EXHIBIT 2
REAL ESTATE SALE AND PURCHASE CONTRACT
THIS CONTRACT ("Contract") is made and entered into as of the 20th day
of January, 2000 (hereinafter referred to as the date hereof), by and between
USP Real Estate Investment Trust, an Iowa common law business trust (hereinafter
referred to as "Seller"), and AEGON USA Realty Advisors, Inc., an Iowa
corporation (hereinafter referred to as "Purchaser").
The parties hereto agree as follows:
1. AGREEMENT TO PURCHASE AND SELL.
A. Seller agrees to sell to Purchaser and Purchaser agrees to
purchase from Seller, subject to the terms and conditions of this Contract, the
six properties (the "Properties") described as follows:
(i) Kingsley Square Shopping Center located in Orange
Park, Florida, and legally described on Exhibit "A-1" attached hereto;
(ii) First Tuesday Mall located in Carrollton, Georgia,
and legally described on Exhibit "A-2" attached hereto;
(iii) Mendenhall Commons Shopping Center located in
Memphis, Tennessee, and legally described on Exhibit "A-3" attached hereto;
(iv) North Park Plaza Shopping Center located in Phoenix,
Arizona, and legally described on Exhibit "A-4" attached hereto;
(v) Presidential Drive Office Building located in
Atlanta, Georgia, and legally described on Exhibit "A-5" attached hereto;
(vi) Yamaha Warehouse located in Cudahy, Wisconsin, and
legally described on Exhibit "A-6" attached hereto.
The Properties are being sold together with:
(vii) All buildings, improvements, structures and fixtures,
placed, constructed, installed, or located on the Properties, together with the
parking facilities related thereto, and all other improvements situated on, over
and under the lands legally described above (the "Improvements");
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(viii) All of the furniture, furnishings, fixtures,
fittings, appliances, apparatus, equipment, tools, supplies and machinery, if
any, owned by Seller and located on the Properties (the "Personal Property");
(ix) Seller's interest as landlord under all leases of
space of and within any part of the Properties, including, without limitation,
any renewals thereof and any options to renew the same, together with any and
all third party guarantees of the obligations of tenants under such leases
(hereinafter referred to as the "Tenant Leases:");
(x) All contract agreements, if any, affecting the
operation of the Improvements as fully developed commercial properties,
including without limitation, all service contracts, maintenance agreements,
equipment leases, advertising contracts, and the like, to the extent assignable,
(hereinafter together referred to as the "Operating Agreements");
(xi) To the extent assignable, all guarantees and
warranties given, made, or issued by any contractors, subcontractors, servicers,
suppliers, manufacturers, installers, and the like, relating to or with respect
to the construction, repair, or maintenance of the Improvements or Personal
Property and the workmanship, materials, components, appliances, and equipment
forming a part of or installed on or included within or upon the Improvements
(hereinafter referred to as the "Warranties");
(xii) All development, construction, and engineering plans,
specifications, drawings, survey materials or other written materials or matters
in the possession of Seller which pertain to the planning, development,
construction, maintenance and repair of the Improvements, including, without
limitation all "working" drawings and all "as-built" drawings and surveys,
compliance reports, engineering reports, soil, geological, and environmental
reports (hereinafter referred to as the "Plans and Specifications");
(xiii) All licenses, permits, authorizations, and
certificates of occupancy affecting the Improvements as fully operational
commercial rental properties (hereinafter referred to as the "Licenses"),
including without limitation the right to use the names of the Properties set
forth above, to the extent Seller has any ownership or proprietary rights to use
such names; and
(xiv) All rents, issues, royalties, and profits of the
Properties, whether coming due before or after the Closing Date, including all
refunds or rebates of any nature concerning the Property which are made on or
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after the Closing Date and including all rights to insurance proceeds or other
recoveries for damage to the Properties (or any part thereof) which is not
repaired by the date of Closing.
The Properties, together with all other rights and properties set forth
in (i) through (xiv) above are collectively sometimes referred to herein as the
"Property".
2. PURCHASE PRICE AND METHOD OF PAYMENT.
A. The total purchase price for the Property to be paid by
Purchaser is Thirty-Three Million Five Hundred Thousand Dollars
($33,500,000.00), payable in cash by Purchaser at Closing. The purchase price
will be reduced in accordance with paragraph 10C hereof if the mortgage on the
Yamaha Warehouse is assumed by Purchaser. The allocation of purchase price
between the Properties for purposes of title insurance coverage and transfer tax
or other legally required declarations shall be as set forth on Exhibit "B".
B. Within three (3) business days after the date hereof,
Purchaser shall deliver to American Title Company, 3131 Turtle Creek Blvd.,
Suite 101, Dallas, TX 75219 Attention: Bo Feagin (hereinafter referred to as the
"Title Company") earnest money (the "Deposit") in the amount of Two Hundred
Thousand Dollars ($200,000.00). The Deposit shall be placed by the Title Company
in an interest bearing account with all interest earned thereon to be for the
benefit of the Purchaser. The Deposit shall be held during the pendency of this
Contract and disbursed in accordance with the terms hereof. In the event the
transactions covered hereby shall close, at Closing the Deposit shall be
credited towards the Purchase Price.
3. PERMITTED TITLE EXCEPTIONS.
The Properties are being sold in fee simple title, subject to the
following exceptions:
A. Zoning and building laws or ordinances;
B. The liens of real estate taxes which are not yet due and
payable;
C. Those matters set forth on the Seller's title polices
concerning the Properties which are identified on Exhibit "C" attached hereto,
except for liens or encumbrances (subject to subparagraph F below) and expired
Tenant Leases or other expired exceptions, which shall be discharged by Seller
at or prior to Closing;
D. Rights of tenants in possession;
E. Those matters set forth on the existing surveys of the
Properties identified on Exhibit "D" attached hereto; and
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F. Subject to paragraph 10C, the lien of the first mortgage and
related security instruments encumbering the Yamaha Warehouse in the current
principal amount of approximately One Million Three Hundred Ninety-Six Thousand
One Hundred Seventy-Three Dollars ($1,396,173.00) held by Wisconsin National
Life Insurance Company (hereinafter referred to as the "Yamaha Lender").
G. Such other easements or reservations of title as shall be
approved by Purchaser after Purchaser's examination of the title binders and
updated surveys for the Property as hereinafter required.
(A through G above are hereinafter collectively referred to as
"Permitted Exceptions").
4. CLOSING.
Consummation of the transactions contemplated by this Contract (the
"Closing") will be held at or closed in escrow through the offices of the Title
Company on a day and at a time mutually agreeable to the parties, after all
conditions precedent have been satisfied, but in any case on or before June 30,
2000. In the absence of a different specified date in accordance with this
paragraph, the Closing shall take place at 9:00 A.M., March 30, 2000
(hereinafter referred to as the "Closing Date").
5. PURCHASER'S CONDITIONS PRECEDENT.
Purchaser's obligations to purchase the Property hereunder are
contingent upon satisfaction of the following conditions precedent ("Purchaser's
Conditions Precedent") within forty-five (45) days of the date hereof (the
"Purchaser's Condition Period"):
A. Unless this Condition is waived by Purchaser within the
Purchaser's Condition Period, Purchaser agrees to obtain a preliminary title
report and commitment to insure title covering each Property issued by the Title
Company. It is a condition precedent to Purchaser's obligations to purchase the
Property that the Title Company agree to issue an owner's policy of title
insurance to Purchaser for each Property in an amount equal to the purchase
price set forth on Exhibit "B" and in ALTA Extended Owner's Form B-1970 or the
equivalent thereof as used in the applicable state. The Title Company shall
agree to delete from the final policies any exceptions for mechanic's or
materialman's liens, and for discrepancies, conflicts in boundary lines, lack of
access, shortages in area, encroachments, or other facts a current survey or
inspection of the Property would disclose. Seller agrees to execute those
affidavits and/or furnish other documentation reasonably requested by the Title
Company to make such deletions and to reflect the current status of rights
pursuant to Tenant Leases as of the Closing Date. Purchaser shall
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have until expiration of its Conditions Period to examine the title to the
Properties and to notify Seller in writing of any defects in or encumbrances
upon Seller's title to the Properties (other than the Permitted Exceptions)
that are unacceptable to Purchaser. Any objection not timely made by
Purchaser shall be deemed to be waived, and all such matters shown as
exceptions to title in the commitments (but not including items shown in
requirements sections) shall be Permitted Exceptions.
Seller shall have until Closing to cure all such defects. If any
defects (other than Permitted Title Exceptions) are not cured or otherwise
removed in a manner reasonably satisfactory to Purchaser by the scheduled date
of Closing, Purchaser shall have the remedies set forth in subparagraph F below.
B. Unless this Condition is waived by Purchaser within the
Purchaser's Condition Period, Purchaser agrees to obtain certified surveys of
the Properties certified by the surveyor to Purchaser and to the Title Company.
It is a Condition Precedent to Purchaser's obligations hereunder that the
surveys reveal no new exceptions to title that are unacceptable to Purchaser.
Any such matters shall be reported to Seller and dealt with in accordance with
the procedure for other title exceptions as set forth in subparagraph 5A above.
C. Purchaser acknowledges receipt of the environmental reports on
the Properties identified in Exhibit "E" attached hereto and agrees to accept
the Properties in the environmental condition as reflected therein, provided,
however, any new or additional information concerning the environmental
condition of any Property shall be subject to Purchaser's approval, in
Purchaser's sole discretion and except that, prior to Closing, Purchaser shall
receive evidence of proper closure or removal of underground tanks as noted in
the report concerning Northpark Shopping Center.
D. The Mutual Representations as set forth herein in paragraph 7
hereof and Seller's representations as set forth in paragraph 8 hereof shall be
true and correct as of the Closing Date without any change in the rent rolls or
the status of defaults of tenants which would be detrimental to the value of any
Property. Each party agrees to promptly notify the other of any matter coming to
the knowledge of such party which would render any of the Mutual Representations
or Seller's Representations untrue in any material respect. Seller agrees to use
reasonable efforts to correct any such matter prior to Closing, but shall not be
obligated to expend any money or to incur any liability to effect any such cure.
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E. The parties acknowledge that Purchaser is the asset manager
for the Properties pursuant to a Management Agreement dated July 1, 1981 and an
Administrative Agreement dated January 1, 1984 (together the "Advisory
Agreements"). Purchaser shall continue to manage the Property in the best
interests of the Seller pursuant to the Advisory Agreements in the same manner
as prior to this Contract. All actions taken by Seller in regard to the Property
at the recommendation of Purchaser as Advisor shall be considered consented to
by Purchaser pursuant to this Contract. Seller hereby directs Purchaser to
conduct operations at the Properties in accordance with any applicable terms and
conditions of this Contract. Seller agrees that Purchaser shall have access to
the Property pending Closing to perform its due diligence and inspections
allowed by this Contract in addition to Purchaser's access to the Property in
its capacity as Advisor. Purchaser agrees to indemnify and hold Seller harmless
from any loss, cost, damage, or liability caused by Purchaser's conduct of the
due diligence set forth herein. This indemnity shall survive the Closing or
earlier termination of this Contract.
F. If the Purchaser's Conditions Precedent set forth in this
paragraph 5 are not timely satisfied, then Purchaser may elect to (i) waive such
condition(s) and close, by giving written notice to Seller such that Seller
receives the notice no later than sixty (60) days after the date hereof in the
event of a failure of conditions to be satisfied within Purchaser's Condition
Period, or no later than the date scheduled for Closing in the event of a
failure of the conditions to be met prior to Closing (hereinafter referred to in
this paragraph as "Timely Notice"), or (ii) terminate this Contract by Timely
Notice to Seller. Upon a termination of this Contract in accordance herewith,
Purchaser's Deposit shall be promptly refunded and neither party shall have any
further rights or obligations hereunder. In the absence of any written notice
from Purchaser, Purchaser shall be deemed to have elected to terminate this
Contract.
6. ADDITIONAL CONDITIONS PRECEDENT.
The parties obligations to purchase and sell the Property hereunder are
conditioned upon the following:
A. Seller obtaining a favorable vote for this transaction from
its holders of beneficial interest in accordance with Seller's Declaration of
Trust. Seller agrees to hold a special meeting for such purpose on or before
June 15, 2000 and to comply with its Declaration of Trust and all applicable
laws, codes, ordinances, and regulations in the holding of such meeting and
vote.
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B. Seller agrees to recommend the sale contemplated by this
Contract for shareholder approval at or prior to the special meeting held for
such purpose. It is a condition precedent to Purchaser's obligations hereunder
that the shareholder approval of this transaction contain a further mandatory
provision satisfactory to Purchaser that the Trust be liquidated and that the
proceeds of this sale, together with other liquid assets of the Trust, less
costs and reserves, be promptly distributed to the holders of beneficial
interests of Seller.
C. Seller's obligations hereunder are subject to the Purchaser's
representations as set forth in paragraph 9 hereof being true and correct on the
Closing Date. Each party agrees to notify the other of any matter which would
render any of Purchaser's representations and warranties untrue in any material
respect. Purchaser agrees to utilize its best efforts to cure such matters, but
shall not be obligated to expend any money or incur any liability to effect such
cure.
E. If any of the Additional Conditions Precedent are not timely
satisfied, unless the parties mutually agree to extend the time for satisfaction
of the conditions, this Contract shall be terminated, the Purchaser's Deposit
shall be promptly returned, and neither party shall have any further rights or
obligations hereunder.
7. MUTUAL REPRESENTATIONS.
The parties, to their actual knowledge, each make to the other the
following statements concerning the condition of the Property (hereinafter
referred to as the "Mutual Representations"):
A. Attached hereto as Exhibits "F-1" through "F-6" are true and
complete rent rolls of the Properties as of the date set forth thereon, and
except as set forth on Exhibits "F-1" through "F-6", no tenant is in material
default under its lease, nor has Seller received any notice that it is in
default as landlord thereunder.
B. All of the Property is, or on the Closing Date will be, owned
by Seller free and clear of liens and encumbrances, other than the Permitted
Title Exceptions.
C. Each of the Properties is in material compliance with all
applicable laws, codes, and ordinances including those regulating zoning,
building, health, fire, or other safety and environmental condition.
D. The Properties are insured against fire and other hazards as
described in Exhibit "G" attached hereto.
E. There are no plans for condemnation of all or any part of the
Properties.
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F. There are no planned street or other improvements which may
result in special assessments against the Properties or any part thereof, or
which may alter or disrupt ingress and egress from the Properties.
G. There are no claims, actions, suits, or proceedings pending,
threatened against, or affecting the Property.
H. There are, and on the date of Closing there will be no damage
to the Property which has not been repaired. Subject to the provisions of
paragraph 15, all damage occurring to the Property prior to Closing shall be
repaired by Seller at Seller's expense. All mechanical equipment for which
Seller is responsible pursuant to the terms of Tenant Leases, including, but not
limited to the plumbing, air conditioning and heating and electrical systems
will be in good and serviceable operating condition.
I. At the time of Closing, any work required to be performed by
the Seller under the terms of the Tenant Leases or the Operating Agreements or
other agreements in connection with the Property will have been completed in
accordance with the plans and specifications therefor, if any, and fully paid
for by Seller, except for tenant finish work incident to new leases entered into
between the date hereof and Closing, which shall be governed by the provisions
of paragraph 10.
J. Neither the execution and delivery of this Contract or the
other documents called for hereunder, nor the consummation of any of the
transactions herein or therein contemplated, nor compliance with the terms and
provisions hereof, or with the terms and provisions thereof, will contravene any
provision of law, statute, rule, or regulation to which Seller is subject, or
will conflict to be inconsistent with, or result in any breach of any of the
terms, conditions, covenants, or provisions of, or constitute a default under or
result in the creation or imposition of any lien, security interest, charge, or
encumbrance upon the Property pursuant to the terms of any indenture, mortgage,
deed of trust, lease, or other instrument to which Seller is a party, or by
which Seller or any Property may be bound. Except as set forth in Exhibit "L",
no person or entity has any right to acquire the Property or any interest or
part thereof.
K. There are no Operating Agreements that are either not
assignable or non-cancelable on thirty (30) days prior notice.
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L. Except for the Permitted Exceptions and except as otherwise
disclosed herein and in Exhibits "C" and "D" attached hereto, there are no
material liens or encumbrances against the Properties or other exceptions to fee
simple title which would materially adversely affect the value of the
Properties.
M. For purposes of this Contract, the actual knowledge of Seller
shall mean the actual knowledge of the Trustees, and the actual knowledge of
Purchaser shall mean the actual knowledge of David Blankenship, Alan Fletcher,
Roger Schulz, Dennis Roland, and Maureen DeWald.
8. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants the following:
A. Seller is not a foreign person, foreign corporation, foreign
partnership, foreign trust, or foreign estate as defined in the Internal Revenue
Code and Regulations.
B. The execution and delivery of this Contract and each
instrument or document required to be executed and delivered by Seller pursuant
hereto and the consummation of the transactions contemplated hereby, upon
execution, delivery, and consummation thereof, will be duly authorized and
approved by all requisite Trust actions and no other authorization or approval,
whether of governmental bodies or otherwise, will be necessary in order to
enable Seller to enter into or to perform this Contract, subject to the
Conditions Precedent. Seller is not a party to any contract or agreement, other
than through Purchaser as Advisor, which would violate the representations
contained in subparagraph J above.
9. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants that it has taken all necessary
action to authorize the execution and delivery of this Contract and to
consummate the purchase of the Property as herein contemplated. The officer
executing this Contract on behalf of Purchaser has been duly authorized to do so
pursuant to proper action by Purchaser's Board of Directors. Purchaser is not
subject to any governmental or other regulations that would restrict this
purchase, nor is this purchase in contravention of any term or provision of
Purchaser's Articles of Incorporation or By-Laws.
10. COVENANTS AND AGREEMENTS.
Between the date hereof and the Closing:
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A. Seller shall not enter into any agreements or contracts
affecting the Properties which survive Closing, nor shall Seller enter into any
new lease or modify or terminate any existing Tenant Lease without the prior
written consent of Purchaser, which consent shall not be unreasonably withheld
or delayed. Notwithstanding the foregoing, Seller may enter the pending lease
transactions described on Exhibit "H" ("Permitted Lease Transactions"). The
parties agree to pursue, approve, and enter new leases in the ordinary course of
business. The parties shall pay for the tenant improvement costs or allowances
and leasing commissions in Permitted or hereafter approved Lease Transactions
entered between the date hereof and Closing in accordance with Exhibit "H".
Nothing in this Contract shall be deemed to require Seller to enter into any new
lease, lease modification, or operating agreement. Any contracts for tenant
improvements for the Permitted Lease Transactions which are not completed prior
to Closing shall be assigned to and assumed by Purchaser as an Operating
Contract pursuant to paragraph 11A(2) hereof, subject to any appropriate
prorations for the costs thereof in accordance with this paragraph.
B. Seller shall operate the Property in the ordinary course of
business, including without limitation, compliance with the terms of all leases,
mortgages, or other contractual obligations relating to the Property and doing
regular, scheduled, or necessary maintenance and repair of the Properties, and
of the fixtures, furniture, and equipment, so that the Property will be in the
condition required herein on the Closing Date. Discretionary repairs and
maintenance shall be performed in accordance with the budget for such matters as
approved by the Seller.
C. The Purchaser shall use reasonable efforts to obtain the
Yamaha Lender's consent to the Purchaser's purchase of Yamaha Warehouse subject
to its mortgage. If such consent is obtained, the purchase price shall be
reduced by the principal balance of the mortgage at Closing and accrued interest
on the mortgage debt will be pro rated between the parties with Purchaser
responsible for interest on and after the date of Closing. Seller agrees to pay
the assumption fee to the Yamaha Lender in the amount of one percent (1%) of the
principal balance of the loan. If the Yamaha Lender refuses to consent to the
sale, then the purchase price will not be reduced, Seller will pay off the
Yamaha mortgage at Closing and deliver the Property free and clear of the
mortgage and related liens.
11. ITEMS TO BE DELIVERED AT THE CLOSING.
A. At Closing, Seller shall cause to be delivered the following:
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(1) A Special Warranty Deed for each Property in the form attached
hereto as Exhibit "I" (modified as necessary to comply with state, local law, or
recording requirements), conveying to Purchaser fee simple title to the
Properties, subject only to the Permitted Exceptions.
(2) A blanket conveyance, bill of sale and assignment for each
Property (the "Bill of Sale"), conveying and assigning title with covenants of
general warranty to Purchaser, free and clear of all liens and encumbrances,
(other than the Permitted Exceptions); the Personal Property and the Tenant
Leases, the Operating Agreements, the Warranties, and the Licenses, such
instrument to be in form attached hereto as Exhibit "J".
(3) A rent roll (the "Rent Roll") for each Property, certified by
Seller and Purchaser to be true, complete and correct as of the Closing Date and
reflecting the status of tenant delinquencies, if any, existing as of the
Closing Date.
(4) All keys in Seller's possession or control to all locks on the
Property.
(5) To the extent they are in Seller's possession, the executed
originals of all Tenant Leases, together with copies of all correspondence
relating to the Leases and such accounting information relating to the Leases as
Purchaser may reasonably require.
(6) A certificate in the form attached hereto as Exhibit "K",
certifying that Seller is a non-foreign entity.
(7) Possession of the Property subject to the Permitted
Exceptions.
(8) Notices to Tenants of sale, in a form acceptable to Purchaser
and Seller.
(9) To the extent they are in Seller's possession, all original
Operating Agreements, Warranties, and Plans and Specifications.
(10) Proper documentation showing the good standing or other
authorization of Seller and the authorization of all persons executing documents
on behalf of Seller. Seller shall also execute and/or deliver all documents
required by the Title Company to issue the title policies in the form required
by this Contract, provided that disclosures, if any, required to be certified by
the Trust shall be either (i) certified to the knowledge of the Trustees, or
(ii) Purchaser as Advisor shall give the same certifications to Seller, which
certifications may be limited to the officers of USP.
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B. Action at the Closing by Purchaser.
On the date of Closing, Purchaser shall deliver the purchase
price to Seller by wire transfer in the amount required by paragraph 2 hereof,
subject to prorations and credits as contemplated herein. Purchaser shall
execute and deliver to Seller at Closing the Bills of Sale evidencing
Purchaser's assumption of the Tenant Leases and Operating Agreements. The
parties shall execute "Notices to Tenants" advising tenants of the sale and
Purchaser agrees to deliver, or cause to be delivered, such notices to each
tenant after Closing.
12. CLOSING PRORATIONS.
Purchaser shall obtain its own insurance coverage for the Property at
Closing. Property expenses, including charges under the continuing Operating
Agreements assumed by Purchaser, collected rents, and ad valorem taxes on the
Property shall be prorated at the Closing, effective as of the Closing date,
using the latest available computations of such items. Utilities shall be
prorated between the parties at Closing. Purchaser shall have all utilities in
Seller's name transferred to Purchaser's name promptly following the Closing.
All expenses which are prorated at Closing (exclusive of any unknown claims
related thereto, which shall remain the responsibility of Seller) shall be
deemed a final proration and Purchaser shall be responsible for payment of such
items when due. Except as prorated between the parties at Closing or as
otherwise agreed by the parties in accordance with this paragraph and paragraph
10A, Seller shall be responsible for all property expenses incurred, undertaken,
or contracted for prior to Closing, and agrees to indemnify and hold Purchaser
harmless from any claim, cost, or cause of action arising from any such expenses
and liabilities, including court costs and attorney's fees in the defense
thereof or in the enforcement of this indemnity. Tenant security deposits in the
possession of Seller and prepaid rents shall be credited to Purchaser. Included
in this sale are all delinquent rental accounts and all rents, issues, and
profits of the Properties due or which may become due after Closing relating to
periods occurring prior to Closing. In addition to the purchase price, Purchaser
shall pay Seller for Seller's prorata share of delinquent tenant rental
accounts, exclusive of late charges and/or interest, at face value, but
specifically excluding payment for delinquent accounts of tenants in Material
Default (hereinafter defined), as of the Closing Date. Purchaser shall also pay
Seller at Closing for Seller's prorata share of tenant reimbursements for CAM
and real estate taxes due after Closing based upon the most recent estimate of
such amounts as used in Seller's ledgers to accrue for such items, specifically
excluding any payment for reimbursables of tenants in Material Default as of the
Closing Date. As used in this paragraph, Material Default
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shall mean any tenant (i) whose rental account is more than ninety (90) days
delinquent, (ii) who is in bankruptcy or insolvency proceedings, (iii) has
vacated the Property and is delinquent in payment of rent for more than thirty
(30) days, or (iv) has indicated in writing its inability or refusal to pay its
account. Subject only to the payments and prorations set forth in this
paragraph, all rent issues and profits of the Properties of every nature due or
paid after Closing shall be the property of Purchaser.
13. CLOSING COSTS.
Purchaser shall pay the cost of the title policies, surveys, and
environmental reports. Seller shall pay for the applicable transfer taxes. The
parties shall each pay one-half of the Title Company escrow fees, if any. Each
party shall bear its own attorney's fees.
14. REMEDIES UPON DEFAULT.
IF PURCHASER SHALL DEFAULT IN ITS PERFORMANCE OF THIS CONTRACT,
PURCHASER AND SELLER AGREE IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO
FIX THE DAMAGES WHICH SELLER MAY SUFFER. THEREFORE, PURCHASER AND SELLER HEREBY
AGREE A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT SELLER WOULD SUFFER IN
THE EVENT PURCHASER DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE
PROPERTIES ARE AND SHALL BE, AS SELLER'S SOLE AND EXCLUSIVE REMEDY (WHETHER AT
LAW OR IN EQUITY), AN AMOUNT EQUAL TO THE EARNEST MONEY. SAID AMOUNT SHALL BE
THE FULL, AGREED AND LIQUIDATED DAMAGES FOR THE BREACH OF THIS CONTRACT BY
PURCHASER, ALL OTHER CLAIMS TO DAMAGES OR REMEDIES BEING HEREIN EXPRESSLY WAIVED
BY SELLER. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A
FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO
SELLER. UPON SUCH DEFAULT BY PURCHASER, THIS AGREEMENT SHALL BE TERMINATED AND
NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER, EACH TO
THE OTHER EXCEPT FOR THE RIGHT OF SELLER TO RECEIVE SUCH LIQUIDATED DAMAGES FROM
THE TITLE COMPANY.
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If Seller shall default in its performance of this Contract, the
Purchaser may, as its sole and exclusive remedies elect to either (i) terminate
this Contract and receive a refund of the Deposit, or (ii) sue Seller for
damages, which damages the parties agree shall be limited to an amount not to
exceed the Deposit.
Except for failure to close on the specified Closing Date, for which
default no notice or cure period is required, prior to a declaration of default,
the declaring party shall give the defaulting party written notice specifying
the default. The defaulting party shall have five (5) business days from receipt
of such notice to cure the default. If the cure period extends beyond the
scheduled date of Closing, the Closing Date shall be postponed to the last day
of the cure period.
In the event either party hereto employs an attorney and commences
legal action because of the other party's default, then the non-prevailing party
shall pay to the prevailing party reasonable attorney's fees incurred in the
enforcement of this Contract.
15. RISK OF LOSS.
Until Closing, all risk of loss of the Property is on the Seller and
if, prior to Closing, the Property, or any part thereof, shall become damaged by
fire or other casualty or become the object of any condemnation proceedings,
Purchaser may, as its sole and exclusive remedy, elect to either (i) terminate
this Contract, or (ii) proceed with the Closing and receive an assignment in
form acceptable to Purchaser of all insurance proceeds or awards for such
taking, free and clear of all liens, claims and encumbrances, and in the case of
casualty, together with a cash payment by Seller to Purchaser in the amount of
the lesser of (a) any deductible under Seller's insurance, or (b) the cost of
the repair of the damage. If the estimated cost of repair is less than One
Million Dollars ($1,000,000.00), Purchaser agrees to proceed to Closing in
accordance with (ii) above. Any election allowed hereunder shall be made in
writing no later than the earlier of (i) the scheduled date of Closing, or (ii)
ten (10) days after a party's receipt of notice of such damage or proceeding.
16. NOTICES.
All notices and demands herein required shall be in writing. Whenever
any notice, demand or request is required or permitted hereunder, such notice,
demand or request shall be hand-delivered personally or by express mail, courier
service (both with delivery receipt), or electronically verifiable facsimile
transmission or sent by United States Mail (registered or certified) postage
prepaid, to the addresses set forth below.
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As to Seller: Patrick E. Falconio, Chairman of the Board
of Trustees
USP Real Estate Investment Trust
111 Cottage Grove SE, #501
Cedar Rapids, IA 52403
Fax: 319/298-1910
With a copy to: Timothy Hearn
Dorsey & Whitney LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, MN 55402
Fax Number: (612) 340-2868
As to Purchaser: AEGON USA Realty Advisors, Inc.
4333 Edgewood Road N.E.
Cedar Rapids, IA 52499
Attention: Maureen DeWald
Fax Number (319) 369-2188
Any notice, demand or request which shall be given in the manner
aforesaid shall be deemed sufficiently given for all purposes hereunder (1) at
the time such notices, demands or requests are hand-delivered (which shall be
deemed to include delivery by express mail or courier service or transmission by
telefax facsimile) or (2) the day such notices, demands or requests are posted,
postage prepaid, in the United States Mail in accordance with the preceding
portion of this paragraph, provided however, time for response to any such
notice shall commence upon receipt at the address specified. Notice by telefax
transmission shall be given on a non-banking holiday weekday between the hours
of 9:00 a.m. to 5:00 p.m. (at the destination) or shall be deemed received on
the next such day and time.
17. TIME OF ESSENCE.
Time is of the essence of this Contract.
18. REAL ESTATE BROKERS.
Purchaser and Seller covenant and represent to each other that, there
is no party entitled to a real estate commission, finder's fee, cooperation fee,
or brokerage-type fee or similar compensation in connection with this Contract
and the transactions contemplated herein, except for a fee due Raymond James &
Associates, Inc. for rendering the fairness opinion requested by Seller herein,
and whose fee shall be paid by Seller pursuant to a separate agreement. Each
party agrees to hold the other harmless from and against any claim for a
commission or fee from
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any other broker or agent claiming by or through the indemnifying party. Seller
warrants that Raymond James & Associates, Inc. has waived any right to claim a
commission or transaction fee on this sale.
19. ENTIRE AGREEMENT.
This Contract contains all of the agreements, representations and
warranties of the parties hereto and supersedes all other discussions,
understandings or agreements in respect to the subject matter hereof. All prior
discussions, understandings and agreements are merged into this Contract, which
alone fully and completely expresses the agreements and understandings of the
parties hereto. This Contract may be amended, superseded, extended or modified
only by an instrument in writing referring hereto signed by both parties.
20. EXHIBITS A PART OF THIS CONTRACT.
All Exhibits referred to in this Contract and attached hereto are
incorporated into this Contract by reference and are hereby made a part hereof.
21. NO BENEFIT TO OTHER PARTIES.
Except as otherwise provided herein, none of the provisions hereof
shall inure to the benefit of any party other than the parties hereto and their
respective successors and permitted assigns, or be deemed to create any rights,
benefits or privileges in favor of any other party except the parties hereto.
22. NO AGENCY, PARTNERSHIP OR JOINT VENTURE.
Nothing herein shall be construed to establish an agency relationship,
a partnership or a joint venture between Seller and Purchaser for any purpose.
23. CAPTIONS.
The captions and headings contained in this Contract are for reference
purposes only and shall not in any way affect the meaning or interpretation
hereof.
24. GOVERNING LAW.
This Contract shall be governed, construed and enforced in accordance
with the laws of the State of Iowa.
25. NO WAIVER.
The waiver by one party of the performance of any covenant or condition
herein shall not invalidate this Contract, nor shall it be considered to be a
waiver by such party of any other covenant or condition herein. The waiver by
either or both parties of the time for
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performing any act shall not constitute a waiver of the time for performing any
other act or an identical act required to be performed at a later time. Except
as otherwise specifically restricted herein, the exercise of any remedy
provided by law and the provisions of this Contract shall not exclude other
available remedies.
26. AS-IS CONDITION.
Purchaser acknowledges that it is purchasing the Property on an AS-IS
condition, based upon its own inspections thereof and without benefit of any
representation, warranty or disclosure from Seller, either express or implied or
in the nature of fitness for any particular purpose, except as specifically set
forth herein. Seller agrees to maintain the Properties in their current physical
condition to the Closing Date, normal wear and tear excepted.
27. SURVIVAL OF REPRESENTATIONS.
The representations and warranties made by Seller in paragraph 8 of
this Contract and by Purchaser in paragraph 9 (the parties "Separate
Representations and Warranties") shall survive the Closing and delivery of deeds
and other conveyance documents. Each party agrees to indemnify and hold the
other harmless from and against any loss, cost, liability, claim, or cause of
action arising from the inaccuracy of such parties Separate Representations and
Warranties, including court costs and attorney's fees incurred by such
indemnified party in the defense of any such claim and in the enforcement of
this indemnity. All indemnities contained in this Contract shall survive the
Closing. The Mutual Representations in paragraph 7 are given for the sole
purpose of establishing the Purchaser's Conditions Precedent to Closing
contained in paragraph 5D and shall not survive the Closing; the sole remedy for
breach of the Mutual Representations being as set forth in paragraph 5F.
Provided, however, notwithstanding the provisions of the prior sentence to the
contrary, the breach of any of the Mutual Representations by Purchaser that
results in a claim against Seller by Purchaser under or pursuant to any
representations or warranties of Seller contained in the conveyance documents
delivered by Seller at Closing, shall survive for the sole benefit of Seller and
for the sole use as a defense against any such claim by Purchaser and/or its
successors or assigns in interest to the Properties.
28. ACCESS TO FILES.
For a period of three (3) years after Closing, Purchaser agrees to
grant to Seller, its successors or assigns, access to Tenant Lease and Property
files delivered to Purchaser at Closing, subject to reasonable advance written
notice.
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29. PACKAGE SALE.
The purchase price provided herein is based upon a group sale of the
Properties, and except as provided in paragraph 5F, no Property or Properties
may be purchased or sold individually hereunder without the prior written
consent of Purchaser and Seller, which consent may be withheld in the sole
discretion of either party.
30. ASSIGNMENT.
Purchaser shall have the right to assign this Contract, in whole or in
part, to one or more affiliated entities, provided written notice shall be given
to Seller of such assignment no later than ten (10) days prior to Closing. Any
such assignment shall not terminate any liability hereunder unless so released
in writing by Seller.
31. BUSINESS DAYS.
In the event that any time period under this Contract expires on a day
that is not a business day, such time period shall be deemed extended to the
first business day following such date. "Business day" as used herein shall mean
any day other than Saturday, Sunday or a legal holiday on which business is
transacted by federally insured national banking institutions in Cedar Rapids,
Iowa.
32. COUNTERPARTS.
This Contract may be signed in counterparts, each of which is deemed an
original. This Contract shall be null and void unless it shall be executed by
Purchaser and one copy returned to Seller on or before January 20, 2000.
WHEREFORE, the parties have hereunto affixed their hands and seals as of the
date set hereof.
SELLER: PURCHASER:
USP Real Estate Investment Trust AEGON USA Realty Advisors, Inc.
By: /s/ Patrick E. Falconio By: /s/ David L. Blankenship
---------------------------- ------------------------------
Patrick E. Falconio, Trustee David L. Blankenship, President
Chairman of the Board of Trustees
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LIST OF EXHIBITS
A Legal Descriptions
A-1 Kingsley Square Shopping Center, Orange Park, Florida
A-2 First Tuesday Mall, Carrollton Georgia
A-3 Mendenhall Commons, Memphis, Tennessee
A-4 North Park Plaza Shopping Center, Phoenix, Arizona
A-5 Presidential Drive, Atlanta, Georgia
A-6 Yamaha Warehouse, Cudahy, Wisconsin
B Purchase Price Allocation Between Properties
C Current Title Policies of the Properties
D Current Surveys of the Properties
E Environmental Reports on the Properties
F Rent Rolls
F-1 Kingsley Square Shopping Center, Orange Park, Florida
F-2 First Tuesday Mall, Carrollton Georgia
F-3 Mendenhall Commons, Memphis, Tennessee
F-4 North Park Plaza Shopping Center, Phoenix, Arizona
F-5 Presidential Drive, Atlanta, Georgia
F-6 Yamaha Warehouse, Cudahy, Wisconsin
G Property Insurance
H Permitted Leasing Transactions
I Deed
J Bill of Sale
K Non-Foreign Affidavit
L Yamaha Motor Corporation USA
Right of First Refusal
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