent, of Assignor
thereunder accruing from and after the date hereof with respect to the REA and
agrees to (a) be fully bound by all of the terms, covenants, agreements,
provisions, conditions, obligations and liability of Assignor thereunder, which
accrue from and after the date hereof, and (b) keep, perform and observe all of
the covenants and conditions contained therein on the part of Assignor to be
kept, performed and observed, from and after the date hereof.
2. General Provisions.
a. Successors. This Assignment shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns.
b. Counterparts. This Assignment may be executed in as
many counterparts as may be deemed necessary and convenient, and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same instrument.
c. Governing Law. This Assignment and the legal
relations of the parties hereto shall be governed by and construed and enforced
in accordance with the laws of the State of Texas, without regard to its
principles of conflicts of law.
G-2
<PAGE> 76
IN WITNESS WHEREOF, this Assignment was made and executed as of the
date first above written.
ASSIGNOR:
LOOP ONE/183 LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.,
General Partner
By: ________________________________
Thomas J. Terkel
Manager
ASSIGNEE:
THE PRICE REIT, INC.,
a Maryland corporation
By: ______________________________________
Name:
Its:
G-3
<PAGE> 77
THE STATE OF TEXAS )
)
COUNTY OF TRAVIS )
This instrument was acknowledged before me on the ________ day of
___________, 1996, by _______________________________________________,
____________________________________________________________________ on behalf
of Loop One/183, Ltd., a Texas limited partnership.
(SEAL)
______________________________________
Notary Public in and for
the State of Texas
______________________________________
(Printed Name of Notary)
My commission expires: _________________
G-4
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STATE OF CALIFORNIA )
: ss.
COUNTY OF LOS ANGELES )
On the _____ day of _________, 1996, before me, ___________________
, personally appeared
__________________________________________________________________ , [
]personally known to me or [ ]proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
____________________________
(SEAL)
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<PAGE> 79
EXHIBIT "H"
BILL OF SALE AND ASSIGNMENT
THIS BILL OF SALE AND ASSIGNMENT ("Bill of Sale") is made and entered
into as of the ________ day of _______, 1996, by LOOP ONE/183 LTD., a Texas
limited partnership ("Seller"), for the benefit of THE PRICE REIT, INC., a
Maryland corporation ("Buyer").
R E C I T A L S
WHEREAS, Seller is the owner of that certain real property located in
the City of Austin, County of Travis, State of Texas (the "Real Property"), as
more particularly described on Exhibit "A" attached hereto and incorporated
herein by reference;
WHEREAS, Buyer and Seller have entered into that certain Phase I
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of
___________, 1996 (the "Purchase Agreement"), with respect to, among other
things, the acquisition of the "Personal Property" and the "Intangible
Property" (each as defined below), and certain other property; and
WHEREAS, the Purchase Agreement requires Seller to convey all of the
Seller's right, title and interest in, to and under the Personal Property and
the Intangible Property to Buyer.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby agrees as follows:
A G R E E M E N T
1. Unless the context otherwise requires, all capitalized terms
used but not otherwise defined herein shall have the respective meanings
ascribed thereto in the Purchase Agreement.
2. Seller does hereby unconditionally, absolutely, and
irrevocably grant, bargain, sell, transfer, assign, convey, set over and
deliver unto Buyer all of Seller's right, title and interest in and to:
H-1
<PAGE> 80
a. all of that certain tangible personal property,
equipment and supplies owned by Seller and either situated at the Real Property
or used by Seller in connection with the use, operation, maintenance,
construction or repair of the Real Property, including, without limitation, all
personal property described on Exhibit "R" attached to the Purchase Agreement
(collectively, the "Personal Property"); and
b. all of that certain intangible property owned by
Seller and used by Seller in connection with the Real Property and/or the
Personal Property, including, without limitation, (i) all contract rights,
books, records, reports, test results, environmental assessments, as-built
plans, specifications and other similar documents and materials relating to the
use, operation, maintenance, repair, construction or fabrication of the Real
Property or the Personal Property; (ii) Seller's right, if any, in and to all
trademarks and trade names, including, without limitation, all rights in and to
the name "Arboretum Crossing Power Center;" (iii) all transferable business
licenses, architectural, site, landscaping or other permits, applications,
approvals, authorizations and other entitlements affecting the Real Property;
and (iv) all transferable guarantees, warranties and utility contracts relating
to the Real Property (collectively, the "Intangible Property" and, together
with the Personal Property, the "Property").
3. Seller represents and warrants, to the best of its knowledge
(as defined in the Purchase Agreement), that the Property is free and clear of
all options, liens, claims, encumbrances, covenants, conditions, restrictions
and any other matters affecting title, other than the Permitted Exceptions.
4. This Bill of Sale shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
5. This Bill of Sale and the legal relations of the parties
hereto shall be governed by and construed and enforced in accordance with the
laws of the State of Texas, without regard to its principles of conflicts of
law.
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<PAGE> 81
IN WITNESS WHEREOF, this Bill of Sale was made and executed as of the
date first above written.
SELLER:
LOOP ONE/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.,
General Partner
By: ________________________________
Thomas J. Terkel
Manager
H-3
<PAGE> 82
EXHIBIT "I"
TENANT ESTOPPEL CERTIFICATE
THIS TENANT ESTOPPEL CERTIFICATE ("Certificate"), dated as of _______,
1996, is executed by __________________ ("Tenant") in favor of The Price REIT,
Inc., a Maryland corporation, or its nominee (collectively, "Buyer").
R E C I T A L S
_________
A. Buyer and Loop One/183, Ltd., a Texas limited partnership
("Landlord"), have entered into that certain Phase I Purchase and Sale
Agreement and Joint Escrow Instructions, dated as of _________, 1996 (the
"Purchase Agreement"), whereby Buyer has agreed to purchase, among other
things, the improved real property located in the City of Austin, County of
Travis, State of Texas, more particularly described on Exhibit "__" attached to
the Purchase Agreement (the "Property").
B. Tenant and Landlord have entered into that certain Lease
Agreement, dated as of ____________ (together with all amendments,
modifications, supplements, guarantees and restatements thereof, the "Lease"),
for a portion of the Property.
C. Pursuant to the Lease, Tenant has agreed that upon the request
of Landlord, Tenant would execute and deliver an estoppel certificate
certifying the status of the Lease.
D. In connection with the Purchase Agreement, Landlord has
requested that Tenant execute this Certificate.
NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer as
follows:
A G R E E M E N T
SECTION 1. LEASE.
Attached hereto as Exhibit "A" is a true, correct, and complete copy
of the Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the amend-
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<PAGE> 83
ments, modifications, supplements, guarantees and restatements thereof:
____________________________________________________________________
__________________________________________________________________ . (If none,
please state "None.")
SECTION 2. LEASED PREMISES.
Pursuant to the Lease, Tenant leases those certain premises (the
"Leased Premises") consisting of approximately __________________ (___________)
rentable square feet within the Property, as more particularly described in the
Lease. In addition, pursuant to the terms of the Lease, Tenant has the
non-exclusive right to use the parking area located on the Property during the
term of the Lease.
SECTION 3. FULL FORCE OF LEASE.
The Lease is in full force and effect, has not been terminated, and is
enforceable in accordance with its terms.
SECTION 4. COMPLETE AGREEMENT
The Lease constitutes the complete agreement between Landlord and
Tenant for the Leased Premises and the Property.
SECTION 5. ACCEPTANCE OF LEASED PREMISES.
Tenant has accepted and is currently occupying the Leased Premises.
SECTION 6. LEASE TERM.
The term of the Lease commenced on _____________ and ends on
_____________________, subject to the following options to extend:
__________________________________________________________________ . (If none,
please state "None.")
SECTION 7. PURCHASE RIGHTS.
Tenant has no option, right of first refusal, right of first offer, or
other right to purchase all or any portion of the Leased Premises or all or any
portion of the Property, except as follows:
______________________________________
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<PAGE> 84
__________________________________________________________________ .
(If none, please state "None.")
SECTION 8. RIGHTS OF TENANT.
Except as expressly stated in this Certificate, Tenant:
(a) has no right to renew or extend the term of the Lease; and
(b) has no right, title, or interest in the Leased Premises, other
than as Tenant under the Lease.
SECTION 9. RENT.
(a) The rent under the Lease is current, and Tenant is not in default
in the performance of any of its obligations under the Lease.
(b) Tenant is currently paying base rent under the Lease in the
amount of ___________________ Dollars ($__________) per month. Tenant has not
received and is not, presently, entitled to any abatement, refunds, rebates,
concessions or forgiveness of rent or other charges, free rent, partial rent,
or credits, offsets or reductions in rent, except as follows:
_____________________
__________________________________________________________________ . (If none,
please state "None.")
(c) Tenant's estimated share of operating expenses, common area
charges, insurance, real estate taxes and administrative and overhead expenses
is __________ percent (______%) and is currently being paid at the rate of
_____________________ Dollars ($__________) per month, payable to
__________________________________________________________________ .
(d) There are no existing defenses or offsets against rent due or to
become due under the terms of the Lease, and there presently is no default or
other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Leased Premises, except as follows:
__________________________________________________________
__________________________________________________________________ . (If none,
please state "None.")
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<PAGE> 85
SECTION 10. SECURITY DEPOSIT.
The amount of Tenant's security deposit held by Landlord under the
Lease is _________________ Dollars ($ __________).
SECTION 11. PREPAID RENT.
The amount of prepaid rent, separate from the security deposit, is
__________________________ Dollars ($___________), covering the period from
__________ to __________ .
SECTION 12. INSURANCE.
All insurance, if any, required to be maintained by Tenant under the
Lease is presently in effect.
SECTION 13. PENDING ACTIONS.
There are no actions, whether voluntary or otherwise, pending against
the Tenant (or any guarantor of the Tenant's obligations under the Lease)
pursuant to the bankruptcy or insolvency laws of the United States or any state
thereof.
SECTION 14. LANDLORD'S OBLIGATIONS
As of the date of this Certificate, Landlord has performed all
obligations required of Landlord pursuant to the Lease; no offsets,
counterclaims, or defenses of Tenant under the Lease exist against Landlord;
and no events have occurred that, with the passage of time or the giving of
notice, would constitute a basis for offsets, counterclaims, or defenses
against Landlord, except as follows:
__________________________________________________________________ . (If none,
please state "None.")
SECTION 15. ASSIGNMENTS BY LANDLORD.
Tenant has received no written notice of any assignment, hypothecation
or pledge of the Lease or rentals under the Lease by Landlord.
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<PAGE> 86
SECTION 16. ASSIGNMENTS BY TENANT.
Tenant has not sublet or assigned the Leased Premises or the Lease or
any portion thereof to any sublessee or assignee. No one except Tenant and its
employees will occupy the Leased Premises. The address for notices to be sent
to Tenant is as set forth in the Lease.
SECTION 17. ENVIRONMENTAL MATTERS.
The operation and use of the Leased Premises does not involve the
generation, treatment, storage, disposal or release into the environment of any
hazardous materials, regulated materials and/or solid waste, except those used
in the ordinary course of operating a retail store or otherwise used in
accordance with all applicable laws.
Tenant makes this Certificate with the knowledge that it will be
relied upon by Buyer in agreeing to purchase the Property.
Tenant has executed this Certificate as of the date first written
above by the person named below, who is duly authorized to do so.
TENANT
___________________________________________
By: ______________________________
Name:
Its:
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<PAGE> 87
EXHIBIT "J"
SELLER ESTOPPEL CERTIFICATE
THIS SELLER ESTOPPEL CERTIFICATE ("Certificate"), dated as of _______,
1996, is executed by LOOP ONE/183, LTD., a Texas limited partnership
("Landlord") in favor of The Price REIT, Inc., a Maryland corporation, or its
nominee (collectively, "Buyer").
R E C I T A L S
A. Buyer and Landlord have entered into that certain Phase I
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of
_________, 1996 (the "Purchase Agreement"), whereby Buyer has agreed to
purchase, among other things, the improved real property located in the City of
Austin, County of Travis, State of Texas, more particularly described on
Exhibit "__" attached to the Purchase Agreement (the "Property").
B. Landlord has entered into that certain Lease Agreement, dated
as of ____________ (together with all amendments, modifications, supplements,
guarantees and restatements thereof, the "Lease"), with _______________
("Tenant") for a portion of the Property.
C. Pursuant to the Purchase Agreement, Landlord has agreed to
execute and deliver an estoppel certificate certifying the status of the Lease.
NOW, THEREFORE, Landlord certifies, warrants, and represents to Buyer
as follows:
A G R E E M E N T
SECTION 1. LEASE.
Attached hereto as Exhibit "A" is a true, correct, and complete copy
of the Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements, guarantees and restatements thereof:
____________________________________________________________________
__________________________________________________________________ . (If none,
please state "None.")
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<PAGE> 88
SECTION 2. LEASED PREMISES.
Pursuant to the Lease, Tenant leases those certain premises (the
"Leased Premises") consisting of approximately __________________ (___________)
rentable square feet within the Property, as more particularly described in the
Lease. In addition, pursuant to the terms of the Lease, Tenant has the
non-exclusive right to use the parking area located on the Property during the
term of the Lease.
SECTION 3. FULL FORCE OF LEASE.
The Lease is in full force and effect, has not been terminated, and
(subject to principles of equity which may limit the availability of certain
equitable remedies and bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other laws applicable to creditors' rights or the
collection of debtors' obligations generally) is enforceable in accordance with
its terms.
SECTION 4. COMPLETE AGREEMENT
The Lease constitutes the complete agreement between Landlord and
Tenant for the Leased Premises and the Property.
SECTION 5. ACCEPTANCE OF LEASED PREMISES.
Tenant has accepted and is currently occupying the Leased Premises.
SECTION 6. LEASE TERM.
The term of the Lease commenced on _____________ and ends on
_____________________, subject to the following options to extend:
__________________________________________________________________ . (If none,
please state "None.")
SECTION 7. PURCHASE RIGHTS.
Tenant has no option, right of first refusal, right of first offer, or
other right to purchase all or any portion of the Leased Premises or all or any
portion of the Property, except as follows:
______________________________________
__________________________________________________________________ . (If none,
please state "None.")
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<PAGE> 89
SECTION 8. RIGHTS OF TENANT.
Except as expressly stated in the Lease, Tenant:
(a) has no right to renew or extend the term of the Lease; and
(b) has no right, title, or interest in the Leased Premises, other
than as Tenant under the Lease.
SECTION 9. RENT.
(a) The rent under the Lease is current, and Tenant is not in default
in the performance of any of its obligations under the Lease.
(b) Tenant is currently paying base rent under the Lease in the
amount of ___________________ Dollars ($__________) per month. Tenant has not
received and is not, presently, entitled to any abatement, refunds, rebates,
concessions or forgiveness of rent or other charges, free rent, partial rent,
or credits, offsets or reductions in rent, except as follows:
_____________________
__________________________________________________________________ . (If none,
please state "None.")
(c) Tenant's estimated share of operating expenses, common area
charges, insurance, real estate taxes and administrative and overhead expenses
is __________ percent (______%) and is currently being paid at the rate of
_____________________ Dollars ($__________) per month, payable to
__________________________________________________________________ .
(d) There are no existing defenses or offsets against rent due or to
become due under the terms of the Lease and there presently is no default or
other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Leased Premises, except as follows:
_____________________________________
__________________________________________________________________ . (If none,
please state "None.")
SECTION 10. SECURITY DEPOSIT.
The amount of Tenant's security deposit held by Landlord under the
Lease is _________________ Dollars ($ __________).
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<PAGE> 90
SECTION 11. PREPAID RENT.
The amount of prepaid rent, separate from the security deposit, is
__________________________ Dollars ($___________), covering the period from
__________ to __________ .
SECTION 12. INSURANCE.
To Landlord's knowledge, all insurance, if any, required to be
maintained by Tenant under the Lease is presently in effect.
SECTION 13. PENDING ACTIONS.
To Landlord's knowledge, there are no actions, whether voluntary or
otherwise, pending against the Tenant (or any guarantor of the Tenant's
obligations under the Lease) pursuant to the bankruptcy or insolvency laws of
the United States or any state thereof.
SECTION 14. LANDLORD'S OBLIGATIONS.
As of the date of this Certificate, Landlord has performed all
obligations required of Landlord pursuant to the Lease; no offsets,
counterclaims, or defenses of Tenant under the Lease exist against Landlord;
and no events have occurred that, with the passage of time or the giving of
notice, would constitute a basis for offsets, counterclaims, or defenses
against Landlord, except as follows:
__________________________________________________________________ . (If none,
please state "None.")
SECTION 15. ASSIGNMENTS BY LANDLORD.
Landlord has not assigned, hypothecated or pledged the Lease or the
rentals under the Lease, other than to Landlord's lender (Texas Commerce Bank
National Association), which assignment was made in connection with Landlord's
securing funds for the acquisition of the Property and construction of certain
improvements thereon, and which will be released as of the Closing (as defined
in the Purchase Agreement).
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<PAGE> 91
SECTION 16. ASSIGNMENTS BY TENANT.
Tenant has not sublet or assigned the Leased Premises or the Lease or
any portion thereof to any sublessee or assignee. The address for notices to
be sent to Tenant is as set forth in the Lease.
SECTION 17. ENVIRONMENTAL MATTERS.
The operation and use of the Leased Premises does not involve the
generation, treatment, storage, disposal or release into the environment of any
hazardous materials, regulated materials and/or solid waste, except those used
in the ordinary course of operating a retail store or otherwise used in
accordance with all applicable laws.
SECTION 18. LANDLORD'S KNOWLEDGE.
Whenever the phrase "Landlord's knowledge" or any similar phrase is
used in this Certificate, the meaning thereof is intended to have, and shall
have, the same meaning as the phrase "Seller's knowledge" set forth in Section
9.27 of the Purchase Agreement.
Tenant makes this Certificate with the knowledge that it will be
relied upon by Buyer in agreeing to purchase the Property.
Tenant has executed this Certificate as of the date first written
above by the person named below, who is duly authorized to do so.
LANDLORD
LOOP ONE/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.,
General Partner
By: ________________________________
Thomas J. Terkel
Manager
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<PAGE> 92
EXHIBIT "K"
REA ESTOPPEL CERTIFICATE
THIS REA ESTOPPEL CERTIFICATE ("Certificate"), dated as of __________,
1996, is executed by __________________ (the "Undersigned") in favor of The
Price REIT, Inc., a Maryland corporation ("Buyer").
R E C I T A L S
A. Buyer and Loop One/183, Ltd., a Texas limited partnership
("Seller"), have entered into that certain Phase I Purchase and Sale Agreement
and Joint Escrow Instructions, dated as of ________, 1996 (the "Purchase
Agreement"), whereby Buyer has agreed to purchase, among other things, the
improved real property located in the City of Austin, County of Travis, State
of Texas, more particularly described on Exhibit "__" attached to the Purchase
Agreement (the "Property").
B. The Undersigned and Seller are parties to that certain
Reciprocal Easement Agreement, dated as of _______ (together with all
amendments, modifications, supplements and restatements thereof, the "REA"),
for a portion of the Property. The Undersigned owns that certain improved real
property located in the City of Austin, County of Travis, State of Texas, more
particularly described on Exhibit "__" to the REA (the "Adjacent Property").
C. In connection with the Purchase Agreement, Seller has
requested that the Undersigned execute this Certificate.
NOW, THEREFORE, the Undersigned certifies, warrants, and represents to
Buyer as follows:
A G R E E M E N T
SECTION 1. REA.
Attached hereto as Exhibit "A" is a true, correct and complete copy of
the REA, including the following amendments, modifications, supplements and
restatements thereof, which together represent all of the amendments,
modifications, supplements and restatements thereof:
___________________________________________________________________. (If none,
please state "None.")
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<PAGE> 93
SECTION 2. FULL FORCE OF REA.
The REA is in full force and effect, has not been terminated, and is
enforceable in accordance with its terms.
SECTION 3. COMPLETE AGREEMENT.
The REA constitutes the complete agreement between Seller and the
Undersigned for the Adjacent Property and the Property.
SECTION 4. OCCUPATION.
The Undersigned is currently occupying the Adjacent Property and
Seller is currently occupying the Property.
SECTION 5. REA TERM.
The term of the REA commenced on ____________________ and is
[perpetual/ends on _________________].
SECTION 6. PURCHASE RIGHTS.
The Undersigned has no option, right of first refusal, right of first
offer, or other right to purchase all or any portion of the Property, except as
follows: __________________________________________________________________ .
(If none, please state "None.")
SECTION 7. RIGHTS OF THE UNDERSIGNED.
Except as expressly stated in this Certificate, the Undersigned:
(a) has no right to renew or extend the term of the REA; and
(b) has no right, title, or interest in the Property, other than
pursuant to the REA.
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SECTION 8. THE UNDERSIGNED'S OBLIGATIONS
(a) The undersigned has been paying its monetary obligations, if
any, under the REA in accordance with the time periods set forth in the REA and
the Undersigned is not in default in the performance of any of its other
obligations under the REA.
(b) The Undersigned's estimated share of any and all expenses for
____________- (list types of expenses) is currently being paid at the rate of
$_________ per month, payable to Seller. (If none, please state "None.")
(c) There are no existing defenses or offsets against the monetary
obligations, if any, due or to become due under the terms of the REA and there
has been no default or other wrongful act or omission by Seller under the REA,
except as follows: ____________-
__________________________________________________________________ . (If none,
please state "None.")
SECTION 9. INSURANCE.
All insurance, if any, required to be maintained by the Undersigned
under the REA is presently in effect.
SECTION 10. PENDING ACTIONS.
There are no actions, whether voluntary or otherwise, pending against
the Undersigned pursuant to the bankruptcy or insolvency laws of the United
States or any state thereof.
SECTION 11. SELLER'S OBLIGATIONS.
As of the date of this Certificate, Seller has performed all
obligations required of Seller pursuant to the REA; no offsets, counterclaims,
or defenses of the Undersigned under the REA exist against Seller; and no
events have occurred that, with the passage of time or the giving of notice,
would constitute a basis for offsets, counterclaims, or defenses against
Seller, except as follows:
__________________________________________________________________ . (If none,
please state "None.")
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<PAGE> 95
SECTION 12. ASSIGNMENTS BY SELLER.
The Undersigned has received no notice of any assignment,
hypothecation or pledge of the REA by Seller.
SECTION 13. ASSIGNMENTS BY THE UNDERSIGNED.
The Undersigned has not assigned the REA or any portion thereof to any
assignee. No one except the Undersigned and its employees will occupy the
Adjacent Property. The address for notices to be sent to the Undersigned is as
set forth in the REA.
SECTION 14. ENVIRONMENTAL MATTERS.
The operation and use of the Adjacent Property does not involve the
generation, treatment, storage, disposal or release into the environment of any
hazardous materials, regulated materials, and/or solid waste, except those used
in the ordinary course of operating a retail store or otherwise used in
accordance with all applicable laws.
SECTION 15. NOTIFICATION BY THE UNDERSIGNED.
From the date of this Certificate and continuing until ____________,
the Undersigned agrees to immediately notify Buyer, in writing, at the
following address, on the occurrence of any event or the discovery of any fact
that would make any representation contained in this Certificate inaccurate:
The Price REIT, Inc.
145 South Fairfax Avenue, 4th Floor
Los Angeles, California 90036
Attention: Mr. Joseph K. Kornwasser
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention Allan G. Mutchnik, Esq.
The Undersigned makes this Certificate with the knowledge that it will
be relied upon by Buyer in agreeing to purchase the Property.
K-4
<PAGE> 96
The Undersigned has executed this Certificate as of the date first
written above by the person named below, who is duly authorized to do so.
______________________________________
By: _______________________
Name:
Its:
K-5
<PAGE> 97
EXHIBIT "L"
SELLER'S REA ESTOPPEL CERTIFICATE
THIS SELLER'S REA ESTOPPEL CERTIFICATE ("Certificate"), dated as of
__________, 1996, is executed by LOOP ONE/183, LTD., a Texas limited
partnership ("Seller") in favor of The Price REIT, Inc., a Maryland corporation
("Buyer").
R E C I T A L S
A. Buyer and Seller have entered into that certain Phase I
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of
________, 1996 (the "Purchase Agreement"), whereby Buyer has agreed to
purchase, among other things, the improved real property located in the City of
Austin, County of Travis, State of Texas, more particularly described on
Exhibit "__" attached to the Purchase Agreement (the "Property").
B. Seller and __________________ ("REA Party") are parties to
that certain Reciprocal Easement Agreement, dated as of _______ (together with
all amendments, modifications, supplements and restatements thereof, the
"REA"), for a portion of the Property. REA Party owns that certain improved
real property located in the City of Austin, County of Travis, State of Texas,
more particularly described on Exhibit "__" to the REA (the "Adjacent
Property").
C. In connection with the Purchase Agreement, Seller has agreed
to execute and deliver this Certificate.
NOW, THEREFORE, Seller certifies, warrants, and represents to Buyer as
follows:
A G R E E M E N T
SECTION 1. REA.
Attached hereto as Exhibit "A" is a true, correct and complete copy of
the REA, including the following amendments, modifications, supplements and
restatements thereof, which together represent all of the amendments,
modifications, supplements and restatements thereof:
____________________________________________________________________
L-1
<PAGE> 98
___________________________________________________________________.
(If none, please state "None.")
SECTION 2. FULL FORCE OF REA.
The REA is in full force and effect, has not been terminated, and
(subject to principles of equity which may limit the availability of certain
equitable remedies and bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other laws applicable to creditors' rights or the
collection of debtors' obligations generally) is enforceable in accordance with
its terms.
SECTION 3. COMPLETE AGREEMENT.
Except as may be set forth in the "Permitted Exceptions" (as defined
in the Purchase Agreement), the REA and that certain Option Agreement, dated as
of __________, by and between REA Party, as optionor, and Seller, as optionee,
constitute the complete agreement between Seller and REA Party for the Adjacent
Property and the Property.
SECTION 4. OCCUPATION.
REA Party is currently occupying the Adjacent Property and Seller is
currently occupying the Property.
SECTION 5. REA TERM.
The term of the REA commenced on ____________________ and is
[perpetual/ends on _________________].
SECTION 6. PURCHASE RIGHTS.
REA Party has no option, right of first refusal, right of first offer,
or other right to purchase all or any portion of the Property, except as
follows: __________________________________________________________________ .
(If none, please state "None.")
SECTION 7. RIGHTS OF REA PARTY.
Except as expressly stated in the REA, REA Party:
L-2
<PAGE> 99
(a) has no right to renew or extend the term of the REA; and
(b) has no right, title, or interest in the Property, other than
pursuant to the REA.
SECTION 8. REA PARTY'S OBLIGATIONS.
(a) REA Party has been paying its monetary obligations, if any,
under the REA in accordance with the time periods set forth in the REA and REA
Party is not in default in the performance of any of its other obligations
under the REA.
(b) REA Party's estimated share of any and all expenses for
_________________________________________________________________ (list types
of expenses) is currently being paid at the rate of $_________ per month,
payable to Seller. (If none, please state "None.")
(c) There are no existing defenses or offsets against the monetary
obligations, if any, due or to become due under the terms of the REA and there
has been no default or other wrongful act or omission by Seller under the REA,
except as follows: ____________-
__________________________________________________________________ . (If none,
please state "None.")
SECTION 9. INSURANCE.
To Seller's knowledge, all insurance, if any, required to be
maintained by REA Party under the REA is presently in effect.
SECTION 10. PENDING ACTIONS.
To Seller's knowledge, there are no actions, whether voluntary or
otherwise, pending against REA Party pursuant to the bankruptcy or insolvency
laws of the United States or any state thereof.
SECTION 11. SELLER'S OBLIGATIONS.
As of the date of this Certificate, Seller has performed all
obligations required of Seller pursuant to the REA; no offsets, counterclaims,
or defenses of REA Party under the REA exist against Seller; and no events have
occurred that,
L-3
<PAGE> 100
with the passage of time or the giving of notice, would constitute a basis for
offsets, counterclaims, or defenses against Seller, except as follows:
____________________________________________________________________
__________________________________________________________________ . (If none,
please state "None.")
SECTION 12. ASSIGNMENTS BY SELLER.
Seller has not assigned, hypothecated or pledged the REA, other than
to Seller's lender (Texas Commerce Bank National Association), which assignment
was made in connection with Seller's securing funds for the acquisition of the
Property and construction of certain improvements thereon, and which will be
released as of the Closing (as defined in the Purchase Agreement).
SECTION 13. ASSIGNMENTS BY REA PARTY.
REA Party has not assigned the REA or any portion thereof to any
assignee. The address for notices to be sent to REA Party is as set forth in
the REA.
SECTION 14. ENVIRONMENTAL MATTERS.
The operation and use of the Adjacent Property does not involve the
generation, treatment, storage, disposal or release into the environment of any
hazardous materials, regulated materials, and/or solid waste, except those used
in the ordinary course of operating a retail store or otherwise used in
accordance with all applicable laws.
SECTION 15. SELLER'S KNOWLEDGE.
Whenever the phrase "Seller's knowledge" or any similar phrase is used
in this Certificate, the meaning thereof is intended to have, and shall have,
the same meaning as the phrase "Seller's knowledge" set forth in Section 9.27
of the Purchase Agreement.
Seller makes this Certificate with the knowledge that it will be
relied upon by Buyer in agreeing to purchase the Property.
L-4
<PAGE> 101
Seller has executed this Certificate as of the date first written
above by the person named below, who is duly authorized to do so.
SELLER
LOOP ONE/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.,
General Partner
By: ________________________________
Thomas J. Terkel
Manager
L-5
<PAGE> 102
EXHIBIT "M"
NON-FOREIGN AFFIDAVIT
1. Section 1445 of the Internal Revenue Code of 1986, as amended
(the "IRC"), provides that a transferee of a United States real property
interest must withhold tax if the transferor is a foreign person.
2. In order to inform The Price REIT, Inc., a Maryland
corporation (the "Transferee"), that withholding of tax is not required upon
the disposition by Loop One/183, Ltd., a Texas limited partnership (the
"Transferor"), of the United States real property more particularly described
on Exhibit "A" attached hereto and incorporated herein by reference (the
"Property"), the undersigned Transferor certifies and declares by means of this
certification, the following:
a. The Transferor is not a foreign person, foreign
corporation, foreign partnership, foreign trust or
foreign estate (as such terms are defined in the IRC
and the Income Tax Regulations).
b. Transferor's federal taxpayer identification number
is:
______________________
c. Transferor's address is:
______________________________
______________________________
______________________________
3. Transferor understands that this certification may be
disclosed to the Internal Revenue Service by Transferee and that any false
statement contained in this certification may be punished by fine, imprisonment
or both.
M-1
<PAGE> 103
Under penalties of perjury, Transferor declares that it has carefully
examined this certification and it is true, correct and complete.
Executed this _____ day of ________, 1996 at ___________, Texas.
LOOP ONE/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.,
General Partner
By: ______________________________________
Thomas J. Terkel
Manager
M-2
<PAGE> 104
EXHIBIT "N"
NOTICE TO TENANTS
[Tenant's Name and Address]
Re: [Name of Lease], dated as of ________________
(the "Lease"), by and between _______________
("Tenant") and Loop One/183, Ltd., a Texas limited
partnership ("Loop One")
Dear Tenant:
Effective as of ___________, 1996, Loop One has sold the Arboretum
Crossing Power Center (and has assigned the Lease) to the Price REIT, Inc., a
Maryland corporation ("Purchaser"). In connection with such purchase and sale,
Purchaser has assumed Loop One's obligations as landlord under the Lease and
has also been transferred your security deposit in the amount of $__________.
All rent hereafter due should be made payable to Purchaser and
forwarded to the following address:
145 S. Fairfax Avenue, 4th Floor
Los Angeles, California 90036
Attention: Accounting Department
In addition, all inquiries you may have should be forwarded to
Purchaser at the above address.
Very truly yours,
LOOP ONE/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.,
General Partner
By: ______________________________
Thomas J. Terkel
Manager
N-1
<PAGE> 105
AGREED TO AND ACCEPTED:
THE PRICE REIT, INC.,
a Maryland corporation
By: ____________________________
Name:
Its:
N-2
<PAGE> 106
EXHIBIT "O"
NOTICE TO VENDORS
[Vendor's Name and Address]
Re: [Name of Service Contract], dated as of _________
(the "Service Contract"), by and between
____________ ("Vendor") and Loop One/183, Ltd.,
a Texas limited partnership ("Loop One")
Dear Vendor:
Effective as of _____, 1996 Loop One has sold the Arboretum Crossing
Power Center (and has assigned its rights in and to the Service Contract) to
the Price REIT, Inc., a Maryland corporation ("Purchaser").
Accordingly, you should make separate arrangements with Purchaser for
any services to be rendered to the Arboretum Crossing Power Center in
accordance with the terms of the Service Contract. All bills for services
rendered through [the Closing Date] should be tendered to Loop One.
All future notices and inquiries that you may have regarding the
Service Contract should be forwarded to Purchaser at the following address:
145 S. Fairfax Avenue, 4th Floor
Los Angeles, California 90036
Attention: Accounting Department
Very truly yours,
LOOP ONE/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.,
General Partner
By: ___________________________
Thomas J. Terkel
Manager
O-1
<PAGE> 107
AGREED TO AND ACCEPTED:
THE PRICE REIT, INC.,
a Maryland corporation
By: ____________________________
Name:
Its:
O-2
<PAGE> 108
EXHIBIT "P"
LEASE SCHEDULE
<TABLE>
<CAPTION>
BUILDING CURRENT COMMENCEMENT* EXPIRATION* SECURITY
BUILDING I AREA TERM RENTS DATE DATE DEPOSIT EXPENSES FREE RENT
- ---------- -------- ------- ------ ------------ ------------ -------- ---------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Suite A DSW Shoe Warehouse 18,900 10 Yrs. $14.00 3/1/97 2/28/07 N/A $1.25 CAM, No CAP N/A
Suite B Baby Superstore 40,000 15 Yrs. $ 9.85 11/1/96 10/31/11 N/A $.75 CAM 2 Months
Suite C Mikasa 15,000 15 Yrs. $15.25 11/15/96 10/31/11 N/A N/A
Suite D Circuit City 45,576 20 Yrs. $14.50 11/1/96 1/31/17 N/A $1.0 CAM&INS, 5% CAP N/A
Suite E Cost Plus 18,900 15 Yrs. $14.20 10/1/96 9/30/11 N/A $1.25 CAM, 10% CAP N/A
BUILDING II
- -----------
Suite A Party City 9,000 10 Yrs. $16.00 10/1/96 9/30/06 $14,437.50 $1.00 CAM N/A
Suite B Leather Leather 6,000 10 Yrs. $16.00 11/1/96 10/31/06 $ 9,500.00 $.75 CAM, No CAP N/A
BUILDING III
- ------------
Suite A Vacancy 3,500
Suite B Shaw Carpet ShowPlace 5,000 5 Yrs. $22.20 11/1/96 10/31/01
Suite C Barbeques Galore 5,000 5 Yrs. $21.60 11/1/97 12/31/01 N/A $1.00 CAM, No CAP N/A
BUILDING IV
- -----------
Just For Feet 15,675 15 Yrs. $19.51 2/1/97 1/31/96 N/A $1.25 CAM, 10% CAP N/A
-------
Total 182,551
</TABLE>
- --------------
* - Estimated dates; actual commencement and expiration dates will be based on
actual opening dates.
P-1
<PAGE> 109
EXHIBIT "Q"
APPROVALS
1. The recorded subdivision plat establishing the Land as its own separate
legal lot as recorded in Volume 96, Pages 296-297, of the Plat Records
of Travis County, Texas.
2. The Development Permit dated October 24, 1995, issued by the City of
Austin, Department of Planning and Development, a copy of which is
attached as Exhibit "Q-2".
3. Those Project Permits issued by the City of Austin, Department of
Planning and Development, copies of which are attached hereto as
Exhibits "Q-3" through "Q-8".
4. Letter dated April 11, 1996, addressed to Mr. Jon Andrus, of Cencor
Realty Services, from the Texas Natural Resource Conservation
Commission's Dan Pearson, Executive Director, relating, in part, to the
Water Pollution Abatement Plan for Arboretum Crossing dated January 10,
1996, prepared for Cencor Realty Services by Doucet & Associates, Inc.,
copies of which buyer, by its execution of the Agreement to which this
Exhibit Q is attached, acknowledges having received.
Q-1
<PAGE> 110
SHOAL CREEK Application
- -------------------- (DEVELOPMENT PERMIT) Date: 24 OCT 95
WATERSHED Department of Planning & Development ---------
Application is hereby made to the Director of the Department of Planning &
Development of the City of Austin, Texas for a permit to develop a site in
accordance with plans and specifications submitted herewith, and in full
conformity with provisions of the Land Development Code and all rules and
ordinances of the City of Austin whether specified herein or not. The location
and pertinent features of said development are as follows:
Project Name (or description): ARBORETUM CROSSING
------------------------------------------------
Project Address or Location Description: 9401 RESEARCH BLVD
---------------------------------------
Owner of Property: CENCOR REALTY SERVICES (JON ANDRUS)
------------------------------------------------------------
Address: 106 E. 6th ST, STE 200, AUSTIN, TX 78701 Telephone: (512)482-8383
---------------------------------------- -------------
Owner's Representative: DOUCET & ASSOCIATES (KEITH SCHAUER)
-------------------------------------------------------
Address: 1301 CAP OF TX HWY. SO, B-325, AUSTIN, TX 78746 Telephone:(512)329-8743
---------------------------------------------- -------------
Subdivision: Section Stock Lot
------------------------- -------- -------- --------
Application is hereby made for the following development: THIS PROJECT
---------------------
INCLUDES APPROX. 220,000 SQ. FT. OF RETAIL SPACE, APPROX. 4,500 SQ. FT. OF
- --------------------------------------------------------------------------------
RESTAURANT SPACE, 1,100 PARKING SPACES & OTHER SITE MODIFICATIONS.
- --------------------------------------------------------------------------------
CONDITIONS OF PERMIT
It is the responsibility of the permit holder to identify all utilities in the
work area and to notify each utility of the scope of work in the immediate area
of the utility.
Engineer's Certification: Inspection and a "Certification of Completion" by a
Texas Registered Professional Engineer is required
for the development approved by this Permit. No
Certificate of Occupancy may be approved until the
Engineer's Certification is filed. The engineer is
responsible for the adequacy of the plans submitted
with this application.
PLANNING DEPT.
- --------------------------------------------------------------------------------
Fee Stamp Special Conditions:
PAID --------------------------------------------------------
OCT 24, 1995
CITY OF AUSTIN --------------------------------------------------------
--------------------------------------------------------
Receipt #1718114
------------- --------------------------------------------------------
================================================================================
It is agreed that for and in consideration of the ------------------------
approval of this application, the proposed Approval:
development shall be performed and completed in
accordance with the plans and specifications as APPROVED
approved by the City of Austin and in accordance APR 05 1996
with the "City of Austin Standard Specification,"
State of Texas construction safety statutes and all By:
Code requirements of the City of Austin and as --------------------
delineated on this application. All plans and DEVELOPMENT SERVICES
specifications submitted by the applicant in ------------------------
connection with this application are hereby made NOT VALID UNLESS STAMPED
a part of this application. All development
approved by this permit is subject to the
inspection and control of the Departments of
Public Works and Transportation Services and
Environmental and Conservation Services of the
City of Austin.
[SIG] For CENCOR Date 4-5-96
- --------------------------- ------------- ----------------
Signature of Applicant (OWNER)
PERMIT EXPIRES 3 YEARS FROM DATE OF APPROVAL
EXHIBIT Q-2
<PAGE> 111
CITY OF AUSTIN - PROJECT PERMIT
<TABLE>
<CAPTION>
<S> <C> <C>
PERMIT NO. ADDRESS DATE
9608668 9333 RESEARCH BV A 06/13/96
- ------------------------------------------------------------------------------------------------------------------------------
????????? PERMIT CLERK
STONEBRIDGE IV, IVA VOLPE, M
- ------------------------------------------------------------------------------------------------------------------------------
???? ????? ???
0911
- ------------------------------------------------------------------------------------------------------------------------------
????? ????? ??????? PROPOSED OCCUPANCY
CS CO NEW SHELL BUILDING
????? ?????
- ------------------------------------------------------------------------------------------------------------------------------
????????? ???????? ????????? ???? ???? ???? ???? BLDG. # ????
SP-95-0414C 0018800 00338926.00 2N B2-2 B-2 D1
- ------------------------------------------------------------------------------------------------------------------------------
WORK PERMITTED ???????? ?????? ???????? ??????? ????
NEW
- ------------------------------------------------------------------------------------------------------------------------------
CONTRACTORS NAME PHONE FEE PAID DATE REQUIRED
CENCOR REALTY 482-8383 INSPECTIONS
OWNER/CONTR. WHITE CONSTRUCTION
BUILDING 1525.00 06/13/96 BUILDING
ELECTRICAL 490.00 ELECTRIC
MECHANICAL 245.00 MECHANIC
PLUMBING 260.00 PLUMBING
SIDEWALK DRIVE CONCRETE
SIGN ENGINEER
OTHER WATER
ARCH/ENGR. SEWER
????? TOTAL FEES TOTAL PAID FIRE
5397.00 4402.00 LANDSCAPE
- -------------------------------------------------------------------------------------------------------- ENERGY
C.O. MAILING ADDRESS
CENCOR REALTY PLAN CHECK 2877.00 05/02/96
106 EAST 6TH STREET
AUSTIN TX 78701
BY TAKING AND/OR PAYING FOR THIS PERMIT
APPLICATION, YOU ARE DECLARING YOU ARE THE
OWNER OR HAVE BEEN AUTHORIZED BY THE OWNER
REMARKS W#G63879,WW#134638*** OR OWNERS TO SUBMIT THIS APPLICATION, THAT
THE GIVEN DATA ARE TRUE FACTS AND THAT THE
WORK WILL CONFORM TO THE PLANS AND
SPECIFICATIONS SUBMITTED HEREWITH:
THIS IS A RECEIPT OF PAYMENT FOR FEE OR FEES
AS MARKED PAID.
CONTRACTOR'S COPY
</TABLE>
EXHIBIT Q-3
<PAGE> 112
CITY OF AUSTIN - PROJECT PERMIT
<TABLE>
<CAPTION>
PERMIT NO. ADDRESS DATE
<S> <C> <C>
9608674 9333 RESEARCH BV A 2 06/13/96
- ----------------------------------------------------------------------------------------------------------------
STONEBRIDGE IV, IVA VOLPE, M
- ----------------------------------------------------------------------------------------------------------------
09Y
- ----------------------------------------------------------------------------------------------------------------
PROPOSED OCCUPANCY
CS CO NEW SHELL BUILDING
- ----------------------------------------------------------------------------------------------------------------
SP-95-0414C 0042296 00867068.00 2N B2-2 B-2 O1
- ----------------------------------------------------------------------------------------------------------------
WORK PERMITTED
NEW
- ----------------------------------------------------------------------------------------------------------------
NAME PHONE FEE PAID DATE REQUIRED
C CENCOR REALTY 482-8383 INSPECTIONS
O OWNER-CONTR. WHITE CONSTRUCTION 3440.00 06/13/96 BUILDING
N BUILDING 795.00 ELECTRIC
T ELECTRICAL 430.00 MECHANIC
R MECHANICAL 410.00 PLUMBING
A PLUMBING ENGINEER
C SIDEWALK/DRIVE WATER
T SIGN SEWER
O OTHER ------------------------------------------------- FIRE
R ARCH/ENGR. TOTAL FEES TOTAL PAID LANDSCAPE
S 7225.00 5590.00 ENERGY
- ------------------------------------------------------------------------------------------
C.O. MAILING ADDRESS
CENCOR REALTY PLAN CHECK 2150.00 06/13/96
106 EAST 6TH STREET
SUITE #200
AUSTIN TX 78701
BY TAKING AND/OR PAYING FOR THIS PERMIT
APPLICATION, YOU ARE DECLARING YOU ARE THE
REMARKS W#G63879, WW#134638/PLAN REV OWNER OR HAVE BEEN AUTHORIZED BY THE OWNER
PD ON BLD#A1/CODE BY TL*** OR OWNERS TO SUBMIT THIS APPLICATION. THAT
THE GIVEN DATA ARE TRUE FACTS AND THAT THE
WORK WILL CONFORM TO THE PLANS AND
SPECIFICATIONS SUBMITTED HEREWITH:
THIS IS A RECEIPT OF PAYMENT FOR FEE OR FEES
AS MARKED PAID.
</TABLE>
CONTRACTOR'S COPY
EXHIBIT Q-4
<PAGE> 113
CITY OF AUSTIN - PROJECT PERMIT
<TABLE>
<S> <C> <C>
PERMIT NO. ADDRESS DATE
9608673 9333 RESEARCH BV A 3 06/13/96
- ----------------------------------------------------------------------------------------------
STONEBRIDGE IV, IVA VOLPE, M
- ----------------------------------------------------------------------------------------------
0911 1
- ----------------------------------------------------------------------------------------------
CS CO NEW SHELL BUILDING
- ----------------------------------------------------------------------------------------------
SP-95-0414C 0015000 00307500.00 2N B242 B-2 01
- ----------------------------------------------------------------------------------------------
NEW
- ----------------------------------------------------------------------------------------------
CONTRACTORS PHONE FEE PAID DATE REQUIRED
CENCOR REALTY INSPECTIONS
OWNER/CONTR. WHITE CONSTRUCTION 482-8383
1295.00 06/13/96 BUILDING
BUILDING 445.00 ELECTRIC
ELECTRICAL 205.00 MECHANIC
MECHANICAL 230.00 PLUMBING
PLUMBING ENGINEER
SIDEWALK/DRIVE WATER
SIGN SEWER
OTHER ------------------------------------------------ FIRE
ARCH/ENGR. TOTAL FEES TOTAL PAID LANDSCAPE
2175.00 1295.00 ENERGY
- ----------------------------------------------------------------------------------------------
C.O. MAILING ADDRESS
CENCOR REALTY
106 EAST 6TH STREET
SUITE #200
AUSTIN TX 78701 BY TAKING AND/OR PAYING FOR THIS PERMIT
APPLICATION, YOU ARE DECLARING YOU ARE THE
REMARKS: W#G63879, WW#134638/PLAN REV OWNER OR HAVE BEEN AUTHORIZED BY THE OWNER
PD ON BLD#A1/CODE BY TL*** OR OWNERS TO SUBMIT THIS APPLICATION. THAT
THE GIVEN DATA ARE TRUE FACTS AND THAT THE
WORK WILL CONFORM TO THE PLANS AND
SPECIFICATIONS SUBMITTED HEREWITH:
THIS IS A RECEIPT OF PAYMENT FOR FEE OR FEES
AS MARKED PAID.
</TABLE>
CONTRACTOR'S COPY
EXHIBIT Q-5
<PAGE> 114
CITY OF AUSTIN - PROJECT PERMIT
<TABLE>
<CAPTION>
<S> <C> <C>
PERMIT NO. ADDRESS DATE
9608672 9333 RESEARCH BV A 5 06/13/96
- ------------------------------------------------------------------------------------------------------------------------------
????????? PERMIT CLERK
STONEBRIDGE IV, IVA VOLPE, M
- ------------------------------------------------------------------------------------------------------------------------------
???? ????? ???
0911 1
- ------------------------------------------------------------------------------------------------------------------------------
????? ????? ??????? PROPOSED OCCUPANCY
CS CO NEW SHELL BUILDING
????? ?????
- ------------------------------------------------------------------------------------------------------------------------------
????????? ???????? ????????? ???? ???? ???? ???? BLDG. # ????
SP-95-0414C 0018900 00387450.00 2N B2-2 B-2
- ------------------------------------------------------------------------------------------------------------------------------
WORK PERMITTED ???????? ?????? ???????? ??????? ????
NEW
- ------------------------------------------------------------------------------------------------------------------------------
CONTRACTORS NAME PHONE FEE PAID DATE REQUIRED
CENCOR REALTY 482-8383 INSPECTIONS
OWNER/CONTR. WHITE CONSTRUCTION
BUILDING 1525.00 06/13/96 BUILDING
ELECTRICAL 395.00 ELECTRIC
MECHANICAL 220.00 MECHANIC
PLUMBING 205.00 PLUMBING
SIDEWALK DRIVE ENGINEER
SIGN WATER
OTHER SEWER
ARCH/ENGR. FIRE
????? TOTAL FEES TOTAL PAID LANDSCAPE
2345.00 1525.00 ENERGY
- --------------------------------------------------------------------------------------------------------
C.O. MAILING ADDRESS
CENCOR REALTY
106 EAST 6TH STREET
SUITE #200
AUSTIN TX 78701
BY TAKING AND/OR PAYING FOR THIS PERMIT
APPLICATION, YOU ARE DECLARING YOU ARE THE
OWNER OR HAVE BEEN AUTHORIZED BY THE OWNER
REMARKS W#G63880,WW#134639/PLAN REV OR OWNERS TO SUBMIT THIS APPLICATION. THAT
PD ON BLD#A1/CODE BY TL*** THE GIVEN DATA ARE TRUE FACTS AND THAT THE
WORK WILL CONFORM TO THE PLANS AND
SPECIFICATIONS SUBMITTED HEREWITH:
THIS IS A RECEIPT OF PAYMENT FOR FEE OR FEES
AS MARKED PAID.
</TABLE>
CONTRACTOR'S COPY
EXHIBIT Q-6
<PAGE> 115
CITY OF AUSTIN - PROJECT PERMIT
<TABLE>
<CAPTION>
<S> <C> <C>
PERMIT NO. ADDRESS DATE
9608671 9333 RESEARCH BV B 0 06/13/96
- ------------------------------------------------------------------------------------------------------------------------------
????????? PERMIT CLERK
STONEBRIDGE IV, IVA VOLPE, M
- ------------------------------------------------------------------------------------------------------------------------------
???? BLOCK LOT
0911 1
- ------------------------------------------------------------------------------------------------------------------------------
????? ????? ??????? PROPOSED OCCUPANCY
CS CO NEW SHELL BUILDING
????? ?????
- ------------------------------------------------------------------------------------------------------------------------------
??????? ??? ???????? ????????? ???? ???? ???? ???? ???? ???? ????
SP-95-0414C 0015060 00287000.00 2N B2-2 B-2 01
- ------------------------------------------------------------------------------------------------------------------------------
WORK PERMITTED ???????? ?????? ???????? ??????? ????
NEW
- ------------------------------------------------------------------------------------------------------------------------------
NAME PHONE FEE PAID DATE REQUIRED
CONTRACTORS CENCOR REALTY 482-8383 INSPECTIONS
OWNER/CONTR. WHITE CONSTRUCTION
BUILDING 1295.00 06/13/96 BUILDING
ELECTRICAL 315.00 ELECTRIC
MECHANICAL 210.00 MECHANIC
PLUMBING 185.00 PLUMBING
SIDEWALK/DRIVE ENGINEER
SIGN WATER
OTHER SEWER
ARCH/ENGR. FIRE
????? TOTAL FEES TOTAL PAID LANDSCAP
2005.00 1295.00 ENERGY
- --------------------------------------------------------------------------------------------------------
C.O. MAILING ADDRESS
CENCOR REALTY
106 EAST 6TH STREET
SUITE #200
AUSTIN TX 78701
BY TAKING AND/OR PAYING FOR THIS PERMIT
APPLICATION, YOU ARE DECLARING YOU ARE THE
OWNER OR HAVE BEEN AUTHORIZED BY THE OWNER
REMARKS W#G63881,WW#134640,PLAN REV OR OWNERS TO SUBMIT THIS APLICATION, THAT
PD ON BLD#A1/CODE BY TL*** THE GIVEN DATA ARE TRUE FACTS AND THAT THE
WORK WILL CONFORM TO THE PLANS AND
SPECIFICATIONS SUBMITTED HEREWITH:
THIS IS A RECEIPT OF PAYMET FOR FEE OR FEES
AS MARKED PAID.
</TABLE>
CONTRACTOR'S COPY
EXHIBIT Q-7
<PAGE> 116
CITY OF AUSTIN - PROJECT PERMIT
<TABLE>
<S> <C> <C>
PERMIT NO. ADDRESS DATE
9608669 9333 RESEARCH BV C 0 06/13/96
- ----------------------------------------------------------------------------------------------
???? PERMIT CLERK
STONEBRIDGE IV, IVA VOLPE, M
- ----------------------------------------------------------------------------------------------
???? LOT
0911 BLOCK 1
- ----------------------------------------------------------------------------------------------
???? ???? ???? PROPOSED OCCUPANCY
CS CO ???? ???? NEW SHELL BUILDING
- ----------------------------------------------------------------------------------------------
???? ???? ???? ???? ???? ???? ???? ???? ????
SP-95-0414C 0013500 00287000.00 2N B2-2 B-2 01
- ----------------------------------------------------------------------------------------------
WORK PERMITTED ???? ???? ???? ???? ????
NEW
- ----------------------------------------------------------------------------------------------
CONTRACTORS NAME PHONE FEE PAID DATE REQUIRED
INSPECTIONS
OWNER/CONTR. CENCOR REALTY 482-8383
WHITE CONSTRUCTION 1070.00 06/13/96 BUILDING
BUILDING 265.00 ELECTRIC
ELECTRICAL 140.00 MECHANIC
MECHANICAL 165.00 PLUMBING
PLUMBING ENGINEER
SIDEWALK/DRIVE WATER
SIGN SEWER
OTHER ------------------------------------------------ FIRE
ARCH/ENGR. ???? TOTAL FEES TOTAL PAID LANDSCAP
3790.00 3220.00 ENERGY
- ----------------------------------------------------------------------------------------------
C.O. MAILING ADDRESS ELECTRIC SERVICE 2150.00 06/13/96
CENCOR REALTY
106 EAST 6TH STREET
SUITE #200
AUSTIN TX 78701 BY TAKING AND/OR PAYING FOR THIS PERMIT
APPLICATION, YOU ARE DECLARING YOU ARE THE
REMARKS W#G63883,WW#134642,PLAN REV OWNER OR HAVE BEEN AUTHORIZED BY THE OWNER
PD ON BLD#A1/CODE BY TL*** OR OWNERS TO SUBMIT THIS APPLICATION, THAT
THE GIVEN DATA ARE TRUE FACTS AND THAT THE
WORK WILL CONFORM TO THE PLANS AND
SPECIFICATIONS SUBMITTED HEREWITH:
THIS IS A RECEIPT OF PAYMENT FOR FEE OR FEES
AS MARKED PAID.
</TABLE>
CONTRACTOR'S COPY
EXHIBIT Q-8
<PAGE> 117
EXHIBIT "R"
LITIGATION
None.
R-1
<PAGE> 118
EXHIBIT "S"
LEASE-UP PAYMENT SCHEDULE
================================================================================
Suite Containing Unleased Space Amount of Annual Base Rent
================================================================================
Suite B $16.00 per square foot
- --------------------------------------------------------------------------------
Suite C $14.00 per square foot
- --------------------------------------------------------------------------------
Suite D $13.00 per square foot
================================================================================
S-1
<PAGE> 119
EXHIBIT "T"
SCHEDULE OF PERSONAL PROPERTY
None.
T-1
<PAGE> 120
EXHIBIT "U"
SITE PLAN
U-1
<PAGE> 121
EXHIBIT ___
MASTER ASSIGNMENT OF AND AMENDMENT TO
PURCHASE AGREEMENTS
THIS MASTER ASSIGNMENT OF AND AMENDMENT TO PURCHASE AGREEMENTS
("Amendment") is made and entered into as of ___________, 1997, by and among (i)
LOOP 1/183, LTD., a Texas limited partnership ("Seller"), (ii) THE PRICE REIT,
INC., a Maryland corporation ("Assignor"), and (iii) PRICE/BAYBROOK, LTD., a
Texas limited partnership ("Buyer").
RECITALS
A. Seller and Assignor have entered into (i) that certain Phase I
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of October
10, 1996 (as amended, the "Phase I Purchase Agreement"), and (ii) that certain
Phase II Purchase and Sale Agreement and Joint Escrow Instructions, dated as of
October 10, 1996 (as amended, the "Phase II Purchase Agreement" and, together
with the Phase I Purchase Agreement, the "Purchase Agreements"). Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Purchase Agreements.
B. Pursuant to Section 16.5.2 of the Purchase Agreements, Assignor
has the right to assign the Purchase Agreements to an entity owned or controlled
by Assignor for the purpose of taking title to each Property.
C. Assignor now desires to assign and Buyer now desires to accept
assignment of and assume all of Assignor's right, title and interest in and to
the Purchase Agreements.
D. The parties also desire to amend the Purchase Agreements in
accordance with the terms and conditions hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Seller, Assignor and Buyer
hereby agree as follows:
AGREEMENT
1. ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENTS
a. Assignment. From and after the date hereof, Assignor
hereby irrevocably assigns, sets over, transfers and conveys to Buyer, its
successors and
<PAGE> 122
assigns, all of Assignor's right, title and interest in and to the Purchase
Agreements (the "Assignment").
b. Acceptance and Assumption. Buyer hereby accepts the
Assignment of the Purchase Agreements and the rights granted herein. Buyer
hereby expressly assumes, for itself and its successors, assigns and legal
representatives, all of the obligations and liabilities, fixed and contingent,
of Assignor under the Purchase Agreements.
c. Acknowledgement of Continuing Liability. Assignor hereby
acknowledges that, notwithstanding the Assignment, Assignor continues to be
liable for its obligations under the Purchase Agreements.
d. No Third Parties. Nothing expressed or implied in this
Section 1 is intended or shall be construed to confer upon or give to any person
or entity, other than the parties hereto and their successors or assigns, any
rights or remedies under or by reason of the Assignment.
2. AMENDMENTS TO PHASE I PURCHASE AGREEMENT
a. Legal Description. The Phase I Purchase Agreement is
hereby amended to delete Exhibit "B" attached thereto in its entirety and insert
Exhibit "A" attached hereto in lieu thereof.
b. Purchase Price. The parties hereby acknowledge and agree
that the Initial Purchase Price has been determined to be Twenty Three Million
One Hundred Fifty Seven Thousand Dollars ($23,157,000.00); provided, however,
that in the event that Seller fails to deliver to Buyer on or before the
thirtieth (30th) day following the Closing Date, a new Tenant Estoppel and an
amendment to the Just For Feet Lease, each executed by Just For Feet and each
indicating that the annual rent paid by Just For Feet pursuant to the terms of
its Lease (as amended) is Three Hundred Thirteen Thousand Ninety Six Dollars
($313,096.00), Seller shall immediately deliver to Buyer, the sum of Sixty Eight
Thousand Seven Hundred Forty Four Dollars ($68,744.00).
c. Closing Date. The Phase I Purchase Agreement is hereby
amended by deleting Section 8.1.1 thereof in its entirety and inserting the
following paragraph in lieu thereof:
"8.1.1 Closing Date. Subject to the provisions of this
Agreement, the Closing shall take place on February 4, 1997 or
on such other date as the parties hereto may agree."
2
<PAGE> 123
d. Qualified Leases. The Phase I Purchase Agreement is
hereby amended by deleting the first sentence of Section 7.1.11 thereof in its
entirety and inserting the following sentence in lieu thereof:
"On or before the Closing, at least 86% of the Property
shall have been leased pursuant to Qualified Leases."
e. Just For Feet.
(1) Rent. Notwithstanding anything to the contrary
contained in the Phase I Purchase Agreement, at the Closing, the sum of Seventy
Five Thousand Six Hundred Six Dollars and Fifty Six Cents ($75,606.56) (the
"Just For Feet Funds") shall be deducted from the Purchase Price payable to
Seller and shall be held in Escrow (and invested in accordance with the terms
hereof. The parties hereby acknowledge that although Just For Feet has entered
into a lease for a portion of the Property, Just For Feet will not be open for
business and will not be paying rent as of the Closing. The Parties hereby agree
(and instruct Escrow Agent) that until Escrow Agent receives written notice from
Buyer and Seller indicating that Just For Feet has commenced paying rent
pursuant to the terms of its lease (the "Rent Notice"), Escrow Agent shall
disburse to Buyer a portion of the Just For Feet Funds equal to the sum of
Thirty Thousand Six Hundred Sixty Two Dollars and Sixty Six Cents ($30,62.66)
(the "Monthly Payment") on the first day of each calendar month after the
Closing (and Buyer shall receive a credit against the Purchase Price paid at the
Closing for a portion of such amount for any partial month in which the Closing
occurs, in accordance with the terms of Section 8.5 of the Phase I Purchase
Agreement.) Upon Escrow Agent's receipt of the Rent Notice, Escrow Agent shall
promptly return any and all excess Just For Feet Funds (and any interest and
dividends earned thereon) to Seller. In the event that from time to time there
are insufficient Just For Feet Funds (and any interest and dividends earned
thereon) to Seller. In the event that from time to time there are insufficient
Just For Feet Funds to allow Escrow Agent to make any Monthly Payment to Buyer
in accordance with the terms hereof, then ten (10) days prior to the date on
which the next such Monthly Payment is due, then ten (10) days prior to the date
on which the next Monthly Payment is due, Escrow Agent shall deliver a written
notice to Seller and Buyer setting forth the amount of such insufficiency and
Seller shall (not later than five (5) Business Days after receiving such notice)
deliver the amount of such insufficiency into Escrow, which amount shall be
added to the Just For Feet Funds and paid to Buyer in accordance with the terms
of this paragraph.
(2) Dispute. The parties hereby acknowledge that a
dispute has arisen between Seller and Just For Feet in connection with a
potential delivery date penalty (the "Dispute"). Therefore, the parties hereby
acknowledge and agree that at the Closing, Ninety One Thousand Two Hundred
Twenty Eight Dollars and
3
<PAGE> 124
Sixty Eight Cents ($91,228.68) (the "Disputed Funds") shall be deducted from
the Purchase Price payable to Seller and shall be held in Escrow and disbursed
in accordance with the terms of Section 8.5.2 of the Phase I Purchase Agreement
(and invested in accordance with the terms of Section 2.1.3 of the Phase I
Purchase Agreement). Seller and Buyer acknowledge that the Disputed Funds (i)
relate to the Dispute in which Seller is presently engaged with Just For Feet
concerning the extent, if at all, that Just For Feet would be entitled to
receive liquidated damages from Seller by reason of Just For Feet's alleged
delay in Seller's delivery of the Just For Feet leased premises to Just For
Feet, (ii) the amount of the Disputed Funds referenced above represents the
maximum amount of liquidated damages claimed by Just For Feet and (iii) Seller
intends to dispute Just For Feet's entitlement to receive the Disputed Funds.
In light of the considerations expressed in the preceding sentence, Seller and
Buyer acknowledge and agree that the Disputed Funds shall be held in escrow by
Escrow Agent until such time as Escrow Agent receives written notice from
Seller and Just For Feet authorizing Escrow Agent to disburse the Disputed
Funds (together with any interest or dividends as shall have accrued thereon)
in such manner as shall be specified in such written notice. Notwithstanding
any provision contained in the Phase I Purchase Agreement which could be
construed otherwise and/or any disbursement of any Disputed Funds to Just For
Feet, Seller hereby acknowledges and agrees that (A) Seller retains and may
exercise the right to assert a claim against (including the right to bring a
lawsuit), and the right to defend any claim that may be brought against Seller
by, Just For Feet in connection with the underlying Dispute to which the
Disputed Funds relate and (B) Seller's indemnification of Buyer set forth in
Section 15 of the Phase I Purchase Agreement, shall apply to the Dispute and
shall survive the Closing.
f. Traffic Signalization and Sidewalks. Notwithstanding
anything to the contrary contained in the Phase I Purchase Agreement, the
parties hereby acknowledge and agree that Seller shall be responsible for the
construction of the traffic signalization system and the sidewalks adjacent to
MOPAC Expressway (and the payment of all costs in connection therewith up to
$100,000.00) until the earlier to occur of: (i) the "Closing" (as defined in the
Phase II Purchase Agreement); or (ii) the third (3rd) anniversary of the
"Closing" (as defined in the Phase II Purchase Agreement); or (ii) the third
(3rd) anniversary of the "Closing" (as defined in the Phase I Purchase
Agreement).
g. Shaw Carpet. Notwithstanding anything to the contrary
contained in the Phase I Purchase Agreement, the parties hereby acknowledge and
agree that Seller shall be required to deliver to Buyer a Tenant Estoppel from
Shaw Carpet as part of the Minimum Estoppel Requirement, in accordance with the
terms of Section 7.1.8 of the Phase I Purchase Agreement. Shaw Carpet shall not
be considered as a tenant in calculating the Purchase Price unless the Tenant
Estoppel
4
<PAGE> 125
from Shaw Carpet provides that (i) the lease for Shaw Carpet is in full force
and effect and (ii) Shaw Carpet has commenced paying rent in accordance with
the terms of such lease. Seller hereby agrees (a) to guaranty the payment of
all rent under the Shaw Carpet lease until the second (2nd) anniversary of the
Closing and (b) in the event that (1) the Shaw Carpet lease is terminated on or
prior to the second (2nd) anniversary of the Closing and (2) Seller consents to
such termination, to re-lease or sublease the Shaw Carpet space (at Seller's
sole cost and expense) on terms reasonably satisfactory to Buyer, for a rent
amount equal to or higher than the rent due under the Shaw Carpet lease.
h. Estoppels. Notwithstanding anything to the contrary
contained in the Phase I Purchase Agreement or in any written correspondence
previously sent from Assignor and/or Buyer to Seller disapproving Tenant
Estoppels previously obtained from one or more Tenants, the parties hereby
acknowledge and agree that Buyer's payment of the Purchase Price and acceptance
of the Deed at the Closing shall be deemed to be either (i) Buyer's approval of
all Tenant Estoppels from the Tenants or (ii) Buyer's waiver of the Minimum
Estoppel Requirement and any requirement under the Phase I Purchase Agreement
that Seller execute and deliver any Seller Estoppels.
i. Tenant Improvements. Notwithstanding anything to the
contrary contained in the Phase I Purchase Agreement, the parties hereby
acknowledge and agree that at the Closing, Two Hundred Forty Five Thousand
Dollars ($245,000.00) (the "TI Funds") shall be deducted from the Purchase Price
payable to Seller and shall be held in Escrow (and invested in accordance with
the terms of Section 2.1.3 of the Phase I Purchase Agreement). The parties
hereby agree (and instruct Escrow Agent) that upon, and in accordance with,
Buyer's written instructions, Escrow Agent shall disburse the TI Funds (in the
manner and in such amounts as Buyer may direct) to the following Tenants: (i) up
to $165,000.00 to Mikasa; (ii) up to $5,000.00 to Baby Superstore; and (iii) up
to $75,000.00 to Shaw Carpet. Following the last of all of the foregoing
disbursements, Escrow Agent shall deliver to Seller any remaining TI Funds and
any and all interest and dividends earned thereon. The parties further
acknowledge and agree as follows: (1) at the Closing, Escrow Agent shall deduct
Twenty Four Thousand Ninety Three Dollars ($24,093.00) from the Purchase Price
payable to Seller and shall immediately disburse such amount to Circuit City
(which amount represents one-half of Circuit City's costs in connection with
erecting certain common walls); and (2) the term "delinquent rents" or
"delinquent rentals" as used in Section 8.5.1 of the Phase I Purchase Agreement
shall include all amounts owed by Tenants under the terms of their Leases
(including, without, limitation, amounts owed in connection with tenant
improvements).
5
<PAGE> 126
j. Remaining Sitework. Notwithstanding anything to the
contrary contained in the Phase I Purchase Agreement, the parties hereby
acknowledge and agree that at the Closing, Forty Thousand Dollars ($40,000.00)
(the "Work Funds") shall be deducted from the Purchase Price payable to Seller
and shall be held in Escrow (and invested in accordance with the terms of
Section 2.1.3 of the Phase I Purchase Agreement). The parties hereby agree (and
instruct Escrow Agent) that upon, and in accordance with, Seller's written
instructions (which written instructions shall be delivered to Escrow Agent no
sooner than five (5) Business Days after Seller has delivered written notice of
any disbursement to Buyer) Escrow Agent shall disburse the Work Funds (in the
manner and in such amounts as Seller shall direct in its written instructions
to Escrow Agent) to the appropriate parties to pay for the following work
(which Seller hereby agrees to complete in accordance with the terms of the
Purchase Agreements): (i) constructing the fence around the sedimentation pond;
(ii) stabilizing the rear retaining wall; (iii) re-painting or re-striping the
parking lot; and (iv) improving the drainage in the detention pond in front of
the Cost Plus store. Following the last of all of the foregoing disbursements
and upon Escrow Agent's receipt of written notice from Buyer and Seller
regarding such fact, Escrow Agent shall deliver to Seller any remaining Work
Funds and any and all interest and dividends earned thereon.
k. Construction. Notwithstanding anything to the contrary
contained herein, the parties hereby acknowledge and agree that Seller shall
remain responsible, at its sole cost and expense, for the completion of the
construction of all Improvements on the Property in accordance with the
Construction Documents and the Purchase Agreements.
l. Easements. The parties hereby acknowledge that Seller
is in the process of amending (i) that certain Electric Utility Easement,
recorded on June 7, 1996, in Volume 12703, Page 1162, of the Real Property
Records of Travis County, Texas (so that it conforms with the actual location
of all poles) and (ii) the REA (so that it conforms with the terms of all of the
Leases). The parties further acknowledge that such amendments may not be
finalized on or before the Closing, in which event, Seller covenants and agrees
to finalize such amendments as soon as possible following the Closing, subject
to Buyers reasonable approval thereof.
m. Common Area Maintenance, Taxes and Insurance.
(1) No Proration. Notwithstanding anything to the
contrary contained in the Phase I Purchase Agreement, the parties hereby
acknowledge and agree that all expenses relating to common area maintenance,
insurance and taxes for the Property for 1997 (collectively, the "1997
Expenses"), and all reimbursements by
6
<PAGE> 127
Tenants therefor, shall not be prorated. At the Closing Seller shall deliver to
Buyer all invoices for the 1997 Expenses and all reimbursements for the 1997
Expenses that Seller has received prior to the Closing Date and Buyer shall be
responsible for paying all such 1997 Expenses to the appropriate parties and
collecting all additional 1997 Expenses from the Tenants.
(2) CAM. The parties hereby acknowledge that the
Initial Purchase Price specified herein has been calculated based upon, among
other things, (A) an assumption that the annual common area maintenance
expenses for the Property ("CAM") will equal One Dollar ($1.00) per square
foot of the Property for 1997 (the "Assumed CAM") and (B) the fact that the
maximum amount of annual reimbursements for CAM that can be collected from each
of Mikasa and Baby Superstore for 1997 pursuant to the terms of their Leases is
Seventy Five Cents ($.75) per square foot of the Property. The parties further
acknowledge that despite their assumption in clause (A) above, it is presently
unknown whether actual 1997 CAM will in fact equal the Assumed CAM. Therefore,
Seller and Buyer covenant and agree that, as soon as practicable following
December 31, 1997 (but in no event later than March 1, 1998), Buyer shall
determine the actual CAM for 1997 expressed in dollars (or, as applicable,
cents) per square foot of the Property (the "Actual CAM") and shall submit a
written statement of Actual CAM as so determined by Buyer to Seller (and such
statement shall be accompanied by reasonable substantiating documentation
establishing the Actual CAM reflected thereon). To the extent that the Actual
CAM exceeds the Assumed CAM, Seller shall, within thirty (30) days of Seller's
receipt of a written request from Buyer, remit to Buyer an amount equal to the
quotient obtained by dividing the Excess Amount (as hereinafter defined) by
.10475, and (ii) to the extent that the Actual CAM is less than the Assumed
CAM, Buyer shall, within thirty (30) days of Buyer's receipt of a written
request from Seller, remit to Seller an amount equal to the quotient obtained
by dividing Deficiency Amount (as hereinafter defined) by .10475. As used
herein, the term "Excess Amount" shall mean the product of (a) the difference
between the Actual CAM and the Assumed CAM multiplied by (b) the square footage
of the leased premises of Mikasa and Baby Superstore. As used herein, the term
"Deficiency Amount" shall mean the product of (1) the difference between the
Assumed CAM and the greater of (y) the Actual CAM and (z) Seventy Five Cents
($.75) multiplied by (2) the square footage of the leased premises of Mikasa
and Baby Superstore.
3. AMENDMENT TO PHASE II PURCHASE AGREEMENT.
a. Legal Description. The Phase II Purchase Agreement is
hereby amended to delete Exhibit "B" attached thereto in its entirety and
insert Exhibit "B" attached hereto in lieu thereof.
7
<PAGE> 128
4. MISCELLANEOUS.
a. Governing Law. This Amendment and the legal relations
of the parties hereto shall be governed by and construed and enforced in
accordance with the laws of the State of Texas, without regard to its
principles of conflicts of law.
b. Effect of Amendment. In the event of any inconsistency
between the terms of the Phase I Purchase Agreement and the terms of Section 2
of this Amendment, the terms of Section 2 of this Amendment shall prevail. In
the event of any inconsistency between the terms of the Phase II Purchase
Agreement and the terms of Section 3 of this Amendment, the terms of Section 3
of this Amendment shall prevail.
c. Ratification. Except as otherwise expressly modified
hereby, the Purchase Agreements shall remain in full force and effect, and all
of the terms and provisions of the Purchase Agreements, as herein modified and
assigned, are hereby ratified and reaffirmed.
d. Attorneys' Fees. In the event that either party hereto
brings an action or proceeding against the other party to enforce or interpret
any of the covenants, conditions, agreements or provisions of this Amendment,
the prevailing party in such action or proceeding shall be entitled to recover
all costs and expenses of such action or proceeding, including, without
limitation, attorneys' fees, charges, disbursements and the fees and costs of
expert witnesses.
e. Counterparts. This Amendment may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument. Additionally, the parties hereby covenant and agree that, for
purposes of facilitating the execution of this Amendment, a facsimile signature
shall be deemed to be an original signature and a telecopy delivery (i.e., the
transmission by any party of its signature on an original or any copy of this
Amendment via telecopy or fax machine) shall be deemed to be the delivery of
such party's original signature.
8
<PAGE> 129
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the day and year first above written.
SELLER:
LOOP 1/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.
Its: General Partner
By:
---------------------------
Thomas J. Terkel
Manager
ASSIGNOR:
THE PRICE REIT, INC.,
a Maryland corporation
By: /s/ [SIG]
---------------------------
Name: Jerald Friedman
Its: Sr. Exec. V.P.
BUYER:
PRICE/BAYBROOK, LTD.,
a Texas limited partnership
By: PRICE/TEXAS, INC.,
a Texas corporation
Its: General Partner
By: /s/ [SIG]
---------------------------
Name: Jerald Friedman
Its: Vice President
<PAGE> 130
EXHIBIT "A"
(To be attached as Exhibit "B" to the Phase I Purchase Agreement)
LEGAL DESCRIPTION
TRACT 1: Lot 1. of ARBORETUM CROSSING, a subdivision in Travis County, Texas,
according to the map or plat of record in Volume 96, Pages 296-297, of the Plat
Records of Travis County, Texas.
TRACE 2-A: Easement rights as described in Article II, Section 2.01, Section
2.02 and Section 2.03 of the Amended and Restated Reciprocal Easement Agreement
dated __________ by Loop 1/183, Ltd., of record in Volume _____, Page _____ of
the Real Property Records of Travis County, Texas, over and across Lot 2, of
Arboretum Crossing, a subdivision in Travis County, Texas, according to the map
or plat of record in Volume 96, Pages 296-297, of the Plat Records of Travis
County, Texas.
TRACT 2-B: Easement rights as described in Article II, Section 2.01, Section
2.02 and Section 2.03 of Amended and Restated Reciprocal Easement Agreement
dated __________ by Loop 1/183, Ltd., of record in Volume _____, Page _____ of
the Real Property Records of Travis County, Texas, over and across Lot 3, of
Arboretum Crossing, a subdivision in Travis County, Texas, according to the map
or plat of record in Volume 95, Pages 296-297, of the Plat Records of Travis
County, Texas.
TRACT 3: Easement rights of access over and across Lot 1-A, of Resubdivision of
Lot 1, Stonebridge IV, a subdivision in Travis County, Texas, according to the
map or plat of record in Volume 93, Pages 391-392 of the Plat Records of Travis
County, Texas, as described in Reciprocal Access Easement of record in Volume
12279, Page 713 of the Real Property Records of Travis County, Texas.
A-1
<PAGE> 131
EXHIBIT "B"
(To be attached as Exhibit "B" to the Phase II Purchase Agreement)
LEGAL DESCRIPTION
TRACT: Lots 2 and 3, of ARBORETUM CROSSING, a subdivision in Travis County,
Texas, according to the map or plat of record in Volume 96, Page(s) 296-297 of
the Plat Records of Travis County, Texas.
TRACT 2: Easement rights as described in Article II, Section 2.01, Section 2.02
and Section 2.03 of the Amended and Restated Reciprocal Easement Agreement
dated __________ by Loop 1/183, Ltd., of record in Volume _____, Page _____ of
the Real Property Records of Travis County, Texas, over and across Lot 1, of
Arboretum Crossing, a subdivision in Travis County, Texas, according to the map
or plat recorded in Volume 96, Page(s) 296-297 of the Plat Records of Travis
County, Texas.
TRACT 3: Easement rights of access over and across Lot 1-A, of Resubdivision of
Lot 1 Stonebridge IV, a subdivision in Travis County, Texas, according to the
map or plat of record in Volume 93, Page(s) 391-392 of the Plat Records of
Travis County, Texas, as described in reciprocal Access Easement of Record in
Volume 12279, Page 713 of the Real Property Records of Travis County, Texas.
B-1
<PAGE> 132
EXHIBIT ____
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Allan G. Mutchnik, Esq.
- --------------------------------------------------------------------------------
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT (this "Memorandum") is made and entered
into as of April 1, 1997, by and between LOOP 1/183, LTD., a Texas limited
partnership ("Loop"), and PRICE/BAYBROOK, LTD., a Texas limited partnership
("Price").
RECITALS
WHEREAS, Loop and Price's predecessor-in-interest are parties to that
certain Phase I Purchase and Sale Agreement and Joint Escrow Instructions, dated
as of October 10, 1996 (as amended and assigned, the "Purchase Agreement"),
pursuant to which Price may have the right to place a lien (the "Lien") against
the property identified on Exhibit "A" attached hereto (the "Property"); and
WHEREAS, Loop and Price have agreed to enter into this Memorandum for
purposes of giving notice of the potential Lien.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and in the Purchase Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Loop and Price hereby agree as follows:
AGREEMENT
1. Lien. In accordance with the terms of the Purchase Agreement,
Price shall have the right to place and enforce a Lien against the Property in
connection with Loop's obligation to reimburse Price for any of "Buyer's
Driveway Costs" (as defined in the Purchase Agreement) which Price may incur
under the Purchase Agreement.
2. Notice. The purpose of this Memorandum is to give notice of the
potential Lien; however, the Lien will not actually attach to, or be enforceable
<PAGE> 133
against, the Property until such time as Price's claim for such Lien is
recorded, it being understood, agreed and acknowledged that for purposes of
determining the priority of such Lien (if such Lien subsequently attaches to the
Property), it shall be subordinate and inferior to other liens and encumbrances
recorded prior to the recordation of Price's claim for the Lien. This Memorandum
is not intended to set forth all of the terms and conditions of the Lien or
Price's rights with respect thereto, for which reference must be made to the
complete Purchase Agreement in the hands of Loop and Price.
3. Miscellaneous. The covenants, conditions, and agreements
contained in the Purchase Agreement and in this Memorandum shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. This Memorandum may be executed in as many counterparts as may be
deemed necessary and convenient, and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum as
of the day first above written.
LOOP:
LOOP 1/183, LTD.,
a Texas limited partnership
By: Loop 1/183 One, L.C.
Its: General Partner
By:
---------------------
Thomas J. Terkel
Manager
2
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PRICE:
PRICE/BAYBROOK, LTD.,
a Texas limited partnership
By: PRICE/TEXAS, INC.,
a Texas corporation
Its: General Partner
By: /s/ JERALD FRIEDMAN
---------------------
Name: Jerald Friedman
Its: Vice President
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<PAGE> 135
THE STATE OF TEXAS )
)
COUNTY OF TRAVIS )
This instrument was acknowledged before me on the ____ day of
_______________________, 1997, by Thomas J. Terkel, as Manager of Loop 1/183
One, L.C., the General Partner of Loop 1/183, Ltd., a Texas limited partnership.
[SEAL]
---------------------------------
Notary Public in and for
the State of Texas
---------------------------------
(Printed Name of Notary)
My commission expires: __________
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STATE OF CALIFORNIA )
) :ss.
COUNTY OF LOS ANGELES )
On the 1st day of April, 1997, before me, Sylvia Rosemond, Notary
Public, personally appeared Jerald Friedman personally known to me to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
[SIG]
- -------------------------------------
(SEAL)
----------------------------
SYLVIA ROSEMOND
COMMISSION #1104608
NOTARY PUBLIC - CALIFORNIA
LOS ANGELES COUNTY
MY COMM. EXPIRES JUL 2, 2000
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EXHIBIT "A"
LEGAL DESCRIPTION
TRACT 1: Lots 2 and 3, of ARBORETUM CROSSING, a subdivision in Travis County,
Texas, according to the map or plat of record in Volume 96, Page(s) 296-297 of
the Plat Records of Travis County, Texas.
TRACT 2: Easement rights as described in Article II, Section 2.01, Section 2.02
and Section 2.03 of the Amended and Restated Reciprocal Easement Agreement
dated _________________ by Loop 1/183, Ltd., of record in Volume ______, Page
_____ of the Real Property Records of Travis County, Texas, over and across Lot
1, of Arboretum Crossing, a subdivision in Travis County, Texas, according to
the map or plat recorded in Volume 96, Page(s) 296-297 of the Plat Records of
Travis County, Texas.
TRACT 3: Easement rights of access over and across Lot 1-A, of Resubdivision of
Lot 1 Stonebridge IV, a subdivision in Travis County, Texas, according to the
map or plat of record in Volume 93, Page(s) 391-392 of the Plat Records of
Travis County, Texas, as described in Reciprocal Access Easement of record in
Volume 12279, Page 713 of the Real Property Records of Travis County, Texas.
A-1
