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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 November 12th, 2007 (the “
Effective Date ”), by and between FRAZE
ENTERPRISES, INC., an Ohio corporation (“
Seller ”) and TRIPLE NET PROPERTIES, LLC, a
Virginia limited liability company (“ Buyer
”), with reference to the following facts:
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A. |
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Seller owns certain real property located in Montgomery County,
Ohio and more specifically described in Exhibit A
attached hereto (the “ Land ”), commonly
known as Park Place office complex and such other assets, as the
same are herein described. |
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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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The purchase and sale includes, and at “ Close of
Escrow ” (as defined in Section 6.2) Seller shall
sell, transfer, grant and assign to Buyer and Buyer shall purchase
and assume from Seller, Seller’s entire right and interest in
and to all of the following (hereinafter sometimes collectively,
the “ Property ”): |
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1.1.2. |
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All of Seller’s 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,
subject to the rights of the Tenants under the Leases, hereafter
defined, (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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Seller’s interest in all leases, licenses and other
occupancy agreements together with all associated amendments,
modifications, extensions or supplements thereto for the persons
and entities identified 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 security deposits held in connection
with the Leases, including, guarantees, letters of credit and other
similar credit enhancements providing additional security for the
Leases, as set forth on Exhibit C attached hereto; |
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1.1.5. |
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All tangible and intangible personal property owned by Seller
that is located on or used in connection with the Real Property,
including, without limitation, all equipment, furniture, tools and
supplies, website maintained by the Seller and related intangibles,
including, Seller’s interest in the name “Park
Place” (collectively, the “ Personal
Property ”), but specifically excluding any items of
personal property owned by Tenants; |
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1.1.6. |
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All of Seller’s rights and interest in contracts,
agreements, warranties and guaranties relating to the operation,
use or maintenance of the Real Property set forth on
Exhibit D attached hereto, which Buyer elects to assume
(collectively, the agreements Buyer elects to assume shall be known
as the “ Contracts ”); and |
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1.1.7. |
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To the extent transferable, all building permits, certificates
of occupancy and other certificates, permits, licenses and
approvals relating to the Property (collectively, the “
Permits ”). |
2.
Purchase Price .
The total
Purchase Price of the Property shall be SIXTEEN MILLION FOUR
HUNDRED FIFTY THOUSAND and No/100 Dollars ($16,450,000.00) (“
Purchase Price ”), and payable as follows:
2.1.
Deposit/Further Payments .
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2.1.1. |
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Within two (2) business days following the Effective Date
, Buyer shall deposit into Escrow (hereinafter defined) with the
Escrow Holder the amount of Three Hundred Twenty Thousand and
No/100 Dollars ($320,000.00) (the “ Deposit
”), in the form of a wire transfer payable to Chicago Title
Insurance Company, with the office located at One Dayton Centre,
One South Main Street, Ste. 133, Dayton, Ohio 45402 Attn: Traci
Walker (“ 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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Unless this Agreement is earlier terminated or a party is in
default, on or before the Close of Escrow, Buyer and Seller shall,
by joint instruction, direct the Escrow Holder to deliver the
Deposit to the Title Company, hereafter identified, to be held in
Escrow. |
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2.1.3. |
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On or before Close of Escrow, Buyer shall deposit with the
Title Company, to be held in Escrow the balance of the Purchase
Price, in immediately available funds by wire transfer made payable
to Escrow Holder. |
2.2.
Allocation of Purchase Price .
The
Purchase Price shall be allocated in a mutually agreeable manner in
accordance with Section 1060 of the Internal Revenue Code of
1986, as amended (the “ Code ”), and the
temporary and/or permanent regulations promulgated thereunder.
Prior to the expiration of the “ Due Diligence Period
” (as defined in Section 5.1), hereafter defined, Seller
and Buyer shall agree on the allocation of the Purchase Price. Once
the allocation of the Purchase Price is agreed upon, Seller and
Buyer shall prepare their respective federal, state and local
income tax returns (including Form 8594) employing the agreed
allocation of the Purchase Price. Each of Seller and Buyer hereby
covenants and agrees that it will not take a position before any
governmental agency charged with the collection of any income,
revenue or franchise tax or in any judicial proceeding that is in
any way inconsistent with the agreed allocation. The terms of this
Section 2.2 shall survive the Close of Escrow.
3.
Title to Property .
3.1.
Title Insurance .
Seller
will, at Seller’s sole expense, cause Fidelity Title Company,
with the office located at 11300 Dove Street, Suite 310,
Newport Beach, CA 92660 Attn: Natalie Priestley (the “
Title Company ”) to issue a Commitment 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 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 ”). Buyer shall be
responsible for the cost of the Title Policy , including any
Endorsements. In any event, Seller covenants to cause to be
released and reconveyed from the Property or insured over, and to
remove as exceptions to the Title Policy on or prior to the Close
of Escrow the following (the “ Pre-Disapproved
Exceptions ”): all labor, materialmens and mechanics
liens arising from work performed by or for Seller, 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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3.1.3. |
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The “ Permitted Exceptions ” (as
defined in Section 3.2 ) included in such policy and
approved by Buyer as herein described. |
3.2.
Procedure for Approval of Title .
Seller
shall, no later than November 15, 2007, provide to Buyer a
title insurance commitment and/or preliminary title report for the
Real Property (the “ Commitment ”) and an
ALTA survey of the Real Property (the “ Survey
”) each 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 twenty (20) days
following the later of (a) the Effective Date; and
(b) the receipt of the later of the Title Documents and the
Survey 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, other than
any Pre-Disapproved Exceptions. If Buyer timely delivers notice to
Seller of Title Defects, 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 or deemed to have been made by Buyer;
provided, however, Seller shall in all events have the obligation
to (i) remove from the Title Policy (by release, discharge or
by causing the Title Company to insure over) the Pre-Disapproved
Exceptions, and (ii) remove any from the Title Policy 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 Title Defect for which Buyer
shall have given Seller notice prior to the end of the Title Review
Period, Seller shall have fifteen (15) days from the
conclusion of the Title Review Period (“ Cure
Period ”) in which to accomplish the cure. Seller
shall be deemed to have accomplished the “cure” of a
Title Defect if Seller either (a) causes the removal,
discharge or release of the Title Defect prior to the end of the
Cure Period, or (b) affirmatively commits in writing to cause
such removal, discharge or release on or before the Close of
Escrow. 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. If Buyer fails to given notice to Seller of a
New Title Defect within such three-day period, Buyer shall be
deemed to have accepted such New Title Defect(s) and such New Title
Defect(s) shall be deemed Permitted Exceptions.
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 items to the extent in
Seller’s possession (collectively, the “ Due
Diligence Items ”): |
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4.1.1. |
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Intentionally omitted; |
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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 to extend the term of the Lease 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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Intentionally omitted; |
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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; |
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4.1.6. |
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A list of all contracts, including service contracts,
warranties, management, maintenance, leasing commission or other
agreements affecting the Real Property, if any, together with
copies of the same; |
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4.1.7. |
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Intentionally omitted; |
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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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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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4.1.10. |
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Intentionally omitted; |
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4.1.11. |
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An inventory of all personal property owned by Seller which is
used in the maintenance of the Real Property or stored for future
use with the Real Property. Such inventory need not specify each
item of personal property or the number of items, but may generally
describe Seller’s stock of tools, supplies and replacement
parts. Further, the parties acknowledge that certain items of
personal property are consumable and used in the operation of the
Real Property. Seller shall not be obligated to deliver at the
Close of Escrow the personal property described in the inventory or
any minimum levels of items such as supplies and parts used in the
operation of the Real Property; |
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4.1.12. |
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Intentionally omitted; |
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4.1.13. |
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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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4.1.14.
4.1.15.
4.1.16.
4.1.17.
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Intentionally omitted;
Intentionally omitted;
Intentionally omitted;
Intentionally omitted; |
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4.1.18. |
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CAM (Operating Expense) reconciliation for two prior calendar
years with supporting documentation; |
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4.1.19. |
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Certificates of occupancy; and |
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4.1.20. |
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Tenant sales report for restaurant 580 Lincoln Park for 2004,
2005 and 2006. |
5.
Inspections .
5.1.
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 until noon EST
on November 19, 2007 (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. If Buyer shall fail to timely give such notice to
Seller, the Due Diligence Period shall not be extended by reason of
Seller’s failure to deliver Due Diligence Items on or before
the Delivery Date. Upon prior reasonable notice to Seller, 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 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 ”). The
foregoing right shall be subject to the rights of the Tenants and
neither Buyer or Buyer’s agents or representatives shall
unreasonably interfere with or disturb the occupancy or operations
of the Tenants. Buyer agrees to promptly (a) restore the
Property to its condition prior to any entry onto, or disturbance
of, the Property, (b) discharge any liens that may be imposed
against the Real Property as a result of Buyer’s Inspections
and (c) to defend, indemnify and hold Seller, the Tenants and
their respective employees, agents and invitees harmless from all
claims, suits, losses, costs, expenses (including without
limitation court costs and attorneys’ fees), liabilities,
judgments and damages (collectively, “ Claims
”) incurred as a result of any Inspections performed by or
for Buyer, any access or entry onto the Property by Buyer or its
agents or representatives or the negligence or willful misconduct
of Buyer or its agents or representatives. Buyer’s
obligations to set forth in items (a-c) above shall survive the
termination of this Agreement or Close of Escrow, as
applicable.
Buyer
agrees that in the event that this Agreement shall terminate for
any reason, other than for Seller’s default, Buyer shall
provide Seller with a copy of all inspections, tests and studies of
the Property undertaken by or for Buyer, without charge to
Seller.
5.2.
Approval .
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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 pursuant to this Section 5.2.1,
Escrow Holder shall, 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 the Buyer requires Seller terminate on or
prior to the Close of Escrow (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 Close of Escrow.
Notwithstanding anything to the contrary set forth in this section,
prior to the Closing Date (a) the Seller shall terminate any
and all management contracts pertaining to the Property, and
(b) Buyer shall assume the natural gas supply contract
identified on Exhibit “C”; provided, however, Seller
agrees not to enter into any amendment or modification of such
contract after the Effective Date without Buyer’s prior
consent. |
5.3
Tenant Interviews .
5.3.1 If this
Agreement is not earlier terminated and Buyer gives notice to
Seller accepting and approving the Inspections, the Due Diligence
Items and the condition of the Real Property pursuant to
Section 5.2.1 and Buyer has contemporaneously given a similar
notice to the Related Seller under the Related Contract, as those
terms are defined in Section 27, then Buyer shall have from
the date Buyer gives Seller the notice prescribed in
Section 5.2.1 until (and including) November 27, 2007
(“Tenant Interview Period”) to conduct interviews of
Tenants. Unless Seller shall otherwise agree, Buyer shall give
Seller notice of the Tenants Buyer desires to interview, Seller
shall make good faith efforts to arrange such interviews (via
telephone or face to face meeting), and Seller or a representative
of Seller shall be entitled to participate in any interview.
5.3.2 If as a
result of the interviews of Tenants, Buyer determines that it is
not satisfied with the Property, Buyer shall have the option to
terminate this Agreement, provided that Buyer shall be obligated to
give Seller notice of termination prior to 5:00 p.m. EST on the
last day of the Tenant Interview Period. If Buyer timely exercises
the right to terminate this Agreement pursuant to this
Section 5.3.1, then Escrow Holder shall return all documents
and funds, including the Deposit, to the parties who deposited same
and no further duties shall be required of Escrow Holder. If Buyer
fails to timely give notice terminating this Agreement pursuant to
this Section 5.3.2, then Buyer shall be deemed to have
accepted and approved the Tenants’ interviews and the
condition of the Property and the right to terminate this Agreement
pursuant to this Section 5.3.2 shall lapse, without
notice.
If this
Agreement is not earlier terminated, the Deposit shall be
nonrefundable as of the expiration of the Due Diligence Period,
except in the event this Agreement is thereafter terminated
pursuant to Section 3.2, Section 9, Section 10 or
Section 11, or in the event of Seller’s default as
provided in Section 13.1. In the event that this Agreement is
terminated by Buyer in accordance with its terms, the Deposit shall
be immediately and automatically paid over to Buyer without the
need for any further action by either party hereto.
5.5.
Condition of Property .
EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER ACKNOWLEDGES AND
AGREES THAT SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY
NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES,
COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER
WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO
(A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE PROPERTY,
(B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C) THE
SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES
WHICH BUYER OR ANY TENANT MAY CONDUCT THEREON, (D) THE
COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS,
RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY, (E) THE HABITABILITY, MERCHANTABILITY,
MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF
THE PROPERTY, (F) THE MANNER OR QUALITY OF THE CONSTRUCTION OR
MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY, (G) THE
MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY,
OR (H) COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION
OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS,
INCLUDING THE EXISTENCE IN OR ON THE PROPERTY OF HAZARDOUS
MATERIALS OR (I) ANY OTHER MATTER WITH RESPECT TO THE
PROPERTY. BUYER HEREBY WAIVES ANY RIGHT TO MAKE ANY CLAIM BASED ON
ANY OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, ANY RIGHT TO
MAKE ANY CLAIM AGAINST SELLER BASED ON THE VIOLATION OF ANY
ENVIRONMENTAL LAWS. NO PERSON ACTING ON BEHALF OF SELLER IS
AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF OF BUYER ACKNOWLEDGES
THAT, EXCEPT AS CONTAINED HEREIN OR INCORPORATED HEREIN BY
REFERENCE, NO PERSON HAS MADE, ANY REPRESENTATION, AGREEMENT,
STATEMENT, WARRANTY, GUARANTY OR PROMISE REGARDING THE PROPERTY OR
THE TRANSACTION CONTEMPLATED HEREIN; AND NO SUCH REPRESENTATION,
WARRANTY, AGREEMENT, GUARANTY, STATEMENT OR PROMISE IF ANY, MADE BY
ANY PERSON ACTING ON BEHALF OF SELLER SHALL BE VALID OR BINDING
UPON SELLER UNLESS EXPRESSLY SET FORTH HEREIN. BUYER FURTHER
ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO
INSPECT THE PROPERTY, BUYER IS RELYING SOLELY ON ITS OWN
INVESTIGATION OF THE PROPERTY AND NOT ON ANY INFORMATION PROVIDED
OR TO BE PROVIDED BY SELLER EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT ANY
INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY
WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE
ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION
AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY, TRUTHFULNESS OR
COMPLETENESS OF SUCH INFORMATION EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
BUYER FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN
IS MADE ON AN “AS IS” CONDITION AND BASIS WITH ALL
FAULTS. IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS
BEEN ADJUSTED BY PRIOR NEGOTIATION TO REFLECT THAT THE PROPERTY IS
SOLD BY SELLER AND PURCHASED BY BUYER SUBJECT TO THE FOREGOING. THE
PROVISIONS OF THIS SUBSECTION SHALL SURVIVE THE CLOSING OR ANY
TERMINATION HEREOF.
6.
Escrow .
6.1.
Opening .
Purchase
and sale of the Property shall be consummated through an escrow
(“ Escrow ”) to be opened with Escrow
Holder and Title Company 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 and
Title Company shall require in order to clarify their respective
duties and responsibilities. If Escrow Holder and/or Title Company
shall require further Escrow instructions, Escrow Holder and/or
Title Company may prepare such instructions on its usual form. Such
further instructions shall, so long as acceptable to Buyer and
Seller shall be 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.
6.2.
Close of Escrow .
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6.2.1. |
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For purposes of this Agreement, the “ Close of
Escrow ” shall be defined as the date the Deed is
recorded in the Official Records of the Montgomery County, Ohio
Recorder’s Office. 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 with five (5) days’ prior
notice to Seller, provided that (a) Buyer has waived in
writing all conditions precedent to Close of Escrow and
(b) Seller can complete its payoff/release of outstanding
mortgage indebtedness, including any defeasance, by such Closing
Date, without incurring additional expense, other than customary
fees and expenses. |
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6.2.2. |
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Intentionally omitted. |
6.3.
Buyer Required to Deliver .
On or
before one (1) business day prior to the Close of Escrow,
Buyer shall deliver (or caused to be delivered) 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 one (1) business day prior to the Close of
Escrow, by 3:00 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 Title Company 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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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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6.3.4. |
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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 or is required to assume pursuant to
Section 5.2.3, and Permits from and after the Close of Escrow
to Buyer; and |
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6.3.5. |
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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. |
6.4.
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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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 or is required to assume pursuant to
Section 5.2.3, and Permits to Buyer from and after the Close
of Escrow; |
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(c) |
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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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(d) |
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The Survey which shall be certified pursuant to the
requirements of Buyer; |
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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
reasonably 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 in all material respects as of the Closing Date; and |
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(j) |
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Intentionally omitted. |
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6.4.2. |
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Within one (1) business day of the Close of Escrow, Seller
shall deliver to Buyer at the Seller’s property
manager’s office located at 580 Lincoln Park, Ste. 255,
Kettering, Ohio 45429 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 Contracts
assumed by Buyer, 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. |
Seller’s
property manager, Wenzler Realty, Inc. shall have fourteen
(14) days after the Close of Escrow to vacate the property
manager’s office. No rent shall be charge for such
occupancy.
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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;
The cost of the Title Policy and all Endorsements;
Buyer’s attorneys’ fees; and |
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6.5.4. |
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All other costs customarily borne by buyers of real property in
Montgomery County, Ohio not otherwise expressly allocated to Seller
hereunder. |
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6.6.
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Seller’s Costs. |
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Seller shall pay the
following:
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6.6.1.
6.6.2.
6.6.3.
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One-half (1/2) of Escrow
Holder’s fees, costs and expenses;
The cost of recording the Deed and any transfer tax;
Seller’s attorney fees; |
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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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The cost of the Survey and any updates thereto; |
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6.6.6. |
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All costs associated with removing any debt encumbering the
Real Property; and |
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6.6.7. |
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All other costs customarily borne by sellers of real property
in Montgomery County, not otherwise expressly allocated to Buyer
hereunder. |
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6.6.8. |
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All costs or fees associated with the Defeasance, including,
without limitation fees and costs payable to the defeasance
manager, rating agency fees (if any), escrow fees, fees and legal
expenses of the special servicer, accounting fees, fees payable to
the custodian/intermediary, and all other similar fees associated
with removing any debt encumbering the Property. |
6.7.
Prorations .
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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: |
(a) Taxes
and Assessments . At Close of Escrow, Escrow Holder shall
prorate real estate taxes and assessments (“
Taxes ”) which are a lien but not yet due and
payable based on the most recent tax duplicate in accordance with
the Montgomery County, Ohio “short” proration method
(except that if there is or has been any reduction or abatement of
taxes by virtue of the nature of the use of the Property or by
virtue of any exception or reduction in favor of Seller, which
reduction or abatement will no longer apply to the Property if
Buyer acquires same or changes the use of the Property, then the
proration shall be based on the full amount of such taxes without
reduction or abatement and Seller shall also be charged with any
“recaptured” taxes.) The Taxes to be prorated at
Closing between Seller and Buyer shall be only those Taxes which,
as of the Closing Date are allocated to vacant leaseable
(rentable) space in the Real Property (without limitation,
space occupied by the on-site property manager shall be considered
vacant space) (“ Seller’s Share ”).
When the actual amount of such Taxes becomes known, Escrow Holder
shall adjust the actual tax proration. Pending such adjustment to
the tax proration, Escrow Holder shall retain in escrow an amount
equal to Seller’s Share of the current effective tax rate
times the difference between thirty-five percent (35%) of the
Purchase Price and the assessed taxable value of the Property, as
shown on the last available County Treasurer’s tax duplicate.
The balance of any funds held in escrow on account of the tax
proration made pursuant to this Section, after the payment of the
tax installment for which the Taxes were escrowed, shall be
returned to Seller. Upon the Close of Escrow and subject to the
adjustment provided above, Buyer shall be responsible for real
estate taxes and assessments on the Property payable from and after
the Close of Escrow. 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.
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 in writing the
obligations set forth herein.
(b)
Rents . Buyer will receive a credit at Close of Escrow for
all rents collected by Seller prior to the Close of Escrow 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, deferred 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 provided
Seller does not sue to evict any tenants or terminate any Leases.
Without limitation, Seller shall retain the right to collect and
receive the Deferred Rent, as identified in Exhibit K .
Buyer shall cooperate with Seller after Close of Escrow to collect
any rent under the Leases which has accrued as of the Close of
Escrow; 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 Close of Escrow shall first
be applied to the month in which the Close of Escrow occurs, then
to any rent then due and owing to Buyer and finally to any rent due
to Seller for the period prior to Close of Escrow or otherwise due
to Seller; provided, however, notwithstanding the foregoing, if
Seller collects any payments from Tenants after Close of Escrow
through its own collection efforts, Seller may first apply such
payments to rent due the Seller for the period prior to Close of
Escrow.
(c) CAM
Expenses . To the extent that Tenants are reimbursing the
landlord for common area maintenance, taxes, insurance, utilities
and other operating expenses (collectively, “ CAM
Charges ”), CAM Charges shall be prorated at Close of
Escrow and again subsequent to Close of Escrow, as of the date of
Close of Escrow on a lease-by-lease basis with each party being
entitled to receive a portion of the CAM Charges payable under each
Lease for the CAM Lease Year in which Close of Escrow 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 Close of Escrow the
Seller shall submit to Buyer an itemization of its actual CAM
Charges operating expenses incurred 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 incurred and to be incurred to the Close of
Escrow, 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 incurred and to be incurred to the Close of
Escrow, to the extent that the Leases provide for a “true
up” at the end of the CAM Lease Year or provide for the
payment of Tenant’s share of CAM charges after the end of the
CAM Lease Year, the Seller shall be entitled to receive any deficit
or Seller’s share of any amount due from the Tenants 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” reconciliation at the
end of the CAM Lease Year, Seller shall deliver to the Buyer within
one (1) business day following the Close of Escrow records of
all of the Seller’s CAM Charge expenditures.
Buyer
covenants with Seller to perform with due diligence and good faith
all obligations of the landlord under the Leases with respect to
preparing year end statements of CAM Charges and “true
up” reconciliations or statements of additional rent due for
each of the Tenants, delivering such statements to the Tenants in a
timely manner and taking all action permitted under the Lease and
at law to collect any amounts due from the Tenants. Annual
statements shall be prepared and notices sent to Tenants within
ninety (90) days after the end of the CAM Lease Year. Buyer shall
provide Seller with a copy of all such statements prepared by Buyer
and notices delivered to Tenants contemporaneously with the
preparation or delivery, as applicable. Within twenty
(20) days after the end of each month after statements have
been prepared and notices sent to Tenants, Buyer shall provide
Seller with a statement identifying the Tenants from whom payment
of CAM Charges have been received, the amounts collected from said
Tenants and Seller’s share of such collections, along with
payment of Seller’s share. In the event Buyer shall fail to
perform any such obligations and such failure shall continue for
more then ten (10) business days
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