Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - WELLS REAL ESTATE FUND XIII L P | Financial_Report.xls |
| EX-31.2 - EXHIBIT 31.2 - WELLS REAL ESTATE FUND XIII L P | fund13q32014ex312.htm |
| EX-10.4 - EXHIBIT 10.4 - WELLS REAL ESTATE FUND XIII L P | fund13q32014ex104.htm |
| EX-10.7 - EXHIBIT 10.7 - WELLS REAL ESTATE FUND XIII L P | fund13q32014ex107.htm |
| EX-10.3 - EXHIBIT 10.3 - WELLS REAL ESTATE FUND XIII L P | fund13q32014ex103.htm |
| EX-10.6 - EXHIBIT 10.6 - WELLS REAL ESTATE FUND XIII L P | fund13q32014ex106.htm |
| EX-10.8 - EXHIBIT 10.8 - WELLS REAL ESTATE FUND XIII L P | fund13q32014ex108.htm |
| EX-10.5 - EXHIBIT 10.5 - WELLS REAL ESTATE FUND XIII L P | fund13q32014ex105.htm |
| EX-31.1 - EXHIBIT 31.1 - WELLS REAL ESTATE FUND XIII L P | fund13q32014ex311.htm |
| EX-32.1 - EXHIBIT 32.1 - WELLS REAL ESTATE FUND XIII L P | fund13q32014ex321.htm |
| 10-Q - 10-Q - WELLS REAL ESTATE FUND XIII L P | fund13q3201410q.htm |
| EX-10.9 - EXHIBIT 10.9 - WELLS REAL ESTATE FUND XIII L P | fund13q32014ex109.htm |
Exhibit 10.2
PURCHASE AND SALE AGREEMENT
BETWEEN
FUND XIII AND FUND XIV ASSOCIATES
AS SELLER
AND
OWENS REALTY CAPITAL, LLC
AS PURCHASER
3500 & 3626 QUADRANGLE BOULEVARD,
ORLANDO, FLORIDA
July 11, 2014
SCHEDULE OF EXHIBITS
Exhibit “A” Description of Property
Exhibit “B” List of Personal Property
Exhibit “C” List of Existing Commission Agreements and Management Agreement
Exhibit “D” Form of Escrow Agreement
Exhibit “E” List of Leases
Exhibit “F” Exception Schedule
Exhibit “G” List of Operating Agreements
Exhibit “H” Form of Tenant Estoppel Certificate
Exhibit “I” Property Tax Appeals
Exhibit “J” | Unpaid Tenant Inducement Costs and Leasing Commissions re current tenants for which Seller is responsible |
SCHEDULE OF CLOSING STATEMENTS
Schedule 1 Form of Special Warranty Deed
Schedule 2 | Form of Assignment and Assumption of Leases and Security Deposits and Leasing Commission Obligations arising after Closing |
Schedule 3 Form of Bill of Sale to Personal Property
Schedule 4 Form of Assignment and Assumption of Operating Agreements
Schedule 5 Form of General Assignment of Seller's Interest in Intangible Property
Schedule 6 Form of Seller's Affidavit (for Purchaser's Title Insurance Purposes)
Schedule 7 Form of Seller's Certificate (as to Seller's Representations and Warranties)
Schedule 8 Form of Seller's FIRPTA Affidavit
Schedule 9 Intentionally Omitted
Schedule 10 Form of Purchaser's Certificate (as to Purchaser's Representations and Warranties)
Schedule 11 Form of Seller’s Estoppel (as to Leases)
PURCHASE AND SALE AGREEMENT
3500 & 3626 QUADRANGLE BOULEVARD,
ORLANDO, FLORIDA
THIS PURCHASE AND SALE AGREEMENT (the "Agreement"), made and entered into this 11th day of July, 2014, by and between FUND XIII AND FUND XIV ASSOCIATES, a Georgia joint venture partnership ("Seller"), and OWENS REALTY CAPITAL, LLC, a Florida limited liability company ("Purchaser").
W I T N E S E T H:
WHEREAS, Seller desires to sell certain improved real property commonly known as 3500 and 3626 Quadrangle Boulevard, Orlando, Florida, together with certain related personal and intangible property, and Purchaser desires to purchase such real, personal and intangible property; and
WHEREAS, the parties hereto desire to provide for said sale and purchase on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the premises, the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt, adequacy, and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby covenant and agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, each of the following capitalized terms shall have the meaning ascribed to such terms as set forth below:
"Additional Earnest Money" shall mean the sum of One Hundred Thousand and No/100 Dollars ($100,000.00 U.S.) payable by Purchaser in the event Purchaser elects to extend the Closing Date pursuant to Section 2.6 hereof.
"Ancillary Closing Documents" shall mean, collectively, the Assignment and Assumption of Leases, the General Assignment, and the Seller's Certificate.
"Assignment and Assumption of Leases" shall mean the form of assignment and assumption of Leases and Security Deposits and obligations under the Commission Agreements to be executed and delivered by Seller and Purchaser at the Closing in the form attached hereto as Schedule 2.
“Assignment and Assumption of Operating Agreements” shall mean the form of assignment and assumption of the Operating Contracts to be executed and delivered by Seller and Purchaser at the Closing in the form attached hereto as Schedule 4.
"Basket Limitation" shall mean an amount equal to Fifty Thousand and No/100 Dollars ($50,000.00 U.S.).
"Bill of Sale" shall mean the form of bill of sale to the Personal Property to be executed and delivered by Seller to Purchaser at the Closing in the form attached hereto as Schedule 3.
"Broker" shall have the meaning ascribed thereto in Section 10.1 hereof.
"Business Day" shall mean any day other than a Saturday, Sunday or other day on which banking institutions in the State of Florida are authorized by law or executive action to close.
"Cap Limitation" shall mean an amount equal to two percent (2%) of the Purchase Price.
"Closing" shall have the meaning ascribed thereto in Section 2.6 hereof.
"Closing Date" shall mean on or before August 7, 2014 as further described in Section 2.6 hereof.
"Commission Agreements" shall have the meaning ascribed thereto in Section 4.1(f) hereof, and such agreements are more particularly described on Exhibit "C" attached hereto and made a part hereof.
"Due Diligence Material" shall have the meaning ascribed thereto in Section 3.7 hereof.
"Earnest Money" shall mean the Initial Earnest Money, together with any Additional Earnest Money actually paid by Purchaser to Escrow Agent hereunder, and together with all interest which accrues thereon as provided in Section 2.3(c) hereof and in the Escrow Agreement.
"Effective Date" shall mean the date upon which Seller and Purchaser shall have delivered a fully executed counterpart of this Agreement to the other, which date shall be inserted in the space provided on the cover page and page 1 hereof. For the purposes of determining the Effective Date, a facsimile or other electronic signature shall be deemed an original signature.
"Environmental Law" shall mean any law, ordinance, rule, regulation, order, judgment, injunction or decree relating to pollution or substances or materials which are considered to be hazardous or toxic, including, without limitation, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Materials Transportation Act, the Clean Water Act, the Toxic Substances Control Act, the Emergency Planning and Community Right to Know Act, the Safe Drinking Water Act, the Clean Air Act, the Occupational Safety & Health Act, any state and local environmental law, all amendments and supplements to any of the foregoing and all regulations and publications promulgated or issued pursuant thereto.
"Escrow Agent" shall mean Chicago Title Insurance Company, at its office at 5565 Glenridge Connector, Suite 300, Atlanta, Georgia 30342, attention: Judy Hudson.
"Escrow Agreement" shall mean that certain Escrow Agreement in the form attached hereto as Exhibit "D" entered into contemporaneously with the execution and delivery of this Agreement by Seller, Purchaser and Escrow Agent with respect to the Earnest Money.
"Existing Survey" shall mean that certain survey with respect to the Land and the Improvements prepared by Professional Engineering Consultants, Inc., dated October 12, 2000.
"FIRPTA Affidavit” shall mean the form of FIRPTA Affidavit to be executed and delivered by Seller to Purchaser at Closing in the form attached hereto as Schedule 8.
"First Title Notice" shall have the meaning ascribed thereto in Section 3.4 hereof.
"General Assignment" shall have the meaning ascribed thereto in Section 5.1(f) hereof.
"Hazardous Substances" shall mean any and all pollutants, contaminants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized under any Environmental Law (including, without limitation, lead paint, asbestos, urea formaldehyde foam insulation, petroleum and polychlorinated biphenyls).
"Improvements" shall mean all buildings, structures and improvements now or on the Closing Date situated on the Land, including without limitation, all parking areas and facilities, improvements and fixtures located on the Land.
"Initial Earnest Money" shall mean the sum of Three Hundred Thousand and No/100 Dollars ($300,000.00 U.S.).
"Inspection Period" shall mean the period expiring at 5:00 P.M. local Atlanta, Georgia time on July 23, 2014.
"Intangible Property" shall mean all intangible property, if any, owned by Seller and related to the Land and Improvements, including without limitation, Seller's rights and interests, if any, in and to the following (to the extent assignable): (i) the name "3500 & 3626 Quadrangle Boulevard", (ii) all assignable plans and specifications and other architectural and engineering drawings for the Land and Improvements; (iii) all assignable warranties or guaranties given or made in respect of the Improvements or Personal Property; (iv) all transferable consents, authorizations, variances or waivers, licenses, permits and approvals from any governmental or quasi-governmental agency, department, board, commission, bureau or other entity or instrumentality solely in
respect of the Land or Improvements; and (v) all of Seller's right, title and interest in and to all assignable Operating Agreements that Purchaser agrees to assume (or is deemed to have agreed to assume).
"Land" shall mean those certain tracts or parcels of real property located in Orlando, Orange County, Florida, containing approximately seven and fifty-three hundreds (7.53) acres of real property which is a portion of the tracts or parcels of real property which are more particularly described on Exhibit "A" attached hereto and made a part hereof, together with all rights, privileges and easements appurtenant to said real property, and all right, title and interest of Seller, if any, in and to any land lying in the bed of any street, road, alley or right-of-way, open or closed, adjacent to or abutting the Land.
"Leases" shall mean the leases or occupancy agreements, which are more particularly identified on Exhibit "E” attached hereto.
"List of Leases" shall mean Exhibit "E" attached to this Agreement and made a part hereof.
"Losses" has the meaning ascribed thereto in Section 12.1 hereof.
"Management Agreement" shall have the meaning ascribed thereto in Section 4.1(f) hereof and is more particularly described on Exhibit "C" attached hereto and made a part hereof.
"Monetary Objection " or "Monetary Objections" shall mean (a) any mortgage, deed to secure debt, deed of trust or similar security instrument encumbering all or any part of the Property, (b) any mechanic's, materialman's or similar lien (unless resulting from any act or omission of Purchaser or any of its agents, contractors, representatives or employees or any tenant of the Property), (c) the lien of ad valorem real or personal property taxes, assessments and governmental charges affecting all or any portion of the Property which are delinquent, and (d) any judgment of record against Seller in the county or other applicable jurisdiction in which the Property is located.
"Operating Agreements" shall mean all those certain contracts and agreements more particularly described on Exhibit "G" attached hereto and made a part hereof relating to the repair, maintenance or operation of the Land, Improvements or Personal Property which will extend beyond the Closing Date, including, without limitation, all equipment leases.
"Other Notices of Sale" shall have the meaning ascribed thereto in Section 5.1(r) hereof.
"Permitted Exceptions" shall mean, collectively, (a) liens for taxes, assessments and governmental charges not yet due and payable or due and payable but not yet delinquent, (b) the Leases, and (c) such other easements, restrictions and encumbrances that do not constitute Monetary Objections.
"Personal Property" shall mean all furniture (including common area furnishings and interior landscaping items), carpeting, draperies, appliances, personal property (excluding any computer software which either is licensed to Seller or Seller deems proprietary), machinery, apparatus and equipment owned by Seller and currently used exclusively in the operation, repair and maintenance of the Land and Improvements and situated thereon, as generally described on Exhibit "B" attached hereto and made a part hereof, and all non-confidential books, records and files (excluding any appraisals, budgets, strategic plans for the Property, internal analyses, information regarding the marketing of the Property for sale, submissions relating to Seller's obtaining of corporate or partnership authorization, attorney and accountant work product, attorney-client privileged documents, or other information in the possession or control of Seller or Seller's property manager which Seller deems proprietary) relating to the Land and Improvements. The Personal Property does not include any property owned by tenants, contractors or licensees, and shall be conveyed by Seller to Purchaser subject to depletions, replacements and additions in the ordinary course of Seller's business.
"Property" shall have the meaning ascribed thereto in Section 2.1 hereof.
"Purchase Price" shall be the amount specified in Section 2.4 hereof.
"Purchaser-Related Entities" has the meaning ascribed thereto in Section 12.1 hereof.
"Purchaser-Waived Breach" has the meaning ascribed thereto in Section 12.3 hereof.
"Purchaser's Certificate" shall have the meaning ascribed thereto in Section 5.2(d) hereof.
"Security Deposits" shall mean any security deposits, rent or damage deposits or similar amounts (other than rent paid for the month in which the Closing occurs) actually held by Seller with respect to the Leases.
"Seller's Affidavit" shall mean the form of owner's affidavit to be given by Seller at Closing to the Title Company in the form attached hereto as Schedule 6.
"Seller's Certificate" shall mean the form of certificate to be executed and delivered by Seller to Purchaser at the Closing with respect to the truth and accuracy of Seller's warranties and representations contained in this Agreement (modified and updated as the circumstances require), in the form attached hereto as Schedule 7.
“Seller’s Estoppel” shall mean the form of estoppel that may be executed and delivered by Seller at Closing in substantially the form attached hereto as Schedule 11, as contemplated in Section 6.1(c) hereof.
"SNDA" shall mean the Subordination, Non-Disturbance and Attornment Agreement to be sought from the tenants under the Leases in a commercially reasonable form provided by a mortgagee providing financing to Purchaser for the acquisition of the Property.
"Survey" and "Surveys" shall have the meaning ascribed thereto in Section 3.4 hereof.
"Taxes" shall have the meaning ascribed thereto in Section 5.4(a) hereof.
“Tenant” shall mean each of the parties holding a leasehold interest in a portion of the Property pursuant to the Leases.
“Tenant Estoppel Certificate” shall mean the certificate from each of the Tenants under the Leases in substantially the form attached hereto as Exhibit “H”.
"Tenant Inducement Costs" shall mean any out-of-pocket payments required under the Leases to be paid by the landlord thereunder to or for the benefit of the tenant thereunder which is in the nature of a tenant inducement, including specifically, but without limitation, tenant improvement costs, lease buyout payments, and moving, design, refurbishment, club membership allowances and costs and any free rental period occurring after the Closing Date.
"Title Company" shall mean Chicago Title Insurance Company, 5565 Glenridge Connector, Suite 300, Atlanta, Georgia 30342.
"Title Commitment" shall have the meaning ascribed thereto in Section 3.4 hereof.
"Warranty Deed" shall mean the form of deed attached hereto as Schedule 1.
ARTICLE 2
PURCHASE AND SALE
2.1 Agreement to Sell and Purchase. Subject to and in accordance with the terms and provisions of this Agreement, Seller agrees to sell and Purchaser agrees to purchase, the following property (collectively, the "Property"):
(a)the Land;
(b)the Improvements;
(c) | all of Seller's right, title and interest in and to the Leases, any guaranties of the Leases and the Security Deposits; |
(d)the Personal Property; and
(e)the Intangible Property.
2.2 Permitted Exceptions. The Property shall be conveyed subject to the matters which are, or are deemed to be, Permitted Exceptions.
2.3 Earnest Money.
(a) Prior to the execution and delivery of this Agreement by Seller and Purchaser, Purchaser has delivered the Initial Earnest Money to Escrow Agent by federal wire transfer, which Initial Earnest Money shall be held and released by Escrow Agent in accordance with the terms of the Escrow Agreement.
(b) On or before the last day of the Inspection Period, Purchaser shall deposit the Additional Earnest Money with Escrow Agent. The parties hereto mutually acknowledge and agree that time is of the essence in respect of Purchaser's timely deposit of the Additional Earnest Money with Escrow Agent prior to the expiration of the Inspection Period; and that if Purchaser elects not to terminate this Agreement prior to the expiration of the Inspection Period and fails to deposit the Additional Earnest Money with Escrow Agent prior to the expiration of the Inspection Period, Seller may elect to terminate this Agreement by providing written notice to Purchaser and Escrow Agent, and Escrow Agent shall deliver the Initial Earnest Money to Seller, and neither party hereto shall have any further rights or obligations hereunder, except those provisions of this Agreement which by their express terms survive the termination of this Agreement.
(c) The Earnest Money shall be applied to the Purchase Price at the Closing and shall otherwise be held, refunded, or disbursed in accordance with the terms of the Escrow Agreement and this Agreement. All interest and other income from time to time earned on the Initial Earnest Money and any Additional Earnest Money shall be earned for the account of Purchaser, and shall be a part of the Earnest Money; and the Earnest Money hereunder shall be comprised of the Initial Earnest Money, any Additional Earnest Money and all such interest and other income.
2.4 Purchase Price. Subject to adjustment and credits as otherwise specified in this Section 2.4 and elsewhere in this Agreement, the purchase price (the "Purchase Price") to be paid by Purchaser to Seller for the Property shall be FOURTEEN MILLION THREE HUNDRED TWENTY THOUSAND and NO/100 DOLLARS ($14,320,000.00 U.S.). The Purchase Price shall be paid by Purchaser to Seller at the Closing as follows:
(a)The Earnest Money shall be paid by Escrow Agent to Seller at Closing; and
(b)At Closing, the balance of the Purchase Price, after applying, as partial payment of the Purchase Price the Earnest Money paid by Escrow Agent to Seller, and subject to prorations and other adjustments specified in this Agreement, shall be paid by Purchaser in immediately available funds to the Title Company, for further delivery to an account or accounts designated by Seller. If the Closing occurs, but the amount due from Purchaser pursuant to this Agreement is not received by Seller on or before the later of 3:00 p.m. local Atlanta, Georgia time or in sufficient time for reinvestment on the Closing Date, Purchaser shall reimburse Seller for loss of interest due to the inability to reinvest Seller's funds on the Closing Date, calculated at the rate of five percent (5%) per annum (calculated on a per diem basis, using a 365-day year). The provisions of the preceding sentence of this section shall survive the Closing.
2.5 Independent Contract Consideration. In addition to, and not in lieu of the delivery to Escrow Agent of the Initial Earnest Money, Purchaser shall deliver to Seller, concurrently with Purchaser's execution and delivery of this Agreement to Seller, Purchaser's check, payable to the order to Seller, in the amount of One Hundred and No/100 Dollars ($100.00). Seller and Purchaser hereby mutually acknowledge and agree that said sum represents adequate bargained for consideration for Seller's execution and delivery of this Agreement and Purchaser's right to inspect the Property pursuant to Article III. Said sum is in addition to and independent of any other consideration or payment provided for in this Agreement and is nonrefundable in all events.
2.6 Closing. The consummation of the sale by Seller and purchase by Purchaser of the Property (the "Closing") shall be held on any date on or before August 7, 2014, or at such earlier time and date as shall be consented to by Seller and Purchaser (the "Closing Date"). Subject to the foregoing, the Closing shall be administered through the offices of the Title Company, 5565 Glenridge Connector, Suite 300, Atlanta, Georgia 30342. It is contemplated that the transaction shall be closed with the concurrent delivery of the documents of title and the payment of the Purchase Price. Notwithstanding the foregoing, there shall be no requirement that Seller and Purchaser physically meet for the Closing, and all documents and funds to be delivered at the Closing shall be delivered to the Title Company unless the parties hereto mutually agree otherwise.
ARTICLE 3.
PURCHASER'S INSPECTION AND REVIEW RIGHTS
3.1 Due Diligence Inspections.
(a)From and after the Effective Date until the Closing Date or earlier termination of this Agreement, Seller shall permit Purchaser and its authorized representatives to inspect the Property to perform due diligence and environmental investigations, to examine the records of Seller with respect to the Property, and make copies thereof, at such times during normal business hours as Purchaser or its representatives may request. Prior to the Effective Date Seller has provided the due diligence materials set forth in Section 3.2(a) in Seller’s possession to Purchaser in electronic format. Unless approved by Seller in writing, such inspections shall be nondestructive in nature, and specifically shall not include any p
hysically intrusive testing. All such inspections shall be performed in such a manner to minimize any interference with the business of the tenant under the Leases at the Property and, in each case, in compliance with Seller's rights and obligations as landlord under the Leases. Seller reserves the right to have a representative present at the time of making any such inspection and tour and at the time of any interviews with the tenant of the Property. Purchaser shall notify Seller not less than two (2) Business Days in advance of making any such inspection, tour or interview. Purchaser agrees that Purchaser shall make no contact with and shall not interview any tenants of the Property either in person or on the telephone without the express prior approval of Seller, which approval shall not be unreasonably withheld, delayed or conditioned. All inspection fees, appraisal fees, engineering fees and all other costs and expenses of any kind incurred by Purchaser relating to the inspection of the Property shall be solely Purchaser's expense.
(b)If the Closing is not consummated hereunder, Purchaser shall promptly deliver copies of all reports, surveys and other information furnished to Purchaser by third parties in connection with such inspections to Seller; provided, however, that delivery of such copies and information shall be without warranty or representation whatsoever, express or implied, including, without limitation, any warranty or representation as to ownership, accuracy, adequacy or completeness thereof or otherwise. This Section 3.1(b) shall survive the termination of this Agreement.
(c)To the extent that Purchaser or any of its representatives, agents or contractors damages or disturbs the Property or any portion thereof, Purchaser shall return the same to substantially the same condition which existed immediately prior to such damage or disturbance. Purchaser hereby agrees to and shall indemnify, defend and hold harmless Seller from and against any and all expense, loss or damage which Seller may incur (including, without limitation, reasonable attorney's fees actually incurred) as a result of any act or omission of Purchaser or its representatives, agents or contractors, other than any expense, loss or damage to the extent arising from any act or omission of Seller during any such inspection and other than any expense, loss or damage resulting from the discovery or release of any Hazardous Substances at the Property (other than Hazardous Substances brought on to the Property by Purchaser or its representatives, agents or contractors, or any release of Hazardous Substances resulting from the negligence of Purchaser or its representatives, agents or contractors). Said indemnification agreement shall survive the Closing and any earlier termination of this Agreement. Purchaser shall maintain and shall ensure that Purchaser's consultants and contractors maintain commercial general liability insurance in an amount not less than $2,000,000, combined single limit, and in form and substance adequate to insure against all liability of Purchaser and its consultants and contractors, respectively, and each of their respective agents, employees and contractors, arising out of inspections and testing of the Property or any part thereof made on Purchaser's behalf. Purchaser agrees to provide to Seller a certificate of insurance with regard to each applicable liability insurance policy prior to any entry upon the Property by Purchaser or its consultants or contractors, as the case may be, pursuant to this Section 3.1.
3.2 Seller's Deliveries to Purchaser; Purchaser's Access to Seller's Property Records.
(a)Seller and Purchaser acknowledge that all of the following either have been or shall be electronically delivered or made available to Purchaser on the Effective Date to the extent the same are in the possession of Seller (and Purchaser further acknowledges that no additional items are required to be delivered by Seller to Purchaser except as may be expressly set forth in other provisions of this Agreement):
(i)Copies of current Property tax bills and assessor's statements of current assessed value.
(ii)Copies of Property operating statements for the past 24 months.
(iii)Copies of the Leases, guarantees, any amendments and letter agreements relating thereto existing as of the Effective Date.
(iv)All Operating Agreements currently in place at the Property, if any.
(v)A copy of Seller's (or its affiliate's) current policy of title insurance with respect to the Land and Improvements.
(vi)A copy of the Existing Survey.
(vii)A copy of Seller’s existing certificates of insurance currently in effect for the Property.
(viii)Copies of any certificates of occupancy in place with respect to the Property.
(b)From the Effective Date until the Closing Date or earlier termination of this Agreement, Seller shall allow Purchaser and Purchaser's representatives, on reasonable advance notice and during normal business hours, to have access to Seller's existing non-confidential books, records and files relating to the Property, at Seller's property manager’s office at 111 North Orange Avenue, Suite 925, Orlando, Florida 32801, for the purpose of inspecting and (at Purchaser's expense) copying the same, including, without limitation, the materials listed below (to the extent any or all of the same are in Seller's possession), subject, however, to the limitations of any confidentiality or nondisclosure agreement to which Seller may be bound, and provided that Seller shall not be required to deliver or make available to Purchaser (i) any records, reports, notices, test results or other information in Seller's possession relating to the environmental condition of the Property, and (ii) any appraisals, property condition reports, budgets, strategic plans for the Property, internal analyses, information regarding the marketing of the Property for sale, submissions relating to Seller's obtaining of corporate authorization, attorney and accountant work product, attorney-client privileged documents, or other information in the possession or control of Seller or Seller's property manager which Seller deems proprietary. In the event that Purchaser requests copies of other non-confidential books, records and files relating to the Property that are located in Seller’s office, Seller shall either (y) send to Purchaser such additional records and files in an electronic format, or (z) make arrangements to have such additional records and files to the office of Seller’s property manager. Purchaser acknowledges and agrees, however, that Seller makes no representation or warranty of any nature whatsoever, express or implied, with respect to the ownership, enforceability, accuracy, adequacy or completeness or otherwise of any of such records, evaluations, data, investigations, reports, cost estimates or other materials. If the Closing contemplated hereunder fails to take place for any reason, Purchaser shall promptly return all copies of materials copied from Seller's books, records and files relating to the Property. It is understood and agreed that Seller shall have no obligation to obtain, commission or prepare any such books, records, files, reports or studies not now in Seller's possession. Subject to the foregoing, Seller agrees to make available to Purchaser for inspection and copying, without limitation, the following books, records and files relating to the Property, all to the extent the same are in Seller's possession:
(i)Tenant Information. A copy of any financial statements or other financial information of the Tenants under the Leases (and any Lease guarantors, if any), written information relative to the Tenant’s payment histories, and Tenant correspondence, to the extent Seller has the same in its possession;
(ii)Commission Agreements. Copies of the Commission Agreements;
(iii)Plans. All available construction plans and specifications in Seller's possession relating to the development, condition, repair and maintenance of the Property, the Improvements and the Personal Property;
(iv)Permits; Licenses. Copies of any permits, licenses or other similar documents in Seller's possession relating to the use, occupancy or operation of the Property; and
(v)Operating Costs and Expenses. All available records of any operating costs and expenses for the Property in Seller's possession.
3.3 Condition of the Property
(a)Seller recommends that Purchaser employ one or more independent engineering and/or environmental professionals to perform engineering, environmental and physical assessments on Purchaser's behalf in respect of the Property and the condition thereof. Purchaser and Seller mutually acknowledge and agree that the Property is being sold in an "AS IS" condition and "WITH ALL FAULTS," known or unknown, contingent or existing. Purchaser has the sole responsibility to fully inspect the Property, to investigate all matters relevant thereto, including, without limitation, the condition of the Property, and to reach its own, independent evaluation of any risks (environmental or otherwise) or rewards associated with the ownership, leasing, management and operation of the Property.
(b)To the fullest extent permitted by law, Purchaser does hereby unconditionally waive and release Seller, and its partners, beneficial owners, officers, directors, shareholders and employees from any present or future claims and liabilities of any nature arising from or relating to the presence or alleged presence of Hazardous Substances in, on, at, from, under or about the Property or any adjacent property, including, without limitation, any claims under or on account of any Environmental Law, regardless of whether such Hazardous Substances are located in, on, at, from, under or about the Property or any adjacent property prior to or after the date hereof. In addition, Purchaser does hereby covenant and agree to defend, indemnify, and hold harmless Seller and its partners, beneficial owners, officers, directors, shareholders and employees from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs or expenses of whatever kind or nature, known or unknown, existing and future, including any action or proceeding brought or threatened, or ordered by
governmental authorities, relating to any Hazardous Substances which may be placed, located or released on the Property after the date of Closing. The terms and provisions of this paragraph shall survive the Closing hereunder.
3.4 Title and Survey. Prior to the execution of this Agreement, Seller ordered from the Title Company a preliminary owner's title commitment with respect to the Property issued in favor of Purchaser (the "Title Commitment"). Purchaser shall request that the Title Company make copies of the Title Commitment, and copies of all underlying recorded exceptions referenced in the Title Commitment, available to Seller on the Title Company's website. Purchaser may arrange, at Purchaser’s sole cost and expense, for the preparation of one or more updates of the Existing Survey (each and together, the "Survey"). Purchaser shall have until the Business Day which is six (6) Business Days prior to the last day of the Inspection Period to give written notice (the "First Title Notice") to Seller of such objections as Purchaser may have to any exceptions to title disclosed in the Title Commitment or in any Survey or otherwise in Purchaser's examination of title. From time to time at any time after the First Title Notice and prior to the Closing Date, Purchaser may give written notice of exceptions to title first appearing of record after the effective date of any updated title commitment or matters of survey which would not have been disclosed by an accurate updated examination of title or preparation of an updated ALTA survey prior to date of the initial Title Commitment or the initial Survey. Seller shall have the right, but not the obligation (except as to Monetary Objections affecting the Property), to attempt to remove, satisfy or otherwise cure any exceptions to title to which the Purchaser so objects. Within five (5) Business Days after receipt of Purchaser's First Title Notice, Seller shall give written notice to Purchaser informing the Purchaser of Seller's election with respect to such objections. If Seller fails to give written notice of election within such five (5) Business Day period, Seller shall be deemed to have elected not to attempt to cure the objections (other than Monetary Objections). If Seller elects to attempt to cure any objections, Seller shall be entitled to one or more reasonable adjournments of the Closing of up to but not beyond the thirtieth (30th) day following the initial date set for the Closing to attempt such cure, but, except for Monetary Objections, Seller shall not be obligated to expend any sums, commence any suits or take any other action to effect such cure. Except as to Monetary Objections affecting the Property, if Seller elects, or is deemed to have elected, not to cure any exceptions to title to which Purchaser has objected or if, after electing to attempt to cure, Seller determines that it is unwilling or unable to remove, satisfy or otherwise cure any such exceptions, Purchaser's sole remedy hereunder in such event shall be either (i) to accept title to the Property subject to such exceptions as if Purchaser had not objected thereto and without reduction of the Purchase Price, (ii) if such exceptions are matters first appearing of record after the date of this Agreement, and arise by, through or under Seller, to terminate this Agreement, or (iii) to terminate this Agreement within three (3) Business Days after receipt of written notice from Seller either of Seller's election not to attempt to cure any objection or of Seller's determination, having previously elected to attempt to cure, that Seller is unable or unwilling to do so, or three (3) Business Days after Seller is deemed hereunder to have elected not to attempt to cure such objections (and upon any such termination under clause (ii) or (iii) above, Escrow Agent shall return the Earnest Money to Purchaser). Notwithstanding anything to the contrary contained elsewhere in this Agreement, Seller shall be obligated to cure or satisfy all Monetary Objections affecting the Property at or prior to Closing, and Seller may use the proceeds of the Purchase Price at Closing for such purpose.
3.5 Operating Agreements. On or before ten (10) days prior to the expiration of the Inspection Period, Purchaser will designate in a written notice to Seller those Operating Agreements that are assignable by Seller which Purchaser will assume at Closing and which Operating Agreements will be terminated by Seller at Closing; provided, however, that Seller shall not be obligated to terminate, and Purchaser shall assume Seller's obligations arising from and after Closing under, all Operating Agreements which cannot be terminated by Seller upon no more than thirty (30) days prior notice or which can be terminated by Seller only upon payment of a fee, premium, penalty or other form of early termination compensation. Taking into account any credits or prorations to be made pursuant to Article 5 hereof for payments coming due after Closing but accruing prior to Closing, Purchaser will assume the obligations arising from and after the Closing Date under those Operating Agreements which Purchaser has designated will not be terminated. Seller, without cost to Purchaser, shall terminate at Closing all Operating Agreements that are not so assumed. If Purchaser fails to notify Seller in writing on or prior to the date which is ten (10) days prior to the expiration of the Inspection Period of any Operating Agreements that Purchaser does not desire to assume at Closing, Purchaser shall be deemed to have elected to assume all such Operating Agreements and to have waived its right to require Seller to terminate such Operating Agreements at Closing.
3.6 Termination of Agreement. Purchaser shall have until the expiration of the Inspection Period to determine, in Purchaser's sole opinion and discretion, the suitability of the Property for acquisition by Purchaser or Purchaser's permitted assignee. Purchaser shall have the right to terminate this Agreement at any time on or before said time and date of expiration of the Inspection Period by giving written notice to Seller of such election to terminate. If Purchaser so elects to terminate this Agreement pursuant to this Section 3.6, Escrow Agent shall pay the Initial Earnest Money to Purchaser, whereupon, except for those provisions of this Agreement which by their express terms survive the termination of this Agreement, no party hereto shall have any other or further rights or obligations under this Agreement. If Purchaser fails to so terminate this Agreement prior to the expiration of the Inspection Period, Purchaser shall have no further right to terminate this Agreement pursuant to this Section 3.6. The parties acknowledge that this Agreement shall not be void or voidable for lack of mutuality.
3.7 Confidentiality. All information acquired by Purchaser or any of its designated representatives (including by way of example, but not in limitation, the officers, directors, shareholders and employees of Purchaser, and Purchaser's engineers, consultants, counsel and potential lenders, and the officers, directors, shareholders and employees of each of them) with respect to the Property, whether delivered by Seller or any of Seller's representatives or obtained by Purchaser as a result of its inspection and investigation of the Property, examination of Seller's books, records and files in respect of the Property, or otherwise (collectively, the "Due Diligence Material") shall be used solely for the purpose of determining whether the Property is suitable for Purchaser's acquisition and ownership thereof and for no other purpose whatsoever. The terms and conditions which are contained in this Agreement and all Due Diligence Material which is not published as public knowledge or which is not generally available in the public domain shall be kept in strict confidence by Purchaser and shall not be disclosed to any individual or entity other than to those authorized representatives of Purchaser who need to know the information for the purpose of assisting Purchaser in evaluating the Property for Purchaser's potential acquisition thereof; provided however, that Purchaser shall have the right to disclose any such information if required by applicable law or as may be necessary in connection with any court action or proceeding with respect to this Agreement. Purchaser shall and hereby agrees to indemnify and hold Seller harmless from and against any and all loss, liability, cost, damage or expense that Seller may suffer or incur (including, without limitation, reasonable attorneys' fees actually incurred) as a result of the unpermitted disclosure or use of any of the Due Diligence Material to any individual or entity other than an appropriate representative of Purchaser and Purchaser's prospective and actual counsel, accountants, professionals, consultants, attorneys and lenders and/or the use of any Due Diligence Material for any purpose other than as herein contemplated and permitted. If Purchaser or Seller elects to terminate this Agreement pursuant to any provision hereof permitting such termination, or if the Closing contemplated hereunder fails to occur for any reason, Purchaser will promptly return to Seller all Due Diligence Material in the possession of Purchaser and any of its representatives, and destroy all copies, notes or abstracts or extracts thereof, as well as all copies of any analyses, compilations, studies or other documents prepared by Purchaser or for its use (whether in written or electronic form) containing or reflecting any Due Diligence Material. In the event of a breach or threatened breach by Purchaser or any of its representatives of this Section 3.7, Seller shall be entitled, in addition to other available remedies, to an injunction restraining Purchaser or its representatives from disclosing, in whole or in part, any of the Due Diligence Material and any of the terms and conditions of this Agreement. Nothing contained herein shall be construed as prohibiting or limiting Seller from pursuing any other available remedy, in law or in equity, for such breach or threatened breach. The provisions of this Section shall survive the Closing and any earlier termination of this Agreement.
ARTICLE 4.
REPRESENTATIONS, WARRANTIES AND OTHER AGREEMENTS
4.1 Representations and Warranties of Seller. Seller hereby makes the following representations and warranties to Purchaser:
(a)Organization, Authorization and Consents. Seller is a duly organized and validly existing partnership under the laws of the State of Georgia, whose sole general partners are Wells Real Estate Fund XIII, L.P., a Georgia limited partnership and Wells Real Estate Fund XIV, L.P., a Georgia limited partnership. Seller has the right, power and authority to enter into this Agreement and to convey the Property in accordance with the terms and conditions of this Agreement, to engage in the transactions contemplated in this Agreement and to perform and observe the terms and provisions hereof.
(b)Action of Seller, Etc. Seller has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and upon the execution and delivery of any document to be delivered by Seller on or prior to the Closing, this Agreement and such document shall constitute the valid and binding obligation and agreement of Seller, enforceable against Seller in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors.
(c)No Violations of Agreements. Neither the execution, delivery or performance of this Agreement by Seller, nor compliance with the terms and provisions hereof, will result in any breach of the terms, conditions or provisions of, or conflict with or constitute a default under, or result in the creation of any lien, charge or encumbrance upon the Property or any portion thereof pursuant to the terms of any indenture, deed to secure debt, mortgage, deed of trust, note, evidence of indebtedness or any other agreement or instrument by which Seller is bound.
(d)Litigation. To Seller's knowledge, Seller has received no written notice that any investigation, action or proceeding is pending or threatened, which (i) if determined adversely to Seller, materially and adversely affects the use or value of the Property, or (ii) questions the validity of this Agreement or any action taken or to be taken pursuant hereto, or (iii) involves condemnation or eminent domain proceedings involving the Property or any portion thereof.
(e)Existing Leases. To Seller's knowledge, (i) other than the Leases listed in the Rent Roll, Seller has not entered into any contract or agreement with respect to the occupancy of the Property or any portion or portions thereof which will be binding on Purchaser after the Closing; (ii) the copies of the Leases heretofore delivered by Seller to Purchaser are true, correct and complete copies thereof; and (iii) the Leases have not been amended except as evidenced by amendments similarly delivered and constitute the entire agreement between Seller and the tenants thereunder.
(f)Leasing Commissions. To Seller's knowledge, (i) there are no lease brokerage agreements, leasing commission agreements or other agreements providing for payments of any amounts for leasing activities or procuring tenants with respect to the Property or any portion or portions thereof other than as disclosed in Exhibit "C" attached hereto (the "Commission Agreements"), and (ii) there are no agreements currently in effect relating to the management and leasing of the Property other than as disclosed on said Exhibit "C" (the "Management Agreement"); and that all leasing commissions, brokerage fees and management fees accrued or due and payable under the Commission Agreements and the Management Agreement, as of the date hereof and at the Closing have been or shall be paid in full; and that Seller shall terminate the Management Agreement as to the Property at Closing at no cost to Purchaser. Notwithstanding anything to the contrary contained herein, Seller is responsible for the payment of all leasing commissions which are due and payable prior to the end of the Inspection Period for (A) any new leases entered into after the Effective Date that have been approved (or deemed approved) by Purchaser, and (B) the renewal, expansion or extension of the Leases existing as of the Effective Date and exercised or effected after the Effective Date. The provisions of this section shall survive the Closing.
(g)Taxes and Assessments. Except as may be set forth on Exhibit "I" attached hereto and made a part hereof, Seller has not filed, and has not retained anyone to file, notices of protests against, or to commence action to review, real property tax assessments against the Property, which are still pending.
(h)Environmental Matters. Except as may be set forth in the Due Diligence Material or as otherwise disclosed in writing by Seller, Seller has received no written notification that any governmental or quasi-governmental authority has determined that there are any violations of any Environmental Law with respect to the Property, nor to Seller's knowledge has Seller received any written notice that any governmental or quasi-governmental authority is contemplating an investigation of the Property, with respect to a violation or suspected violation of any Environmental Law.
(i)Compliance with Laws. To Seller's knowledge and except as set forth on Exhibit "F", Seller has received no written notice alleging any violations of law, municipal or county ordinances, or other legal requirements with respect to the Property or any portion thereof where such violations remain outstanding.
(j)Easements and Other Agreements. To Seller's knowledge, Seller has not received any written notice of Seller's default in complying with the terms and provisions of any of the covenants, conditions, restrictions or easements constituting a Permitted Exception.
(k)Other Agreements. To Seller's knowledge, except for the Leases, the Commission Agreements, the Management Agreement and the Permitted Exceptions, there are no leases, Operating Agreements, management agreements, brokerage agreements, leasing agreements or other agreements or instruments in force or effect that grant to any person or any entity any right, title, interest or benefit in and to all or any part of the Property or any rights relating to the use, operation, management, maintenance or repair of all or any part of the Property which will survive the Closing or be binding upon Purchaser other than those which Purchaser has agreed in writing to assume prior to the expiration of the Inspection Period (or is deemed to have agreed to assume) or which are terminable upon thirty (30) days notice without payment of premium or penalty.
(l)Seller Not a Foreign Person. Seller is not a "foreign person" which would subject Purchaser to the withholding tax provisions of Section 1445 of the Internal Revenue Code of 1986, as amended.
(m)Condemnation. Seller has received no written notice of the commencement of any proceedings for taking by condemnation or eminent domain of any part of the Property.
(n)Employees. Seller has no employees to whom by virtue of such employment Purchaser will have any obligation after the Closing.
The representations and warranties made in this Agreement by Seller shall be continuing and shall be deemed remade by Seller as of the Closing Date, with the same force and effect as if made on, and as of, such date, subject to Seller's right to update such representations and warranties by written notice to Purchaser and in Seller's certificate to be delivered pursuant to
Section 5.1(h) hereof. The provisions of this Section 4.1 shall survive the Closing for a period of one hundred eighty (180) days following the Closing.
Except as otherwise expressly provided in this Agreement or in any documents to be executed and delivered by Seller to Purchaser at the Closing, Seller has not made, and Purchaser has not relied on, any information, promise, representation or warranty, express or implied, regarding the Property, whether made by Seller, on behalf of Seller, or otherwise, including, without limitation, the physical condition of the Property, the financial condition of the Tenants under the Leases, title to or the boundaries of the Property, pest control matters, soil conditions, the presence, existence or absence of hazardous wastes, toxic substances or other environmental matters, compliance with building, health, safety, land use and zoning laws, regulations and orders, structural and other engineering characteristics, traffic patterns, market data, economic conditions or projections, past or future economic performance of the Tenants under the Leases or the Property, and any other information pertaining to the Property or the market and physical environments in which the Property is located. Purchaser acknowledges (i) that Purchaser has entered into this Agreement with the intention of making and relying upon its own investigation or that of Purchaser's own consultants and representatives with respect to the physical, environmental, economic and legal condition of the Property and (ii) that Purchaser is not relying upon any statements, representations or warranties of any kind, other than those specifically set forth in this Agreement or in any document to be executed and delivered by Seller to Purchaser at the Closing, made (or purported to be made) by Seller or anyone acting or claiming to act on behalf of Seller. Purchaser will inspect the Property and become fully familiar with the physical condition thereof and, subject to the terms and conditions of this Agreement, shall purchase the Property in its "as is" condition, "with all faults," on the Closing Date. The provisions of this paragraph shall survive the Closing until the expiration of any applicable statute of limitations.
4.2 Knowledge Defined. All references in this Agreement to the "knowledge of Seller" or "to Seller's knowledge" shall refer only to the actual knowledge of F. Parker Hudson, Managing Director of Wells Real Estate Funds as agent for Seller, who has been actively involved in the management of Seller's business in respect of the Property. The term "knowledge of Seller" or "to Seller's knowledge" shall not be construed, by imputation or otherwise, to refer to the knowledge of Seller, or any affiliate of Seller, or to any other partner, beneficial owner, officer, director, agent, manager, representative or employee of Seller, or any of their respective affiliates, or to impose on the individual named above any duty to investigate the matter to which such actual knowledge, or the absence thereof, pertains. There shall be no personal liability on the part of the individual named above arising out of any representations or warranties made herein or otherwise.
4.3 Covenants and Agreements of Seller.
(a)Leasing Arrangements. During the pendency of this Agreement, Seller will not enter into any lease affecting the Property, or modify or amend in any material respect, or terminate, the existing Leases without Purchaser's prior written consent in each instance, which consent shall not be unreasonably withheld, delayed or conditioned and which shall be deemed given unless withheld by written notice to Seller given within three (3) Business Days after Purchaser's receipt of Seller's written request therefor, each of which requests shall be accompanied by a copy of any proposed modification or amendment of an existing Leases or of any new Lease that Seller wishes to execute between the Effective Date and the Closing Date, including, without limitation, a description of any Tenant Inducement Costs and leasing commissions associated with any proposed renewal or expansion of an existing Leases or with any such new Lease. If Purchaser fails to notify Seller in writing of its approval or disapproval within said three (3) Business Day period, such failure by Purchaser shall be deemed to be the approval of Purchaser.
(b)New Contracts. During the pendency of this Agreement, Seller will not enter into any contract, or modify, amend, renew or extend any existing contract, that will be an obligation affecting the Property or any part thereof subsequent to the Closing without Purchaser's prior written consent in each instance (which Purchaser agrees not to withhold or delay unreasonably), except contracts entered into in the ordinary course of business that are terminable without cause (and without penalty or premium) on 30 days (or less) notice.
(c)Operation of Property. During the pendency of this Agreement, Seller shall continue to operate the Property in a good and businesslike fashion consistent with Seller's past practices.
(d)Insurance. During the pendency of this Agreement, Seller shall, at its expense, continue to maintain the insurance policy covering the Improvements which is currently in force and effect.
(e)Tenant Estoppel Certificates. Seller shall use commercially reasonable efforts to obtain and deliver to Purchaser, on or before the date which is five (5) days prior to the Closing Date, “clean” Tenant Estoppel Certificates in the form attached hereto as Exhibit “H” or as may be required by tenant’s lease, executed by each Tenant. The “clean” Tenant
Estoppel Certificate shall not contain any material discrepancies from the Rent Roll, Leases, or Seller’s representations hereunder, nor, asserting a default by landlord under such Leases or assert a right to an abatement, counter-claim or offset by such tenant. Tenant Estoppel Certificates shall be dated no more than thirty (30) days prior to Closing. The delivery of the executed Tenant Estoppel Certificates pursuant to this Section 4.3(e) shall be an express condition precedent to Purchaser’s obligation to close the purchase and sale transaction under this Agreement. In the event that Seller is unable to obtain and deliver to Purchaser the written Tenant Estoppel Certificates on or before the date which is five (5) days prior to the Closing Date, the Seller may elect to extend the Closing Date for a period not to exceed ten (10) days for the sole purpose of Seller’s delivery of the Tenant Estoppel Certificates. In no event shall the inability or failure of Seller to obtain and deliver the Tenant Estoppel Certificates (Seller having used commercially reasonable efforts as set forth above) be a default of Seller hereunder. In the event all of the tenants of the Property have not delivered Tenant Estoppel Certificates prior to the extended Closing Date, Purchaser’s sole and exclusive remedy shall be to terminate this Agreement on or before the extended Closing Date, receive back the Earnest Money and receive a reimbursement from Seller for its actual, out of pocket third party costs and expenses incurred by Purchaser in connection with this Agreement and its inspections of the Property in an amount not to exceed Thirty Thousand and No/100 Dollars ($30,000.00) or to waive the requirement for any further Tenant Estoppel Certificates.
(f)Subordination, Non-Disturbance and Attornment Agreement. At the request of a mortgage lender providing financing to Purchaser for the acquisition of the Property, Seller shall endeavor in good faith (but without obligation to incur any cost or expense) to obtain and deliver to such mortgagee, on or before Closing, a written SNDA signed by the tenants under the Leases; provided that delivery of such signed SNDA shall not be a condition of Closing; and in no event shall the inability or failure of Seller to obtain and deliver said SNDA (Seller having used its good faith efforts as set forth above as to the tenants under the Leases) be a default of Seller hereunder.
4.4 Representations and Warranties of Purchaser.
(a)Organization, Authorization and Consents. Purchaser is a duly organized and validly existing limited liability company under the laws of the State of Florida. Purchaser has the right, power and authority to enter into this Agreement and to purchase the Property in accordance with the terms and conditions of this Agreement, to engage in the transactions contemplated in this Agreement and to perform and observe the terms and provisions hereof.
(b)Action of Purchaser, Etc. Purchaser has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and upon the execution and delivery of any document to be delivered by Purchaser on or prior to the Closing, this Agreement and such document shall constitute the valid and binding obligation and agreement of Purchaser, enforceable against Purchaser in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors.
(c)No Violations of Agreements. Neither the execution, delivery or performance of this Agreement by Purchaser, nor compliance with the terms and provisions hereof, will result in any breach of the terms, conditions or provisions of, or conflict with or constitute a default under the terms of any indenture, deed to secure debt, mortgage, deed of trust, note, evidence of indebtedness or any other agreement or instrument by which Purchaser is bound.
(d)Litigation. To Purchaser's knowledge, Purchaser has received no written notice that any action or proceeding is pending or threatened, which questions the validity of this Agreement or any action taken or to be taken pursuant hereto.
The representations and warranties made in this Agreement by Purchaser shall be continuing and shall be deemed remade by Purchaser as of the Closing Date, with the same force and effect as if made on, and as of, such date subject to Purchaser's right to update such representations and warranties by written notice to Seller and in Purchaser's certificate to be delivered pursuant to Section 5.2(d) hereof.
ARTICLE 5.
CLOSING DELIVERIES, CLOSING COSTS AND PRORATIONS
5.1 Seller's Closing Deliveries. For and in consideration of, and as a condition precedent to Purchaser's delivery to Seller of the Purchase Price, Seller shall obtain or execute and deliver to Purchaser at Closing the following documents, all of which shall be duly executed, acknowledged and notarized where required:
(a)Deed. A Special Warranty Deed to the Land and Improvements, in the form attached hereto as Schedule 1 (the "Deed"), subject only to the Permitted Exceptions, and executed, acknowledged and sealed by Seller. The legal descriptions of the Land set forth in deed shall be based upon and conform to the legal description contained in the Survey;
(b)Bill of Sale. A bill of sale for the Personal Property in the form attached hereto as Schedule 3 (the "Bill of Sale"), without warranty as to the title or condition of the Personal Property;
(c)Assignment and Assumption of Leases and Security Deposits. Two (2) counterparts of an assignment and assumption of Leases and Security Deposits and, to the extent required elsewhere in this Agreement, the obligations of Seller under the Commission Agreements in the form attached hereto as Schedule 2 (the "Assignment and Assumption of Leases"), executed, acknowledged and sealed by Seller;
(d)General Assignment. An assignment of the Intangible Property in the form attached hereto as Schedule 5 (the "General Assignment"), executed, acknowledged and sealed by Seller;
(e)Assignment and Assumption of Operating Agreements. Two (2) counterparts of an assignment and assumption of Operating Agreements in the form attached hereto as Schedule 4 (the “Assignment and Assumption of Operating Agreements”), executed, acknowledged and sealed by Seller;
(f)Seller's Affidavit. An owner's affidavit substantially in the form attached hereto as Schedule 6 ("Seller's Affidavit"), stating that there are no known boundary disputes with respect to the Property, that there are no parties in possession of the Property other than Seller and the Tenants under the Leases, that there are no brokers except as disclosed herein, that any improvements or repairs made by, or for the account of, or at the instance of Seller to or with respect to the Property within ninety (90) days prior to the Closing have been paid for in full (or that adequate provision has been made therefore to the reasonable satisfaction of the Title Company), and including such other matters as may be reasonably requested by the Title Company;
(g)Seller's Certificate. A certificate in the form attached hereto as Schedule 7 ("Seller's Certificate");
(h)FIRPTA Certificate A FIRPTA Certificate in the form attached hereto as Schedule 8;
(i)Evidence of Authority Such documentation as may reasonably be required by Purchaser's title insurer to establish that this Agreement, the transactions contemplated herein, and the execution and delivery of the documents required hereunder, are duly authorized, executed and delivered;
(j)Settlement Statement A settlement statement setting forth the amounts paid by or on behalf of and/or credited to each of Purchaser and Seller pursuant to this Agreement;
(k)Surveys and Plans. Such surveys, site plans, plans and specifications, and other matters relating to the Property as are in the possession of Seller to the extent not theretofore delivered to Purchaser;
(l)Certificates of Occupancy. To the extent the same are in Seller's possession, original or photocopies of certificates of occupancy for all space within the Improvements located on the Property;
(m)Leases. To the extent the same are in Seller's possession, an original executed counterpart of the Leases;
(n)Notices of Sale to Tenants. Seller will join with Purchaser in executing a notice, in form and content reasonably satisfactory to Seller and Purchaser (the "Tenant Notices of Sale"), which Purchaser shall send to each tenant under each Lease informing each such tenant of the sale of the Property and of the assignment to and assumption by Purchaser of Seller's interest in the Leases and the Security Deposit and directing that all rent and other sums payable for periods after the Closing under such Leases shall be paid as set forth in said notices;
(o)Keys. All of the keys to any door or lock on the Property in Seller's possession;
(p)Tenant Estoppel Certificates and SNDA. Any originally executed Tenant Estoppel Certificate and SNDA as may be in the possession of Seller; and
(q)Other Documents. Such other documents as shall be reasonably requested by Purchaser's title insurer to effectuate the purposes and intent of this Agreement.
5.2 Purchaser's Closing Deliveries. Purchaser shall obtain or execute and deliver to Seller at Closing the following documents, all of which shall be duly executed, acknowledged and notarized where required:
(a.)Assignment and Assumption of Leases. Two (2) counterparts of the Assignment and Assumption of Leases, executed, acknowledged and sealed by Purchaser;
(b.)Assignment and Assumption of Operating Agreements. Two (2) counterparts of the Assignment and Assumption of Operating Agreements, executed, acknowledged and sealed by Purchaser;
(c.)General Assignment. Two (2) counterparts of the General Assignment, executed, acknowledged and sealed by Purchaser;
(d.)Purchaser's Certificate. A certificate in the form attached hereto as Schedule 10 ("Purchaser's Certificate"), evidencing the reaffirmation of the truth and accuracy in all material respects of Purchaser's representations, warranties and agreements contained in Section 4.4 hereof, with such modifications thereto as may be appropriate in light of any change in circumstances since the Effective Date;
(e.)Notice of Sale to Tenant. The Tenant Notices of Sale, executed by Purchaser, as contemplated in Section 5.1(m) hereof;
(f.)Settlement Statement A settlement statement setting forth the amounts paid by or on behalf of and/or credited to each of Purchaser and Seller pursuant to this Agreement;
(g.)Evidence of Authority. A copy of resolutions of the Board of Directors of Purchaser, certified by the Secretary or Assistant Secretary of Purchaser to be in force and unmodified as of the date and time of Closing, authorizing the purchase contemplated herein, the execution and delivery of the documents required hereunder, and designat-ing the signatures of the persons who are to execute and deliver all such documents on behalf of Purchaser or if Purchaser is not a corporation, such documentation as Seller may reasonably require to establish that this Agreement, the transaction contemplated herein, and the execution and delivery of the documents required hereunder, are duly authorized, executed and delivered; and
(h.)Other Documents. Such other documents as shall be reasonably requested by Seller's counsel to effectuate the purposes and intent of this Agreement.
5.3 Closing Costs. Seller shall pay the cost of the documentary stamps or transfer taxes imposed by the State of Florida, all recording fees on recording the Deed and all documents recorded to remove encumbrances, the costs of base title insurance premium for Purchaser’s owner’s title policy and any search and exam fees and the attorneys' fees of Seller, the brokerage commission due Broker and Purchaser’s Broker, and all other costs and expenses incurred by Seller in closing and consummating the purchase and sale of the Property pursuant hereto. Purchaser shall pay the cost of any extended coverage owner's title insurance premium, any costs for a lender’s policy of title insurance and any endorsements to either the owners or lender’s title policy and, all recording fees on all instruments (other than the Deed) to be recorded in connection with this transaction, the cost of the Survey, the attorneys' fees of Purchaser, and all other costs and expenses incurred by Purchaser in the performance of Purchaser's due diligence inspection of the Property and in closing and consummating the purchase and sale of the Property pursuant hereto. Purchaser and Seller shall equally divide the Escrow Agent fee.
5.4 Prorations and Credits. The items in this Section 5.4 shall be adjusted and prorated between Seller and Purchaser as of 11:59 P.M. on the day preceding the Closing, based upon the actual number of days in the applicable month or year:
(a)Taxes. All general real estate taxes imposed by any governmental authority ("Taxes") for the year in which the Closing occurs shall be prorated between Seller and Purchaser as of the Closing. If the Closing occurs prior to the receipt by Seller of the tax bill for the calendar year or other applicable tax period in which the Closing occurs, Taxes shall be prorated for such calendar year or other applicable tax period based upon the prior year's tax bill.
(b)Reproration of Taxes. Within thirty (30) days after receipt of final bills for Taxes, the party receiving said final tax bills shall furnish copies of the same to the other party and shall prepare and present to such other party a calculation of the reproration of such Taxes based upon the actual amount of such items charged to or received by the parties for the year or other applicable tax period. Purchaser and Seller shall make the appropriate adjusting payment between them
within thirty (30) days after presentment of the calculation as to the reproration and appropriate back-up information. The provisions of this Section 5.4(b) shall survive the Closing for a period of one (1) year after the Closing Date.
(c)Rents, Income and Other Expenses. Rents and any other amounts paid to Seller by the Tenants under the Leases (and any new lease entered into in accordance with the terms of this Agreement), if any, shall be prorated as of the Closing Date and be adjusted against the Purchase Price on the basis of a schedule which shall be prepared by Seller and delivered to Purchaser for Purchaser's review and approval prior to Closing. Seller and Purchaser shall prorate all rents, additional rent, common area maintenance charges, operating expense contributions, tenant reimbursements and escalations, and all other payments under the Leases, if any (and any such new lease) received as of the Closing Date so that at Closing Seller will receive monthly basic rent payments through the day prior to the Closing Date and so that Seller will receive reimbursement for all expenses paid by Seller through the day prior to the Closing Date for which Seller is entitled to reimbursement under the Leases, if any (including, without limitation, Taxes) (such expenses shall be reasonably estimated if not ascertainable as the Closing Date and then shall be re-adjusted as provided in (g) below when actual amounts are determined), and so that the excess, if any, is credited to Purchaser. Purchaser agrees to pay to Seller, upon receipt, any rents or other payments by the Tenants under the Leases with respect to the Property that apply to periods prior to Closing but which are received by Purchaser after Closing; provided, however, that any rents or other payments by such tenants received by Purchaser after Closing shall be applied first to any current amounts then owed to Purchaser by such tenants, with the balance, if any, paid over to Seller to the extent of delinquencies existing on the date of Closing to which Seller is entitled. It is understood and agreed that Purchaser shall not be legally responsible to Seller for the collection of any rents or other charges payable with respect to the Leases of Seller or any portion thereof which are delinquent or past due as of the Closing Date; but Purchaser agrees that Purchaser shall use commercially reasonable effort to collect any rents and charges not collected as of the Closing Date. The provisions of this Section 5.4(c) shall survive the Closing.
(d)Percentage Rents. Percentage rents, if any, collected by Purchaser from any tenant under such tenant's Lease for the percentage rent accounting period in which the Closing occurs shall be prorated between Seller and Purchaser as of the Closing Date, as, if, and when received by Purchaser, such that Seller's pro rata share shall be an amount equal to the total percentage rentals paid for such percentage rent accounting period under the applicable Lease multiplied by a fraction, the numerator of which shall be the number of days in such accounting period prior to Closing and the denominator of which shall be the total number of days in such accounting period; provided, however, that such proration shall be made only at such time as such tenant is current or, after application of a portion of such payment, will be current in the payment of all rental and other charges under such tenant's Lease that accrue and become due and payable from and after the Closing. The provisions of this Section 5.4(d) shall survive the Closing.
(e)Tenant Inducement Costs. Set forth on Exhibit "J" attached hereto and made a part hereof is a list of tenants at the Property with respect to which Tenant Inducement Costs and/or leasing commissions have not been paid in full as of the Effective Date. Seller shall pay all such Tenant Inducement Costs and leasing commissions set forth in Exhibit "J", as and when the same are due and payable. If said amounts have not been paid in full on or before Closing, Purchaser shall receive a credit against the Purchase Price in the aggregate amount of all such Tenant Inducement Costs and leasing commissions remaining unpaid at Closing, and Purchaser shall assume the obligation to pay amounts payable after Closing up to the amount of such credit received at Closing. Except as may be specifically provided to the contrary elsewhere in this Agreement, Purchaser shall be responsible for the payment of all Tenant Inducement Costs and leasing commissions which become due and payable after the end of the Inspection Period (i) as a result of any renewals or extensions or expansions of the Lease approved or deemed approved by Purchaser in accordance with Section 4.3(a) hereof after the end of the Inspection Period, and (ii) Tenant Inducement Costs and leasing commissions associated with new Leases executed after the end of the Inspection Period. The provisions of this Section 5.4(e) shall survive the Closing.
(f)Security Deposits. Purchaser shall receive at Closing a credit for all Security Deposits transferred and assigned to Purchaser at Closing, if any, in connection with the Leases, together with a detailed inventory of such Security Deposits certified by Seller at Closing.
(g)Operating Expenses. Personal property taxes, installment payments of special assessment liens, vault charges, sewer charges, utility charges, and normally prorated operating expenses actually paid or payable as of the Closing Date shall be prorated as of the Closing Date and adjusted against the Purchase Price, provided that within ninety (90) days after the Closing, Purchaser and Seller will make a further adjustment for such taxes, charges and expenses which may have accrued or been incurred prior to the Closing Date, but not collected or paid at that date. In addition, within ninety (90) days after the close of the fiscal year(s) used in calculating the pass-through to tenants of operating expenses and/or common area maintenance costs under the Leases (where such fiscal year(s) include(s) the Closing Date), Seller and Purchaser shall, upon the request of either, re-prorate on a fair and equitable basis in order to adjust for the effect of any credits or payments due
to or from tenants for periods prior to the Closing Date. All prorations shall be made based on the number of calendar days in such year or month, as the case may be. The provisions of this Section 5.4(g) shall survive the Closing.
ARTICLE 6.
CONDITIONS TO CLOSING
6.1 Conditions Precedent to Purchaser's Obligations. The obligations of Purchaser hereunder to consummate the transaction contemplated hereunder shall in all respects be conditioned upon the satisfaction of each of the following conditions prior to or simultaneously with the Closing, any of which may be waived by Purchaser in its sole discretion by written notice to Seller at or prior to the Closing Date:
(a.)Seller shall have performed, in all material respects, all covenants, agreements and undertakings of Seller contained in this Agreement;
(b.)All representations and warranties of Seller as set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of Closing, provided that solely for purposes of this subparagraph such warranties and representations shall be deemed to be given without being limited to Seller's knowledge and without modification (by update or otherwise, as provided in Section 5.1(h) hereof);
(c.)A Tenant Estoppel Certificate executed by each Tenant shall have been delivered to Purchaser on or before the date which is five (5) days prior to the Closing Date in accordance with the terms of Section 4.3(c) hereof, with such estoppel certificate to be in the form attached hereto as EXHIBIT “H” and otherwise in form and substance required by the applicable Lease. The delivery of said Tenant Estoppel Certificates shall be a condition of Purchaser’s obligation to Close, but the failure or inability of Seller to obtain and deliver said Tenant Estoppel Certificates from the Tenants, Seller having used commercially reasonable efforts to obtain the same from such tenant(s) under the Leases, shall not constitute a default by Seller under this Agreement. Notwithstanding anything to the contrary contained herein, if Seller has been unable to obtain and deliver to Purchaser by Closing the Tenant Estoppel Certificates meeting the requirements set forth above, then, at the option of Purchaser, this condition to Closing may be satisfied by Seller’s execution and delivery to Purchaser at Closing, on behalf of any one or more tenants which have failed to provide the required Tenant Estoppel Certificate an estoppel certificate substantially in the form attached hereto as Schedule 11 (“Seller’s Estoppel”) (provided that Seller’s Estoppels cannot be delivered with respect to tenants occupying more than twenty-five percent (25%) of the aggregate net rentable square footage of all of the Improvements); and provided that Seller’s liability under any such Seller’s Estoppel so executed and delivered by Seller to Purchaser at Closing shall cease and terminate upon the receipt by Purchaser after Closing of a duly executed Tenant Estoppel Certificate from the tenant under the applicable Lease covered in such Seller’s Estoppel.
In the event any of the conditions in this Section 6.1 have not been satisfied (or otherwise waived in writing by Purchaser) prior to or on the Closing Date (as same may be extended or postponed as provided in this Agreement), Purchaser’s sole and exclusive remedy shall be to terminate this Agreement by written notice to Seller on or before Closing Date (as same may be extended or postponed as provided in this Agreement) and, receive back the Earnest Money and to receive a reimbursement from Seller for its actual, out of pocket third party costs and expenses incurred by Purchaser in connection with this Agreement and its inspections of the Property in an amount not to exceed Thirty Thousand and No/100 Dollars ($30,000.00) or to waive the requirement for any further Tenant Estoppel Certificates. In the event Purchaser elects to terminate this Agreement pursuant to the terms of this Section 6.1 no party hereto shall have any other or further rights or obligations under this Agreement except for those provisions of this Agreement which by their express terms survive the termination of this Agreement.
6.2 Conditions Precedent to Seller's Obligations. The obligations of Seller hereunder to consummate the transaction contemplated hereunder shall in all respects be conditioned upon the satisfaction of each of the following conditions prior to or simultaneously with the Closing, any of which may be waived by Seller in its sole discretion by written notice to Purchaser at or prior to the Closing Date:
(a.)Purchaser shall have paid and Seller shall have received the Purchase Price, as adjusted pursuant to the terms and conditions of this Agreement, which Purchase Price shall be payable in the amount and in the manner provided for in this Agreement;
(b.)Purchaser shall have performed, in all material respects, all covenants, agreements and undertakings of Purchaser contained in this Agreement; and
(c.)All representations and warranties of Purchaser as set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of Closing, provided that solely for purposes of this subparagraph such warranties and representations shall be deemed to be given without being limited to Purchaser's knowledge and without modification (by update or otherwise, as provided in Section 5.2(d) hereof).
ARTICLE 7.
CASUALTY AND CONDEMNATION
7.1 Casualty. Risk of loss up to and including the Closing Date shall be borne by Seller. In the event of any immaterial damage or destruction to the Property or any portion thereof, Seller and Purchaser shall proceed to close under this Agreement, and Purchaser will receive (and Seller will assign to Purchaser at the Closing Seller's rights under insurance policies to receive) any insurance proceeds (including any rent loss insurance applicable to any period on and after the Closing Date) due Seller as a result of such damage or destruction and assume responsibility for such repair, and Purchaser shall receive a credit at Closing for any deductible, uninsured or coinsured amount under said insurance policies. For purposes of this Agreement, the term "immaterial damage or destruction" shall mean such instances of damage or destruction: (i) which can be repaired or restored at a cost of $500,000.00 or less; and (ii) which can be restored and repaired within one hundred eighty (180) days from the date of such damage or destruction, and (iii) which are not so extensive as to allow a Tenant to terminate its Lease on account of such damage or destruction.
In the event of any material damage or destruction to the Property or any portion thereof, Purchaser may, at its option, by notice to Seller given within the earlier of twenty (20) days after Purchaser is notified by Seller of such damage or destruction, or the Closing Date, but in no event less than ten (10) days after Purchaser is notified by Seller of such damage or destruction (and if necessary the Closing Date shall be extended to give Purchaser the full 10-day period to make such election): (i) terminate this Agreement, whereupon Escrow Agent shall immediately return the Earnest Money to Purchaser, or (ii) proceed to close under this Agreement, receive (and Seller will assign to Purchaser at the Closing Seller's rights under insurance policies to receive) any insurance proceeds (including any rent loss insurance applicable to the period on or after the Closing Date) due Seller as a result of such damage or destruction (less any amounts reasonably expended for restoration or collection of proceeds) and assume responsibility for such repair, and Purchaser shall receive a credit at Closing for any deductible amount under said insurance policies. If Purchaser fails to deliver to Seller notice of its election within the period set forth above, Purchaser will conclusively be deemed to have elected to proceed with the Closing as provided in clause (ii) of the preceding sentence. If Purchaser elects clause (ii) above, Seller will cooperate with Purchaser after the Closing to assist Purchaser in obtaining the insurance proceeds from Seller's insurers. For purposes of this Agreement "material damage or destruction" shall mean all instances of damage or destruction that are not immaterial, as defined herein.
7.2 Condemnation. If, prior to the Closing, all or any part of the Property is subjected to a bona fide threat of condemnation by a body having the power of eminent domain or is taken by eminent domain or condemnation (or sale in lieu thereof), or if Seller has received written notice that any condemnation action or proceeding with respect to the Property is contemplated by a body having the power of eminent domain (collectively, a "Taking"), Seller shall give Purchaser immediate written notice of such Taking. In the event of any immaterial Taking with respect to the Property or any portion thereof, Seller and Purchaser shall proceed to close under this Agreement. For purposes of this Agreement, the term "immaterial Taking" means such instances of Taking of the Property: (i) which do not result in a taking of any portion of the building structure of the building occupied by tenants on the Property; and (ii) which do not result in a decrease in the number of parking spaces at the Property (taking into account the number of additional parking spaces that can be provided within one hundred eighty (180) days of such Taking); and (iii) which are not so extensive as to allow a Tenant under a Lease to terminate its Lease or abate or reduce rent payable there under unless business loss or rent insurance (subject to applicable deductibles) or condemnation award proceeds shall be available in the full amount of such abatement or reduction, and Purchaser shall receive a credit at Closing for such deductible amount on account of such Taking.
In the event of any material Taking of the Property or any portion thereof, Purchaser may, at its option, by written notice to Seller given within thirty (30) days after receipt of such notice from Seller, elect to terminate this Agreement, or Purchaser may choose to proceed to close. If Purchaser chooses to terminate this Agreement in accordance with this Section 7.2, then the Earnest Money shall be returned immediately to Purchaser by Escrow Agent and the rights, duties, obligations, and liabilities of the parties hereunder shall immediately terminate and be of no further force and effect, except for those provisions of this Agreement which by their express terms survive the termination of this Agreement. For purposes of this Agreement "material Taking " means all instances of a Taking that are not immaterial, as defined herein.
If Purchaser does not elect to, or has no right to, terminate this Agreement in accordance herewith on account of a Taking, this Agreement shall remain in full force and effect and the sale of the Property contemplated by this Agreement, less any interest taken by eminent domain or condemnation, or sale in lieu thereof, shall be effected with no further adjustment and without reduction of the Purchase Price, and at the Closing, Seller shall assign, transfer, and set over to Purchaser all of the right, title, and interest of Seller in and to any awards applicable to the Property that have been or that may thereafter be made for such Taking. At such time as all or a part of the Property is subjected to a bona fide threat of condemnation and Purchaser has not elected to terminate
this Agreement as provided in this Section 7.2, and provided that the Inspection Period has expired, (i) Purchaser shall thereafter be permitted to participate in the proceedings as if Purchaser were a party to the action, and (ii) Seller shall not settle or agree to any award or payment pursuant to condemnation, eminent domain, or sale in lieu thereof without obtaining Purchaser's prior written consent thereto in each case.
ARTICLE 8
DEFAULT AND REMEDIES
8.1 Purchaser's Default. If Purchaser fails to consummate this transaction for any reason other than the default of Seller, failure of a condition to Purchaser's obligation to close, or the exercise by Purchaser of an express right of termination granted herein, Seller shall be entitled, as its sole remedy hereunder, to terminate this Agreement and to receive and retain the Earnest Money as full liquidated damages for such default of Purchaser, the parties hereto acknowledging that it is impossible to estimate more precisely the damages which might be suffered by Seller upon Purchaser's default, and that said Earnest Money is a reasonable estimate of Seller's probable loss in the event of default by Purchaser. Seller's retention of said Earnest Money is intended not as a penalty, but as full liquidated damages. The right to retain the Earnest Money as full liquidated damages is Seller's sole and exclusive remedy in the event of default hereunder by Purchaser, and Seller hereby waives and releases any right to (and hereby covenants that it shall not) sue the Purchaser: (a) for specific performance of this Agreement, or (b) to recover actual damages in excess of the Earnest Money. Purchaser hereby waives and releases any right to (and hereby covenants that it shall not) sue Seller or seek or claim a refund of said Earnest Money (or any part thereof) on the grounds it is unreasonable in amount and exceeds Seller's actual damages or that its retention by Seller constitutes a penalty and not agreed upon and reasonable liquidated damages.
8.2 Seller's Default. If Seller fails to perform any of its obligations under this Agreement for any reason other than Purchaser's default or the permitted termination of this Agreement by Seller or Purchaser as expressly provided herein, Purchaser shall be entitled, as its sole remedy, either (a) to receive the return of the Earnest Money from Escrow Agent, which return shall operate to terminate this Agreement and release Seller from any and all liability hereunder, or (b) to enforce specific performance of the obligation of Seller to execute and deliver the documents required to convey the Property to Purchaser in accordance with this Agreement; it being specifically understood and agreed that the remedy of specific performance shall not be available to enforce any other obligation of Seller hereunder. Notwithstanding the foregoing, if after the Effective Date, Seller has conveyed title to the Property to another party or intentionally and knowingly taken any other action to defeat the remedy of specific performance, Purchaser shall be entitled to seek actual damages from Seller not to exceed the Cap Limitation. Except as expressly provided to the contrary in this Section 8.2, Purchaser expressly waives its rights to seek damages in the event of the default of Seller hereunder. Purchaser shall be deemed to have elected to terminate this Agreement and to receive a return of the Earnest Money from Escrow Agent if Purchaser fails to file suit for specific performance against Seller in a court having jurisdiction on or before sixty (60) days following the date upon which the Closing was to have occurred.
ARTICLE 9
ASSIGNMENT
9.1 Assignment. Subject to the next following sentence, this Agreement and all rights and obligations hereunder shall not be assignable by any party without the written consent of the other. Notwithstanding the foregoing to the contrary, this Agreement and Purchaser's rights hereunder may be transferred and assigned to any entity controlled by Purchaser or under common control with Purchaser. Any assignee or transferee under any such assignment or transfer by Purchaser as to which Seller's written consent has been given or as to which Seller's consent is not required hereunder shall expressly assume all of Purchaser's duties, liabilities and obligations under this Agreement by written instrument delivered to Seller as a condition to the effectiveness of such assignment or transfer. No assignment or transfer shall relieve the original Purchaser of any duties or obligations hereunder, and the written assignment and assumption instrument shall expressly so provide. For purposes of this Section 9.1, the term "control" shall mean the ownership of at least fifty percent (50%) of the applicable entity. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns. This Agreement is not intended and shall not be construed to create any rights in or to be enforceable in any part by any other persons.
ARTICLE 10
BROKERAGE COMMISSIONS
10.1 Broker. Upon the Closing, and only in the event the Closing occurs, Seller shall pay a brokerage commission to CBRE, Inc. ("Broker") pursuant to a separate agreement between Seller and Broker. In addition, upon the Closing, and only in the event the Closing occurs, Seller shall pay a brokerage commission to Owens Realty Network (“Purchaser’s Broker”) a brokerage commission in the amount of 1.75% of the Purchase Price. Broker is representing Seller in
this transaction and Purchaser’s Broker is representing Purchaser. Neither Broker nor Purchaser’s Broker shall be entitled to a real estate commission and no such commission shall be earned or due either of them if the transaction contemplated herein does not close for any reason whatsoever. Seller shall and does hereby indemnify and hold Purchaser harmless from and against any and all liability, loss, cost, damage, and expense, including reasonable attorneys' fees actually incurred and costs of litigation, Purchaser shall ever suffer or incur because of any claim by any agent, salesman, or broker, whether or not meritorious, for any fee, commission or other compensation with regard to this Agreement or the sale and purchase of the Property contemplated hereby, and arising out of any acts or agreements of Seller, including any claim asserted by Broker. Likewise, Purchaser shall and does hereby indemnify and hold Seller free and harmless from and against any and all liability, loss, cost, damage, and expense, including reasonable attorneys' fees actually incurred and costs of litigation, Seller shall ever suffer or incur because of any claim by any agent, salesman, or broker, whether or not meritorious, for any fee, commission or other compensation with respect to this Agreement or the sale and purchase of the Property contemplated hereby and arising out of the acts or agreements of Purchaser. This Section 10.1 shall survive the Closing or any earlier termination of this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 Notices. Wherever any notice or other communication is required or permitted hereunder, such notice or other communication shall be in writing and shall be delivered by overnight courier, hand, or electronic transmission (including email transmission of a PDF), or sent by U.S. registered or certified mail, return receipt requested, postage prepaid, to the addresses or facsimile numbers set out below or at such other addresses as are specified by written notice delivered in accordance herewith:
PURCHASER: Owens Realty Capital, LLC
1646 33rd Street
Orlando, FL 32839
Attention: Robert Owens
Email: bowens@owens-services.com
with a copy to: Ford & Paulekas, LLP
280 Trumbull Street
Hartford, Connecticut 06103
Attention: Scott P. Consoli
Email: sconsoli@fpllp.com
SELLER: Fund XIII and Fund XIV Associates
6200 The Corners Parkway
Suite 250
Norcross, Georgia 30092
Attention: Mr. F. Parker Hudson
Email: parker.hudson@wellsref.com
with a copy to: McGuireWoods LLP
Suite 2100
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attn: John T. Grieb
Email: jgrieb@mcguirewoods.com
Any notice or other communication (i) mailed as hereinabove provided shall be deemed effectively given or received on the third (3rd) Business Day following the postmark date of such notice or other communication, (ii) sent by overnight courier or by hand shall be deemed effectively given or received upon receipt, and (iii) sent by electronic transmission (including email) shall be deemed effectively given or received on the day of such electronic transmission of such notice or other communication and confirmation of such transmission, if transmitted and confirmed prior to 5:00 p.m. local Atlanta, Georgia time on a Business Day and otherwise shall be deemed effectively given or received on the first Business Day after the day of transmission of such notice and confirmation of such transmission. Refusal to accept delivery shall be deemed delivered. Any notice may be given by a party's attorney.
11.2 Possession. Full and exclusive possession of the Property, subject to the Permitted Exceptions and the rights of the Tenants under the Leases, if any, shall be delivered by Seller to Purchaser on the Closing Date.
11.3 Time Periods. If the time period by which any right, option, or election provided under this Agreement must be exercised, or by which any act required hereunder must be performed, or by which the Closing must be held, expires on a Saturday, Sunday, or holiday, then such time period shall be automatically extended through the close of business on the next regularly scheduled Business Day.
11.4 Publicity. The parties agree that, prior to Closing, and except for disclosures required by law or governmental regulations applicable to such party, no party may, with respect to this Agreement and the transactions contemplated hereby, contact or conduct negotiations with public officials, make any public announcements or issue press releases regarding this Agreement or the transactions contemplated hereby to any third party without the prior written consent of the other party hereto. Seller and Purchaser will each have the right to approve the press release of the other party issued in connection with the Closing, which approval may not be unreasonably withheld or delayed. No party may record this Agreement or any notice hereof.
11.5 Discharge of Obligations. The acceptance by Purchaser of Seller's Warranty Deed hereunder shall be deemed to constitute the full performance and discharge of each and every warranty and representation made by Seller and Purchaser herein and every agreement and obligation on the part of Seller and Purchaser to be performed pursuant to the terms of this Agreement, except those warranties, representations, covenants and agreements which are specifically provided in this Agreement to survive Closing.
11.6 Severability. This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations. If any provision of this Agreement, or the application thereof to any person or circumstance, shall, for any reason and to any extent be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby but rather shall be enforced to the greatest extent permitted by law.
11.7 Construction. This Agreement shall not be construed more strictly against one party than against the other merely by virtue of the fact that this Agreement may have been prepared by counsel for one of the parties, it being mutually acknowledged and agreed that Seller and Purchaser and their respective counsel have contributed substantially and materially to the preparation and negotiation of this Agreement. Accordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.
11.8 Sale Notification Letters. Promptly following the Closing, Purchaser shall deliver the Tenant Notices of Sale to each of the respective tenants under the Leases and the Other Notices of Sale to each service provider and leasing agent, the obligations under whose respective Operating Agreements and Commission Agreements Purchaser has assumed at Closing. The provisions of this Section shall survive the Closing.
11.9 Access to Records Following Closing. Seller agrees that for a period of one (1) year following the Closing, Purchaser shall have the right during regular business hours, on five (5) days' written notice to Seller, to examine and review at Seller's office, all books, records and files, if any, retained by Seller relating to the ownership and operation of the Property by Seller prior to the Closing. The provisions of this Section shall survive the Closing.
11.10 General Provisions. No failure of either party to exercise any power given hereunder or to insist upon strict compliance with any obligation specified herein, and no custom or practice at variance with the terms hereof, shall constitute a waiver of either party's right to demand exact compliance with the terms hereof. This Agreement contains the entire agreement of the parties hereto, and no representations, inducements, promises, or agreements, oral or otherwise, between the parties not embodied herein shall be of any force or effect. Any amendment to this Agreement shall not be binding upon Seller or Purchaser unless such amendment is in writing and executed by both Seller and Purchaser. Subject to the provisions of Section 9.1 hereof, the provisions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors, and permitted assigns. TIME IS OF THE ESSENCE IN THIS AGREEMENT. The headings inserted at the beginning of each paragraph are for convenience only, and do not add to or subtract from the meaning of the contents of each paragraph. This Agreement shall be construed and interpreted under the laws of the State of Florida. Except as otherwise provided herein, all rights, powers, and privileges conferred hereunder upon the parties shall be cumulative but not restrictive to those given by law. All personal pronouns used in this Agreement, whether used in the masculine, feminine, or neuter gender shall include all genders, and all references herein to the singular shall include the plural and vice versa.
11.11 Attorney's Fees. If Purchaser or Seller brings an action at law or equity against the other in order to enforce the provisions of this Agreement or as a result of an alleged default under this Agreement, the prevailing party in such action shall be entitled to recover court costs and reasonable attorney's fees actually incurred from the other.
11.12 Counterparts. This Agreement may be executed in one or more counterparts, each of which when taken together shall constitute one and the same original. To facilitate the execution and delivery of this Agreement, the parties may execute and exchange counterparts of the signature pages by facsimile, and the signature page of either party to any counterpart may be appended to any other counterpart.
11.13 Tax-Deferred Exchange. Purchaser and Seller hereby agree to reasonably cooperate with each other and shall execute any and all documents necessary, in the form reasonably approved by the both parties, which shall assign all of such party's right, title and interest in and to this Agreement to an intermediary, which intermediary shall complete the sale/purchase of the Property, in order to accommodate a tax-deferred exchange for such party pursuant to the provisions of Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”); provided, however, that in no event shall (i) either party hereto be required to incur any additional costs, expenses, obligations or other liabilities in connection with assisting the other party with a tax-deferred exchange (other than any costs and expenses resulting from the review of exchange documents), (ii) such exchange delay or be a condition to the Closing, (iii) either party hereto be required to take title to any real property other than the Property, or (iv) any assignment in connection with any such exchange release either party from any liability or obligation or performance by either party hereunder. Neither party makes any representation to the other regarding qualification of an exchange undertaken by the other under Section 1031 of the Code and shall not be liable to the other in any manner whatsoever if the exchange completed in accordance with this Section 11.13 should not qualify for any reason under Section 1031 of the Code. The party requesting cooperation in connection with the tax-deferred exchange shall reimburse the other party for any costs or expenses incurred by such party in connection with such cooperation. Upon Purchaser’s request, Seller agrees to return the Earnest Money to Purchaser at Closing, provided that Purchaser simultaneously causes its intermediary to replace such funds with funds which such intermediary is holding for the benefit of Purchaser.
ARTICLE 12
INDEMNIFICATION
12.1 Indemnification by Seller. Following the Closing and subject to Sections 12.3 and 12.4, Seller shall indemnify and hold Purchaser, its affiliates, members and partners, and the partners, shareholders, members, officers, directors, employees, representatives and agents of each of the foregoing (collectively, "Purchaser-Related Entities") harmless from and against any and all costs, fees, expenses, damages, deficiencies, interest and penalties (including, without limitation, reasonable attorneys' fees and disbursements) suffered or incurred by any such indemnified party in connection with any and all losses, liabilities, claims, damages and expenses ("Losses"), arising out of, or in any way relating to, (a) any breach of any representation or warranty of Seller contained in this Agreement or in any Closing Document, and (b) any breach of any covenant of Seller contained in this Agreement which survives the Closing or in any Closing Document.
12.2 Indemnification by Purchaser. Following the Closing and subject to Sections 12.3 and 12.4, Purchaser (and Purchaser's permitted assignees to whom any rights of Purchaser are assigned pursuant to Section 9.1 hereof) shall indemnify and hold Seller, its affiliates, and partners, and the partners, shareholders, officers, directors, employees, representatives and agents of each of the foregoing (collectively, "Seller-Related Entities") harmless from any and all Losses arising out of, or in any way relating to, (a) any breach of any representation or warranty by Purchaser contained in this Agreement or in any Closing Document, and (b) any breach of any covenant of Purchaser contained in this Agreement which survives the Closing or in any Closing Documents.
12.3 Limitations on Indemnification. Notwithstanding the foregoing provisions of Section 12.1, (a) Seller shall not be required to indemnify Purchaser or any Purchaser-Related Entities under this Agreement unless the aggregate of all amounts for which an indemnity would otherwise be payable by Seller under Section 12.1 above exceeds the Basket Limitation and, in such event, Seller shall be responsible for the entire amount including all amounts representing the Basket Limitation, (b) in no event shall the liability of Seller with respect to the indemnification provided for in Section 12.1 above exceed in the aggregate the Cap Limitation, (c) if prior to the Closing, Purchaser obtains knowledge of any inaccuracy or breach of any representation, warranty or covenant of Seller contained in this Agreement (a "Purchaser-Waived Breach") and nonetheless proceeds with and consummates the Closing, then Purchaser and any Purchaser-Related Entities shall be deemed to have waived and forever renounced any right to assert a claim for indemnification under this Article 12 for, or any other claim or cause of action under this Agreement, at law or in equity on account of any such Purchaser-Waived Breach, and (d) notwithstanding anything herein to the contrary, the Basket Limitation and the Cap Limitation shall not apply with respect to
Losses suffered or incurred as a result of breaches of any covenant or agreement of Seller set forth in Section 5.3, Section 5.4 or Section 10.1 of this Agreement.
12.4 Survival. The representations, warranties and covenants contained in this Agreement and the Closing Documents shall survive until the date which is one hundred eighty (180) days after the Closing, unless a longer or shorter survival period is expressly provided for in this Agreement, or unless prior to the date which is one hundred eighty (180) days after the Closing, Purchaser or Seller, as the case may be, delivers written notice to the other party of such alleged breach specifying with reasonable detail the nature of such alleged breach and files an action with respect thereto within sixty (60) days after the giving of such notice.
12.5 Indemnification as Sole Remedy. If the Closing has occurred, the sole and exclusive remedy available to a party in the event of a breach by the other party to this Agreement of any representation, warranty, or covenant or other provision of this Agreement or any Closing Document which survives the Closing shall be the indemnifications provided for under Section 3.1(c), Section 3.3(b), Section 10.1, and this Article 12.
Signatures appear on following page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day, month and year first above written.
SELLER:
FUND XIII and FUND XIV ASSOCIATES,
a Georgia joint venture partnership
By: | Wells Real Estate Fund XIII, L.P., a Georgia limited partnership, Venturer |
By: | Wells Capital, Inc., a Georgia corporation, its general partner |
By: /s/ F. Parker Hudson
Name: F. Parker Hudson
Title: Assistant Vice President
(CORPORATE SEAL)
By: Wells Real Estate Fund XIV, L.P.,
a Georgia limited partnership, Venturer
By: | Wells Capital, Inc., a Georgia corporation, its general partner |
By: /s/ F. Parker Hudson
Name: F. Parker Hudson
Title: Assistant Vice President
(CORPORATE SEAL)
PURCHASER:
OWENS REALTY CAPITAL, LLC, a Florida limited liability company
By: /s/ Robert D. Owens
Name: Robert D. Owens
Title: President/CEO