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AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY AND
ESCROW INSTRUCTIONS
THIS
AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW
INSTRUCTIONS (this “ Agreement ”) is made
and entered into as of March 6, 2008 (the “
Effective Date ”), by and between Epler Parke,
LLC, an Indiana Limited Liability Company (“
Seller ”) and Grubb & Ellis Realty
Investors, LLC, a Virginia limited liability company (“
Buyer ”), with reference to the following
facts:
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A. |
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Seller owns that certain real property commonly known as 5550
S. East Street, City of Indianapolis, Marion County, State of
Indiana, as more particularly described on Exhibit A
attached hereto (the “ Land ”), commonly
known as Epler Parke Building B and such other assets, as more
particularly described in this Agreement. |
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B. |
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Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the Land and the associated assets. |
NOW,
THEREFORE, in consideration of the mutual covenants, premises and
agreements herein contained, the parties hereto do hereby agree as
follows:
1.
Purchase and Sale .
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1.1. |
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At the “ Close of Escrow ” (as
defined below) Seller hereby agrees to sell and convey to Buyer and
Buyer hereby agrees to purchase from Seller, subject to the terms
and conditions of this Agreement, all of Seller’s right,
title, estate and interest in and to all of the following
(collectively, the “ Property ”): |
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1.1.2. |
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All rights, privileges and easements appurtenant to the Land,
including, without limitation, all of Seller’s right, title
and interest, if any, in minerals, oil, gas and other hydrocarbon
substances on the Land, as well as all development rights, air
rights, water rights and water stock owned by Seller relating to
the Land, and any easements, rights of way or other appurtenances
of Seller used in connection with the beneficial use and enjoyment
of the Land (collectively, the “ Appurtenances
”); |
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1.1.3. |
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All of Seller’s right, title and interest in all
improvements and fixtures located on the Land, including, without
limitation, all buildings and structures owned by Seller presently
located on the Land, all apparatus, equipment and appliances used
in connection with the operation or occupancy of the Land, such as
heating, air conditioning, and lighting systems and other
facilities used to provide any utility services, refrigeration,
ventilation, garbage disposal, or other services on the Land (all
of which are collectively referred to as the “
Improvements ,” and together with the Land, the
Appurtenances and the Improvements are collectively referred to
herein as the “ Real Property ”); |
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1.1.4. |
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All tangible personal property now or hereafter owned by Seller
and located on or in, or used in connection with, the Real Property
(the “ Personal Property ”); |
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1.1.5. |
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All leases, licenses and other occupancy agreements together
with all associated amendments, modifications, extensions or
supplements thereto set forth on Exhibit B attached
hereto and any other lease, license or occupancy agreement entered
into in accordance with the terms of this Agreement prior to the
Close of Escrow (collectively, the “ Leases
”) with all persons or entities occupying the Real Property
or any part thereof pursuant to the Leases (“
Tenants ”), together with all deposits held in
connection with the Leases, including, without limitation, all
security deposits, prepaid rent, guaranties, letters of credit and
other similar charges and credit enhancements providing additional
security for the Leases, as set forth on Exhibit C
attached hereto; |
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1.1.6. |
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To the extent assignable, all intangible personal property now
or hereafter owned by Seller and used in the ownership, use,
operation, occupancy, maintenance or development of the Real
Property and Personal Property, including, without limitation
(i) all licenses, permits, certificates, approvals,
authorizations and other entitlements issued (the “
Permits ”); (ii) all reports, test
results, environmental assessments, surveys, plans, specifications
(the “ Plans ”); (iii) all
warranties and guaranties from manufacturers, contractors,
subcontractors, suppliers and installers (“
Warranties ”); (iv) all trade names,
trademarks, service marks, building and property names and building
signs used in connection with the Real Property, including the name
“Epler Parke Building B” and the non-exclusive right to
use the name “Epler Parke” and all variations thereof
(the “ Tradenames ”); (v) all
telephone numbers, domain names, e-mail addresses and other means
of contact utilized in connection with the Real Property; and
(vi) all other intangible property related to the Real
Property (collectively the “ Intangible
Property ”); |
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1.1.7. |
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All assignable equipment leases, service, utility, supply,
maintenance, and concession contracts, agreements and other
continuing contractual obligations affecting the use, operation,
maintenance, development and repair of the Real Property or the
Personal Property which shall extend beyond the date of Closing and
which the Buyer elects to assume (the “
Contracts ”). |
2.
Purchase Price . The total Purchase Price of the Property
shall be Five Million Eight Hundred Fifty Thousand and No/100
Dollars ($5,850,000.00) (“ Purchase Price
”), and payable as follows:
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2.1. |
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Deposit/Further Payments . |
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2.1.1. |
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Within two (2) business days following the date a fully
executed original of this Agreement is received by the Escrow
Holder, as defined below (the date the fully executed original of
this Agreement is received by the Escrow Holder shall hereinafter
be referred to as the “ Effective Date
”), Buyer shall deposit into Escrow (hereinafter defined) the
amount of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) (the “ Deposit ”), in the
form of a wire transfer payable to Land America Title Company, 915
Wilshire Boulevard, Suite 2100, Los Angeles California 90017
, Attn: Lois McAuley (“ Escrow Holder
”) . Escrow Holder shall place the Deposit into an
interest bearing money market account at a bank or other financial
institution reasonably satisfactory to Buyer, and interest thereon
shall be credited to Buyer’s account and shall be deemed to
be part of the Deposit. |
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2.1.2. |
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On or before Close of Escrow, Buyer shall deposit with the
Escrow Holder to be held in Escrow the balance of the Purchase
Price, in immediately available funds by wire transfer made payable
to Escrow Holder. |
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2.1.3. |
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Escrow Holder shall deposit the Deposit in a non-commingled
trust account and shall invest the Deposit in an insured, interest
bearing money market accounts, certificates of deposit, United
States Treasury Bills or such other instruments as directed by
Buyer and reasonably acceptable to Seller and interest thereon
shall be credited to Buyer’s account and deemed to be part of
the Deposit. In the event of the consummation of the purchase and
sale of the Property as contemplated hereunder, the Deposit shall
be paid to Seller and credited against the Purchase Price at the
“ Close of Escrow ” (as defined below).
In the event the sale of the Property is not consummated because of
the termination of this Agreement by Buyer in accordance with any
right to so terminate provided herein, or the failure of any
Buyer’s Conditions (as defined below), or for any other
reason, except for a default by Buyer under
Section 13.2 , then the Deposit shall be immediately
and automatically paid over to Buyer without the need for any
further action by either party hereto. In the event the sale of the
Property is not consummated because of a default by Buyer under
Section 13.2 , the Deposit shall be promptly paid to
and retained by Seller in accordance with Section 13.2
. |
3.
Title to Property; Survey .
Seller
will, cause Land America Title Company (the “ Title
Company ”) to issue an Extended Coverage ALTA
Owner’s Policy of Title Insurance (the “ Title
Policy ”) for and on behalf of Buyer in the total
amount of the Purchase Price and obtainable at standard rates not
to exceed $5,850 insuring good, marketable and insurable title in
and to the Real Property. The Title Policy shall provide full
coverage against mechanics’ and materialmens liens and shall
contain such endorsements as Buyer may reasonably require (the
“ Endorsements ”). Seller shall pay up to
$5,850 for the basic insurance coverage and Buyer shall pay the
cost of all endorsements. In any event, Seller covenants to cause
to be released and reconveyed from the Property, and to remove as
exceptions to title on or prior to the Close of Escrow the
following (the “ Pre-Disapproved Exceptions
”): all labor, materialmens and mechanics liens, mortgages,
deeds of trust, and other monetary encumbrances, assessments and/or
indebtedness, except for the current installment of non-delinquent
real property taxes and assessments payable as part of the real
property tax bill. The Title Policy shall be free and clear of
exceptions except as follows:
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3.1.1. |
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Real property taxes and assessments, which are a lien not yet
due; |
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3.1.2. |
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The “ Permitted Exceptions ” (as
defined in Section 3.2 ) included in such policy and
approved by Buyer as herein described. |
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3.2. |
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Procedure for Approval of Title . |
Seller
shall, no later than three (3) days following the Effective
Date, provide to Buyer a title insurance commitment and/or
preliminary title report for the Real Property (the “
Commitment ”) dated no earlier than thirty
(30) days prior to the Effective Date, together with legible
copies of all items identified as exceptions therein (the “
Title Documents ”). Buyer shall have thirty
(30) days following the later of (a) the Effective Date; and
(b) the receipt of the later of the Title Documents and the
“ Survey ” (as defined in Section
4.1.1 ) to review and approve, in writing, the condition of the
title to the Real Property ( “ Title Review
Period ” ) . If the Title Documents or the
Survey reflect or disclose any defect, exception or other matter
affecting the Real Property (“ Title Defects
”) that is unacceptable to Buyer, then Buyer shall provide
Seller with written notice of Buyer’s objections no later
than the conclusion of the Title Review Period; provided,
however , if Buyer shall fail to notify Seller in writing
within the Title Review Period either that the condition of title
is acceptable or of any specific objections to the state of title
to the Real Property, then Buyer shall be deemed to have accepted
all exceptions to title or other conditions or matters which are
shown on the Survey or described in the Title Documents. Seller
may, at its sole option, elect, by written notice given to Buyer
within five (5) business days following the conclusion of the
Title Review Period (“ Seller’s Notice
Period ”), to cure or remove the objections made by
Buyer; provided, however, Seller shall in all events have the
obligation to (i) act in good faith in making such election
and curing any Title Defects that Seller elects to cure,
(ii) specifically remove the Pre-Disapproved Exceptions, and
(iii) remove any Title Defect that attaches to the Real
Property subsequent to the conclusion of the Title Review Period.
The failure of Seller to deliver written notice electing to cure
any or all such objected to exceptions during the Seller’s
Notice Period shall be deemed an election by Seller not to cure
such exceptions. Should Seller elect to attempt to cure or remove
any objection, Seller shall have fifteen (15) days from the
conclusion of the Title Review Period (“ Cure
Period ”) in which to accomplish the cure. In the
event Seller elects (or is deemed to have elected) not to cure or
remove any objection, or in any event Seller fails to cure or
remove any objection which Seller agrees or is required to cure
within the Cure Period, then Buyer shall be entitled, as
Buyer’s sole and exclusive remedies, either to (i) terminate
this Agreement and obtain a refund of the Deposit or
(ii) waive any objections that Seller has not elected to cure
and close this transaction as otherwise contemplated herein. The
failure of Buyer to provide written notice to Seller within ten
(10) days following the expiration of the Seller’s
Notice Period waiving any objections Seller has not elected to cure
shall be deemed an election by Buyer to terminate this Agreement.
Any exceptions to title accepted by Buyer pursuant to the terms of
this Section shall be deemed “ Permitted
Exceptions .” If at anytime prior to the Close of
Escrow, Buyer receives an update or supplement to the Commitment or
Survey and such update or supplement discloses one or more Title
Defects that are not Permitted Exceptions (in each case, a “
New Title Defect ”) and any New Title Defect is
unacceptable to Buyer, Buyer may, within three (3) business
days after receiving such update or supplement to the Commitment or
Survey, as the case may be, deliver to the Seller another written
notice of Buyer’s objections with respect to any New Title
Defect only and the process described in this Section shall apply
thereto.
Seller
shall obtain an ALTA survey of the Real Property dated no earlier
than thirty (30) days prior to the Effective Date (the “
Survey ”). Seller shall order the survey within
three (3) days after the Effective Date and shall obtain such
survey within fifteen (15) days after the Effective Date.
4.
Due Diligence Items .
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4.1. |
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Seller shall, on or before three (3) days after the
Effective Date (the “ Delivery Date ”),
deliver to Buyer each of the following (collectively, the “
Due Diligence Items ”): |
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4.1.1. |
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A copy of the most recent survey of the Real Property in
Seller’s possession; |
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4.1.2. |
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Copies of all Leases presently in effect with respect to the
Real Property, together with any amendments or modifications
thereof; |
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4.1.3. |
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A “ Rent Roll ” with respect to the
Real Property for the calendar month immediately preceding the
Effective Date, showing with respect to each Tenant of the Real
Property: (1) the name of the Tenant, (2) the number of
rentable square feet in Tenant’s premises as set forth in
Tenant’s Lease, (3) the current monthly base rental payable
by such Tenant, (4) the term of the Lease, (5) any
available options for the Tenant under the Lease; and (6) the
amount of any security deposit; |
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4.1.4. |
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A Rent Roll current as of December, 2006, 2007 and
2008 year to date; |
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4.1.5. |
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An aging report showing, with respect to each Tenant of the
Real Property, the date through which such Tenant has paid rent and
a Tenant by Tenant monthly aging report for the preceding
24 months; |
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4.1.6. |
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Copies of all contracts, including, without limitation, service
contracts, warranties, management, maintenance, leasing commission
or other agreements affecting the Property; |
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4.1.7. |
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All site plans, leasing plans, as-built plans, drawings,
environmental, mechanical, electrical, structural, soils and
similar reports and/or audits and plans and specifications relative
to the Real Property in the possession of Seller or under the
control of Seller, if any; |
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4.1.8. |
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True and correct copies of the real estate and personal
property tax statements covering the Property or any part thereof
for each of the two (2) years prior to the current year and, if
available, for the current year; |
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4.1.9. |
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A schedule of all current or pending litigation with respect to
the Real Property or any part thereof, if any, or otherwise with
respect to Seller that might have a material adverse effect on
Seller’s ability to perform hereunder, together with a brief
description of each such proceeding; |
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4.1.10. |
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Operating statements for the Real Property for the two prior
calendar years and the current year to date, or if shorter, for any
periods during which Seller was owner of the Real Property; |
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4.1.11. |
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Copies of Tenant files and records relating to the ownership
and operation of the Real Property; |
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4.1.12. |
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An inventory of all personal property located on the Real
Property which is used in the maintenance of the Real Property or
stored for future use with the Real Property; |
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4.1.13. |
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Copies of existing loan documents and notes affecting the Real
Property, if loan is to be assumed; |
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4.1.14. |
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Copies of utility bills for the Real Property for the two prior
calendar years and the current year to date or if shorter, for any
periods during which the Seller was the owner of the Property; |
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4.1.15. |
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Any existing report from a licensed pest control contractor
regarding the presence on the Real Property of dry rot or termite
infestation; |
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4.1.16. |
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Any existing report from a licensed HVAC contractor concerning
the condition of HVAC equipment and its capacity to service the
Real Property; |
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4.1.17. |
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Any existing Environmental Impact Report for the Real Property;
and |
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4.1.18. |
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Any existing report from a licensed roofer concerning the
water-proofness and condition of the roof for the Real
Property. |
5.
Inspections .
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5.1. |
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Procedure; Indemnity . |
Buyer, at
its sole expense, shall have the right to conduct feasibility,
environmental, engineering and physical studies of the Real
Property at any time from and after Effective Date and for a period
of thirty (30) days thereafter (the “ Due
Diligence Period ”); provided, however, if the
Due Diligence Items are not delivered on or before the Delivery
Date, Buyer shall give Seller written notice within ten
(10) business days after the Delivery Date identifying the Due
Diligence Items that have not been delivered to Buyer, in which
event the Due Diligence Period shall be extended for a period equal
to the associated delay in delivery of such materials beyond the
Delivery Date. Buyer and its duly authorized agents or
representatives shall be permitted to enter upon the Real Property
at all reasonable times during the Due Diligence Period (but
without disrupting Tenant’s operations) in order to conduct
tenant interviews, engineering studies, soil tests and any other
inspections and/or tests that Buyer may deem necessary or advisable
(collectively, the “ Inspections ”).
Buyer agrees to promptly discharge any liens that may be imposed
against the Real Property as a result of Buyer’s Inspections
and to defend, indemnify and hold Seller harmless from all claims,
suits, losses, costs, expenses (including without limitation court
costs and attorneys’ fees), liabilities, judgments and
damages (collectively, “ Claims ”)
incurred by Seller as a result of any Inspections performed by
Buyer, except for any Claims against Seller based upon any
obligations and liabilities of Seller.
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5.2.1. |
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Buyer shall have until the conclusion of the Due Diligence
Period (as the same may be extended in accordance with the terms of
Section 5.1 above) to approve or disapprove of the
Inspections and the Due Diligence Items enumerated in
Section 4 . If Buyer shall fail to deliver a written
notice to Seller and Escrow Holder within the Due Diligence Period
approving the condition of the Real Property this Agreement shall
thereupon be automatically terminated, Buyer shall not be entitled
to purchase the Real Property, Seller shall not be obligated to
sell the Real Property to Buyer and the parties shall be relieved
of any further obligation to each other with respect to the Real
Property. Upon termination, Escrow Holder shall, without any
further action required from any party, return all documents and
funds, including the Deposit, to the parties who deposited same and
no further duties shall be required of Escrow Holder. |
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5.2.2. |
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Notwithstanding anything to the contrary contained herein,
Buyer hereby agrees that in the event this Agreement is terminated
for any reason, then Buyer shall promptly and at its sole expense
return to Seller all Due Diligence Items which have been delivered
by Seller to Buyer in connection with Buyer’s inspection of
the Real Property within one (1) business day following the
termination of this Agreement |
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5.2.3. |
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On or before the expiration of the Due Diligence Period, the
Buyer may deliver written notice to the Seller (the “
Contracts Notice ”) specifying any Contracts
with respect to which Buyer requires Seller deliver notices of
termination at the Closing (the “ Terminated
Contracts ”) whereupon the Terminated Contracts shall
not be assigned to, or assumed by, the Buyer. To the extent that
any such Terminated Contract requires payment of a penalty or
premium for cancellation, the Seller shall be solely responsible
for the payment of any such cancellation fees or penalties. If the
Buyer fails to deliver the Contracts Notice on or before the
expiration of the Due Diligence Period, there shall be no
Terminated Contracts and the Buyer shall assume all Contracts set
forth on Exhibit D at the Closing. Notwithstanding
anything to the contrary set forth in this section, prior to the
Closing Date the Seller shall terminate any and all management
contracts pertaining to the Property. |
6.
Escrow .
Purchase
and sale of the Property shall be consummated through an escrow
(“ Escrow ”) to be opened with Escrow
Holder within two (2) business days after the execution of
this Agreement by Seller and Buyer. This Agreement shall be
considered as the Escrow instructions between the parties, with
such further consistent instructions as Escrow Holder shall require
in order to clarify its duties and responsibilities. If Escrow
Holder shall require further Escrow instructions, Escrow Holder may
prepare such instructions on its usual form. Such further
instructions shall, so long as not inconsistent with the terms of
this Agreement, be promptly signed by Buyer and Seller and returned
to Escrow Holder within three (3) business days of receipt
thereof. In the event of any conflict between the terms and
conditions of this Agreement and any further Escrow instructions,
the terms and conditions of this Agreement shall control.
The “
Close of Escrow ” shall occur on the date that
is thirty (30) days after the expiration of the Due Diligence
Period (as such period may be extended pursuant to
Section 5.1 hereof); or on such other date mutually
approved in writing by Seller and Buyer (the “ Closing
Date ”); provided, however , that Buyer shall
have the right to set the Closing Date at any date prior to the
thirty (30) days after the expiration of the Due Diligence Period
without Seller’s consent within five (5) days’
notice to Seller. The foregoing notwithstanding, Buyer may, at
Buyer’s election, and upon payment of Fifty Thousand and
No/100 Dollars ($50,000.00) (the “ Extension
Deposit ”) to Escrow Holder, extend the Close of
Escrow for thirty (30) days. In the event an Extension Deposit
is paid to Escrow Holder, all references to the Deposit in this
Agreement shall include the Extension Deposit. The Extension
Deposit shall be non-refundable except as otherwise set forth
herein.
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6.3. |
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Buyer Required to Deliver . On or before the Close of
Escrow, Buyer shall deliver to Escrow the following: |
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6.3.1. |
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In accordance with Section 2 , the Deposit; |
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6.3.2. |
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On or before Close of Escrow, by 5:00 p.m. (Eastern Time) of
the Closing Date, the balance of the Purchase Price; provided,
however that Buyer shall not be required to deposit the balance
of the Purchase Price into Escrow until Buyer has been notified by
Escrow Holder that (i) Seller has delivered to Escrow each of
the documents and instruments to be delivered by Seller in
connection with Buyer’s purchase of the Property,
(ii) Title Company has committed to issue and deliver the
Title Policy to Buyer, and (iii) the only impediment to Close
of Escrow is delivery of such amount by or on behalf of Buyer; |
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6.3.3. |
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One (1) original Indiana Sales Disclosure pursuant to
Indiana Code Section 6-1.1-5.5 (“ Sales
Disclosure ”), duly executed and acknowledged by
Buyer and in proper form for recording. |
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6.3.4. |
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On or before Close of Escrow, such other documents as the Title
Company may require from Buyer in order to issue the Title
Policy; |
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6.3.5. |
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Two (2) originals of an Assignment and Assumption
Agreement in the form attached hereto as Exhibit E (the
“ Assignment Agreement ”), duly executed
by Buyer assigning all of Seller’s right, title and interest
in and to the Leases, Personal Property, Contracts, which Buyer
elects to assume, and Permits from and after the Close of Escrow to
Buyer; and |
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6.3.6. |
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Such other documents as may be required by this Agreement or as
may reasonably be required to carry out the terms and intent of
this Agreement, provided that such documents shall not increase
Buyer’s liability or result in a material expense to
Buyer. |
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6.3.7. |
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A written undertaking, reasonably satisfactory to Seller, under
which Buyer agrees to maintain, in good condition and repair, the
paved drives and the drainage pond located on the Property within
easements pursuant to that certain Declaration of Easements
dated February 28, 2003 and recorded on March 5, 2003 in
the office of the recorder of Marion County, Indiana as Instrument
Number 2003-0045941. |
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6.4. |
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Seller Required to Deliver . |
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6.4.1. |
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No later than one (1) business day prior to the Close of
Escrow (unless an earlier date is specified), Seller shall deliver
to Escrow Holder the following: |
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(a) |
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One (1) original Limited Warranty Deed in the form
attached hereto as Exhibit F (the “
Deed ”), duly executed and acknowledged by
Seller and in proper form for recording, conveying fee title to the
Real Property to Buyer; |
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(b) |
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One (1) original Sales Disclosure, duly executed and
acknowledged by Seller and in proper form for recording. |
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(c) |
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Two (2) original Assignment Agreements, duly executed by
Seller, assigning all of Seller’s right, title and interest
in and to the Leases, Personal Property, Contracts, which Buyer
elects to assume, and Permits to Buyer from and after the Close of
Escrow; |
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(d) |
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One (1) original certification as to Seller’s
non-foreign status which complies with the provisions of Section
1445(b)(2) of the Internal Revenue Code of 1986, as amended, any
regulations promulgated thereunder, and any revenue procedures or
other officially published announcements of the Internal Revenue
Service or the U.S. Department of the Treasury in connection
therewith (the “ FIRPTA ”); |
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(e) |
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One (1) original letter, in a form acceptable to Buyer,
duly executed by Seller, advising the tenants under the Leases of
the change in ownership of the Real Property; |
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(f) |
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No later than ten (10) days prior to Close of Escrow,
Tenant’s estoppel certificates as required by and provided
for in Section 9.1.6 and “ SNDA ,”
as defined in, required by and provided for in
Section 9.1.6 ; |
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(g) |
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Such other documents and instruments, executed and properly
acknowledged by Seller, if applicable, as Title Company may require
from Seller in order to issue the Title Policy; |
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(h) |
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Such other documents as may be required by this Agreement or as
may reasonably be required to carry out the terms and intent of
this Agreement, provided that such documents shall not increase
Seller’s liability or result in a material expense to
Seller; |
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(i) |
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A current Rent Roll certified by the Seller as being true and
accurate as of the Closing Date; and |
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6.4.2. |
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Within one (1) business day after the Close of Escrow,
Seller shall make available to Buyer or its agent the
following: |
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(a) |
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All keys to all buildings and other improvements located on the
Real Property, combinations to any safes thereon, and security
devices therein in Seller’s possession; |
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(b) |
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A letter from Seller addressed to each Tenant informing such
Tenant of the change in ownership; |
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(c) |
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The original Leases, Contracts and Permits; and |
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(d) |
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All records and files relating to the management or operation
of the Real Property, including, without limitation, all insurance
policies, all service contracts, all tenant files (including
correspondence), property tax bills, and all calculations used to
prepare statements of rental increases under the Leases and
statements of common area charges, insurance, property taxes and
other charges which are paid by Tenants of the Real Property. |
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6.5.
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Buyer’s Costs. |
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Buyer shall pay the
following: |
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6.5.1.
6.5.2.
6.5.3. |
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One half (1/2) of Escrow
Holder’s fee, costs and expenses;
Buyer’s attorneys’ fees; and
The cost of any Title Policy endorsements requested by Buyer;
and |
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6.5.4. |
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All other costs customarily borne by buyers of real property in
Marion County, Indiana. |
Seller
shall pay the following:
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6.6.1. |
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One half (1/2) of Escrow Holder’s fee, costs and
expenses; provided, however, Seller shall only be required
to pay $500 of the Escrow Holder’s fee, costs and
expenses; |
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6.6.2. |
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Seller’s attorney fees; |
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6.6.3. |
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The cost of recording the Deed; |
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6.6.4. |
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Recording fees for any document(s) required by the Title
Company in order to release Title Defects or New Title
Defects; |
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6.6.5. |
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Escrow Holder premium for the basic Title Policy up to
$5,850; |
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6.6.6. |
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The cost of the Survey and any updates thereto; provided,
however, that if the Close of Escrow does not occur for any
reason other than a default by Seller, Buyer shall be responsible
for the cost of the Survey and any updates thereto and shall
immediately reimburse Seller for the cost thereof. |
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6.6.7. |
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All costs associated with removing any debt encumbering the
Real Property; and |
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6.6.8. |
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All other costs customarily borne by sellers of real property
in Marion County, Indiana. |
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6.7.1. |
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Items to be Prorated . The following shall be prorated
between Seller and Buyer as of the Close of Escrow with the Buyer
being deemed the owner of the Property as of the Close of
Escrow: |
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(a) |
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Taxes and Assessments . Buyer assumes and agrees to pay
all assessments for municipal improvements made after the Close of
Escrow, and all real estate taxes (“ Taxes
”) due and payable after Close of Escrow. The parties intend
to prorate Taxes on a cash basis not an accrual basis.
Consequently, at the time of Close of Escrow Buyer shall receive as
a credit on the cash payment required at Close of Escrow an amount
equal to the percentage of the Taxes payable in 2008 after the
Close of Escrow equivalent to the portion of 2008 (after any tax
payment date) that the Property was owned by Seller. By way of
example, if the Taxes payable in 2008 are $60,000, none of which
have been paid at the Close of Escrow, and the Seller has owned the
Property for ninety (90) days in 2008 then Buyer shall receive
a credit of 90/365 x $60,000 or $14,794.52. If the actual tax rate
is not known on the Closing Date, the Taxes shall be prorated based
upon the prior years tax rate and re-prorated within thirty
(30) days after the actual tax rate is published by the
appropriate governmental authority. In no event shall Seller be
charged with or be responsible for any increase in the taxes or
assessments on the Property resulting from the sale of the Property
or from any improvements made or leases entered into after the
Close of Escrow. |
The
foregoing notwithstanding, Tenant reimbursements for Taxes paid by
Seller prior to the Close of Escrow or for which Buyer receives a
credit from Seller hereunder shall by payable to Seller and if
received by Buyer from a Tenant shall be promptly accounted for and
remitted to Seller.
Seller
shall be responsible for all Taxes due prior to the Close of
Escrow, including any increases in the Taxes assessed in 2006,
payable in 2007, as a result of a pending reassessment of the
Property. Escrow Holder shall withhold Twenty Thousand Dollars
($20,000) of the Purchase Price and place such money into an escrow
(“ Tax Escrow ”) with Escrow Holder
pursuant to a separate escrow agreement, the terms of which shall
be mutually satisfactory to Seller, Buyer and Escrow Holder, which
shall be used solely to pay the potential increase in the Taxes
assessed in 2006 and payable in 2007. Buyer shall promptly bill
Tenants who occupied space in the Property in 2007 for their
pro-rata share of any such increased amount of Taxes and shall
remit such amounts collected from Tenants to Seller.
With
respect to all periods for which Seller has paid Taxes, Seller
hereby reserves the right to institute or continue any proceeding
or proceedings for the reduction of the assessed valuation of the
Property, and, in its sole discretion, to settle the same. Seller
shall have sole authority to control the progress of, and to make
all decisions with respect to, such proceedings but shall provide
Buyer with copies of all communications with the taxing
authorities. All net tax refunds and credits attributable to any
period prior to the Close of Escrow which Seller has paid or for
which Seller has given a credit to Buyer shall belong to and be the
property of Seller, provided, however , that any such
refunds and credits that are the property of Tenants under Leases
shall be promptly remitted by Seller directly to such Tenants or to
Buyer for the credit of such Tenants. All net tax refunds and
credits attributable to any period subsequent to the Close of
Escrow shall belong to and be the property of Buyer. Buyer agrees
to cooperate with Seller in connection with the prosecution of any
such proceedings and to take all steps, whether before or after the
Close of Escrow, as may be necessary to carry out the intention of
this subsection, including the delivery to Seller, upon demand, of
any relevant books and records, including receipted tax bills and
cancelled checks used in payment of such taxes, the execution of
any and all consent or other documents, and the undertaking of any
acts necessary for the collection of such refund by Seller. Buyer
agrees that, as a condition to the transfer of the Property by
Buyer, Buyer will cause any transferee to assume the obligations
set forth herein.
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(b) |
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Rents . Buyer will receive a credit at closing for all
rents collected by Seller prior to the Closing and allocable to the
period from and after the Close of Escrow based upon the actual
number of days in the month. No credit shall be given the Seller
for accrued and unpaid rent or any other non-current sums due from
Tenants until these sums are paid, and Seller shall retain the
right to collect any such rent or other amounts provided Seller
does not sue to evict any tenants or terminate any Leases. Buyer
shall cooperate with Seller after Closing to collect any rent or
other amounts due under the Leases which has accrued as of the
Closing; provided, however, Buyer shall not be obligated to sue any
Tenants or exercise any legal remedies under the Leases or to incur
any expense over and above its own regular collection expenses. All
payments collected from Tenants after Closing shall first be
applied to the month in which the Closing occurs, then to any rent
due to Buyer for the period after Closing and finally to any rent
due to Seller for the period prior to Closing; provided, however,
notwithstanding the foregoing, if Seller collects any payments from
Tenants after Closing through its own collection efforts, Seller
may first apply such payments to rent due the Seller for the period
prior to Closing. |
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(c) |
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CAM Expenses . To the extent that Tenants are
reimbursing the landlord for common area maintenance and other
operating expenses (collectively, “ CAM Charges
”), CAM Charges shall be prorated at Closing and again
subsequent to Closing, as of the date of Closing on a
lease-by-lease basis with each party being entitled to receive a
portion of the CAM Charges payable under each Lease (including any
CAM reconciliation charges) for the CAM Lease Year in which Closing
occurs, which portion shall be equal to the actual CAM Charges
incurred during the party’s respective periods of ownership
of the Property during the CAM Lease Year. As used herein, the term
“ CAM Lease Year ” means the twelve
(12) month period as to which annual CAM Charges are owed
under each Lease. Five (5) days prior to Closing the Seller
shall submit to Buyer an itemization of its actual CAM Charges
operating expenses through such date and the amount of CAM Charges
received by the Seller as of such date, together with an estimate
of CAM Charges to be incurred to, but not including, the Close of
Escrow. In the event that the Seller has received CAM Charges
payments in excess of its actual CAM Charges operating expenses,
the Buyer shall be entitled to receive a credit against the
Purchase Price for the excess. In the event that the Seller has
received CAM Charges payments less than its actual CAM Charges
operating expenses, to the extent that the Leases provide for a
“true up” at the end of the CAM Lease Year, the Seller
shall be entitled to receive any deficit but only after the Buyer
has received any true up payment from the Tenant. Upon receipt by
either party of any CAM Charge true up payment from a Tenant, the
party receiving the same shall provide to the other party its
allocable share of the “true up” payment within five
(5) days of the receipt thereof. |
To assist
the Buyer in preparing “true up” r
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