AGREEMENT OF PURCHASE AND SALE
James Center, Tacoma Washington
ARTICLE 1: PROPERTY/PURCHASE PRICE
1.1 Certain Basic Terms.
(a) Seller and Notice Address:
JS - JAMES CENTER ASSOCIATES, L.P., a ___________________.
Attn: Theodore M. Johnson, Jr.
1019 Pacific Avenue, Suite 1119
Tacoma, Washington 98402
Telephone: 253/272-4499
Facsimile: 253/272-6226
With a copy to:Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim, P.L.L.C.
Attn: Dale L. Carlisle
1201 Pacific Avenue, Suite 2200
Tacoma, Washington 98401
Telephone: 253/620-6401
Facsimile: 253/620-6565
(b) Purchaser and Notice Address:
PACIFIC RETAIL TRUST, a Maryland real estate investment trust
Attn: Craig Ramey
Five Centerpointe Drive, Suite 100
Lake Oswego, Oregon 97035
Telephone: 503/624-6503
Facsimile: 503/624-9132
With a copy to: Pacific Retail Trust
Attn: Morgan L. Scott
8140 Walnut Hill Lane, Suite 400
Dallas, Texas 75231
Telephone: 214/696-9500
Facsimile: 214/750-9033
With a copy to: Mayer, Brown & Platt
Attn: Linda H. Earle, Esq.
700 Louisiana, Suite 3600
Houston, Texas 77002
Telephone: 713/547-9678
Facsimile: 713/224-6410
(c) Date of this Agreement: The later date of execution by Seller and
Purchaser, as indicated on the signature page.
(d) Purchase Price: Twelve Million Five Hundred Thousand and No/100
Dollars ($12,500,000.00).
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(e) Earnest Money: Two Hundred Thousand and No/100 Dollars ($200,000.00), plus
interest thereon.
(f) Due Diligence Period: The period ending sixty (60) days after
September 25, 1998.
(g) Closing Date: As designated by Purchaser upon not less than 5 days'
prior notice to Seller, but except as set forth herein,
no later than thirty (30) days after the Due Diligence
Period. However, in no event shall the Closing Date
occur prior to January 4, 1999 or after January 14, 1999.
(h) Title Company: Chicago Title Insurance Company
700 South Flower Street, Suite 920
Los Angeles, California 90017
Attn: Frank Jansen
Telephone: 213/488-4300
Facsimile: 213/891-0834
(i) Escrow Agent: Chicago Title Insurance Company
2601 South 35th Street, Suite 100
Tacoma, Washington 98409
Attn: Bruce Judson
Telephone: 253/474-2377 Ext. 617
Facsimile: 253/475-4351
(j) Brokers: Pacific NW Partners, LLC and Northwest Retail Partners, LTD.
1.2 Property. Subject to the terms and conditions of this Purchase and
Sale Agreement (this "Agreement"), Seller agrees to sell to Purchaser, and
Purchaser agrees to purchase from Seller, the following property (collectively,
the "Property"):
(a) The "Real Property," being the land described in Exhibit A attached
hereto, together with the following: all improvements and fixtures (other than
trade fixtures owned by tenants pursuant to the Leases, a term which is defined
below) located thereon, including but not limited to the retail building or
buildings located on such land, commonly known as "James Center" (the
"Improvements"); all and singular the rights, benefits, privileges, easements,
tenements, hereditaments, and appurtenances thereon or in anywise appertaining
to such real property; and all right, title, and interest of Seller in and to
all strips and gores and any land lying in the bed of any street, road or alley,
open or proposed, adjoining such real property.
(b) The landlord's interest in the "Leases," being all leases of space
in the Improvements (including leases which may be made by Seller after the date
hereof and before Closing as permitted by this Agreement), and any and all
amendments and supplements thereto, and any and all guarantees and security
received by landlord in connection therewith.
(c) The "Personal Property," being all right, title and interest of
Seller in and to all tangible personal property now or hereafter used in
connection with the operation, ownership, maintenance, management, or occupancy
of the Real Property, including, without limitation, all equipment, machinery,
heating, ventilating and air conditioning units, furniture, art work,
furnishings, trade fixtures, office equipment and supplies, and, whether stored
on or off-site, all tools and maintenance equipment, supplies, and construction
and finish materials not incorporated in the Improvements and held for repairs
and replacements.
(d) The "Intangible Property," being all right, title and interest of
Seller in and to all intangible personal property now or hereafter used in
connection with the operation, ownership, maintenance, management, or occupancy
of the Real Property, including, without limitation, any and all of the
following: trade names and trade marks associated
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with the Real Property, including, without limitation the name of the Real
Property; the plans and specifications for the Improvements, including as-built
plans; unexpired warranties, guarantees, indemnities and claims against third
parties; contract rights related to the construction, operation, repair,
renovation, ownership or management of the Real Property that are expressly
assumed by Purchaser pursuant to this Agreement; pending permit or approval
applications, permits, approvals and licenses (to the extent assignable);
insurance proceeds and condemnation awards to the extent provided in Paragraphs
4.2 or 4.3; and books and records relating to the Property.
1.3 Earnest Money. Within three (3) business days after the Date of
this Agreement, Purchaser shall deposit the Earnest Money with the Escrow Agent.
The Escrow Agent shall pay the Earnest Money to Seller pursuant to the terms of
Paragraph 10.3 or at and upon Closing, or otherwise, to the party entitled to
receive the Earnest Money in accordance with this Agreement. The Earnest Money
shall be held and disbursed by the Escrow Agent pursuant to Article 10 of this
Agreement. In the event Purchaser does not elect to terminate this Agreement
prior to the expiration of the Due Diligence Period, the Earnest Money is to be
delivered by Escrow Agent to Seller upon Purchaser's receipt of the SEPA
Approval (as described in Paragraph 2.8) for the Property, and the Earnest Money
shall not be returned to Purchaser unless this transaction fails to close as a
result of an adverse condition as described in Paragraph 2.5 or Seller's failure
to provide the Tenant Estoppels and required updates as described in Paragraph
2.3. For purposes of this paragraph, it is understood and agreed that the SEPA
Approval must be without conditions or restrictions that are unacceptable to
Purchaser, as determined by Purchaser in its sole discretion, and that all
appeal periods with respect to the SEPA Approval shall have expired without any
appeal having been filed, or, if filed, such appeal shall have been resolved to
the satisaction of the Purchaser.
1.4 Fred Meyer Approvals. It is understood and agreed that Purchaser
will have to obtain certain approvals and waivers from Fred Meyer in order to
proceed with Purchaser's planned redevelopment of the Property. Purchaser and
Seller shall cooperate and work together in an effort to reduce or eliminate the
fee to be paid to Fred Meyer for such approvals and waivers. However, in the
event Buyer, in its sole and absolute discretion, determines that a fee must be
paid to Fred Meyer or the rental rate under the Fred Meyer lease must be reduced
to insure the receipt of the necessary approvals and waivers, Purchaser shall
receive a credit against the Purchase Price in an amount equal to (i) fifty
percent (50%) of such fee, up to a maximum credit of One Hundred Thousand and
No/100 Dollars ($100,000.00) or (ii) the aggregate rental reduction to Fred
Meyer for a full lease year divided by ten percent (10%), up to a maximum credit
of One Hundred Thousand and No/100 Dollars ($100,000.00) provided the rental
reduction is approved by the Lender (as hereafter defined). Purchaser shall
deliver to Seller and Escrow Agent written verification of the amount of the fee
paid or to be paid to Fred Meyer or the rental reduction to Fred Meyer prior to
the Closing.
ARTICLE 2: INSPECTION
2.1 Seller's Delivery of Specified Documents. Within 5 business days
after the Date of this Agreement, Seller shall provide to Purchaser or make
available to Purchaser copies of each and every item set forth on Exhibit B to
this Agreement (the "Property Information"). The terms "Rent Roll," "Operating
Statements," "Commission Schedule," and "Service Contracts," used herein are
defined in Exhibit B. Upon delivery of, or making available to Purchaser, the
last item of Property Information, Seller shall deliver to Purchaser a written
notice (the "Property Information Notice") certifying that this obligation has
been satisfied together with an itemization of the matters delivered or made
available to Purchaser. If any such item is not in Seller's possession or
control, Seller shall provide to Purchaser a written acknowledgment to that
effect. The term "Commencement Date" shall mean the date, not earlier than the
Date of this Agreement, upon which the Property Information Notice is received
by Purchaser, or, if Seller does not send a Property Information Notice, then
the date Purchaser reasonably determines that it has received all of the
Property Information. Seller shall have the continuing obligation during the
pendency of this Agreement to provide Purchaser with any document described
above and coming
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into Seller's possession or produced by Seller after the initial delivery of the
Property Information.
2.2 Due Diligence. Purchaser shall have through the last day of the Due
Diligence Period in which to examine, inspect, and investigate the Property and,
in Purchaser's sole and absolute judgment and discretion, to determine whether
the Property is satisfactory to Purchaser and to obtain appropriate internal
approval to proceed with this transaction. Purchaser may terminate this
Agreement pursuant to this Paragraph 2.2 by giving notice of termination to
Seller on or before the last day of the Due Diligence Period. This Agreement
shall continue in full force and effect if Purchaser does not give the notice of
termination. Upon such termination, the Earnest Money shall be refunded to
Purchaser immediately upon request, and all further rights and obligations of
the parties under this Agreement shall terminate, except any obligation which by
its terms survives any termination of this Agreement.
Purchaser and its agents, employees and representatives shall have
reasonable access to the Property and all books and records for the Property
that are in Seller's possession or control for the purpose of conducting
analyses, surveys, architectural, engineering, geotechnical and environmental
inspections and tests (including intrusive inspection and sampling), and any
other inspections, studies, or tests reasonably required by Purchaser. Prior to
Closing, Purchaser agrees that all information obtained during the Due Diligence
Period shall be kept in confidence and shall not be disclosed to unrelated third
parties other than to its investors, officers, employees, affiliates, attorneys,
accountants, or agents or as otherwise required by law or for any valid business
purpose of Purchase. During the pendency of this Agreement, Purchaser and its
agents, employees, and representatives shall have a continuing right of
reasonable access to the Property and any office where the records of the
Property are kept for the purpose of examining and making copies of all books
and records and other materials relating to the Property in Seller's or its
property manager's possession. Purchaser shall have the right to conduct a
"walk-through" of the Property before Closing upon appropriate notice to tenants
as permitted under the Leases. In the course of its investigations, Purchaser
may make inquiries to third parties, including, without limitation, tenants,
lenders, contractors, property managers, parties to Service Contracts and
municipal, local and other government officials and representatives, and Seller
consents to such inquiries. In the event of termination hereunder, and at the
request of Seller, Purchaser shall promptly deliver to Seller, without
representation or warranty, complete copies of any non-proprietary written
reports or documents relating to the Property prepared by a third party for
Purchaser during the Due Diligence Period, including engineering reports,
environmental reports, surveys, roof reports and prospective tenant letters of
intent and related correspondence, but it is understood and agreed that
Purchaser shall have no obligation to provide Seller with copies of any
information or reports prepared by Purchaser or financial summaries prepared by
a third party for Purchaser with respect to the Property. Purchaser shall keep
the Property free and clear of any liens and will indemnify, defend, and hold
Seller harmless from all liens or any claims asserted by third parties against
Seller to recover for personal injury or property damage as a result of
Purchaser's entry onto the Property. If any inspection or test disturbs the
Property, Purchaser will restore the Property to its condition before any such
inspection or test. Purchaser's obligations under the preceding two sentences
shall survive Closing or any termination of this Agreement.
Notwithstanding anything to the contrary contained herein, it is
understood and agreed that Purchaser shall notify Seller of any objections to
environmental matters, the physical condition of the Property or Leases (subject
to receipt and approval of Tenant Estoppels) within the first thirty (30) days
of the Due Diligence Period. Prior to the expiration of the Due Diligence
Period, Seller shall notify Purchaser of those objections, if any, which Seller
has attempted to cure.
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2.3 Tenant Estoppels. Seller shall endeavor to secure and shall deliver
to Purchaser, as and when received, but in any event by at least 3 business days
before the expiration of the Due Diligence Period, estoppel certificates
(including such additions or modifications thereto as Purchaser may request
based on its review of the Leases) from tenants under all Leases in the form of
Exhibit C attached hereto or such other form as may be approved by Purchaser in
its sole discretion (the "Tenant Estoppels"). Seller shall provide Purchaser
with copies of the Tenant Estoppels for Purchaser's review and comment before
delivering the Tenant Estoppels to tenants. Purchaser's obligation to close this
transaction is subject to the condition that (a) at least 3 business days prior
to the expiration of the Due Diligence Period, Purchaser shall have received
from Fred Meyer, Kinkos, Ivars, U.S. Bank and 80% of the balance of the tenants
in the Property, Tenant Estoppels in the form of Exhibit C and consistent with
the rent roll delivered as part of the Property Information (the "Rent Roll")
and the representations of Seller in Paragraph 7.1; (b) as of the Closing Date,
the Leases shall be in full force and effect and no material default or claim by
landlord or tenant shall exist or have arisen under any Leases that was not
specifically disclosed in the Rent Roll included in the initial delivery of the
Property Information; (c) as of the Closing Date, no tenant shall have initiated
or had initiated against it any insolvency, bankruptcy, receivership or other
similar proceeding; and (d) at least 5 days before the Closing Date, Purchaser
shall have received updated Tenant Estoppels from the tenants specified above
which are dated no earlier than 30 days prior to the Closing Date. Except for a
current date, the updated Tenant Estoppels shall not contain any additions or
deletions to the Tenant Estoppels delivered prior to the expiration of the Due
Diligence Period other than changes which are acceptable to Purchaser in its
sole discretion. If the required Tenant Estoppels are not delivered to
Purchaser, or if any Tenant Estoppel either does not meet the foregoing
requirements or discloses any facts objectionable to Purchaser in its reasonable
opinion, Purchaser may elect to either: (i) terminate this Agreement by
delivering written notice to Seller on or before Closing (in which event the
Earnest Money shall be promptly returned to Purchaser); or (b) waive the
satisfaction of this condition (and failure to provide such written notice of
termination shall be deemed a waiver) and proceed with Closing.
2.4 Service Contracts. During the Due Diligence Period, Purchaser shall
notify Seller as to which Service Contracts Purchaser will assume and which
Service Contracts will be terminated by Seller at Closing. Purchaser will assume
the obligations arising from and after the Closing Date under those Service
Contracts that are not in default as of the Closing Date and which Purchaser has
elected to assume. Seller shall terminate at Closing all Service Contracts that
are not so assumed. At Purchaser's option, Seller shall terminate or assign to
Purchaser at Closing, any property management agreement affecting the Property.
2.5 Adverse Conditions. As a condition to Purchaser's obligation to
close, there shall be no material change in any condition of or affecting the
Property not caused by Purchaser or its contractors, employees, affiliates or
other related or similar parties that has occurred after the first thirty (30)
days of the Due Diligence Period including without limitation (i) any additions
or modifications to the Title Commitment (as hereafter defined) or Survey (as
hereafter defined) which are not acceptable to Purchaser and are not removed or
modified prior to Closing in accordance with Paragraph 3.2, (ii) any dumping or
discovery of refuse or environmental contamination (excluding any information
disclosed in the environmental report prepared for Buyer during the Due
Diligence Period), or (iii) any default by Seller under this Agreement which is
not cured by Seller to Purchaser's satisfaction within ten (10) days of receipt
of written notice specifying such defaults.
2.6 Transition Information. No later than 5 days prior to the Closing
or on such other date as may be specified in this Paragraph 2.6, Seller will
provide Purchaser with the following information: (i) a tenant contact list that
includes the legal notification address, telephone number and emergency contact
(including individual
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and telephone numbers) for each tenant: (ii) an aged accounts receivable list
for the Property to be generated and delivered to Purchaser on the day preceding
the Closing Date; (iii) a list of all vendors for the Property, including
contacts, addresses and telephone numbers; (iv) a list of all utility providers
and account numbers for the Property; and (v) copies of invoices forwarded to
tenants for the month preceding Closing, and, if then prepared, for the month of
Closing.
2.7 Loan Assumption. The Property is subject to a mortgage lien in
favor of Aegon USA Realty Advisers, Inc. ("Lender"), securing a loan in the
original principal amount of $6,450,000.00 (the "Loan"). The Property is also
subject to a mortgage lien in favor of Seafirst which will be released by Seller
on or before Closing. The Property is to be conveyed without release of, and
Purchaser shall assume, the lien of the existing mortgage and related security
instruments and documents, as so amended and modified (collectively, the
"Existing Mortgage") in favor of Lender, which secures payment of the Loan:
(a) Conditions to Assumption. It shall be a condition precedent to the
obligation of Purchaser to close the transactions contemplated hereby that as of
the Closing: (1) any required consent of Lender to the conveyance of the
Property subject to the Existing Mortgage and the assumption of the Existing
Mortgage by Purchaser shall have been obtained from Lender; (2) such consent of
Lender shall have been granted upon terms and conditions which are satisfactory
to Purchaser in its sole discretion and Seller and which do not obligate
Purchaser to assume any personal liability for any of the undertakings under the
Existing Mortgage, other than exceptions to non-recourse provisions in the
Existing Mortgage that relate to events, acts or omissions first arising from
and after the Closing Date; (3) Lender shall have executed and delivered, and
performed its obligations under, agreements pursuant to which Purchaser shall
assume the borrower's obligations with respect to the Loan under the Existing
Mortgage from and after Closing, which agreements shall be satisfactory to
Purchaser in its sole discretion; (4) as of the Closing there shall not exist
any uncured default under the Existing Mortgage, and Purchaser shall have
obtained from Lender an acknowledgment that it is not aware of any such uncured
default under the Existing Mortgage; and (5) as of the Closing Date the
principal balance of the Loan shall not exceed $6,000,000.00.
(b) Assumption Costs. All transfer or other fees charged by Lender and
any costs and expenses charged by Lender in connection with the transfer of the
Property, recording costs and expenses relating to the recordation of any
mortgage assignment agreement or other documentation relating to the transfer of
the Property, attorneys' fees incurred by Lender, any title insurance premiums
or costs for endorsements required by Lender, and any other costs and expenses
relating to the transfer of the Loan ("Assumption Costs") up to, but not
exceeding, Fifty Thousand and No/100 Dollars ($50,000.00) shall be paid by
Purchaser. All Assumption Costs in excess of $50,000.00 shall be paid by Seller.
(c) Cooperation. The parties shall cooperate in good faith and with
reasonable diligence to secure the approval of the Lender to the conveyance of
the Property to Purchaser. Purchaser shall have the right to negotiate directly
with Lender concerning Lender's consent. Purchaser shall promptly provide to
Lender all information it may reasonably require in order to obtain Lender's
consent. If the conditions set forth in this Paragraph 2.7 have not been
satisfied as of Closing, then Purchaser shall elect, by delivering written
notice to Seller on or before the Closing Date, (i) to terminate this Agreement,
in which event the Earnest Money shall promptly be refunded to Purchaser; or
(ii) to proceed with the Closing, but only if any required consent of Lender to
the assumption of the Existing Mortgage by Purchaser has been obtained. Seller
shall not be obligated to pay off the Loan at Closing.
(d) Adjustment of Purchase Price. At Closing, Purchaser shall receive a
credit against the Purchase Price in the amount of the principal balance of the
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Loan, all accrued and unpaid interest and other sums, if any, then due and
payable pursuant to the Existing Mortgage.
2.8 SEPA Approval. Within forty-five (45) days from the Date of this
Agreement, Purchaser shall submit to the City of Tacoma the SEPA Checklist and
related information necessary to receive environmental approval of the Property
("SEPA Approval"). It shall be a condition to Purchaser's obligation to close
that the SEPA Approval must be received without conditions or restrictions that
are unacceptable to Purchaser, as determined by Purchaser in its sole
discretion, and that all appeal periods with respect to the SEPA Approvals shall
have expired without any appeal having been filed or, if filed, such appeal
shall have been resolved to the satisfaction of Purchaser. In the event the
required SEPA Approval has not been received on or before five (5) days prior to
the Closing Date, Purchaser may elect to (i) terminate this Agreement and
receive a refund of the Earnest Money, (ii) waive the requirement and proceed
with the Closing or (iii) extend the Closing Date for up to thirty (30) days in
an attempt to obtain the SEPA Approval. In the event Purchaser elects to extend
the Closing Date, Purchaser shall notify Seller and Escrow Agent of the
extension at least three (3) days prior to the Closing Date.
ARTICLE 3: TITLE AND SURVEY REVIEW
3.1 Delivery of Title Commitment and Survey. Seller shall cause to be
prepared and delivered to Purchaser within ten (10) business days after the Date
of this Agreement: (a) a current, effective commitment for title insurance (the
"Title Commitment") issued by the Title Company, in the amount of the Purchase
Price with Purchaser as the proposed insured, and accompanied by true, complete,
and legible copies of all documents referred to in the Title Commitment; (b) a
copy of the survey of the Property that was prepared for Lender in connection
with the Loan (the "Existing Survey"); and (c) copies of Uniform Commercial Code
searches in the name of Seller and the Property issued by the Title Company or a
search company acceptable to Purchaser ("UCC Searches").
3.2 Title Review and Cure. During the first thirty (30) days of the Due
Diligence Period, Purchaser shall review title to the Property as disclosed by
the Title Commitment, the Existing Survey and UCC Searches. Within such thirty
(30) day period, Purchaser shall advise Seller, the Title Company and the
surveyor in writing of any matters set forth on those documents to which
Purchaser objects. In the event the Title Commitment, copies of the title
exceptions, the Existing Survey and UCC Searches are not delivered to Purchaser
within ten (10) business days after the Date of this Agreement, the thirty (30)
day period in which Purchaser must object to such matters shall automatically be
extended by the number of days that Seller is delinquent in providing the
specified materials. Seller will reasonably cooperate with Purchaser in curing
Purchaser's objections, but Seller shall not be obligated to cure any such
objections except liens and security interests created by, through or under
Seller (including, without limitation,
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those disclosed by the UCC Searches), all of which liens and security interests
Seller shall cause to be released at Closing. Seller also agrees to remove or
cause to be removed any exceptions or encumbrances to title which arise after
the date of this Agreement. Prior to the expiration of the Due Diligence Period,
the parties shall memorialize in writing those objections which Seller is
obligated to cure as aforesaid, or has elected to cure at Closing, and together
with the Title Company cause a revised Title Commitment to be issued. The term
"Permitted Exceptions" means all those exceptions shown on the Title Commitment,
the Existing Survey and UCC Searches as of the expiration of the first thirty
(30) days of the Due Diligence Period other than those objections that Seller
has elected to cure in writing prior to the expiration of the Due Diligence
Period.
If after the expiration of the first thirty (30) days of the Due
Diligence Period the Title Company revises the Title Commitment to add or modify
exceptions or to add or modify the conditions to obtaining any endorsement
requested by Purchaser during the first thirty (30) days of the Due Diligence
Period, then Purchaser may terminate this Agreement and receive a refund of the
Earnest Money if provision for their removal or modification satisfactory to
Purchaser is not made. Purchaser shall have been deemed to have approved any
title exception that Seller is not obligated to remove and to which either
Purchaser did not object as provided above, or to which Purchaser did object,
but with respect to which Purchaser did not terminate this Agreement.
On or before November 11, 1998, Seller shall cause to be prepared and
delivered to Purchaser a current ALTA/ACSM Urban survey of the Property (the
"Survey") including a certification addressed to Purchaser, in the form attached
hereto as Exhibit D. Within ten (10) days after Purchaser's receipt of the
Survey, Purchaser shall advise Seller, the Title Company and the surveyor in
writing of any matters set forth on the Survey (which were not set forth on the
Existing Survey) to which Purchaser objects. Seller will reasonably cooperate
with Purchaser in curing Purchaser's objections, but Seller shall not be
obligated to cure any such objections except for items that have been created
by, through or under Seller. No later than five (5) days prior to the expiration
of the Due Diligence Period, Seller shall notify Purchaser of those objections
to the Survey that Seller is obligated or has agreed to cure prior to Closing.
If Seller fails to cure the objections specified in such notice in a manner
acceptable to Purchaser, in its sole discretion, on or before the Closing Date,
Purchaser may elect to (i) terminate this Agreement and receive a refund of the
Earnest Money or (ii) waive the Survey objections and proceed with the Closing.
3.3 Delivery of Title Policy at Closing. As a condition to
Purchaser's obligation to close, the Escrow Agent shall deliver to
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Purchaser at Closing an ALTA Owner's Policy (Revised 10-17-70 and 10-17-84) (or
other form if required by state law) of title insurance, with extended coverage
(i.e., with ALTA General Exceptions 1 through 5 deleted, or with corresponding
deletions if the Property is located in a non-ALTA state), issued by the Title
Company as of the date and time of the recording of the Deed, in the amount of
the Purchase Price, containing the Purchaser's Endorsements, insuring Purchaser
as owner of good, marketable and indefeasible fee simple title to the Property,
and subject only to the Permitted Exceptions (the "Title Policy"). "Purchaser's
Endorsements" shall mean, to the extent such endorsements are available under
the laws of the state in which the Property is located: (a) owner's
comprehensive; (b) access; (c) survey (accuracy of survey); (d) location (survey
legal matches title legal); (e) separate tax lot; (f) legal lot; (g) zoning 3.1,
with parking and loading docks; and (h) such other endorsements as Purchaser may
require during the Due Diligence Period based on its review of the Title
Commitment and Survey. Seller shall execute at Closing an ALTA Statement
(Owner's Affidavit) and any other documents or agreements required by the Title
Company to issue the Title Policy in accordance with the provisions of this
Agreement.
3.4 Title and Survey Costs. Seller shall pay for the cost of the
Survey, including any revisions necessary to make the Survey conform to the
requirements of this Agreement, the ALTA portion of the premium for the Title
Policy and the cost of the UCC Searches. Purchaser shall pay the premium for
upgrading the Title Policy to meet the requirements herein set forth, including
the cost of Purchaser's Endorsements.
ARTICLE 4: OPERATIONS AND RISK OF LOSS
4.1 Ongoing Operations. During the pendency of this Agreement, Seller
covenants and agrees as follows:
(a) Preservation of Business. Seller shall cause the Property to be
operated only in the ordinary and usual course of business and consistent with
past practice, shall preserve intact the Property, preserve the good will and
advantageous relationships of Seller with tenants, customers, suppliers,
independent contrac tors, employees and other persons or entities material to
the operation of its business, shall perform its obligations under Leases and
other agreements affecting the Property and shall not take any action or
omission which would cause any of the representations or warranties of Seller
contained herein to become inaccurate or any of the covenants of Seller to be
breached.
(b) Maintenance of Insurance. Seller shall continue to carry its
existing insurance through the Closing Date, and shall not terminate or cancel
such insurance policies.
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(c) New Contracts. Without Purchaser's prior written consent in each
instance, Seller will not amend, terminate, grant concessions regarding, or
enter into any contract or agreement that will be an obligation affecting the
Property or binding on Purchaser after Closing.
(d) Listings and Other Offers. Seller will not list the Property with
any broker or otherwise solicit or make or accept any offers to sell the
Property, engage in any discussions or negotiations with any third party with
respect to the sale or other disposition of the Property, or enter into any
contracts or agreements (whether binding or not) regarding any disposition of
the Property.
(e) Leasing Arrangements. Seller will not amend, terminate, grant
concessions regarding, or enter into any Lease without Purchaser's prior written
consent in each instance.
(f) Removal and Replacement of Tangible Personal Property. Seller will
not remove any Tangible Personal Property unless it is replaced with a
comparable item of equal quality and quantity as existed as of the time of such
removal.
(g) Maintenance of Permits. Seller shall maintain in existence all
licenses, permits and approvals, if any, in its name necessary or reasonably
appropriate to the ownership, operation or improvement of the Property.
4.2 Damage. Seller shall promptly give Purchaser written notice of any
damage to the Property, describing such damage, whether such damage is covered
by insurance and the estimated cost of repairing such damage. If such damage is
not material, then: (a) Seller shall, to the extent possible, begin repairs
prior to Closing out of any insurance proceeds received by Seller for the
damage; (b) Purchaser shall receive all insurance proceeds not applied to the
repair of any such Property prior to Closing (including rent loss insurance
applicable to any period from and after the Closing Date) due to Seller for the
damage; (c) any uninsured damage or deductible (including rent abatement not
covered by rent loss insurance) shall be credited to Purchaser at Closing; and
(d) Purchaser shall assume the responsibility for the repair after Closing. If
such damage is material, then by notice to Seller given within 14 days after
Purchaser is notified of such damage (and Closing shall be extended, if
necessary, to give Purchaser such 14 day period to respond to such notice),
Purchaser may elect to either: (i) proceed in the same manner as in the case of
damage that is not material; or (ii) terminate this Agreement, in which event
the Earnest Money shall be immediately returned to Purchaser. Damage as to any
one or multiple occurrences is material if the cost to repair the damage, plus
the cost of rent abatement after Closing resulting from the damage, exceeds
$500,000
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or entitles any Major Tenant or 2 or more other tenants occupying at least 5% of
the rentable area of the Property to terminate its/their Lease(s).
4.3 Condemnation. By notice to Seller given within 14 days after
Purchaser receives notice of proceedings in eminent domain that are
contemplated, threatened or instituted by any body having the power of eminent
domain with respect to the Property (and if necessary the Closing Date shall be
extended to give Purchaser the full 14 day period to make such election),
Purchaser may either: (a) terminate this Agreement, whereupon the Earnest Money
shall be returned to Purchaser; or (b) proceed under this Agreement, in which
event Seller shall, at Closing, assign to Purchaser its entire right, title and
interest in and to any condemnation award. Purchaser shall have the right during
the pendency of this Agreement to participate in negotiations and other dealings
with the condemning authority in respect of such matter.
ARTICLE 5: CLOSING
5.1 Closing and Escrow. The consummation of the transaction
contemplated herein ("Closing") shall occur on the Closing Date through an
escrow with the Escrow Agent at the offices of the Escrow Agent. Funds shall be
deposited into and held by Escrow Agent in a closing escrow account with a bank
satisfactory to Purchaser and Seller. Upon satisfaction or completion of all
closing conditions and deliveries, the parties shall direct the Escrow Agent to
immediately record and deliver the closing documents to the appropriate parties
and make disbursements according to the closing statements executed by Seller
and Purchaser. The Escrow Agent shall agree in writing with Seller and Purchaser
that: (a) recordation of the Deed constitutes its representation that it is
holding the closing documents, closing funds and closing statement and is
prepared and irrevocably committed to disburse the closing funds in accordance
with the closing statements; and (b) release of funds to Seller shall
irrevocably commit it to issue the Title Policy in accordance with this
Agreement. Provided such supplemental escrow instructions are not in conflict
with this Agreement as it may be amended in writing from time to time, Seller
and Purchaser agree to execute such supplemental escrow instructions as may be
appropriate to enable Escrow Agent to comply with the terms of this Agreement.
5.2 Conditions to the Parties' Obligations to Close. In addition to all
other conditions set forth herein, the obligation of Seller, on the one hand,
and Purchaser, on the other hand, to consummate the transactions contemplated
hereunder shall be contingent upon the following:
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(a) The other party's representations and warranties contained herein
shall be true and correct as of the date of this Agreement and the Closing Date;
(b) As of the Closing Date, the other party shall have performed its
obligations hereunder and all deliveries to be made by the other party at
Closing have been tendered;
(c) As of the Closing Date, no action or proceeding by or before any
governmental authority shall have been instituted or threatened (and not
subsequently dismissed, settled or otherwise terminated) which is reasonably
expected to restrain, prohibit or invalidate the transactions contemplated by
this Agreement, other than an action or proceeding instituted or threatened by
such party;
(d) Any other condition set forth in this Agreement to such party's
obligation to close is not satisfied by the applicable date; and
(e) As a condition to Purchaser's obligation to close, at Closing
Seller shall not be in default under any agreement to be assigned to, or
obligation to be assumed by, Purchaser under this Agreement.
So long as a party is not in default hereunder, if any condition to
such party's obligation to proceed with Closing hereunder has not been satisfied
as of the Closing Date or other applicable date, such party may, in its sole
discretion, terminate this Agreement by delivering written notice to the other
party on or before the Closing Date or other applicable date, or elect to close,
notwithstanding the non-satisfaction of such condition, in which event such
party shall be deemed to have waived any such condition except for breach by a
party of a covenant in which case Closing shall not relieve such breaching party
from any liability it would otherwise have hereunder.
5.3 Seller's Deliveries in Escrow. Seller shall deliver in
escrow to the Escrow Agent the following:
(a) Deed. A general warranty or grant deed (warranting title against
any party) in form provided for under the law of the state where the Property is
located and materially satisfactory to the parties, executed and acknowledged by
Seller, conveying good, indefeasible and marketable fee simple title to the
Property to Purchaser subject only to the Permitted Exceptions (the "Deed");
(b) Bill of Sale and Assignment of Leases and Contracts. A Bill of Sale
and Assignment of Leases and Contracts in the form of Exhibit E attached hereto
(the "Assignment"), executed and acknowledged by Seller, vesting in Purchaser
good title to the
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property described therein free of any claims, except for the
Permitted Exceptions to the extent applicable;
(c) Certificate. A certificate from Seller that each of the
representations and warranties contained in Paragraph 7.1 hereof is true and
correct as set forth herein as of the Closing Date. Such certificate shall
contain an updated list of the Leases and Service Contracts which Seller shall
certify to be true and correct as of Closing;
(d) Notice to Tenants. A notice to each tenant in the form of Exhibit F
attached hereto;
(e) State Law Disclosures. Such disclosures and reports as
are required by applicable state and local law in connection with
the conveyance of real property;
(f) FIRPTA. A Foreign Investment in Real Property Tax Act affidavit
executed by Seller. If Seller fails to provide the necessary affidavit and/or
documentation of exemption on the Closing Date, Purchaser may proceed in
accordance with the withholding provisions in such Act;
(g) Tenant Estoppels and Service Contract Estoppels.
Estoppel certificates satisfying the conditions in Paragraph 2.3,
dated (or recertified and updated as of a date) not earlier than 30
days before the Closing Date;
(h) Terminations. Terminations, effective no later than Closing, of
those Service Contracts which Purchaser has elected not to assume, including any
management agreements affecting the Property;
(i) Permits and Approvals. Evidence reasonably satisfactory to
Purchaser to the effect that the Seller possesses all licenses, permits,
approvals, zoning exceptions and approvals, consents and orders of governmental,
municipal or regulatory authorities required as of the Closing Date for the full
and unrestricted ownership, operation and use of the Property, including,
without limitation, a certificate of occupancy for each of the buildings which
comprise the Improvements; and written acknowledgments from governmental
authorities with respect to licenses, permits and approvals to be assigned to
Purchaser;
(j) CCRs. If the Property is subject to a declaration of covenants,
conditions and restrictions or similar instrument ("CCRs") governing or
affecting the use, operation, maintenance, management or improvement of the
Property, (i) estoppel certificates in form and substance satisfactory to
Purchaser from the declarant, association, committee, agent and/or other person
or entity having governing or approval rights under the CCRs, or if
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Seller is unable to obtain the estoppel certificates, an affidavit, in form and
substance satisfactory to Purchaser, from the Seller stating that the Seller is
not in default under the CCRs, and (ii) a recordable assignment, in form and
substance satisfactory to Purchaser, assigning any and all developer, declarant
or other related rights or interests of Seller (or any affiliate of Seller), if
any, in or under the CCRs;
(k) Authority. Evidence of the existence, organization and authority of
Seller and of the authority of the persons executing documents on behalf of
Seller reasonably satisfactory to the Escrow Agent and the Title Company; and
(l) Other Deliveries. Any other Closing deliveries required to be made
by or on behalf of Seller hereunder.
5.4 Purchaser's Deliveries in Escrow. At least 3 business days before
the Closing Date (except as otherwise permitted below), Purchaser shall deliver
in escrow to the Escrow Agent the following:
(a) Purchase Price. On the Closing Date, the Purchase Price, less the
Earnest Money that is applied to the Purchase Price and any credit due Purchaser
pursuant to Paragraph 1.4, plus or minus applicable prorations, deposited by
Purchaser with the Escrow Agent in immediate, same-day federal funds wired for
credit into the Escrow Agent's escrow account;
(b) Bill of Sale and Assignment of Leases and Contracts. The
Assignment, executed by Purchaser;
(c) State Law Disclosures. Such disclosures and reports as
are required by applicable state and local law in connection with
the conveyance of real property; and
(d) Other Deliveries. Any other Closing deliveries required to be made
by or on behalf of Purchaser hereunder.
5.5 Closing Statements/Escrow Fees. Seller and Purchaser shall deposit
with the Escrow Agent executed closing statements consistent with this Agreement
in the form required by the Escrow Agent. The Escrow Agent's escrow fee, closing
charges, and any cancellation fee shall be divided equally between and paid by
Seller and Purchaser. If Seller and Purchaser cannot agree on the closing
statement to be deposited as aforesaid because of a dispute over the prorations
and adjustments set forth therein, the Closing nevertheless shall occur, and the
amount in dispute shall be withheld from the Purchase Price and placed in an
escrow with the Title Company, to be paid out upon the joint direction of the
parties or pursuant to court order upon resolution or other final determination
of the dispute.
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5.6 Sales, Transfer, and Documentary Taxes. Seller shall pay all sales,
gross receipts, compensating, stamp, excise, documentary, transfer, deed or
similar taxes and fees imposed in connection with this transaction under
applicable state or local law.
5.7 Possession. At the time of Closing, Seller shall deliver to
Purchaser possession of the Property, subject only to the Permitted Exceptions.
5.8 Delivery of Books and Records. On the Closing Date, and as a
condition to Purchaser's obligation to close, Seller shall deliver to the
Purchaser's corporate office in Dallas, Texas: the original Leases and Service
Contracts or copies thereof if originals are not available; copies or originals
of all books and records of account, contracts, copies of correspondence with
tenants and suppliers, receipts for deposits, unpaid bills and other papers or
documents which pertain to the Property; all permits and warranties; all
advertising materials, booklets, and other items, if any, used in the operation
of the Property. The keys and, if in Seller's possession or control, the
original "as-built" plans and specification; all other available plans and
specifications and all operation manuals shall be delivered to the offices of
Purchaser's property manager on the Closing Date. Seller shall cooperate with
Purchaser after Closing to transfer to Purchaser any such information stored
electronically. The obligations of Seller under this Paragraph 5.8 shall survive
Closing.
ARTICLE 6: PRORATIONS AND ADJUSTMENTS
6.1 Prorations. At least 3 business days prior to Closing, Seller shall
provide to Purchaser such information and verification reasonably necessary to
support the prorations and adjustments under this Article 6. The items in
subparagraphs (a) through (e) of this Paragraph 6.1 shall be prorated between
Seller and Purchaser as of the close of the day immediately preceding the
Closing Date (the"Adjustment Date"), the Closing Date being a day of income and
expense to Purchaser:
(a) Taxes and Assessments. Purchaser shall receive a credit for any
accrued but unpaid real estate taxes (and any assessments imposed by private
covenant) applicable to any period before the Adjustment Date, even if such
taxes and assessments are not yet due and payable. If the amount of any such
taxes have not been determined as of the Adjustment Date, such credit shall be
based on 110 percent of the most recent ascertainable taxes and shall be re-
prorated upon issuance of the final tax bill. Purchaser shall receive a credit
for any special assessments which are levied or charged against the Property,
whether or not then due and payable.
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(b) Rents. Purchaser shall receive a credit for all rent and other
recurring and periodic income for the month in which the Closing occurs
(excluding any income that is specifically treated elsewhere in this Paragraph
6.1) applicable to any period after the Adjustment Date under Leases in effect
on the Adjustment Date based on the Rent Roll. Delinquent tenant rentals shall
be prorated, but if and when collected by Purchaser, shall be applied first to
current months' rents, and then to delinquent rent in the inverse order of
delinquency, with any remaining amounts allocable to the period prior to the
Adjustment Date being paid to Seller. Seller shall have the right to seek
collection from any tenants who are no more than 30 days in arrears as of the
Closing, but shall not have a right to seek recovery from tenants more than 30
days in arrears. In seeking such collection, however, Seller shall not have the
right to terminate any Lease or dispossess a tenant.
(c) Percentage Rents. Percentage rents shall be separately prorated
under each Lease on the basis of the lease year set forth in such Lease for the
payment of percentage rents. All percentage rent payments for the lease year in
which the Closing Date occurs that are made prior to the Adjustment Date shall
be credited to Purchaser. All payments of percentage rent for the lease year in
which the Closing Date occurs that are received by either party on or after the
Adjustment Date shall be retained by, or remitted to, Purchaser, as the case may
be, until determination of Seller's allocable share thereof in each instance, as
provided in Paragraph 6.2 below. Upon final determination of percentage rents
owed by a tenant under its Lease for the lease year in which Closing occurs,
Seller and Purchaser shall adjust between themselves amounts owed for such lease
year on account of percentage rents, and Seller's allocable share of such
percentage rents shall be an amount equal to the amount of percentage rent owed
by such tenant for the lease year multiplied by a fraction, the numerator of
which is the number of days in such lease year prior to and including the
Adjustment Date, and the denominator of which is the total number of days in
such lease year.
(d) Operating Expense Pass-throughs.
(i) Information Provided at Closing. Seller, as landlord under the
Leases, is currently collecting from tenants under the Leases additional rent to
cover taxes, insurance, utilities, maintenance and other operating costs and
expenses (collectively, "Operating Expense Pass-throughs") incurred by Seller in
connection with the ownership, operation, maintenance and management of the
Property. In order for the parties to determine the credits and adjustments
herein provided for, no later than 3 business days prior to the Closing Date,
Seller will deliver to Purchaser copies of all relevant portions of its books
and records and all back-up or supporting documentation, including without
limitation, copies of invoices, evidence of payment and all other information
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corroborating the amount paid by Seller and the amount received from the tenants
in respect of Operating Expense Pass-throughs as of the Adjustment Date, and at
Closing Seller will also deliver to Purchaser copies of the same information for
each year prior to the Closing for which any tenant has audit rights and the
ability to challenge any prior year's reconciliations. With respect to any
Operating Expense Pass-throughs which cannot be billed prior to the Closing,
Purchaser shall bill the tenant(s) for such items in accordance with the
respective Lease terms. Purchaser shall remit to Seller its pro rata portion of
any amounts collected within 30 days after receipt of same.
(ii) Reconciliation as of Adjustment Date. As of the Adjustment Date,
Seller shall, to the extent possible under the terms of the Leases and the
information then available to Seller, make a final determination of the amount,
if any, by which Seller has been over or under collecting from tenants in
respect of Operating Expense Pass-throughs for the period prior to and including
the Adjustment Date. If such reconciliation results in a net amount due to
tenants for the period prior to and including the Adjustment Date, Seller shall
credit such amount to Purchaser and Purchaser will be responsible for paying or
crediting to the tenants, as applicable, amounts due to them in respect of such
over-collections. If amounts are due from tenants, Seller shall bill tenants for
such amounts promptly after Closing.
(iii) Final Reconciliation. As to any Leases for which a final
reconciliation of Operating Expense Pass-throughs cannot be completed between
the Seller, as landlord, and the tenants as of the Adjustment Date in accordance
with Subparagraph (ii), the parties will adjust their prorations made at Closing
when the correct amount of Operating Expense Pass-throughs can be determined
(including without limitation with respect to any amounts under- collected by
Seller) and when, under the terms or the respective Leases, all information
required to make such landlord/tenant adjustment is available. Seller shall be
responsible for providing Purchaser with the final reconciliation for Seller's
period of ownership. If Seller fails timely to provide Purchaser with it final
reconciliation, Seller acknowledges and agrees that Purchaser's ability to make
a final determination of any amounts due to Seller or any additional amounts due
from Seller in respect of Operating Expense Pass-throughs for the period prior
to the Adjustment Date is dependent upon, and expressly conditioned upon,
Seller's delivering all information required by Purchaser, as provided for
Subparagraph (i), and Seller's delivering to Purchaser subsequent to the Closing
Date copies of all invoices and bills received by Seller subsequent to the
Adjustment Date for Operating Expense Pass-through items applicable to the
period on or before the Adjustment Date, as well as evidence of payments made by
Seller in respect of such invoices and bills. Seller agrees to cooperate in good
faith and with reasonable diligence in providing to
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Purchaser as and when needed copies of all invoices, bills, evidence of payment
and other information required by Purchaser to confirm the final reconciliation
performed by Seller for its period of ownership and/or to make any required
post-Closing reconciliations of Operating Expense Pass-throughs.
If when Seller is able to make its year end reconciliation for the
period prior to the Closing, it is determined, after giving effect to any
applicable credit received by Purchaser at Closing under this Paragraph 6.1(d),
that Seller has under- collected from any tenants, then Purchaser shall bill
such tenants for the amounts due to Seller within 60 days after year end, and
remit to Seller Seller's portion of any amounts collected monthly, within 30
days after receipt of same. If, however, it is determined that Seller
over-collected from tenants, again after giving effect to any credits received
by Purchaser at Closing as aforesaid, Seller will pay to Purchaser the amount
over-collected and not previously credited to Purchaser, within 30 days after
receipt from Purchaser of written notice setting forth the amount due,
accompanied by documentation reasonably establishing such amount, and Purchaser
shall be responsible for crediting or repaying amounts to the appropriate
tenants. In order to assist Seller in its confirmation of any required
post-closing adjustments, Purchaser shall make available to Seller upon request,
copies of the tax bills and any other bills and invoices needed by Seller. Each
party shall have the right to audit the other party's books and records, upon
reasonable prior notice and during normal business hours, for purposes of
confirming any calculations made by Purchaser.
(e) Service Contracts. Seller or Purchaser, as the case may be, shall
receive a credit for regular charges under Service Contracts assumed by
Purchaser pursuant to this Agreement paid and applicable to Purchaser's period
of ownership or payable and applicable to Seller's period of ownership,
respectively.
(f) Utilities. Seller shall cause the meters, if any, for utilities to
be read the day on which the Closing Date occurs and to pay the bills rendered
on the basis of such readings. If any such meter reading for any utility is not
available, then adjustment therefor shall be made on the basis of the most
recently issued bills therefor which are based on meter readings no earlier than
30 days before the Closing Date; and such adjustment shall be re-prorated when
the next utility bills are received.
6.2 Tenant Improvements and Allowances. All Tenant improvement
expenses (including all hard and soft construction costs, whether payable to the
contractor or the tenant), tenant allowances, rent abatement, moving expenses
and other out-of-pocket costs which are the obligation of the landlord under
Leases shall be paid by Seller on or before the Closing Date.
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(a) Evidence of Payment. At Closing, Seller shall provide lien waivers,
payment affidavits, certificates of completion, Tenant Estoppels and other
evidence reasonably necessary to confirm Seller's compliance with its
obligations pursuant to this Paragraph 6.2, and, to the extent such coverage is
available, shall provide such indemnity or other assurance to enable the Title
Company to insure against any claims against the Property arising from work
performed before the Closing.
6.3 Leasing Commissions. On or before the Closing Date, Seller shall
pay in full all leasing commissions due to leasing or other agents for the
current remaining term of each Lease (determined without regard to any
unexercised termination or cancellation right); provided, however, that if any
leasing agent will not accept such payment, then Purchaser shall receive a
credit against the Purchase Price at Closing in an amount equal to the
then-unpaid leasing commissions and Purchaser shall assume, in writing, the
obligation to pay any such leasing commissions due thereunder after the Closing
Date up to the amount of such credit.
6.4 Post-Closing Adjustments. Either party shall be entitled to a
post-Closing adjustment for any incorrect proration or adjustment. This
obligation, as well as every other provision in the Article 6 providing for
post-closing adjustments, shall survive the Closing hereunder. No other expense
related to the ownership or operation of the Property shall be charged to or
paid or assumed by Purchaser, whether allocable to any period before or after
Closing, other than those obligations expressly assumed by Purchaser.
6.5 Tenant Deposits. All tenant security deposits (and interest thereon
if required by law or contract to be earned thereon) shall be transferred or
credited to Purchaser at Closing. As of the Closing Date, Purchaser shall assume
Seller's obligations related to tenant security deposits, but only to the extent
they are properly credited and transferred to Purchaser.
6.6 Wages. Purchaser shall not be liable for any wages, fringe
benefits, payroll taxes, unemployment insurance contributions, accrued vacation
pay, accrued pay for unused sick leave, accrued severance pay and other
compensation accruing before Closing for employees at the Property. Purchaser
shall not be liable for any obligations accruing before Closing under any union
contract or multi-employer pension plan applicable to any such employees or
arising from the termination of any such employees at or prior to Closing.
6.7 Utility Deposits. Seller shall receive a credit for the amount of
deposits, if any, with utility companies that are transferable and that are
assigned to Purchaser at Closing.
6.8 Sales Commissions. Seller and Purchaser represent and
warrant each to the other that they have not dealt with any real
estate broker, sales person or finder in connection with this
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transaction other than Brokers. If this transaction is closed, Seller shall pay
Pacific Northwest Partners, LLC in accordance with their separate agreement, and
Pacific Northwest Partners, LLC shall pay Northwest Retail Partners, Ltd. its
share of the commission in accordance with their separate agreement. Brokers are
independent contractors and are not authorized to make any agreement or
representation on behalf of either party. Except as expressly set forth above,
in the event of any claim for broker's or finder's fees or commissions in
connection with the negotiation, execution or consummation of this Agreement or
the transactions contemplated hereby, each party shall indemnify and hold
harmless the other party from and against any such claim based upon any
statement, representation or agreement of such party.
ARTICLE 7: REPRESENTATIONS AND WARRANTIES
7.1 Seller's Representations and Warranties. As a material inducement
to Purchaser to execute this Agreement and consummate this transaction, Seller
represents and warrants to Purchaser that:
(a) Organization and Authority. Seller has been duly organized, is
validly existing, and is in good standing and qualified to do business in the
state of its organization and the state in which the Property is located. Seller
has the full right and authority and has obtained any and all consents required
to enter into this Agreement and to consummate or cause to be consummated the
transactions contemplated hereby. This Agreement has been, and all of the
documents to be delivered by Seller at Closing will be, authorized and properly
executed and constitute, or will constitute, as appropriate, the valid and
binding obligations of Seller, enforceable in accordance with their terms.
(b) Conflicts and Pending Actions or Proceedings. There is no agreement
to which Seller is a party or, to Seller's knowledge, binding on Seller which is
in conflict with this Agreement, or which challenges or impairs Seller's ability
to execute or perform its obligations under this Agreement. There is not now
pending or, to the best of Seller's knowledge, threatened, any action, suit or
proceeding before any court or governmental agency or body against Seller that
would prevent Seller from performing its obligations hereunder or against or
with respect to the Property.
(c) Leases and Rent Roll. The documents constituting the Leases that
are delivered to Purchaser pursuant to Paragraph 2.1 are true, correct and
complete copies of all of the Leases affecting the Property, including and all
amendments and guarantees. All information set forth in each Rent Roll is true,
correct, and complete in all material respects as of its date. Except as set
forth in the Rent Roll first delivered hereunder, there are no leasing or other
fees or commissions due, nor will any
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become due, in connection with any Lease or any renewal or extension or
expansion of any Lease, and no understanding or agreement with any party exists
as to payment of any leasing commissions or fees regarding future leases or as
to the procuring of tenants. To Seller's knowledge, except as disclosed in the
Property Information, no tenants have asserted nor are there any defenses or
offsets to rent accruing after the Closing Date and no default or breach exists
on the part of any tenant. Seller has not received any notice of any default or
breach on the part of the landlord under any Lease, nor, to the best of Seller's
knowledge, does there exist any such default or breach on the part of the
landlord. Except as set forth in the Rent Roll, all of the landlord's
obligations to construct tenant improvements or reimburse the tenants for tenant
improvements under the Leases have been paid and performed in full and all
concessions (other than any unexpired rent abatement set forth in the Leases)
from the landlord under the Leases have been paid and performed in full.
(d) Service Contracts and Operating Statements. The list of Service
Contracts delivered to Purchaser pursuant to this Agreement is true, correct,
and complete as of the date of its delivery. The documents constituting the
Service Contracts that are delivered to Purchaser are true, correct and complete
copies of all of the Service Contracts affecting the Property. Neither Seller
nor, to Seller's knowledge, any other party is in default in any material
respect under any Service Contract. The Operating Statements to be delivered to
Purchaser pursuant to this Agreement show all items of income and expense
(operating and capital) incurred in connection with Seller's ownership,
operation, and management of the Property for the periods indicated and are
true, correct, and complete in all material respects.
(e) Permits, Legal Compliance, and Notice of Defects. Seller
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has all licenses, permits and certificates necessary for the use
and operation of the Property, including, without limitation, all
certificates of occupancy necessary for the occupancy of the
Property, all of which are in full force and effect, and Seller has
not taken or failed to take any action that would result in their
revocation, and has not received any written notice of an intention
to revoke any of them. To Seller's knowledge, neither the Property
nor the use thereof violates any governmental law or regulation or
any covenants or restrictions encumbering the Property. To
Seller's knowledge there are no material physical defects in the
Improvements. Seller has not received any written notice from any
insurance company or underwriter of any defects that would
materially adversely affect the insurability of the Property or
cause an increase in insurance premiums. Seller has received no
written notice from any governmental authority or other person of,
and has no knowledge of any violation of zoning, building, fire,
health, environmental, or other statutes, ordinances, regulations
or orders (including those respecting the Americans with
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Disabilities Act), or any restriction, condition, covenant or consent in regard
to the Property or any part thereof which have not been corrected to the
satisfaction of the issuer.
(f) Environmental. Seller has no knowledge of any violation of
Environmental Laws related to the Property or the presence or release of
Hazardous Materials on or from the Property except as disclosed in the Property
Information. Neither Seller nor, to Seller's knowledge, any tenant or other
occupant has manufactured, introduced, released or discharged from or onto the
Property any Hazardous Materials or any toxic wastes, substances or materials
(including, without limitation, asbestos) in violation of any Environmental
Laws, and neither Seller, nor to Seller's knowledge any tenant or other occupant
has used the Property or any part thereof for the generation, treatment,
storage, handling or disposal of any Hazardous Materials in violation of any
Environmental Laws. The term "Environmental Laws" includes without limitation
the Resource Conservation and Recovery Act and the Comprehensive Environmental
Response Compensation and Liability Act and other federal laws governing the
environment as in effect on the Date of this Agreement together with their
implementing regulations and guidelines as of the Date of this Agreement, and
all state, regional, county, municipal and other local laws, regulations and
ordinances that are equivalent or similar to the federal laws recited above or
that purport to regulate Hazardous Materials. The term "Hazardous Materials"
includes petroleum, including crude oil or any fraction thereof, natural gas,
natural gas liquids, liquified natural gas, or synthetic gas usable for fuel (or
mixtures of natural gas or such synthetic gas), and any substance, material
waste, pollutant or contaminant listed or defined as hazardous or toxic under
any Environmental Law.
(g) Utilities. All water, sewer, gas, electric, telephone, and drainage
facilities, and other utilities required for the normal and proper operation of
the Property are installed and connected to the Property with valid permits, and
are adequate to serve the Property for its current use and to permit full
compliance with all requirements of law and the Leases. All permits and
connection fees are fully paid and no action is necessary on the part of
Purchaser to transfer such permits to it. To Seller's knowledge, all utilities
serving the Property enter it through publicly-dedicated roads or through
currently effective public or private easements. To Seller's knowledge, no fact
or condition exists which would result in the termination of such utilities
services to the Property.
(h) Independent Unit. The Property is an independent unit which does
not now rely on any facilities (other than facilities covered by easements
appurtenant to the Property or facilities of municipalities or public utilities)
located on any property that is not part of the Property to fulfill any
municipal or other
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governmental requirement, or for the furnishing to the Property of any essential
building systems or utilities (including drainage facilities, catch basins, and
retention ponds). No other building or other property that is not part of the
Property relies upon any part of the Property to fulfill any municipal or other
governmental requirement, or to provide any essential building systems or
utilities, other than CCR's covered by Paragraph 5.3(j).
(i) Withholding Obligation. Seller's sale of the Property is not
subject to any federal, state or local withholding obligation of Purchaser under
the tax laws applicable to Seller or the Property.
(j) Disclosure. Other than this Agreement, the documents delivered at
Closing pursuant hereto, the Permitted Exceptions, Leases, Service Contracts,
and any commission agreements described in the Commission Schedule, there are no
contracts or agreements of any kind relating to the Property to which Seller or
its agents is a party and which would be binding on Purchaser after Closing.
Copies of Property Information delivered to Purchaser pursuant to Paragraph 2.1
hereof are or will be true, correct and complete copies; and Seller is not aware
of any material inaccuracy or omission in the Property Information delivered
pursuant to Paragraph 2.1. To Seller's knowledge, there are no other facts or
events which could materially affect the Property which have not been disclosed
in writing to Purchaser pursuant to this Agreement.
7.2 Purchaser's Representations and Warranties. As a material
inducement to Seller to execute this Agreement and consummate this transaction,
Purchaser represents and warrants to Seller that:
(a) Organization and Authority. Purchaser has been duly organized and
is validly existing as a Maryland real estate investment trust, in good standing
in the State of Maryland, and will be qualified to do business in the state in
which the Real Property is located on the Closing Date. Purchaser has the full
right and authority and has obtained any and all consents required to enter into
this Agreement and, subject only to obtaining certain internal approvals on or
before the expiration of the Due Diligence Period, to consummate or cause to be
consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Purchaser at Closing will be, authorized
and properly executed and constitutes, or will constitute, as appropriate, the
valid and binding obligation of Purchaser, enforceable in accordance with their
terms.
(b) Conflicts and Pending Action. There is no agreement to which
Purchaser is a party or to Purchaser's knowledge binding on Purchaser which is
in conflict with this Agreement. There is no action or proceeding pending or, to
Purchaser's knowledge,
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threatened against Purchaser which challenges or impairs Purchaser's ability to
execute or perform its obligations under this Agreement.
7.3 Survival of Representations and Warranties. The representations and
warranties set forth in this Article 7 are made as of the date of this Agreement
and are remade as of the Closing Date and shall not be deemed to be merged into
or waived by the instruments of Closing, but shall survive Closing for a period
of one (1) year. Seller and Purchaser shall have the right to bring an action
thereon only if Seller or Purchaser, as the case may be, has given the other
party written notice of the circumstances giving rise to the alleged breach
within such 1 year period.
ARTICLE 8: INDEMNIFICATION
8.1 Seller's Indemnity. Seller agrees to indemnify, defend and hold
Purchaser harmless from any liability, claim, demand, loss, expense or damage
(collectively, "loss") that is: (a) suffered by, or asserted by any person or
entity against, Purchaser arising from any act or omission of Seller, its
agents, employees or contractors occurring on or before Closing; or (b) arising
from any breach by Seller of any obligation related to the Property other than
those obligations which by this Agreement, or any closing delivery, specifically
becomes the obligation of Purchaser.
8.2 Purchaser's Indemnity. Purchaser agrees to indemnify, defend and
hold Seller harmless of and from any loss that is: (a) suffered by, or asserted
by any person or entity against, Seller arising from any act or omission of
Purchaser, its agents, employees or contractors occurring on or after Closing;
or (b) arising from any breach by Purchaser of any obligation of Purchaser
related to the Property which by this Agreement, or any closing delivery,
specifically becomes the obligation of Purchaser.
8.3 Procedure. The following provisions govern all actions for
indemnity under this Article 8 and any other provision of this Agreement.
Promptly after receipt by an indemnitee of notice of any claim, such indemnitee
will, if a claim in respect thereof is to be made against the indemnitor,
deliver to the indemnitor written notice thereof and the indemnitor shall have
the right to participate in and, if the indemnitor agrees in writing that it
will be responsible for any costs, expenses, judgments, damages, and losses
incurred by the indemnitee with respect to such claim, to assume the defense
thereof, with counsel mutually satisfactory to the parties; provided, however,
that an indemnitee shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnitee, if the indemnitee reasonably believes
that representation of such indemnitee by the counsel retained by
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the indemnitor would be inappropriate due to actual or potential differing
interests between such indemnitee and any other party represented by such
counsel in such proceeding. The failure of indemnitee to deliver written notice
to the indemnitor within a reasonable time after indemnitee receives notice of
any such claim shall relieve such indemnitor of any liability to the indemnitee
under this indemnity only if and to the extent that such failure is prejudicial
to the indemnitor's ability to defend such action, and the omission so to
deliver written notice to the indemnitor will not relieve it of any liability
that it may have to any indemnitee other than under this indemnity. If an
indemnitee settles a claim without the prior written consent of the indemnitor,
then the indemnitor shall be released from liability with respect to such claim
unless the indemnitor has unreasonably withheld such consent.
ARTICLE 9: DEFAULT
9.1 Seller's Default. If this transaction fails to close as a result of
Seller's default, the Earnest Money shall be returned to Purchaser. In addition,
Purchaser shall be entitled to such remedies for breach of contract as may be
available at law and in equity, including without limitation, the remedy of
specific performance.
9.2 Purchaser Default. If this transaction fails to close due to the
default of Purchaser, Seller's sole remedy in such event shall be to terminate
this Agreement and to retain the Earnest Money as liquidated damages, Seller
waiving all other rights or remedies in the event of such default by Purchaser.
The parties acknowledge that Seller's actual damages in the event of a default
by Purchaser under this Agreement will be difficult to ascertain, and that such
liquidated damages represent the parties' best estimate of such damages.
9.3 Other Expenses. If this Agreement is terminated due to the default
of a party, then the defaulting party shall pay any fees due to the Escrow Agent
for holding the Earnest Money and any fees due to the Title Company for
cancellation of the Title Commitment.
ARTICLE 10: EARNEST MONEY PROVISIONS
10.1 Investment and Use of Funds. The Escrow Agent shall invest the
Earnest Money in government insured interest-bearing accounts satisfactory to
Purchaser, shall not commingle the Earnest Money with any funds of the Escrow
Agent or others, and shall promptly provide Purchaser and Seller with
confirmation of the investments made. If the Closing under this Agreement
occurs, the Earnest Money shall be applied as a credit against the Purchase
Price.
10.2 Termination before Expiration of Due Diligence Period.
The Purchaser shall notify the Escrow Agent of the date that the
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Due Diligence Period ends promptly after such date is established under this
Agreement, and Escrow Agent may rely upon such notice. If Purchaser elects to
terminate the Purchase Agreement pursuant to Paragraph 2.2, Escrow Agent shall
pay the entire Earnest Money to Purchaser one business day following receipt of
a copy of the Due Diligence Termination Notice from Purchaser (as long as the
current investment can be liquidated in one day). No notice to Escrow Agent from
Seller shall be required for the release of the Earnest Money to Purchaser by
Escrow Agent. The Earnest Money shall be released and delivered to Purchaser
from Escrow Agent upon Escrow Agent's receipt of a copy of the Due Diligence
Termination Notice despite any objection or potential objection by Seller.
Seller agrees it shall have no right to bring any action against Escrow Agent
which would have the effect of delaying, preventing, or in any way interrupting
Escrow Agent's delivery of the Earnest Money to Purchaser pursuant to this
paragraph, any remedy of Seller being against Purchaser, not Escrow Agent.
10.3 Payment to Seller. In the event Purchaser does not elect to
terminate this Agreement prior to the expiration of the Due Diligence Period,
Escrow Agent shall pay the entire Earnest Money to Seller one (1) business day
following the expiration of the Due Diligence Period. The Earnest Money shall be
applied as a credit against the Purchase Price, but it shall not be refunded to
Purchaser unless this transaction fails to close as a result of an adverse
condition as described in Paragraph 2.5 or the occurrence of any event for which
Purchaser has the express right to terminate this Agreement. If Purchaser elects
to terminate this Agreement as a result of any event described in the preceding
sentence, Seller shall return the Earnest Money to Purchaser within one (1)
business day of such termination.
10.4 Interpleader. Seller and Purchaser mutually agree that in the
event of any controversy regarding the Earnest Money, unless mutual written
instructions are received by the Escrow Agent directing the Earnest Money's
disposition, the Escrow Agent shall not take any action, but instead shall await
the disposition of any proceeding relating to the Earnest Money or, at the
Escrow Agent's option, the Escrow Agent may interplead all parties and deposit
the Earnest Money with a court of competent jurisdiction in which event the
Escrow Agent may recover all of its court costs and reasonable attorneys' fees.
Seller or Purchaser, whichever loses in any such interpleader action, shall be
solely obligated to pay such costs and fees of the Escrow Agent, as well as the
reasonable attorneys' fees of the prevailing party in accordance with the other
provisions of this Agreement.
10.5 Liability of Escrow Agent. The parties acknowledge that the Escrow
Agent is acting solely as a stakeholder at their request and for their
convenience, that the Escrow Agent shall not be deemed to be the agent of either
of the parties, and that the
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Escrow Agent shall not be liable to either of the parties for any action or
omission on its part taken or made in good faith, and not in disregard of this
Agreement, but shall be liable for its negligent acts and for any loss, cost or
expense incurred by Seller or Purchaser resulting from the Escrow Agent's
mistake of law respecting the Escrow Agent's scope or nature of its duties.
Seller and Purchaser shall jointly and severally indemnify and hold the Escrow
Agent harmless from and against all costs, claims and expenses, including
reasonable attorneys' fees, incurred in connection with the performance of the
Escrow Agent's duties hereunder, except with respect to actions or omissions
taken or made by the Escrow Agent in bad faith, in disregard of this Agreement
or involving negligence on the part of the Escrow Agent.
10.6 Escrow Fee. Except as expressly provided herein to the contrary,
the escrow fee, if any, charged by the Escrow Agent for holding the Earnest
Money or conducting the Closing shall be shared equally by Seller and Purchaser.
ARTICLE 11: MISCELLANEOUS
11.1 Parties Bound. Neither party may assign this Agreement without the
prior written consent of the other, and any such prohibited assignment shall be
void; provided, however, that Purchaser may assign this Agreement without
Seller's consent to an Affiliate or to effect an Exchange pursuant to Paragraph
11.18 hereof. Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the respective legal representatives, successors,
assigns, heirs, and devisees of the parties. For the purposes of this paragraph,
the term "Affiliate" means: (a) an entity that directly or indirectly controls,
is controlled by or is under common control with Purchaser; or (b) an entity at
least a majority of whose economic interest is owned by Purchaser; and the term
"control" means the power to direct the management of such entity through voting
rights, ownership or contractual obligations.
11.2 Headings. The article and paragraph headings of this Agreement are
for convenience only and in no way limit or enlarge the scope or meaning of the
language hereof.
11.3 Expenses. Except as otherwise expressly provided herein, each
party hereto shall pay its own expenses incident to this Agreement and the
transactions contemplated hereunder, including all legal and accounting fees and
disbursements.
11.4 Invalidity and Waiver. If any portion of this Agreement is held
invalid or inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and, to the greatest
extent legally possible, effect
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shall be given to the intent manifested by the portion held invalid or
inoperative. The failure by either party to enforce against the other any term
or provision of this Agreement shall not be deemed to be a waiver of such
party's right to enforce against the other party the same or any other such term
or provision in the future.
11.5 Governing Law. This Agreement shall, in all respects, be governed,
construed, applied, and enforced in accordance with the law of the state in
which the Real Property is located.
11.6 Survival. The provisions of this Agreement that contemplate
performance after Closing and the obligations of the parties not fully performed
at Closing shall survive Closing and shall not be deemed to be merged into or
waived by the instruments of Closing.
11.7 No Third Party Beneficiary. This Agreement is not intended to give
or confer any benefits, rights, privileges, claims, actions, or remedies to any
person or entity as a third party beneficiary, decree, or otherwise.
11.8 Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all before agreements and
understandings relating to the Property. This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against whom
enforcement is sought.
11.9 Time. Time is of the essence in the performance of this
Agreement.
11.10 Confidentiality. Seller shall make no public announcement or
disclosure of any information related to this Agreement to outside brokers or
third parties, before or after Closing, without the specific, prior written
consent of Purchaser, except for such disclosures to Seller's lenders,
creditors, officers, employees and agents as are necessary to perform Seller's
obligations hereunder.
11.11 Attorneys' Fees. Should either party employ attorneys to enforce
any of the provisions hereof, the party against whom any final judgment is
entered agrees to pay the prevailing party all reasonable costs, charges, and
expenses, including reasonable attorneys' fees, expended or incurred by the
prevailing party in connection therewith.
11.12 Notices. All notices required or permitted hereunder shall be in
writing and shall be served on the parties at the addresses set forth in
Paragraph 1.1. Any such notices shall be either: (a) sent by overnight delivery
using a nationally recognized overnight courier, in which case notice shall be
deemed delivered one business day after deposit with such courier; (b)
-28-
sent by telefax, in which case notice shall be deemed delivered upon
transmission of such notice; or (c) sent by personal delivery, in which case
notice shall be deemed delivered upon receipt. A party's address may be changed
by written notice to the other party; provided, however, that no notice of a
change of address shall be effective until actual receipt of such notice. Copies
of notices are for informational purposes only, and a failure to give or receive
copies of any notice shall not be deemed a failure to give notice.
11.13 Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any exhibits or amendments hereto.
11.14 Remedies Cumulative. The remedies provided in this Agreement
shall be cumulative and, except as otherwise expressly provided shall not
preclude the assertion or exercise of any other rights or remedies available by
law, in equity or otherwise.
11.15 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event after
which the designated period of time begins to run is not to be included and the
last day of the period so computed is to be included at, unless such last day is
a Saturday, Sunday or legal holiday for national banks in the location where the
Property is located, in which event the period shall run until the end of the
next day which is neither a Saturday, Sunday, or legal holiday. The last day of
any period of time described herein shall be deemed to end at 6 p.m, Pacific
Standard Time.
11.16 Information and Audit Cooperation. At Purchaser's request, at any
time before or after Closing, Seller shall provide to Purchaser's designated
independent auditor access to the books and records of the Property, and all
related information regarding the period for which Purchaser is required to have
the Property audited under the regulations of the Securities and Exchange
Commission, and Seller shall provide to such auditor a representation letter
regarding the books and records of the Property, in substantially the form of
Exhibit G attached hereto, in connection with the normal course of auditing the
Property in accordance with generally accepted auditing standards. The Purchaser
agrees to indemnify and hold harmless the Seller from any claim, damage, loss,
or liability to which Seller is at any time subjected by any person who is not a
party to this Agreement as a result of Seller's compliance with this paragraph.
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11.17 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of such counterparts shall constitute one Agreement. To facilitate execution of
this Agreement, the parties may execute and exchange by telephone facsimile
counterparts of the signature pages.
11.18 Section 1031 Exchange. Purchaser and/or Seller may consummate the
purchase and sale of the Property as part of a so-called like kind exchange (the
"Exchange") pursuant to ss. 1031 of the Internal Revenue Code of 1986, as
amended (the "Code"), provided that: (a) Closing shall not be delayed or
affected by reason of the Exchange nor shall the consummation or accomplishment
of the Exchange be a condition precedent or condition subsequent to Purchaser's
obligations under this Agreement; (b) Purchaser and/or Seller shall effect the
Exchange through an assignment of this Agreement, or their respective rights
under this Agreement, to a qualified intermediary; (c) neither Seller nor
Purchaser shall be required to take an assignment of the purchase agreement for
the relinquished property or be required to acquire or hold title to any real
property for purposes of consummating the Exchange; and (d) neither party shall
pay any additional costs that would not otherwise have been incurred by such
party had the other party not consummated its purchase through the Exchange.
Purchaser and Seller shall not, by this agreement or acquiescence to the
Exchange, have their respective rights under this Agreement affected or
diminished in any manner or be responsible for compliance with or be deemed to
have warranted to the other party that the Exchange in fact complies with ss.
1031 of the Code.
11.19 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by either
party at Closing, each party agrees to perform, execute and deliver, on or after
Closing any further actions, documents, and will obtain such consents, as may be
reasonably necessary or as may be reasonably requested to fully effectuate the
purposes, terms and conditions of this Agreement or to further perfect the
conveyance, transfer and assignment of the Property to Purchaser.
11.20 Limitation of Liability. In accordance with the declaration of
trust of Purchaser, notice is hereby given that all persons dealing with
Purchaser shall look solely to the assets of Purchaser for the enforcement of
any claim against Purchaser, as neither the trustees, officers, employees nor
shareholders of Purchaser assume any personal liability for obligations entered
into by or on behalf of Purchaser.
11.21 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL
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RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[Signature Page Follows]
SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT BETWEEN PACIFIC RETAIL TRUST
AND
JS - JAMES CENTER ASSOCIATES, L.P.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year written below.
JS - JAMES CENTER ASSOCIATES, L.P.,
a ___________________________________
By: ____________________________
Name: ____________________________
Title:____________________________
Dated:__________
"Seller"
PACIFIC RETAIL TRUST, a Maryland
realestate investment trust
By: ___________________________
Name: ___________________________
Title:___________________________
Dated:
"Purchaser"
[signatures continue on following page]
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CONTINUATION OF SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT
BETWEEN PACIFIC RETAIL TRUST
AND
JS - JAMES CENTER ASSOCIATES, L.P.
Escrow Agent has executed this Agreement in order to confirm that
Escrow Agent has received and shall hold the Earnest Money and the interest
earned thereon, in escrow, and shall disburse the Earnest Money, and the
interest earned thereon, pursuant to the provisions of Article 10 hereof.
CHICAGO TITLE INSURANCE COMPANY
By: __________________________
Name: __________________________
Title: __________________________
Dated: __________________ "Escrow Agent"
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EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
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EXHIBIT B
PROPERTY INFORMATION
o Rent Roll. A rent roll ("Rent Roll") of the Property (and, in
addition, Seller's most recent rent roll of the Property),
containing the following information for each tenant:
o Full name of tenant as shown on the Lease
o Description of space leased to tenant, including suite
number and square feet of net rentable area o Date of Lease
and any amendments or guarantees thereto o Term of Lease with
commencement and expiration dates o Options to extend term o Options to
expand space o Annual base rental o Annual reimbursements for taxes,
CAM, merchants'
association, and other expenses
o Percentage rental
o Concessions, including free rent, construction
allowances, etc.
o Dates through which base and percentage rental have been
paid
o Rental collected in advance
o Defaults by tenant
o Security deposit and interest accrued thereon
o Operating Statements. Operating statements of the Property
for the 36 months preceding the date of this Agreement
("Operating Statements").
o Commission Schedule and Agreements. A schedule ("Commission
Schedule") and copies of all commission agreements related to
the Leases or the Property.
o Service Contracts. A list together with copies of all
management, service, supply, equipment rental and other
contracts related to the operation of the Property ("Service
Contracts").
o Leases. Copies of all leases and occupancy agreements
including all amendments, guarantees, side letters and other
relevant documents.
o Tax Statements. Copies or a summary of ad valorem tax
statements for the current or most recently available tax
period and for the prior 36 months including the Property's
tax identification number(s).
o Tangible Personal Property. A current inventory of all
tangible personal property and fixtures.
30177448.6 40899 1702C 98484215
o Tenant Information:
o Financial statements of all tenants under Leases covering
prior 2 years
o Information relative to tenant payment history
o CAM, real estate taxes and insurance reconciliations by
tenant
o Tenants' allocation of CAM, real estate taxes and
insurance reimbursements for the prior 2 years
o A gross sales report for the last 3 years (and current year if
available) for each tenant paying percentage rent
o All tenant correspondence
o Maintenance Records. All maintenance work orders for the
prior 12 months.
o List of Capital Improvements. A list of all capital
improvements performed on the Property within the prior 24
months.
o Reports. Any environmental, soil, structural engineering and
drainage reports, assessments, audits and surveys.
o As-Built Survey. All existing as-built surveys of the
Property.
o Site Plans. All site plans relating to the Property.
o Square Footage. A square footage breakdown of the Property by
building.
o As-Built Plans and Specifications. All as-built construction,
architectural, mechanical, electrical, plumbing, landscaping and
grading plans and specifications relating to the Property and any major
capital repairs or tenant improvements (including bay depths and fire
protection specifications).
o Parking Information. A parking plan (which may be reflected in the
Survey) showing the number of parking spaces for the Property, and a
comparison to the number of parking spaces for the Property required by
zoning requirements applicable to the Property.
o Permits and Warranties. Copies of all warranties and
guaranties, permits, certificates of occupancy, licenses and
other approvals.
o Financial Statements. Copies of financial statements
reflecting the operation of the Property for the prior 3
calendar years, including statements of cash flow and year-end
balance sheets, and statements of income, expense, accounts
30177448.6 40899 1702C 98484215
payable and accounts receivable for each such year, each prepared in
accordance with generally accepted accounting principles consistently
applied, and fairly presenting the financial position of Seller with
respect to the Property at the end of each such year and the results of
the operations thereof for such year.
o Operating Information. Copies of all utilities bills relating
---------------------
to the Property for the prior 12 calendar months and a list of
any utility company deposits, all service contract billings,
all certificates of insurance of each tenant, all tax returns
relating to the Property for the past calendar year, details
of any reserves and the back-up for any projections upon which
the reserves are based, year-to-date general ledger, and
accounts receivable aging report.
o Management Report. Copies of monthly management reports for
the Property for the past 3 calendar years and for the current
year-to-date.
o Budget. Seller's most recent budget for the Property,
including the forthcoming year, if applicable.
o Insurance. Copies of Seller's certificate of insurance for the
Property, all insurance policies, a loss history, a list of any current
claims relating to the Property, and any notices received by insurance
carriers.
o Proceedings. Copies of any documents or materials relating to any
litigation, investigation, condemnation, or proceeding of any kind
pending or threatened affecting any of the Property or the ability of
Seller to consummate the transaction contemplated by this Agreement.
o General. Any other documents or information pertaining to the Property
in Seller's possession or control or in the possession or control of
Seller's agents or independent contractors.
o CCR'S. Copies of all covenants, conditions and restrictions or similar
instruments governing or affecting the use, operation, maintenance,
management or improvement of the Property including all amendments,
modifications, supplements and other relevant documents.
30177448.6 40899 1702C 98484215
EXHIBIT C
TENANT ESTOPPEL CERTIFICATE
The undersigned ("Tenant") hereby certifies to Pacific Retail Trust, a
Maryland Real Estate Investment Trust, its successors and assigns (collectively,
"Buyer") and each of their mortgagees and their respective successors and
assigns (collectively "Lender") as follows:
1. [Name of Tenant] is the lessee of square feet of leasable area (the
"Premises") in the James Center Shopping Center located in County, Washington
("Property"), under a lease agreement dated , 199 (as modified or amended, the
"Lease") entered into between Tenant and JS - James Center Associates, L.P., or
its predecessor in interest as lessor ("Lessor") as modified by the documents,
if any, attached hereto as Exhibit A.
2. The Lease is in full force and effect, and, to the best of Tenant's
knowledge, Tenant is not in default thereunder. To the best of Tenant's
knowledge, there exist no facts that would constitute a basis for any default
under the Lease upon the lapse of time or the giving of notice or both.
3. The Lease, in the form of Exhibit A hereto, constitutes the entire
agreement between the Lessor and Tenant and there are no amendments, written or
oral, to the Lease except as included in Exhibit A. Tenant has no options or
rights to extend the term of the Lease, expand the Premises, or purchase the
Property or any portion thereof except as set forth in the Lease. The Lease has
not been assigned, transferred or hypothecated by Tenant, nor the Premises or
any portion thereof sublet, except as set forth in the documents attached as
Exhibit A hereto.
4. All construction, maintenance, and repair obligations of Lessor have
been performed in full and all allowances or other amounts payable to Tenant
under the Lease have been paid in full by Lessor. All conditions of the Lease to
be performed by Lessor and necessary to the obligation of Tenant to perform its
obligations under the Lease have been performed. All portions of the Premises
and any additional space required to be delivered to Tenant under the Lease have
been delivered. Tenant does not currently have, and hereby waives, any and all
termination, abatement, or offset rights based on the failure of Lessor to
timely and adequately perform any of its obligations under the Lease prior to
the date hereof. To the extent Tenant's Lease affords Tenant any right to
approve or confirm any matters relating to permitting, signage, zoning or
variances, and other matters pertaining to the use and occupancy of
C-1
the Premises, all such matters have been approved by Tenant and Tenant waives
any right to object to any such matters.
5. Tenant has accepted the Premises and is paying rent under the Lease.
Tenant has not made any prepayment of rent or other charges more than one (1)
month in advance and no payments have been made by Tenant except as provided in
the Lease.
6. The term of the Lease commenced on , 199 and will end on , 199 at a
monthly base rental (exclusive of Tenant's obligation to pay common area
maintenance costs, percentage rents, expenses, taxes, or insurance) of [Base
Rent] [Increase details]. There are no concessions, bonuses, free rental
periods, rebates, credits or other matters affecting the rental for Tenant under
the Lease except as described in Exhibit A hereto. Tenant is currently paying
[pass-through details] as Tenant's share of common area maintenance costs and
other expense pass-throughs.
7. As of the date of this certificate, to the knowledge of Tenant,
there exist no offsets, abatements, reductions in rent, counterclaims or
defenses of Tenant under the Lease against Lessor, except as expressly described
in Exhibit A, and, to the knowledge of Tenant, there exist no events that would
constitute a basis for such offset, abatement, reduction, counterclaim or
defense against Lessor upon the lapse of time or the giving of notice or both.
Tenant has no right to or claims for the refund of any rents or other sums
heretofore paid to Lessor (excluding the right to a refund of any security
deposit paid by Tenant in the amount set forth in Paragraph 8 hereof).
8. The amount of prepaid rent or lease deposit, however referred to,
paid under the terms of the Lease is $ . To Tenant's knowledge, no portion of
the foregoing amount has been applied by Lessor to the payment of rent or any
other amounts due under the Lease.
9. Tenant acknowledges that the Lessor's interest in the Lease will be
assigned to Buyer and agrees, upon receipt of notice of such assignment from
Buyer, to attorn to Buyer, to recognize Buyer as the Lessor for all purposes,
and to perform all of Tenant's obligations as lessee under the Lease, including,
without limitation, the payment of rent, directly to Buyer, or its agent, as the
Lessor under the Lease, from and after the date of such notice.
10. To the extent Tenant's Lease affords Tenant such rights, Tenant has
approved the site plan for the Property and approves the design, configuration,
location, use, and operation of all improvements located on the Property as
complying with the approved site plan. All common areas located on the Property
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comply in full with the requirements of the Lease. All parking requirements of
the Lease have been satisfied in full. The exclusive rights and other
restrictions contained in the Lease have been satisfied and there is no
violation thereof by any previous or existing lessor or by any third party.
Tenant has no right to terminate the Lease or cease operating based upon a
breach of any cotenancy provisions or any other provision of the Lease
conditioning Tenant's performance of its obligations under the Lease on the
occupancy of other premises by other tenants.
11. Tenant has not filed and is not the subject of any filing for
bankruptcy or reorganization under federal bankruptcy laws.
12. The address for notices to Tenant under the Lease is correctly set
forth in the Lease.
13. All exhibits attached hereto are by this reference incorporated
fully herein and are true, correct, and complete. The term "this certificate"
shall be considered to include all such exhibits.
14. All guarantors of the Lease ("Guarantor") are identified below and
by their execution below consent to and confirm all obligations under any such
guaranty and all covenants and certifications set forth in this estoppel
certificate.
15. This certificate may be executed in any number of counterparts, any
of which may contain the signatures of less than all of the parties, and all of
which shall be construed together as but a single instrument.
16. This certificate may be relied upon and shall inure to the benefit
of Buyer and Lender and shall be binding upon Tenant, Guarantor and each of
their respective successors and assigns.
[Signature block continued on next page.]
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[Signature block continued from previous page.]
EXECUTED______________, 1998.
TENANT:
_________________________
By:
Name:
Title:
GUARANTOR 1:
________________________
By:
Name:
Title:
GUARANTOR 2:
________________________
By:
Name:
Title:
C-4
STATE OF )
-------------------
) ss.
COUNTY OF __________________ )
Sworn to and subscribed before me by _________________ on this day of
_____________, 1998.
_______________________________________
Notary Public
_______________________________________
Printed Name of Notary
My Commission Expires:
STATE OF )
-------------------
) ss.
COUNTY OF __________________ )
Sworn to and subscribed before me by _____________________ on this
_____ day of________________, 1998.
Notary Public
Printed Name of Notary
My Commission Expires:
C-5
STATE OF )
-------------------
) ss.
COUNTY OF )
Sworn to and subscribed before me by _____________________ on this_____ day
of ___________, 1998.
_______________________________
Notary Public
_______________________________
Printed Name of Notary
My Commission Expires:
C-6
EXHIBIT D
SURVEY CERTIFICATION FORM
To: Pacific Retail Trust ("Purchaser"), Wells Fargo Realty
Advisors Funding, Incorporated, and Chicago Title Insurance
Company
The undersigned Registered Public Engineer (the "Engineer") hereby
certifies that (a) this plat of survey and the property description set forth
hereon are true and correct and prepared from an actual on-the-ground survey of
the real property (the "Property") shown hereon and is the same property that is
described in Chicago Title Insurance Company Commitment No.
dated , 1998; (b) such survey was conducted by the Engineer, or under his
supervision and was made in accordance with "Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys, "jointly established and adopted
by ALTA and ACSM in 1997, as defined therein and includes Items 1, 2, 3, 4, 6,
7(a), 7(c), 8, 9, 10, 11, 13, 14, 15, and 16 of Table A thereof, indicates all
access easements and off-site easements appurtenant, and meets the accuracy
requirements of an Urban Survey, as defined therein; (c) all monuments shown
hereon actually exist, and the location, size and type of material thereof are
correctly shown; (d) except as shown hereon, there are no encroachments onto the
Property or protrusions therefrom, there are no visible easements or
rights-of-way on the Property and there are no visible discrepancies, conflicts,
shortages in area or boundary line conflicts; (e) the size, location and type of
improvements are as shown hereon, and all are located within the boundaries of
the Property and set back from the Property lines the distances indicated; (f)
the distance from the nearest intersecting street or road is as shown; (g) the
Property has access to and from a public roadway; (h) all recorded easements
have been correctly platted hereon; and (i) the boundaries, dimensions and other
details shown hereon are true and correct.
The survey correctly shows the zone designation of any area shown as
being within a Special Flood Hazard Area according to current Federal Emergency
Management Agency Maps which make up a part of the National Flood Insurance
Administration Report; Community No. , Panel No. dated
.
EXECUTED this ______day of___________________,1998.
Registered Public Engineer
No.
D-1
No.____________________________
Address:_______________________
_______________________________
_______________________________
(SEAL)
D-2
EXHIBIT E
BILL OF SALE AND
ASSIGNMENT OF LEASES, CONTRACTS AND PERSONAL PROPERTY
This instrument is executed and delivered pursuant to that certain
Purchase and Sale Agreement (the "Agreement") dated ________________ between JS
- - JAMES CENTER ASSOCIATES, L.P. ("Seller") and PACIFIC RETAIL TRUST
("Purchaser") covering the real property described in Schedule 1 attached hereto
("Real Property"). All capitalized terms that are used by not defined herein
shall have the same meanings ascribed to such terms in the Agreement.
1. Assignment and Assumption. For good and valuable consideration
Seller hereby assigns and conveys to Purchaser, and Purchaser hereby accepts:
(a) Leases. All of Seller's right, title and interest in and to the
leases ("Leases") as set forth on the Rent Roll attached hereto as Schedule 2,
and Purchaser hereby assumes all of Seller's obligations under the Leases
arising from and after Closing (as defined in the Agreement) but as to Seller's
obligations with regard to security deposits and other deposits, only to the
extent the security deposits have been transferred or credited to Purchaser;
(b) Tangible Personalty. All right, title and interest of Seller in and
to all tangible personal property now owned by Seller and used in connection
with the operation, ownership, maintenance, management, or occupancy of the Real
Property, including, without limitation, all equipment, machinery, heating,
ventilating and air conditioning units, furniture, art work, furnishings, trade
fixtures, office equipment and supplies, and, whether stored on or off-site, all
tools and maintenance equipment, supplies, and construction and finish materials
not incorporated in the Improvements and held for repairs and replacements,
except any such tangible personal property belonging to tenants under the Leases
and specifically including the personal property listed on Schedule 3 attached
hereto;
(c) Intangible Personalty. All right, title and interest of Seller in
and to all intangible personal property now owned by Seller and used in
connection with the operation, ownership, maintenance, management, or occupancy
of the Real Property, including, without limitation, any and all of the
following: trade names and trade marks associated with the Real Property,
including, without limitation the name of the Real Property ("James Center");
the plans and specifications for the Improvements, including as-built plans;
unexpired warranties, guarantees, indemnities and claims against third parties;
contract rights related to the
E-1
construction, operation, repair, renovation, ownership or management of the Real
Property that are expressly assumed by Purchaser pursuant to this Agreement;
pending permit or approval applications, permits, approvals and licenses (to the
extent assignable); insurance proceeds and condemnation awards to the extent
provided in the Agreement; and books and records relating to the Property; and
(d) Contracts. All of Seller's right, title and interest in and to the
contracts ("Contracts") described in Schedule 4 attached hereto, and Purchaser
hereby assumes the obligations of Seller under such contracts arising from and
after Closing.
2. Warranty. Seller represents and warrants to Purchaser that it is the
owner of the property described above, that such property is free and clear of
all liens, charges and encumbrances other than the Permitted Exceptions (as
defined in the Agreement), and Seller warrants and defends title to the
above-described property unto Purchaser, its successors and assigns, against any
person or entity claiming, or to claim, the same or any part thereof, subject
only to the Permitted Exceptions as defined in the Agreement.
3. Indemnification. Seller shall defend, indemnify and hold harmless
Purchaser from and against any liability, damages, causes of action, expenses,
and attorneys' fees incurred by Purchaser by reason of the failure of Seller to
fulfill, perform, discharge, and observe its obligations with respect to the
Leases and the Contracts arising before the Closing Date (as defined in the
Agreement). Purchaser shall defend, indemnify and hold harmless Seller from and
against any liability, damages, causes of action, expenses, and attorneys' fees
incurred by Seller by reason of the failure of Purchaser to fulfill, perform,
discharge, and observe the obligations assumed by it under this instrument with
respect to the Leases or the Service Contracts arising after the date hereof.
4. Limitation of Liability of Trustees. In accordance with the
declaration of trust of Purchaser, notice is hereby given that all persons
dealing with Purchaser shall look to the assets of Purchaser for the enforcement
of any claim against Purchaser, as neither the trustees, officers, employees nor
shareholders of purchasers assume any personal liability for obligations entered
into by or on behalf of Purchaser.
SELLER:
JS - JAMES CENTER ASSOCIATES, L.P.,
a ___________________________________
E-2
By:____________________________
Name:__________________________
Title:_________________________
PURCHASER:
PACIFIC RETAIL TRUST, a Maryland real
estate investment trust
By:____________________________
Name:__________________________
Title:_________________________
E-3
EXHIBIT F
NOTICE TO TENANTS
[Date of Sale]
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
P_______________________
FirstName LastName
Job Title
Company
Address
City, State Postal Code
Re: Sale of Property - James Center, Tacoma, Washington
Lease Agreement dated _____________ by and between _________________
("Tenant") and ___________________ ("Landlord")
Dear ____________:
As required in the Notice Provision of your Lease Agreement and by applicable
Washington law, if any, notice from both Seller and Purchaser is hereby given
that effective _____________, 199__, Landlord has sold James Center Shopping
Center, located in Tacoma, Washington to Pacific Retail Trust. All future rental
payments should be sent as follows:
Please note the following:
1) All future rental payments should be sent as follows:
Make checks payable to: Pacific Retail Trust - [Insert Property]
Mail payment to: Pacific Retail Trust - [Insert Property]
P.O. Box [Insert Box #]
Dallas, TX [Insert Zip Code]
F-1
2) All questions regarding financial payment should be directed to [Insert
Lease Administrator], Lease Administration at 800/529-4506 or
214/340-2330 and 214/503-6026 (fax), 10675 East Northwest Highway,
Suite 2630, Dallas, Texas 75238.
3) Please contact your insurance agent immediately and instruct them to
change the name of the Certificate Holder and Additional Insured as
required in your Lease Agreement to reflect the new owner, Pacific
Retail Trust. Promptly forward a copy via fax and mail the original to
the Dallas address noted above within the next ten days:
4) Your Contact for property management is:
Property Manager: [Insert Director, Property Operations]
Pacific Retail Trust
[Insert Street Address]
[Insert City], [Insert State] [Insert Zip Code]
Telephone Number: [Insert #]
FAX Number: [Insert #]
5) Attached is an Emergency Contact Form. Please complete as requested and
return to [Insert Director, Property Operations] at the above address.
6) Attached you will find a Certificate of Non-Foreign status in which the
Purchaser, Pacific Retail Trust certifies Purchaser is not a foreign
entity. Additionally, the Purchaser's U.S. employer identification
number and Purchaser's principal place of business is also provided for
your records.
All of the Landlord's interest in your lease will be held by the new owner,
Pacific Retail Trust, including transfer and recognition of tenant's security
deposit in the amount of ($Secdep) and the new owner will from and after the
date hereof be responsible for such deposit.
Service of Legal Notice shall be addressed to:
Pacific Retail Trust
8140 Walnut Hill Lane, Suite 400
Dallas, TX 75231
Attn: Dennis H. Alberts
Very truly yours,
[Insert Seller's Signature Block]
[Insert Corporation/Partnership, State]
By:
F-2
Name:
Title:
"SELLER"
PACIFIC RETAIL TRUST,
a Maryland real estate investment trust
By:
Name: [Name of VP/Due Diligence]
Its: Vice President
"PURCHASER"
30177448.6 40899 1702C 98484215
F-3
CERTIFICATE OF NON-FOREIGN STATUS
To: Lessee
Definitions: Lessee: [Tenant]
Lease: Lease Agreement by and between Lessee, JS -
James Center Associates, L.P., a
_______________________ ("Seller")
Certain provisions of the Internal Revenue Code of the United Stats (the "Code")
provide that a lessee of a U.S. real property interest must, under certain
circumstances, withhold tax from lease payments if the lessor is a "foreign
person," as that term is used in the Code. The undersigned ("Purchaser") has
purchased the James Center Shopping Center from Seller and assumed the position
of lessor under the Lease, and associated documents. With respect to the
applicable Code provisions, the undersigned hereby certifies:
Purchaser is not a foreign person, foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Code and
associated regulations);
Purchaser's U.S. employer identification number is ID 74-6426985;
Purchaser's principal place of business is:
Pacific Retail Trust
8140 Walnut Hill Lane, Suite 400
Dallas, TX 75231
Purchaser understands and agrees that this certificate may be relied upon by
Lessee and may be disclosed to the Internal Revenue Service by Lessee.
I declare that I have examined this certification and to the best of my
knowledge and belief, it is true, correct, and complete, and I further declare
that I have authority to sign this document on behalf of Purchaser, either as an
officer or an authorized agent of the Purchaser's corporation.
PURCHASER: PACIFIC RETAIL TRUST
By:
Name:
Title:
F-4
EXHIBIT G
AUDIT LETTER
[Company Letterhead]
(Date)
(date of the auditor's report)
Price Waterhouse LLP
2001 Ross Avenue
Suite 1800
Dallas, Texas 75201
Dear Sirs:
We confirm, to the best of our knowledge and belief, the following
representations made to you during your audit of the financial statements of for
the year ended December 31, 199 for the purpose of expressing an opinion as to
whether the financial statements present fairly the results of operations of
in conformity with generally accepted
accounting principles.
1. We acknowledge management's responsibility for the fair presentation in
the financial statements of results of operations in conformity with
generally accepted accounting principles.
2. All financial and accounting records and related data have been made
available to you. We are not aware of any accounts, transactions or
material agreements not fairly described and properly recorded in the
financial and accounting records underlying the financial statements.
3. We are not aware of (a) any irregularities involving
management or employees who have significant roles in the
system of internal accounting control, or any irregularities
involving other employees that could have a material effect
on the financial statements, or (b) any violations or possible
violations of laws or regulations, the effects of which should
be considered for disclosure in the financial statements or
as a basis for recording a loss contingency. There have been
no communications from regulatory agencies concerning
noncompliance with or deficiencies in financial reporting
practices that could have a material effect on the financial
statements. The company has complied with all aspects of
contractual agreements that would have a material effect on
the financial statements.
4. There are no other material liabilities or gain or loss contingencies
that are required to be accrued or disclosed by
G-1
Statement of Financial Accounting Standards No. 5 and no
unasserted claims or assessments that our legal counsel has
advised us are probable of assertion and required to be
disclosed in accordance with that Statement.
5. No matters or occurrences have come to our attention up to the date of
this letter that would materially affect the financial statements for
the year ended December 31, 199 or, although not affecting such
financial statements, have caused or are likely to cause any material
change, adverse or otherwise, in the results of operations of the
property.
(Signatures)
G-2