AGREEMENT FOR PURCHASE AND SALE
This Agreement For Purchase and Sale ("Agreement") is made as of
the
last date written below by and between ACI
FINANCING, L.L.C., a Missouri limited
liability company ("Seller"), and DBSI
HOUSING INC., an Idaho corporation, its
nominee or assigns ("Purchaser") (sometimes
collectively referred to herein as
the "Parties").
1.
Definitions. As used in this Agreement, the following terms shall
have
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the following meanings:
1.1 "Property"
means:
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(a) the Real
Property located at 330 South 108th Avenue,
Omaha, Nebraska, and more particularly
described on Exhibit "A" attached hereto
and incorporated herein by reference,
together with any and all improvements
thereon and appurtenances thereto (the
"Realty");
(b) the
personal property associated with the ownership,
operation and maintenance of the Realty,
and owned by Seller, if any (the
"Personalty"); and
(c) all right,
title, and interest, if any, in intangible
personal property, including, without
limitation:
1. leases with tenants;
2. assignable warranties and guarantees on property
purchased, if any;
3. assignable licenses, permits, governmental
approvals or similar documentation;
4. the name "ACI Building", and any telephone numbers
associated therewith, related
trademarks,
service marks;
5. rights-of-way, rights of ingress and egress;
6. drawings, plans, specifications, and other
architectural and engineering work
product;
7. security and other reserve and deposit accounts
made as security for the fulfillment of any
of
Seller's obligations;
8. assignable guaranties, warranties, or other
assurances of performance received.
Agreement for Purchase and Sale
Page 1
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1.2
"Escrow Holder" means Assured Quality Title Company.
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1.3
"Title Insurer" means Assured Quality Title Company.
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1.4
"Seller's knowledge". Wherever the phrase "Seller's knowledge",
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"to the best of Seller's knowledge", or "to Seller's knowledge" or similar
phrase is used herein, such phrase shall be interpreted as referring to the
actual knowledge of Seller and Seller's
agents.
1.5
"Effective Date" means the date on which an original of this
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Agreement has been signed by and delivered
to both Purchaser and Seller.
1.6 "Closing". Closing
shall be deemed to have occurred at such
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time as the Escrow Holder is in receipt of
all Closing Documents
(as defined in
Section 9 herein) and is able to comply
with Seller's and
Purchaser's
closing
instructions. In no event shall Closing occur prior to the date set forth
in
Section 6 below, unless otherwise agreed to
in writing by the Parties.
2.
Purchase and Sale. Seller agrees to sell to Purchaser, and
Purchaser
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agrees to purchase from Seller, fee simple
title to all of Seller's right,
title, and interest in and to the Property,
on the terms and conditions set
forth in this Agreement.
3.
Purchase Price. The Purchase Price for the Property is Eight
Million
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Two Hundred Two Thousand Five Hundred and
00/100 Dollars ($8,202,500.00).
3.1 Earnest
Money. Purchaser shall deposit with Escrow Holder
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Earnest Money in the sum of Fifty Thousand
and 00/100 Dollars ($50,000.00)
within five (5) business days of the
Effective Date of this Agreement, and an
additional Fifty Thousand and 00/100
Dollars ($50,000.00) within five (5)
business days of Purchaser's approval of
its Due Diligence Review of the
Property (as defined below). Except as
otherwise provided in this Agreement,
upon Purchaser's deposit of the additional
Earnest Money, the Earnest Money
shall become nonrefundable.
3.2 Escrow
Holder shall deposit the Earnest Money in an insured,
interest-bearing account. All Earnest Money
and accrued interest ("Earnest
Money") shall be applied to the Purchase
Price at Closing. The Earnest Money and
accrued interest shall be refundable and
returned to Purchaser without further
instruction from either party to the Escrow
Holder, and any and all rights or
obligations of Seller and Purchaser under
this Agreement shall terminate and be
of no further force or effect at such time
as Purchaser has or is deemed to have
rejected the Property or otherwise
terminated this Agreement as otherwise
provided in this Agreement.
3.3 Balance of
Purchase Price. On or before Closing, Purchaser
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shall deposit with Escrow Holder the
balance of the Purchase Price in cash or
other immediately available funds, plus any
other sums necessary to close, less
the balance of the existing loan to be
assumed by Purchaser from Principal
Commercial Funding, LLC, a Delaware limited
liability company ("Lender") with an
outstanding balance of approximately Four
Million One Hundred Thousand
Agreement for Purchase and Sale
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and 00/100 Dollars ($4,100,000.00) (as of
December 2002) at the interest rate of
8.63% per annum, and maturing August 1,
2010.
4. Title and Title
Insurance.
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4.1 At
Closing, title shall be free of (and title insurance shall
insure that title is free of) liens,
encumbrances, easements or defects, except
instruments of record listed as exceptions
to Title that are approved in writing
by Purchaser ("Permitted Exceptions"),
pursuant to Section 4.2 below.
4.2
Within ten (10) days following the Effective Date of this
Agreement, Seller will request and make
arrangements with Title Insurer to make
available to Purchaser a commitment for
title insurance ("Preliminary
Commitment"), along with legible copies of
all listed exceptions issued by Title
Insurer showing the condition of Seller's
title to the Realty. Purchaser shall
give written notice to Seller (on or before
twenty (20) days following the date
of receipt of Seller's most current
existing ALTA survey, the Preliminary
Commitment and legible copies of all listed
exceptions) of any listed exceptions
in Seller's title to which Purchaser
objects in its sole discretion
("Purchaser's Objection Notice"). Within
ten (10) days of receipt of Purchaser's
Objection Notice, Seller shall notify
Purchaser in writing ("Seller's Exception
Notice") whether Seller intends to remove
prior to Closing the listed exceptions
to title to which Purchaser objects;
provided, however, that Seller shall not be
obligated to incur any expense or liability
in connection with the attempted
removal of such exceptions. In the event
Seller notifies Purchaser that Seller
will remove any of the listed exceptions
objected to by Purchaser, Seller shall
have removed all such listed exceptions on
or before Closing. In the event
Seller notifies Purchaser that Seller will
not remove any or all of the listed
exceptions objected to by Purchaser,
Purchaser must elect to accept such listed
exceptions in Seller's title as Seller
declines or fails to cure or,
alternatively, elect to terminate this
Agreement by delivering written notice to
Seller within ten (10) days following
Seller's Exception Notice. Notwithstanding
any provision otherwise provided in this
Agreement to the contrary, in the event
Purchaser so elects to terminate this
Agreement, Escrow Holder shall refund the
Earnest Money and accrued interest to
Purchaser without further instruction from
either party, and any and all rights or
obligations of Seller and Purchaser
under this Agreement shall terminate and be
of no further force or effect,
except as otherwise set forth herein. If
Purchaser does not receive Seller's
Exception Notice within the time required
above, Seller shall be deemed to have
declined to cure the listed exceptions set
forth in the Purchaser's Objection
Notice.
Notwithstanding the foregoing, Purchaser shall have the right
to object to any additional title matters
that appear on a new survey or update
of the existing survey that did not appear
on Seller's existing survey
("Additional Title Matters") within five
(5) business days after Purchaser's
receipt of such new ALTA or equivalent TLTA
survey or update of the existing
survey. The parties shall deal with the
Additional Title Matters as set forth
above in this Section 4.2.
4.3
Title Insurer shall deliver to Purchaser at Closing, an
extended Form ALTA owner's policy of title
insurance insuring Purchaser's fee
simple title to the Realty in the face
Agreement for Purchase and Sale
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amount of the purchase price containing no exceptions
other than the
Permitted
Exceptions ("Title Policy"). Seller agrees to provide affidavits and/or
indemnities as required to obtain such
coverage.
5. Due
Diligence Period/Right of Entry.
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5.1 For a
period of sixty (60) days from the Effective Date ("Due
Diligence Period"), Purchaser and its
representatives shall, at its sole
expense, conduct its due diligence review
which may include, without limitation,
entry upon the Realty to make inspections,
investigations, and other
examinations of the Property, including any
third party inspections,
investigations, and other examinations not
provided by Seller, and all books,
records, and files relating to the
Property, including the documents listed on
Exhibit "B" attached hereto and
incorporated herein (the "Due Diligence
Documents"). Seller shall provide Purchaser
with the Due Diligence Documents, in
Seller's possession or economically
attainable by Seller, within three (3) days
of the Effective Date. Purchaser shall have
the entire Due Diligence Period to
perform and complete its due diligence
review. Purchaser may extend the Due
Diligence Period an additional thirty (30)
days for the sole purpose of
obtaining the Lender's Approval Notice as
defined in Section 6.1(b) below.
5.2 Such
inspections and review may include, without limitation, a
review, inspection, and acquisition of the
following: structural matters; the
roof; the HVAC; the mechanical and
electrical systems of the Property; the
environmental condition of the Property;
all title documents; tenant leases; all
government permits and approvals; the area
where the Property is located; the
past and potential financial performance of
the Property including the latest
three (3) years' financial
records/operating statements; the availability of
government permits and approvals;
suitability of the surrounding amenities; soil
conditions; and all other matters affecting
the feasibility of the Property for
Purchaser's intended purpose and other
examinations of the Property; and the
documents listed on Exhibit "B" ("Due
Diligence Review").
5.3 If
Purchaser wishes to inspect portions of the Realty occupied
by tenants, Purchaser shall give reasonable
notice to Seller of the time for
inspection, and Seller shall give advance
notice to such tenants. Neither the
Purchaser nor its broker or any affiliates
will contact any of the tenants or
their representatives without the Seller's
prior written consent. Purchaser
shall indemnify, defend, and hold Seller
and the Property harmless from and
against physical damage to the Property
directly caused from Purchaser's entry
on or about the Property pursuant to this
Section 5, excepting such damage
resulting from the Seller's
misrepresentation, breach of warranty, conditions
existing on the Property, or Seller or its
agent's own misconduct or negligence.
Purchaser shall immediately repair and
restore any damage caused by any such
activities. Seller represents and warrants
that Seller has the right and
authority to grant Purchaser these
rights.
5.4
Seller hereby grants to Purchaser access to the Property for
the purposes of this Section 5, subject to
the conditions imposed herein.
Agreement for Purchase and Sale
Page 4
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5.5
Notwithstanding any provision in this Agreement to the
contrary, in the event the results of the
Due Diligence Review are not
satisfactory to Purchaser for any reason
whatsoever, in Purchaser's unrestricted
and sole discretion, this Agreement shall
terminate, as provided below, and
Escrow Holder shall return all Earnest
Money to Purchaser without further
instruction from either party hereto.
5.6 On
or before the expiration of the Due Diligence Period,
Purchaser shall either: (1) notify Seller
in writing that it accepts the
Property and place into escrow the
additional Earnest Money, subject any
remaining Conditions to Close set forth in
Section 6.1 hereof; or (2) advise
Seller that Purchaser is not satisfied with
the Property and all Earnest Money
will be returned to Purchaser as set forth
herein. Purchaser's failure to notify
Seller in writing within the Due Diligence
Period that Purchaser is satisfied
with the Property shall be deemed
Purchaser's dissatisfaction and disapproval
thereof.
6.
Conditions to Close and Closing. The following are conditions
precedent
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("Condition(s) to Close"), each of which
must be satisfied fully or waived in
writing by Purchaser in its sole discretion
before Purchaser is obligated to
purchase the Property and before any
Earnest Money becomes nonrefundable. All
Conditions must remain satisfied (if not
waived) as of Closing, which Conditions
are for Purchaser's sole benefit and may be
waived only by Purchaser. Should the
Conditions to Close remain unsatisfied on
the date of Closing, Purchaser may
choose to waive such remaining Conditions
to Close in writing and proceed with
Closing. Notwithstanding any provision in
this Agreement to the contrary, should
Purchaser choose not to waive the remaining
Conditions to Close, Escrow Holder
shall return all Earnest Money to Purchaser
without further instruction from
either party hereto, and, except as
specifically provided herein, all rights and
obligations of Seller and Purchaser under
this Agreement shall terminate and be
of no further force or effect.
6.1 Conditions
to Close. The
Conditions to Close are:
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(a) On or before the expiration of the Due Diligence Period,
Purchaser's approval, in its sole
discretion, of the form and terms of any
Existing Loan on the Property.
(b) Lender's
unconditional written
approval of Purchaser's
assumption of any Existing Loan ("Lender's
Approval Notice"),
and consummation
of such assumption of the Existing Loan on or before Closing, in which case
Purchaser will be responsible for all costs of assumption and mortgage
insurance.
(c) On or before the expiration of the Due Diligence Period,
Purchaser's approval of a current ALTA
survey of the Property to be obtained and
paid for by Seller, prepared by a surveyor
licensed in the state in which the
Property is located, in form and content
(including certification) satisfactory
to Purchaser. The legal description on the
survey shall be the description used
in the deed conveying the Property to
Purchaser and in the title insurance
policy.
Agreement for Purchase and Sale
Page 5
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(d) The Title Insurer is unconditionally prepared to issue to
Purchaser or its nominee, at Closing, an
ALTA Owner's Extended Coverage Title
Policy (or equivalent extended coverage) in
the full amount of the Purchase
Price, insuring fee simple title to the
Property to be vested in Purchaser or
its nominee, together with endorsements
available to Purchaser, subject only to
the Permitted Exceptions ("Title
Policy").
(e) On or before the expiration of the Due Diligence Period,
Purchaser or Purchaser's lender obtaining
an acceptable appraisal of the
Property indicating a value at least equal
to the Purchase Price.
(f) Seller delivering to Escrow Holder on or before the date
scheduled for Closing a duly executed,
acknowledged, and recordable Special
Warranty Deed conveying fee simple title to
Purchaser subject only to the
Permitted Exceptions of record.
(g) Purchaser's approval of estoppel certificates from all
tenants of the Property which have leases
with expiration dates ending in 2004
or beyond or have an option to renew that
would carry into or past 2004, which
estoppel certificates shall be delivered at
least five (5) business days prior
to Closing in a form reasonably approved by
the Purchaser. Said estoppel
certificates shall confirm, without
limitation, that (1) the lease (to be
attached to the estoppel) is in full force
and effect with no default existing;
(2) the amount of the rent is correct and
current; (3) the rent payment terms
have not been altered; and (4) that such
tenants have no claims against Seller.
Should Seller fail to provide such tenant
estoppel certificates prior to
Closing, Purchaser may terminate this
Agreement and Escrow Holder shall return
all Earnest Money to Purchaser without
further instruction from either party.
(h) There has been no material adverse change in the condition
of the Property between the date of
expiration of the Due Diligence Period and
the Closing, normal wear and tear
excepted.
6.2
Closing. Except as otherwise provided in this Agreement,
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Closing shall occur in escrow in the office
of Escrow Holder within thirty (30)
days after Purchaser's receipt of Lender's
Approval Notice and lender's final
assumption checklist). Purchaser or Seller
may extend the Closing date an
additional thirty (30) days for purposes of
finalizing the assumption or their
respective 1031 exchange.
6.3 At
Closing, Seller shall convey fee simple title to Purchaser
or its nominee by recordable Special
Warranty Deed, subject only to the
Permitted Exceptions of record.
6.4 Any
expenditure, commitment, or other action taken by Seller
or Purchaser pursuant to this Agreement, or
otherwise in contemplation of the
Closing, is taken by it at its own risk. No
such expenditure, commitment, or
action shall obligate Purchaser to purchase
the Property unless and until all
Conditions to Close are satisfied or waived
as provided herein.
Agreement for Purchase and Sale
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7.
Prorations.
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7.1 Real
property taxes shall be prorated as of Closing based
upon a three hundred sixty-five (365) day
year. At Closing, Purchaser shall be
given a credit for all such taxes and
assessments which occur prior to Closing
but which are not yet due. All payments and
installments due through the Closing
Date on bonds, special taxes, or
assessments shall be paid by Seller.
7.2
All rents and charges due under leases of the Property shall
be prorated as of Closing based upon
figures supplied to the Escrow Holder by
Seller and reasonably approved by
Purchaser. If, at Closing, there are any past
due rents or charges owed by tenants with
respect to periods prior thereto,
Purchaser shall not pay to Seller, in
addition to the Purchase Price, the amount
of such delinquencies; but Purchaser shall
thereafter account to Seller for any
sums received from such tenants. If Seller
receives any prepaid rents or other
charges from tenants applicable to periods
after Closing, then Purchaser shall
be credited through escrow with such rents
and charges or, if received after
Closing, such amounts shall be paid
promptly to Purchaser.
7.3
Purchaser shall be credited through escrow with the amount
of any refundable or nonrefundable tenant
security deposits and any other
refundable or nonrefundable tenant deposits
or fees previously received by
Seller or on behalf of Seller that have not
been, as of Closing, expended or
applied to tenant obligations pursuant to
the leases, including, without
limitation, cleaning deposits. "Credit
check" fees shall not be considered to be
a tenant deposit or fee.
7.4
Water, electricity, gas, and other utility payments or
charges shall not be adjusted through
escrow if readings can be made at Closing
by the utility companies. Purchaser agrees
to open accounts with the respective
utilities and to cooperate with Seller in
requesting readings on Closing. In the
event that appropriate readings cannot
possibly be obtained as of Closing, then
adjustments shall be made by Purchaser and
Seller through escrow on the basis of
estimates from the latest bills
available.
7.5
All other expense and income associated with the Property
shall be adjusted through escrow, based
upon figures supplied by Seller and
reasonably approved by Purchaser. Seller
and Purchaser shall each provide
preliminary figures to the other no later
than five (5) days prior to Closing.
7.6
Seller shall assume and pay all debts, charges, claims,
damages, and liabilities attributable to
leases or the operation of the Property
accruing and/or arising prior to Closing
and shall hold Purchaser harmless
therefrom and indemnify and defend against
same, except liabilities expressly
assumed in writing by Purchaser, including,
without limitation, obligations of
landlord under the tenant leases.
7.7
Purchaser shall assume and pay all debts, charges, claims,
damages, and liabilities attributable to
leases or the operation of the Property
accruing and/or arising after Closing and
shall hold Seller harmless therefrom
and indemnify and defend against same,
except liabilities
Agreement for Purchase and Sale
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expressly retained in writing by Seller,
including, without limitation,
obligations of landlord under the tenant
leases.
7.8
Within ninety (90) days after Closing, Purchaser and Seller
shall reconcile the actual amount of
revenues or liabilities upon receipt or
payment thereof, to the extent those items
were prorated or credited at Closing
based upon estimates.
7.9
To the extent in Seller's possession, Seller shall furnish
to Purchaser with the documents identified
on Exhibit "B" and in accordance with
Section 5 above, a certified listing of all
rental deposits and move-in fees of
whatever nature, including redecoration,
cleaning, and processing charges. All
such deposits, fees, and move-in charges
shall be transferred to Purchaser at
Closing. Prior to Closing, Seller shall
deliver to Purchaser the original of
each written lease and other rental
agreement and a written description of each
oral lease or rental agreement which
affects the real estate or improvements,
including all amendments and modifications
thereof and options to renew or
extend the term thereof.
7.10
Seller shall pay any real estate or personal property,
transfer, excise, or sales taxes or any
similar taxes due as a result of the
sale of the Property.
7.11
Mortgage and other reserves, if any, shall be assigned to
Purchaser at Closing. Purchaser shall not
reimburse Seller for such reserves
assigned to Purchaser.
8.
Closing Costs.
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8.1
Seller shall pay:
(a) one-half of Escrow Holder's fee;
(b) any excise, documentary transfer, sales, use or similar
taxes resulting from the conveyance of the
Property and the Personalty;
(c) the cost of an ALTA owner's standard coverage policy of
title insurance;
(d) all real estate fees and commissions due as a result of
the sale as defined in Section 29 below,
except any specifically contracted for
in writing by Purchaser;
(e) Seller's pro rata share of real estate taxes assessed
against the Property and due and payable or
accrued in the year of Closing;
(f) Seller's legal counsel fees; and
(g) Seller's prorations as set forth in Section 7 above.
8.2
Purchaser shall pay:
Agreement for Purchase and Sale
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(a) one-half of Escrow Holder's fee;
(b) recording fees for sale documents;
(c) all real estate fees and commissions specifically
contracted for in writing by Purchaser;
(d) Buyer's legal counsel fees;
(e) Purchaser's prorations as set forth in Section 7 above;
(f) the cost of a new ALTA survey or update to the existing
ALTA survey;
(g) the difference between the ALTA owner's standard policy
and extended coverage and any other
endorsements available to Purchaser; and
(h) Purchaser shall pay all loan assumption fees and
expenses of Lender.
8.3
Any other Closing Costs not specifically provided for
herein shall be divided fifty percent (50%)
each to Seller and Purchaser.
9.
Closing Documents. On or before Closing, Seller and Purchaser
shall
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cause to be delivered into escrow fully
executed originals conforming to the
terms and conditions of this Agreement and
satisfactory in form and substance to
Seller and Purchaser of the following
documents, together with escrow
instructions, funds required to close, and
any other documents reasonably
required to close and any other documents
reasonably required to complete the
transactions contemplated herein:
(a)
a duly executed, acknowledged, and recordable Special
Warranty Deed conveying fee simple title in
the Realty to Purchaser subject only
to the Permitted Exceptions of record. Said
Special Warranty Deed shall be
substantially in the same form attached
hereto as Exhibit "D";
(b)
a Bill of Sale including standard warranties as to title
and absence of liens conveying title to the
Personalty to Purchaser in the form
attached hereto as Exhibit "C";
(c)
a Rent Roll certified as correct by Seller identifying each
unit, the tenant of each unit, the lease
expiration date, the monthly rent, the
status of payment of ren
