ASSIGNMENT OF PURCHASE AGREEMENT
AND ESCROW INSTRUCTIONS
BRAINERD DRUGSTORE, LLC, AS SELLER
AND
SERIES A, LLC, AS BUYER
ASSIGNOR, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, does hereby assign all of its right, title and
interest in that certain Purchase Agreement and Escrow Instructions (the
"Purchase Agreement") described herein, to ASSIGNEE and its successors and
assigns. The Purchase Agreement is described as follows:
DATE OF AGREEMENT: August 18, 2005, as amended on August 26, 2005,
September 1, 2005, and September 7, 2005
ORIGINAL BUYER: Series A, LLC
ASSIGNED TO: Cole WG Brainerd MN, LLC
PROPERTY ADDRESS: 340 W. Washington St., Brainerd, MN 56401
ASSIGNOR acknowledges that it is not released from any and all obligations
or liabilities under said Purchase Agreement with the exception of the earnest
money deposit which is currently in escrow.
ASSIGNEE hereby agrees to assume and be responsible for all obligations
and liabilities under said Purchase Agreement. This Assignment shall be in full
force and effect upon its full execution.
Executed this 28th day of September, 2005.
ASSIGNOR: ASSIGNEE:
SERIES A, LLC, COLE WG BRAINERD MN, LLC,
an Arizona limited liability company a Delaware limited liability company
By: COLE REIT ADVISORS II, LLC, a
Delaware limited liability company,
its Manager
By: /s/ John M. Pons
----------------------
John M. Pons
Authorized Officer
By: /s/ John M. Pons
------------------------------
John M. Pons
Senior Vice President
EXHIBIT 10.3
PURCHASE AGREEMENT
AND ESCROW INSTRUCTIONS
BETWEEN
BRAINERD DRUGSTORE, LLC
AS SELLER
AND
SERIES A, LLC
AS BUYER
AUGUST 18, 2005
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PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
DATED: Dated to be effective as of August 18, 2005 (the "Effective Date").
PARTIES: This Purchase Agreement and Escrow Instructions (this "Agreement")
is between Brainerd Drugstore, LLC, a Colorado limited liability
company, as "Seller", and Series A, LLC, an Arizona limited
liability company, as "Buyer".
WHEREAS, as of the Effective Date, Seller is the owner of that certain
improved property located at 340 West Washington Street, Brainerd, Minnesota,
that is legally described on Exhibit A attached (the "Real Property");
WHEREAS, as of the Effective Date, the Real Property is improved with a
building containing approximately 15,076 square feet (the "Building"), which
Building is leased to Walgreen Co., an Illinois corporation ("Tenant") in
accordance with a written lease dated May 17, 1999 as amended by an Amendment to
Lease dated November 12, 1999 (collectively, the "Lease"). The Real Property,
the Building, the improvements to the Real Property (the "Improvements"), the
personal property, if any, of Seller located on the Real Property and Seller's
interest in the Lease and all rents issued and profits due or to become due
under the Lease are collectively referred to as the "Property"; and
WHEREAS, Buyer desires to purchase the Property from Seller and Seller
desires to sell the Property to Buyer, all as more particularly set forth in
this Purchase Agreement and Escrow Instructions (this "Agreement").
NOW THEREFORE, in consideration of the promises set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, Seller and Buyer (collectively, the "Parties" or
individually, a "Party") agree as follows:
1. INCORPORATION OF RECITALS. All of the Recitals are incorporated as
agreements of the Parties.
2. BINDING AGREEMENT. This Agreement constitutes a binding agreement
between Seller and Buyer for the sale and purchase of the Property subject to
the terms set forth in this Agreement. Subject to the limitations set forth in
this Agreement, this Agreement shall bind and inure to the benefit of the
Parties and their respective successors and assigns. This Agreement supersedes
all other written or verbal agreements between the Parties concerning any
transaction embodied in this Agreement. No claim of waiver or modification
concerning the provisions of this Agreement shall be made against a Party unless
based upon a written instrument signed by such Party.
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3. INCLUSIONS IN PROPERTY.
(a) The Property. The term "Property" also shall include the
following:
(1) all tenements, hereditaments and appurtenances pertaining
to the Real Property;
(2) all mineral, water and irrigation rights, if any, running
with or otherwise pertaining to the Real Property;
(3) all interest, if any, of Seller in any road adjoining the
Real Property;
(4) all interest, if any, of Seller in any award made or to be
made or settlement in lieu of such award for damage to the Property by reason of
condemnation, eminent domain or exercise of police power;
(5) all of Seller's interest in the Building, the Improvements
and any other improvements and fixtures on the Real Property;
(6) all of Seller's interest, if any, in any equipment,
machinery and personal property on or used in connection with the Real Property
(the "Personalty");
(7) the Lease and security deposit, if any, now or hereafter
due under the Lease; and,
(8) all of Seller's interest, to the extent transferable, in
any permits and licenses (the "Permits"), warranties, contractual rights and
intangibles with respect to the operation, maintenance, repair or improvement of
the Property (the "Contracts").
(b) The Transfer Documents. Except for the Personalty which shall be
transferred by that certain bill of sale from Seller to Buyer, a specimen of
which is attached as Exhibit B (the "Bill of Sale"), the Lease which is to be
transferred by that certain assignment and assumption of lease, a specimen of
which is attached as Exhibit C (the "Assignment of Lease"), the Permits and
Contracts which are to be transferred by that certain assignment agreement, a
specimen of which is attached as Exhibit D (the "Assignment Agreement"), all
components of the Property shall be transferred and conveyed by execution and
delivery of Seller's limited warranty deed, a specimen of which is attached as
Exhibit E (the "Deed"). The Bill of Sale, the Assignment of Lease, the
Assignment Agreement and the Deed are hereinafter collectively referred to as
the "Transfer Documents".
4. PURCHASE PRICE. The price to be paid by Buyer to Seller for the
Property is Four Million Three Hundred Twenty-Eight Thousand Five Hundred and
no/100 Dollars ($4,328,500.00) (the "Purchase Price"), payable as follows:
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(a) Fifty Thousand and no/100 Dollars ($50,000.00) earnest money
(the "Earnest Money Deposit") to be deposited by Buyer in escrow with First
American Title Insurance Company, 2425 E. Camelback Road, Suite 300, Phoenix,
Arizona 85016, Attention: Carol Peterson ("Escrow Agent") within one business
day after receipt of written confirmation of execution of this Agreement by
Seller along with a copy of the fully-executed original of this Agreement (the
"Opening of Escrow"), which Earnest Money Deposit is to be held by Escrow Agent
until released as provided in this Agreement or paid to Seller at close of
escrow ("COE");
(b) Ten Thousand and no/100 ($10,000.00) of the Earnest Money
Deposit (the "Non-Refundable Deposit") will be non-refundable to Buyer from and
after August 26, 2005, except as specifically provided in this Agreement;
(c) The Earnest Money Deposit is to be increased by an additional
Fifty Thousand and no/100 Dollars ($50,000.00) (bringing the total Earnest Money
Deposit to $100,000.00) to be deposited with the Escrow Agent by Buyer within
one business day following the expiration of the Due Diligence Period (as
defined below) unless Buyer elects to cancel this Agreement on or before the
last day of the Due Diligence Period under Section 6 or Section 7(c). If Buyer
does not so cancel the Agreement on or before the last day of the Due Diligence
Period, the entire Earnest Money Deposit shall become non-refundable to Buyer
except as specifically provided in this Agreement; and
(d) Four Million Two Hundred Twenty-Eight Thousand Five Hundred and
no/100 Dollars ($4,228,500.00) in additional cash, or other immediately
available funds (as may be increased or decreased by such sums as are required
to take into account any additional deposits, prorations, credits, or other
adjustments required by this Agreement), to be deposited in escrow with Escrow
Agent one day prior to the COE (the "Additional Funds") which are to be held by
Escrow Agent until cancellation of this Agreement as provided in this Agreement
or paid to Seller at COE.
5. DISPOSITION OF EARNEST MONEY DEPOSIT. Seller and Buyer hereby instruct
Escrow Agent to place the Earnest Money Deposit in a federally insured
interest-bearing passbook account on behalf of Seller and Buyer. The Earnest
Money Deposit and interest on the Earnest Money Deposit shall be applied as
follows:
(a) if Buyer cancels this Agreement prior to August 26, 2004, as
Buyer is so entitled to do as provided in this Agreement, the Earnest Money
Deposit and all interest earned to the effective date of withdrawal shall be
paid immediately to Buyer;
(b) if Buyer cancels this Agreement after August 26, 2004, but prior
to the expiration of the Due Diligence Period, as Buyer is so entitled to do as
provided in this Agreement, the Earnest Money Deposit and all interest earned to
the effective date of withdrawal less the Non-Refundable Deposit shall be paid
immediately to Buyer and the Non-Refundable Deposit shall be paid to Seller,
except as specifically set forth in this Agreement;
(c) if the Earnest Money Deposit is forfeited by Buyer pursuant to
this Agreement, such Earnest Money Deposit and all interest earned to the date
of withdrawal shall
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be paid to Seller as Seller's agreed and total liquidated damages, it being
acknowledged and agreed that it would be difficult or impossible to determine
Seller's exact damages; and
(d) if escrow closes, the Earnest Money Deposit and all interest
earned to COE shall be credited to Buyer, automatically applied against the
Purchase Price and paid to Seller upon Closing.
6. TITLE COMMITMENT AND OBJECTIONS.
(a) Evidence of Title. Within ten days after the Effective Date,
Escrow Agent shall deliver a current title commitment (the "Commitment") for an
ALTA standard coverage title insurance policy (the "Owner's Policy") on the Real
Property to Buyer and Seller. The Commitment shall show the status of title to
the Real Property as of the date of the Commitment and shall also describe the
requirements of Escrow Agent for the issuance of the Owner's Policy as described
in this Agreement. The cost of a standard Owner's Policy will be paid for by
Seller; Buyer shall pay any additional cost for the extended coverage policy and
any endorsements to the policy if such policy or endorsements are required by
Buyer or its lender. In addition to the Commitment, Escrow Agent shall deliver
simultaneously to Buyer and Seller copies of all documents identified in Part
Two of Schedule B of the Commitment (the "Title Documents").
(b) Defects of Title. If on or before August 31, 2005, Buyer asserts
the existence of any encumbrance, encroachment on or defect in, or objection to
title to, any portion of the Real Property based on Buyer's examination of the
Commitment and the Title Documents, or any other information received by Buyer
(any of which is called a "Defect in Title"), Buyer will give written notice
thereof to Seller on or before August 31, 2005, and then Seller may, at Seller's
sole election either: (i) notify Buyer in writing that it does not intend to
correct or cure the Defect in Title, or (ii) attempt to correct or cure the
Defect in Title on or before the COE by (A) attempting to obtain title insurance
over such Defect in Title, or (B) otherwise using reasonable efforts to remove
the Defect in Title. Seller's lack of response within a period of one business
day after receipt of Buyer's notice shall be deemed as Seller's election not to
correct or cure the Defect in Title prior to COE. If Seller does not elect or is
deemed not to have elected o correct or cure the Defect in Title, Buyer shall
have the right to cancel this Agreement by delivering written notice to Seller
on or before the last day of the Due Diligence Period, or to waive any such
Defect in Title and elect to close under this Agreement.. If Seller elects to
attempt to correct or cure the Defect in Title, but the Defect in Title cannot,
through the exercise of reasonable diligence, be corrected or cured on or before
the COE, the COE shall be automatically extended for a time period not to exceed
15 days in order to allow Seller to correct or cure such matter. If Seller
elects to attempt to correct or cure the Defect in Title and if such Defect in
Title cannot be corrected or cured within the 15-day extension of the COE, then
Buyer will have the right to either: (x) waive any such Defect in Title and
elect to close under this Agreement, or (y) cancel this Agreement by delivering
written notice to Seller on or before the date of the COE (as it may be
extended). If Buyer elects to cancel this Agreement due to Seller's election to
not correct or cure any Defect in Title, Buyer will receive a prompt refund of
the Earnest Money Deposit plus interest less the Non-Refundable Deposit and the
Parties will be relieved of all further obligations under this Agreement, except
that the indemnities contained in Sections 7(b) and 16(b) shall survive such
termination. If, after Seller notifies Buyer of its intent
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to correct or cure any Defect in Title but is subsequently unable to correct or
cure any Defect in Title within the 15-day extension of COE and Buyer terminates
due to such inability, Buyer will receive a prompt refund of the entirety of the
Earnest Money Deposit plus interest and the Parties will be relieved of all
further obligations under this Agreement, except that the indemnities contained
in Sections 7(b) and 16(b) shall survive such termination.
(c) Permitted Exceptions. The Lease, the title exceptions shown on
the Commitment not made the subject of any objection to title by Buyer, any
title exceptions otherwise approved by Buyer in writing on or before the last
day of the Due Diligence Period, and any Defect in Title waived by Buyer as
provided in Sections 6(b) and 6(d), will be deemed to be approved by Buyer and
will be referred to as "Permitted Exceptions" under this Agreement. At COE,
Seller will convey the Property to Buyer free and clear of all liens, claims,
pledges and encumbrances arising by, through or under Seller, subject the
Permitted Exceptions.
(d) Change in Title. In the event on or before COE any supplement to
the Commitment discloses any change or addition to the Permitted Exceptions
which, in Buyer's sole judgment, could have a material adverse effect on the
condition of title to the Property or on Buyer's ability to operate the Property
in the manner in which it currently is being operated, other than changes caused
by Buyer (an "Additional Exception"), Buyer may object in writing to such
Additional Exception in which case Seller may, at Seller's sole election,
either: (i) notify Buyer in writing that it does not intend to correct or cure
the Defect in Title, or (ii) attempt to correct or cure the Additional Exception
on or before the COE by (A) attempting to obtain title insurance over such
Additional Exception, or (B) otherwise using reasonable efforts to remove the
Additional Exception. Seller's lack of response within a period of one business
day of receipt of Buyer's notice shall be deemed as Seller's election not to
correct or cure the Defect in Title prior to COE. In the event the Defect in
Title cannot, through the exercise of reasonable diligence, be corrected or
cured on or before the COE, the COE shall be automatically extended for a time
period not to exceed 15 days in order to allow Seller to correct or cure such
matter. If Seller does not elect to correct or cure the Additional Exception or
if such Additional Exception cannot be corrected or cured within the 15-day
extension of the COE, then Buyer will have the right to either: (x) waive any
such Additional Exception and elect to close under this Agreement, or (y) cancel
this Agreement by delivering written notice to Seller on or before the date of
the COE (as it may be extended). If Buyer elects to cancel this Agreement due to
Seller's election to not correct or cure any Additional Exception, Buyer will
receive a prompt refund of the Earnest Money Deposit plus interest less the
Non-Refundable Deposit and the Parties will be relieved of all further
obligations under this Agreement, except that the indemnities contained in
Sections 7(b) and 16(b) shall survive such termination. If, after Seller
notifies Buyer of its intent to correct or cure any Additional Exception but is
subsequently unable to correct or cure any Additional Exception within the
15-day extension of COE and Buyer terminates due to such inability, Buyer will
receive a prompt refund of the entirety of the Earnest Money Deposit plus
interest and the Parties will be relieved of all further obligations under this
Agreement, except that the indemnities contained in Sections 7(b) and 16(b)
shall survive such termination.
7. BUYER'S DUE DILIGENCE PERIOD.
(a) The Due Diligence Period. Buyer shall have until 10:00 a.m.
Denver, Colorado time on September 6, 2005 (the "Due Diligence Period"), at
Buyer's sole cost, within
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which to conduct and approve any investigations, studies or tests deemed
necessary by Buyer, in Buyer's sole discretion, to determine the feasibility of
acquiring the Property (the "Studies"). The Studies shall include, but not be
limited to, Buyer's right to: (i) review and approve the Survey (as defined
below), the Lease, Seller's operating statements with respect to the Property,
and the Contracts; (ii) meet and confer with Tenant; and, (iii) obtain, review
and approve an environmental study of the Real Property and Building.
(b) Right of Entry. Subject to the prior rights of the Tenant of the
Property, Seller hereby grants to Buyer and Buyer's agents, employees and
contractors the right to enter upon the Property, at any reasonable time or
times during the Due Diligence Period and after reasonable prior notice to
Seller, to conduct the Studies. In conducting the Studies, Buyer shall use
commercially reasonable efforts to not interfere with any of the operations or
business of the Tenant of the Property. In consideration of the license granted
to Buyer in this Section, Buyer hereby indemnifies and holds Seller harmless
from any and all liabilities, claims, losses or damages, including, but not
limited to, court costs and attorneys' fees, which may be incurred by Seller as
a direct result of the Studies. Buyer's indemnity and hold harmless obligation
shall survive cancellation of this Agreement or COE.
(c) Cancellation. Unless Buyer so notifies Seller and Escrow Agent,
in writing, on or before the end of the Due Diligence Period of Buyer's
acceptance of the Studies and waiver of the contingencies as set forth in this
Section 7, this Agreement shall be canceled. If Buyer notifies Seller and Escrow
Agent that it desires to cancel this Agreement on or before August 26, 2005, the
Earnest Money Deposit plus interest shall be returned immediately to Buyer and
the Parties will be relieved of all further obligations under this Agreement,
except that the indemnities contained in Sections 7(b) and 16(b) shall survive
such termination. If Buyer notifies Seller and Escrow Agent that it desires to
cancel this Agreement after August 26, 2005 but prior to the expiration of the
Due Diligence Period, or if Buyer is deemed to have canceled this Agreement
pursuant to the first sentence of this subsection 7(c), the Earnest Money
Deposit plus interest less the Non-Refundable Deposit shall be returned
immediately to Buyer and the Parties will be relieved of all further obligations
under this Agreement, except that the indemnities contained in Sections 7(b) and
16(b) shall survive such termination. If this Agreement is canceled for any
reason, then (x) to the extent reasonably practicable, Buyer shall, within ten
days after cancellation, repair any damage caused by any of those visits,
inspections or studies so as to restore the Property to as near its same
condition as before the damage as is reasonably possible, (y) within the same
ten-day period Buyer will return to Seller all Property Documents, and (z) Buyer
will maintain in confidence any information it obtained about the Property. The
provisions of this paragraph will survive COE.
(d) Right of First Refusal. If at any time prior to or following the
expiration of the Due Diligence Period the Tenant validly exercises its right of
first refusal contained in the Lease, this Agreement will terminate, and Buyer
will receive a prompt refund of the Earnest Money Deposit plus interest and the
Parties will be relieved of all further obligations under this Agreement, except
that the indemnities contained in Sections 7(b) and 16(b) shall survive such
termination.
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8. DELIVERY OF STUDIES.
(a) Deliveries to Buyer. The Parties agree that prior to the
Effective Date, Seller has delivered to Buyer copies of the following documents:
the executed Lease including any amendments to the Lease; the Geotechnical
Exploration Report dated October 20, 1998; the Phase I Environmental Site
Assessment dated November 12, 1998; the Phase I Environmental Site Assessment
Update dated September 15, 1999; the Phase I Environmental Site Assessment dated
June 18, 2001; an existing ALTA survey of the Real Property and the Building; an
existing owner's title policy for the Real Property; site plans; the roof
warranty; a zoning letter dated June 2001; a certificate of occupancy dated
April 20, 2000; the Architect/Developer Project Specifications dated July 17,
1999; and Walgreen's Statements of Receipts for July 1, 2002 through June 30,
2003 and July 1, 2003 through June 30, 2004 (the "Property Documents"). Seller
makes no representation or warranty regarding, and does not assume liability or
responsibility for, the truth, accuracy or completeness of any reports,
material, tests or information prepared by third parties.
(b) Delivery by Buyer. If this Agreement is canceled for any reason,
except Seller's willful default hereunder, Buyer agrees to deliver to Seller all
Property Documents received by Buyer.
9. THE SURVEY. Buyer, at Buyer's cost, shall, at any time after the
Opening of Escrow, have the option to cause a certified ALTA survey of the Real
Property, Building and Improvements, or an update of Seller's existing survey,
(either being referred to as the "Survey") to be completed by a surveyor
licensed in the State of Minnesota and deposited with Escrow Agent. The Survey
shall set forth the legal description and boundaries of the Property and all
easements, encroachments and improvements thereon.
10. IRS SECTION 1445. Seller shall furnish to Buyer in escrow by COE a
sworn affidavit (the "Non-Foreign Affidavit") stating under penalty of perjury
that Seller is not a "foreign person" as such term is defined in Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). If
Seller does not timely furnish the Non-Foreign Affidavit, Buyer may withhold (or
direct Escrow Agent to withhold) from the Earnest Money Deposit and/or the
Additional Funds, an amount equal to the amount required to be so withheld
pursuant to Section 1445(a) of the Code, and such withheld funds shall be
deposited with the Internal Revenue Service as required by such Section 1445(a)
and the regulations promulgated thereunder. The amount withheld, if any, shall
nevertheless be deemed to be part of the Purchase Price paid to Seller.
11. DELIVERY OF POSSESSION. Seller shall deliver possession of the
Property to Buyer at COE subject only to the rights of Tenant under the Lease as
approved by Buyer as part of the Studies.
12. CONDITIONS PRECEDENT. In addition to all other conditions precedent
set forth in this Agreement, Buyer's obligations to perform under this Agreement
and to close escrow are expressly subject to the following:
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(a) the delivery by Buyer and Seller to Escrow Agent, respectively,
for delivery to the other party at COE, of the executed original Transfer
Documents to the extent required to be executed by such Parties, and other
documents reasonably necessary to consummate the transaction contemplated
hereby, including without limitation an owner's affidavit;
(b) the issuance of the Owner's Policy (or a written commitment
therefor) subject only to those Permitted Exceptions approved or deemed approved
by Buyer pursuant to this Agreement;
(c) the delivery by Seller to Buyer at COE of all security deposits
and pre-paid/abated rents under the Lease, if any, in the form of a credit in
favor of Buyer against the Additional Funds;
(d) upon expiration of the Due Diligence Period and Buyer's
acceptance of the Studies without cancellation of this Agreement as set forth in
Section 7 (or prior thereto at Seller's sole option), Seller shall request a
tenant estoppel certificate from the Tenant. Such certificate shall be on the
Tenant's standard form of certificate, which shall be substantially similar to
that on Exhibit F attached, shall state that the Lease is in full force and
effect and shall not identify any offset or abatement rights (except as are
stated in the Lease), punchlist items or defaults (the "Estoppel"). The Tenant
is not required under the Lease to list Buyer and its lender on the Estoppel;
however, Seller will make reasonable efforts to add Buyer and its lender,
Wachovia Bank, National Association, to the Estoppel. Seller makes no guarantee
on the timing of receipt of the Estoppel; therefore, if the Estoppel is not
received by two (2) business days prior to the scheduled date of COE pursuant to
Section 17 , the COE shall be extended to the date which is two (2) business
days after receipt of the Estoppel, provided such extension shall not exceed
thirty (30) days. If the Estoppel is not received within such 30-day extension
period, Buyer may terminate this Agreement upon written notice to Seller, which
termination shall have the effect set forth below in this Section 12;
(e) the deposit with Escrow Agent of letter from Seller to Tenant
requesting that future rent under the Lease be paid to Buyer;
(f) each Party shall have performed all covenants, agreements and
obligations required to be performed by it under this Agreement;
(g) delivery by Seller of originals of the Lease, the Contracts and
Permits, if any such original documents are in the possession of Seller;
(h) each Party shall have executed and delivered to the Escrow Agent
a certificate confirming the that all of the representations and warranties of
such Party set forth in Section 13 are accurate and complete in all material
respects as of the COE (with appropriate modifications as permitted under this
Agreement);
(i) receipt of an express waiver of Tenant's right of first refusal
under the Lease or, in the alternative, the deposit with the Escrow Agent of
evidence satisfactory to Buyer, in its reasonable discretion, that Seller has
delivered the notice letter to the Tenant described in
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Section 13(e)(5) together with an affidavit of Seller stating that the period
for Tenant's exercise of its right of first refusal provided in the Lease has
expired without Tenant having exercised such right; and
(j) deposit with Escrow Agent by Buyer of the Additional Funds, by
wire transfer of immediately available funds;
Seller's obligations to perform under this Agreement and to close escrow are
expressly subject to the satisfaction by Buyer of the conditions set forth in
Section 12(a), (f), (h), (i) and (j) above. Either Party shall have the right,
in its sole and absolute discretion, to waive in writing of the foregoing
conditions that are included for the sole benefit for the waiving Party. If any
of the conditions described above which is not an obligation of Buyer has not
been satisfied by the COE as such date may be extended under the terms of this
Agreement, then Buyer shall have the right, at Buyer's sole option, by giving
written notice to Seller and Escrow Agent, to cancel this Agreement and Buyer
will receive a prompt refund of the Earnest Money Deposit plus interest and the
Parties will be relieved of all further obligations under this Agreement, except
that the indemnities contained in Sections 7(b) and 16(b) shall survive such
termination.
13. SELLER'S WARRANTIES AND COVENANTS.
(a) Seller represents and warrants to Buyer as of the Effective Date
that:
(1) to Seller's Actual Knowledge, no notice of violation has
been issued and delivered to Seller with regard to any applicable regulation,
ordinance, requirement, covenant, condition or restriction relating to the
present use or occupancy of the Property by any person, authority or agency
having jurisdiction;
(2) to Seller's Actual Knowledge, there is no impending or
contemplated condemnation or taking by inverse condemnation of the Property, or
any portion thereof, by any governmental authorities;
(3) to Seller's Actual Knowledge, there are no suits or claims
pending or threatened with respect to or in any manner affecting the Property;
(4) other than Tenant's right of first refusal set forth in
the Lease, Seller has not entered into and there is not existing any other
agreement, written or oral, under which Seller is or could become obligated to
sell the Property, or any portion thereof, to a third party, prior to
termination of this Agreement;
(5) this transaction will not in any way violate any other
agreements to which Seller is a party;
(6) Seller has full power and authority to execute, deliver
and perform under this Agreement as well as under the Transfer Documents,
specimens of which are attached as Exhibits;
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(7) to Seller's Actual Knowledge, no default of Seller or of
the other parties exists under any of the Contracts;
(8) no consent of any third party is required in order for
Seller to enter into this Agreement and perform Seller's obligations hereunder
(subject to Tenant's election not to exercise Tenant's right of first refusal).
Without limiting the generality of the foregoing, to Seller's Actual Knowledge,
no consent of any third party is required in order for Seller to assign to Buyer
the Contracts or the Lease;
(9) the execution, delivery and performance of this Agreement
and the Transfer Documents, specimens of which are attached as Exhibits, have
not and will not constitute a breach or default under any other agreement or, to
Seller's Actual Knowledge, any law or court order under which Seller is a party
or may be bound;
(10) to Seller's Actual Knowledge, all general real estate
taxes, assessments and personal property taxes that have become due with respect
to the Property have been paid or will be so paid by Tenant pursuant to the
terms of the Lease;
(11) to Seller's Actual Knowledge and except as disclosed in
the Property Documents, Seller is not aware that there exists or has existed,
and Seller itself has not caused any generation, production, location,
transportation, storage, treatment, discharge, disposal, release or threatened
release upon, under or about the Property of any Hazardous Materials. "Hazardous
Materials" shall mean any flammables, explosives, radioactive materials,
hazardous wastes, hazardous and toxic substances or related materials, asbestos
or any material containing asbestos (including, without limitation, vinyl
asbestos tile), or any other substance or material, defined as a "hazardous
substance" by any federal, state, or local environmental law, ordinance, rule or
regulation including, without limitation, the Federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, the
Federal Hazardous Materials Transportation Act, as amended, the Federal Resource
Conservation and Recovery Act, as amended, and the rules and regulations adopted
and promulgated pursuant to each of the foregoing ("Environmental Law)". Seller
hereby assigns to Buyer, effective as of COE, all claims, counterclaims,
defenses, or actions whether at common law, or pursuant to any other applicable
federal or state or other laws which Seller may have against any third parties
relating to the existence of any Hazardous Materials in, at, on, under or about
the Property (including Hazardous Materials released on the Property prior to
COE and continuing in existence on the Property at COE); and
(12) except for any item to be prorated at COE in accordance
with this Agreement, all bills or other charges, costs or expenses arising out
of or in connection with or resulting from Seller's use, ownership, or operation
of the Property up to COE shall be paid in full by Seller, except to the extent
payable by Tenant pursuant to the terms of the Lease.
(b) all representations made in this Agreement by Seller shall
survive the execution and delivery of this Agreement and COE for a period of
four (4) months after COE, after which time they shall automatically terminate
and be of no further force or effect. Seller shall and does hereby indemnify
against and hold Buyer harmless from any loss, damage,
11
liability and expense, together with all court costs and attorneys' fees which
Buyer may incur, directly as a result of any material misrepresentation by
Seller or any material breach of any of Seller's warranties. Seller's indemnity
and hold harmless obligations shall survive COE for a period of four (4) months
after COE, after which time they shall automatically terminate and be of no
further force or effect. As used in this Agreement, the phrase "to Seller's
Actual Knowledge" or words of similar import shall mean the actual (and not
constructive or imputed) knowledge, without independent investigation or
inquiry, of Marcel J.C. Arsenault, as managing member of Seller.
(c) In the event that any representation or warranty of Seller needs
to be modified due to changes since the Effective Date, Seller shall deliver to
Buyer a certificate dated as of the COE signed by Seller, identifying any
representation or warranty which is not, or no longer is, true and correct and
explaining the state of facts giving rise to the change. The occurrence of any
such change shall, if materially adverse to Purchaser, constitute the
non-fulfillment of the condition set forth in Section 12(h) entitling Buyer to
terminate this Agreement and Buyer will receive a prompt refund of the Earnest
Money Deposit plus interest and the Parties will be relieved of all further
obligations under this Agreement, except that the indemnities contained in
Sections 7(b) and 16(b) shall survive such termination. Such remedy shall be
Buyer's sole and exclusive remedy for any change in the foregoing
representations and warranties about which Seller provides such notice to Buyer,
or about which Buyer learns, before the COE, and Buyer hereby waives any and all
other remedies therefor. If the COE occurs despite such changes in Seller's
representations and warranties or other matters described in the Seller's
certificate, Seller's representations and warranties set forth in this Agreement
shall be deemed to have been modified by all statements made in the certificate.
(d) With the sole exception of the representations set forth in this
Section 13, this Agreement is made without representation or warranty of any
kind by Seller; Seller makes no representation or warranty of any kind with
regard to the physical condition of the Property or any component thereof, with
regard to any restrictions, requirements, costs or constraints that may be
associated with the Property, with regard to the suitability of the Property for
Buyer's purposes or with regard to the accuracy or completeness of any of the
Property Documents furnished or made available to Buyer (including, without
limitation, any environmental or structural studies or reports), it being the
parties' express understanding and agreement that Buyer shall fully inspect the
Property and all aspects thereof during the Due Diligence Period and prior to
COE, and that Buyer will rely solely on its own inspection in determining the
physical condition and other features of the Property, any restrictions,
requirements, costs or constraints that may be associated with the Property, and
whether the Property is suitable for Buyer's intended purposes; and Buyer will
acquire the Property in "AS IS" and "WITH ALL FAULTS" condition. Without
limiting the generality of the foregoing, Buyer, for itself and its successors
and assigns, releases Seller and Seller's partners, agents, employees, managers,
members, brokers, contractors and representatives from, and waives any and all
causes of action or claims against any of such persons for, (i) any and all
liability attributable to any physical condition of or at the Property,
including, without limitation, the presence on, under or about the Property of
any Hazardous Materials; and (ii) any and all liability resulting from the
failure of the Property to comply with any applicable laws, including, without
limitation, any
12
Environmental Law (as defined below). This Section 13(d) shall survive the
execution and delivery of this Agreement and the COE.
(e) Seller covenants with Buyer that Seller will perform and comply
with each of the following from and after the Effective Date, or the date the
Due Diligence Period expires without cancellation of this Agreement by Buyer, as
the case may be, until termination of this Agreement:
(1) from and after the Effective Date, Seller will not enter
into nor execute any agreement to grant a right of first refusal or option to
purchase the Property, or any portion of the Property, to a third party, without
Buyer's prior written consent; provided, however, that Seller shall be allowed
to enter into back-up contracts for the sale of the Property that are expressly
contingent upon the expiration or termination of this Agreement;
(2) from and after the Effective Date until termination of
this Agreement, Seller will not enter into or execute any employment, management
or service contract with respect to the Real Property without Buyer's prior
written consent, which consent shall not be unreasonably withheld or delayed,
provided that any such contract so entered by Seller with or without Buyer's
consent shall provide that such contract can be terminated by Seller, or
Seller's successor, at any time without penalty, upon not more than thirty (30)
days' prior written notice to the other party. When any such contracts are fully
executed, Seller shall deliver a copy thereof to Buyer;
(3) from and after the Effective Date until termination of
this Agreement, Seller shall not execute or enter into any lease with respect to
the Property, or terminate, amend, modify, extend or waive any rights under the
Lease without Buyer's prior written consent, which consent may be withheld at
Buyer's discretion;
(4) from and after the Effective Date until termination of
this Agreement, Seller, without Buyer's prior written consent which consent will
not be unreasonably withheld or delayed, shall not amend, modify or terminate
any Contract or waive any substantial right thereunder; and
(5) no later than the fifth business day after the Effective
Date, Seller will send a letter to Tenant notifying Tenant of Buyer's offer and
requesting that Tenant provide Seller with an signed waiver of Tenant's right of
first refusal under the Lease as to the transaction described in this Agreement,
it being understood that the Lease does not require Tenant to affirmatively
respond to a request by Seller for a written waiver and Tenant may elect to
waive by permitting the period for exercise of the right to expire. Seller will
provide Buyer with a copy of its letter to the Tenant.
14. BUYER'S WARRANTIES AND COVENANTS.
(a) Buyer hereby represents to Seller as of the Effective Date that:
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(1) Buyer has full power and authority to execute, deliver and
perform under this Agreement as well as under the Transfer Documents, specimens
of which are attached as Exhibits;
(2) there are no actions or proceedings pending or to Buyer's
Actual Knowledge, threatened against Buyer which may in any manner whatsoever
affect the validity or enforceability of this Agreement or any of the documents,
specimens of which are attached as Exhibits; and
(3) the execution, delivery and performance of this Agreement
and the Transfer Documents, specimens of which are attached hereto as Exhibits,
have not and will not constitute a breach or default under any other agreement
or, to Buyer's Actual Knowledge, any law or court order under which Buyer is a
party or may be bound.
(b) all representations made in this Agreement by Buyer shall
survive the execution and delivery of this Agreement and COE for a period of
four (4) months after COE, after which time they shall automatically terminate
and be of no further force or effect. Buyer shall and does hereby indemnify
against and hold Seller harmless from any loss, damage, liability and expense,
together with all court costs and attorneys' fees, if awarded by a court of law,
which Seller may incur directly as a result of any material misrepresentation by
Buyer or any material breach of any of Buyer's warranties. Buyer's indemnity and
hold harmless obligations shall survive COE for a period of four (4) months
after COE, after which time they shall automatically terminate and be of no
further force or effect. As used in this Agreement, the phrase "to Buyer's
Actual Knowledge" or words or similar import shall mean the actual (and not
constructive or implied) knowledge, without independent investigation or
inquiry, of John M. Pons as Authorized Officer of Buyer.
(c) Buyer shall hold maintain as confidential (i) all data and
information received by Buyer from Seller that is not in the public domain or
known generally to the public with respect to the Property and the Seller or its
business, whether obtained before or after the execution and delivery of this
Agreement, and (ii) the terms and conditions of this Agreement, and Buyer shall
not disclose same to others, except that Buyer may make such disclosures to its
accountants, attorneys, lenders and consultants as Buyer reasonably deems
necessary or desirable in order to evaluate or obtain financing for the
transaction contemplated by this Agreement. The foregoing provisions
notwithstanding, if the COE occurs, then no such confidentiality obligation
shall apply thereafter. Under no circumstances shall Buyer market the Property
for sale to third parties or list the Property with a real estate broker or
agent for sale, prior to the end of the Due Diligence Period and before Buyer
has delivered to Seller the second $50,000 installment of the Earnest Money
Deposit due pursuant to Section 4(c). If Buyer breaches any provision of this
Section 14 (c), Seller shall have all of the remedies provided in Section 20(b)
of this Agreement.
15. CONDEMNATION. Seller shall bear all risk of a taking or condemnation
of the Property which may occur prior to COE. If prior to COE any governmental
or other entity having condemnation authority institutes an eminent domain
proceeding or takes any steps preliminary thereto to condemn any portion of the
Real Property or Building, Buyer will have the right to terminate this Agreement
upon notice to Seller and Escrow Agent. If Buyer elects to
14
cancel this Agreement then Buyer will receive a prompt refund of the Earnest
Money Deposit plus interest and the Parties will be relieved of all further
obligations under this Agreement, except that the indemnities contained in
Sections 7(b) and 16(b) shall survive such termination. If Buyer does not so
terminate this Agreement, Buyer will proceed to COE without any reduction to the
Purchase Price, and Seller agrees to assign to Buyer at the COE, Seller's rights
to any compensation or damages relating to such taking.
16. BROKER'S COMMISSION. Concerning any brokerage commission, the Parties
agree as follows:
(a) The Parties warrant to one another that they have not dealt with
any finder, broker or realtor in connection with this Agreement except Anthon
Stauffer and Sage Investment Properties (collectively, "Broker");
(b) If any person other than Broker shall assert a claim to a
finder's fee or brokerage commission on account of alleged employment as a
finder or broker in connection with this Agreement, the Party under whom the
finder or broker is claiming shall indemnify and hold the other Party harmless
from and against any such claim and all costs, expenses and liabilities incurred
in connection with such claim or any action or proceeding brought on such claim,
including, but not limited to, counsel and witness fees and court costs in
defending against such claim. The provisions of this Section shall survive
cancellation of this Agreement or COE; and
(c) In the event of the COE, Seller shall be responsible for payment
of a commission to Broker in an amount equal to one percent (1.0 %) of the
Purchase Price, which commission shall be paid at COE.
17. CLOSE OF ESCROW. COE shall be on October 6, 2005 or such earlier date
as Buyer and Seller may mutually agree in writing. Seller may extend the COE
date for up to an additional thirty (30) days upon delivery of written notice to
extend the COE to Escrow Agent prior to the original COE date, such period of
extension to run concurrently with any extension required by Seller pursuant to
the provisions of Sections 6(b) or (d). Notwithstanding any provision to the
contrary contained in this Agreement, Buyer will cooperate with Seller's loan
defeasance requirements by closing the Transfer Documents into escrow two
business days prior to the scheduled COE and funding the Additional Funds one
business day prior to the COE on or before 12:00 p.m. Denver, Colorado time on
such date.
18. ASSIGNMENT. This Agreement may not be assigned by Seller without the
prior written consent of Buyer (which consent shall not be unreasonably
withheld), other than an Approved Assignee (defined below) or as part of an
Exchange (defined below). Buyer may not assign its rights under this Agreement
without Seller's consent, which consent may be withheld for any reason, other
than to an Approved Assignee. Any assignment by Buyer permitted under this
Agreement shall not become effective until the assignee executes an instrument
whereby such assignee expressly assumes each of the obligations of Buyer under
this Agreement, including specifically, without limitation, all obligations
concerning the Earnest Money Deposit. No assignment shall release or otherwise
relieve Buyer from any obligations hereunder. Subject
15
to the foregoing, this Agreement shall be binding upon, and inure to the benefit
of, the Parties and their respective successors, personal representatives, heirs
and permitted assigns. For purposes of this Agreement, an "Approved Assignee" is
any entity that controls, is controlled by or is under common control with, any
original Party executing this Agreement, with the word "control" meaning the
power to direct or cause the direction of the management or policies of such
Party or the assignee, as the case may be. An assignment, pledge or transfer of
the control of the original Buyer executing this Agreement, voluntarily,
involuntarily or by operation of law, will constitute an assignment of this
Agreement requiring Seller consent.
19. RISK OF LOSS. Seller shall bear all risk of loss or damage to the
Property which may occur prior to COE. In the event any part of the Property is
damaged or destroyed prior to the COE, Seller shall notify Buyer of such event
in a written notice that includes a description of the damage and pertinent
insurance information. If the cost to repair any such damage or destruction or
to restore the Property exceeds Fifty Thousand Dollars ($50,000.00) Buyer may,
at Buyer's sole option, by written notice to Seller and Escrow Agent, cancel
this Agreement whereupon Buyer will receive a prompt refund of the Earnest Money
Deposit plus interest and the Parties will be relieved of all further
obligations under this Agreement, except that the indemnities contained in
Sections 7(b) and 16(b) shall survive such termination. If Buyer waives any such
loss or damage to the Property and closes escrow, Seller at COE shall pay Buyer
or credit Buyer against the Additional Funds the amount of any insurance
proceeds payable to Seller as a result of such casualty, or assign to Buyer, as
of COE and in a form acceptable to Buyer, all of Seller's rights or claims for
relief to the same.
20. REMEDIES.
(a) Seller's Breach. If Seller breaches this Agreement, Buyer may,
at Buyer's sole option and remedy, either: (i) by written notice to Seller and
Escrow Agent, cancel this Agreement whereupon the Earnest Money Deposit,
including the portion thereof constituting the Non-Refundable Deposit, plus
interest shall be paid immediately by Escrow Agent to Buyer and, except as
otherwise provided in this Agreement, neither of the Parties shall have any
further liability or obligation hereunder; or (ii) seek specific performance
against Seller in which event COE shall be automatically extended as necessary.
Notwithstanding the foregoing, if specific performance is unavailable as a
remedy to Buyer because of Seller's affirmative acts, Buyer shall be entitled to
pursue all rights and remedies available at law or in equity; provided, however,
that damages awarded to Buyer shall in no event exceed the amount of the Earnest
Money Deposit. Except for any damages incurred arising out of Seller's breach of
its warranty set forth in Section 16, a claim by Buyer for attorneys' fees
pursuant to this Agreement, or any other amounts owing from Seller to Buyer
pursuant to Seller's express indemnification of Buyer in this Agreement, the
remedies provided above in this Section for the breach of this Agreement by
Seller shall be Buyer's sole remedy.
(b) Buyer's Breach. If Buyer breaches this Agreement, Seller may
terminate this Agreement and instruct the Escrow Agent to cancel the escrow
created hereunder in which case the Escrow Agent shall immediately pay over to
Seller the Earnest Money Deposit plus interest as liquidated damages, and not as
a penalty, in full satisfaction of Seller's claim. Promptly following Escrow
Agent's receipt of such instructions from Seller the Escrow Agent
16
shall cancel the escrow. The Parties acknowledge and agree that since it would
be extremely difficult to determine the actual amount of Seller's damages
arising out of a breach by Buyer, the amount of the liquidated damages provided
in this Section constitutes a fair estimate of those damages, which the Parties
have agreed upon in a good-faith effort to make damages certain. Except for any
damages that may be incurred arising out of any investigations, tests and
Studies with respect to the Property that Buyer may elect to undertake, any
damages incurred arising out of Buyer's breach of its warranty set forth in
Section 16, a claim by Seller for attorneys' fees pursuant to this Agreement, or
any other amounts owing from Buyer to Seller pursuant to Buyer's express
indemnification of Seller in this Agreement, the liquidated damages provided in
this Section for the breach of this Agreement by Buyer shall be Seller's sole
remedy.
21. ATTORNEYS' FEES. In addition to the foregoing remedies, in the event
of litigation arising out of any alleged default or breach of this Agreement,
the prevailing party will be awarded all costs and expenses incurred in the
prosecution or defense of such litigation, including without limitation
reasonable in house and outside attorneys' and legal assistants' fees and
disbursements. For purposes of this Section, "prevailing party" will include,
but not be limited to, a party who withdraws or moves to dismiss a claim in
consideration for payment due, performance owed, or other consideration in
substantial satisfaction of the claim withdrawn or dismissed.
22. NOTICES.
(a) Addresses. Any notice or other written communication required or
permitted under this Agreement shall be in writing and shall be given (i) by
personal delivery, (ii) by deposit in the U.S. Mail, marked certified or
registered mail, return receipt requested, with postage prepaid, (iii) by
delivery to a reputable national overnight courier service, or (iv) by tested
telex, or telegram, or facsimile with electronic confirmation, in any case,
addressed to the Parties at the addresses and facsimile numbers set forth below,
or set forth in a notice given by a Party in accordance with this Section.
If to Seller: Brainerd Drugstore, LLC
c/o Colorado and Santa Fe Real Estate Company
2400 Industrial Lane, Suite 2100
Broomfield, CO 80020
Attn: Judy Lawson
Tel.: (303) 466-2500
Fax: (303) 466-4202
with copies to: Colorado and Santa Fe Real Estate Company
2400 Industrial Lane, Suite 2100
Broomfield, CO 80020
Attn: Stephanie J. Griffin
Tel.: (303) 466-2500
Fax: (303) 466-4202
17
If to Buyer: Series A, LLC
2555 East Camelback Road
Suite 400
Phoenix, AZ 85016
Attn: Legal Department
Tel.: (602) 778-8700
Fax: (602) 778-8786
with copies to: Bennett Wheeler Lytle & Cartwright, PLC
3838 N. Central Avenue, Suite 1120
Phoenix, AZ 85012
Attn: J. Craig Cartwright
Tel: (602) 445-3433
Fax: (602) 266-9119
If to Escrow Agent: First American Title Insurance Company
2425 E. Camelback Road, Suite 300
Phoenix, AZ 85016
Attn: Carol Peterson
Tel: (602) 567-8100
Fax: (602) 567-8101
(b) Effective Date of Notices. Any such notice to Seller or Buyer
will be deemed to be given and effective: (i) if personally delivered, then on
the date of such delivery, (ii) if sent via overnight courier, then one business
day after the date such notice is sent, (iii) if sent by registered or certified
mail, then three business days following the date on which such notice is
deposited in the United States mail addressed as aforesaid, or (iv) if sent by
telex, telegram or facsimile, then at the time and on the date set forth on the
electronic confirmation sheet, provided that if the time of delivery under
clause (iv) is after 6:00 p.m. Denver, Colorado time, delivery will be deemed
given on the next business day. For purposes of this Agreement, "business day"
will be deemed to mean a day of the week other than a Saturday or Sunday or
other holiday recognized by banking institutions of the State of Colorado. If
escrow has opened, a copy of any notice given to a Party also shall be given to
Escrow Agent by regular U.S. Mail or by any other method provided for in this
Section.
23. CLOSING COSTS.
(a) Closing Costs. Seller and Buyer agree to pay closing costs as
indicated in this Agreement and in the escrow instructions attached hereto as
Exhibit G, and by this reference incorporated herein (the "Escrow
Instructions"). At COE, Seller shall pay (i) the costs of releasing any
judgments and any liens and other encumbrances to secure financing and the cost
of recording such releases, (ii) one-half of the fees and costs due Escrow Agent
for its services, (iii) the premium for the standard coverage Owner's Policy,
(iv) all documentary fees, excise fees, transfer taxes and deed taxes assessed
against the Property including the Personalty in connection with this
transaction, and (v) any other costs to be paid by Seller under this Agreement.
At COE, Buyer shall pay (1) the costs of recording any of the Transfer Documents
18
and any documents in connection with any loan obtained by Buyer at COE, (2)
one-half of the fees and costs due Escrow Agent for its services, (3) the
premium to obtain extended coverage title insurance, if any, and the cost of any
endorsements requested by Buyer or Buyer's lender, (4) the cost of the Survey if
Buyer obtains one, and (5) any other costs to be paid by Buyer under this
Agreement. Except as otherwise provided for in this Agreement, Seller and Buyer
will each be solely responsible for and bear all of their own respective
expenses, including, without limitation, expenses of legal counsel, accountants,
and other advisors incurred at any time in connection with pursuing or
consummating the transaction contemplated by this Agreement.
(b) Real Estate Taxes. To the extent not payable by the Tenant under
the Lease, real estate taxes shall be prorated based upon the current valuation
and latest available tax rates.
(c) Rents. Current and prepaid rents which have been previously
collected under the Lease shall be apportioned to the date that is one business
day prior to COE with such date being Buyer's day for the purposes of such
calculations. Buyer shall receive a credit at Closing in the amount of any
security deposit held by Seller pursuant to the Lease.
(d) Prorations. Prorations shall be calculated as of the date that
is one business day prior to COE based upon the latest available information,
including, without limitation, a credit to Buyer for any security deposits and
any rent prepaid by Tenant for the period beginning with and including the date
on which the closing occurs through and including the last day of the month in
which the closing occurs. All other credits to Buyer shall be similarly
prorated. Any other closing costs not specifically designated as the
responsibility of either Party in the Escrow Instructions or in this Agreement
shall be paid by Seller and Buyer according to the usual and customary
allocation of the same by Escrow Agent. Seller agrees that all closing costs
payable by Seller shall be deducted from Seller's proceeds otherwise payable to
Seller at COE. Buyer shall deposit with Escrow Agent sufficient cash to pay all
of Buyer's closing costs. Except as provided in this Section 23(a), Seller and
Buyer shall each bear their own costs in regard to this Agreement.
(e) Post-Closing Adjustment. If after COE, the Parties discover any
errors in adjustments and apportionments or additional information becomes
available which would render the closing prorations materially inaccurate, the
same shall be corrected as soon after their discovery as possible. The provision
of this Section 23(e) shall survive COE except that no adjustment shall be made
later than two months after COE unless prior to such date the Party seeking the
adjustment shall have delivered a written notice to the other Party specifying
the nature and basis for such claim. In the event that such claim is valid, the
Party against whom the claim is sought shall have ten days in which to remit any
adjustment due.
(f) Instructions. This Agreement, together with the Escrow
Instructions, shall constitute escrow instructions for the transaction
contemplated by this Agreement. Such escrow instructions shall be construed as
applying to Escrow Agent's engagement.
24. ESCROW CANCELLATION CHARGES. If escrow fails to close because of
Seller's default, Seller shall be liable for any cancellation of Escrow Agent
charges. If escrow
19
fails to close because of Buyer's default, Buyer shall be liable for any
cancellation charges of Escrow Agent. If escrow fails to close for any other
reason, Seller and Buyer shall each be liable for one-half of any cancellation
charges of Escrow Agent. The provisions of this Section 24 shall survive
cancellation of this Agreement.
25. APPROVALS. Concerning all matters in this Agreement requiring the
consent or approval of any Party, the Parties agree that any such consent or
approval shall not be unreasonably withheld unless otherwise provided in this
Agreement.
26. ADDITIONAL ACTS. The Parties agree to execute promptly such other
documents and to perform such other acts as may be reasonably necessary to carry
out the purpose and intent of this Agreement.
27. GOVERNING LAW/JURISDICTION/VENUE. This Agreement shall be governed by
and construed or enforced in accordance with the internal laws of the State of
Minnesota.
28. CONSTRUCTION. The terms and provisions of this Agreement represent the
results of negotiations among the Parties, each of which has been represented by
counsel of its own choosing, and neither of which has acted under any duress or
compulsion, whether legal, economic or otherwise. Consequently, the terms and
provisions of this Agreement shall be interpreted and construed in accordance
with their usual and customary meanings, and the Parties each hereby waive the
application of any rule of law which would otherwise be applicable in connection
with the interpretation and construction of this Agreement that ambiguous or
conflicting terms or provisions contained in this Agreement shall be interpreted
or construed against the Party whose attorney prepared the executed Agreement or
portions of the Agreement or any earlier draft of the same.
29. TIME OF ESSENCE. Time is of the essence with respect to the
performance of this Agreement. However, if this Agreement requires any act to be
done or action to be taken on a date which is not a business day (as defined in
Section 22(b)), such act or action shall be deemed to have been validly done or
taken if done or taken on the next succeeding day which is not a Saturday,
Sunday or legal holiday, and the successive periods shall be deemed extended
accordingly. References in this Agreement to a number of days will be deemed to
refer to calendar and not business days, unless the context clearly indicates
otherwise.
30. INTERPRETATION. If there is any specific and direct conflict between,
or any ambiguity resulting from, the terms and provisions of this Agreement and
the terms and provisions of any document, instrument or other agreement executed
in connection with this Agreement or to effectuate this Agreement, including any
Exhibits hereto, the same shall be consistently interpreted in such manner as to
give effect to the general purposes and intention as expressed in this Agreement
which shall be deemed to prevail and control.
31. HEADINGS. The headings of this Agreement are for reference only and
shall not limit or define the meaning of any provision of this Agreement.
20
32. FAX AND COUNTERPARTS. This Agreement may be executed by facsimile
and/or in any number of counterparts. Each party may rely upon any facsimile or
counterpart copy as if it were one original document.
33. INCORPORATION OF EXHIBITS BY REFERENCE. All Exhibits to this Agreement
are fully incorporated herein as though set forth at length in this Agreement.
34. SEVERABILITY. If any provision of this Agreement is determined by a
court to be invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it, or its application, valid and enforceable,
and the invalidity or lack of enforceability of one or more provisions shall not
affect the validity or enforceability of the remainder of this Agreement.
35. SELLER'S ACCEPTANCE. If a fully-executed original of this Agreement
has not been delivered by Seller to Buyer by 6:00 p.m. Denver, Colorado time on
August 18, 2005, for subsequent delivery to Escrow Agent along with the Earnest
Money Deposit, this Agreement shall automatically be deemed revoked and null and
void.
36. NO ORAL UNDERSTANDINGS OR WAIVERS. There are and were no verbal or
written representations, warranties, understandings, stipulations, agreements,
or promises pertaining to the subject matter of this Agreement made by either
Party or any agent, employee, or other representative of either Party or by any
broker or any other person representing or purporting to represent either Party,
not incorporated in writing in this Agreement, and neither this Agreement nor
any of the terms, provisions, conditions, representations, or covenants
contained in this Agreement can be modified, changed, terminated, amended,
superseded, waived, or extended except by an appropriately written instrument
duly executed by the Parties. No waiver of any breach of any provision contained
in this Agreement will be deemed a waiver of any preceding or succeeding breach
of that provision or of any other provision contained in this Agreement. No
extension of time for performance of any obligations or acts will be deemed an
extension of the time for performance of any other obligations or acts.
37. SECTION 1031 EXCHANGE. Each Party shall provide reasonable cooperation
requested by the other in implementing any tax deferred exchange under Section
1031 of the Internal Revenue Code or other exchange (the "Exchange"), including
the execution of reasonably necessary documentation in connection therewith,
including documents providing for an exchanging Party's assignment of this
Agreement to a qualified intermediary; provided that the cooperating Party shall
not be obligated to incur any additional expense or liability beyond its
existing obligations under this Agreement, and the exchange shall not delay the
COE. No assignment of this Agreement in connection with an Exchange shall
relieve the exchanging Party of any obligation under this Agreement.
38. RECORDING. Neither this Agreement nor any memorandum or evidence of
this Agreement shall be filed for recording with any governmental body; provided
that, a Party may file a notice of lis pendens or equivalent document for
recording in connection with a lawsuit filed by such Party if such Party
determines that such filing is necessary to protect its rights to specific
performance under this Agreement. If Buyer records any portion of this
Agreement, then in addition to receiving the Earnest Money Deposit, Seller shall
be entitled to all remedies
21
available to it at law or in equity, notwithstanding Section 20(b) or any other
provision of this Agreement to the contrary. The provisions of this Section 38
shall survive the termination of this Agreement and the COE.
22
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of
the Effective Date.
SELLER: BRAINERD DRUGSTORE, LLC
By: /S/ Sharon K. Eshima
----------------------------
Sharon K. Eshima
Its: Manager
BUYER: SERIES A, LLC
By: /S/ John M. Pons
----------------------------
Name: John M. Pons
Title: Authorized Officer
23
ESCROW AGENT'S ACCEPTANCE
The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this _____ day of August, 2005, which for
the purposes of this Agreement shall be deemed to be the date of Opening of
Escrow. Escrow Agent hereby accepts the engagement to handle the escrow
established by this Agreement in accordance with the terms set forth in this
Agreement.
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /S/ Carol Peterson
----------------------------------
Title: Escrow
24
FIRST AMENDMENT TO PURCHASE AGREEMENT AND ESCROW
INSTRUCTIONS
THIS FIRST AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS (this
"Amendment") is entered into by and between BRAINERD DRUGSTORE, LLC, a Colorado
limited liability company (the "Seller"), and SERIES A, LLC, an Arizona
liability company (the "Buyer").
W I T N E S E T H:
WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions dated as of August 18, 2005 (the "Contract"), providing for
the sale by Seller to Buyer of a property located in Brainerd, Minnesota leased
to Walgreen's Co. (the "Property") and being more particularly described in the
Contract; and
WHEREAS, Seller and Buyer desire to amend the Contract as hereinafter set
forth.
NOW, THEREFORE, based on these facts and in consideration of the mutual
benefits to be obtained by this Amendment, Seller and Buyer agree as follows:
1. Amending Provisions. The Contract is hereby amended as follows:
(a) Sections 4(b) and 7(c) of the Contract are amended to change any date
that refers to August 26, 2005 from August 26 to August 29, 2005.
(b) There are no other amendments.
2. Consequence of Amendment. Nothing in this Amendment affects or modifies
any of the provisions of the Contract, except as expressly provided herein. The
Contract, as amended by this Amendment, will continue in full force and effect
and it ratified and affirmed by Seller and Buyer as if originally written as
herein amended.
3. Miscel1aneous.
(a) The section headings contained in this Amendment are for convenience
of reference only and are not intended to delineate or limit the meaning of any
provision of this Amendment or to be considered in construing or interpreting
the provisions of this Amendment. Capitalized terms used in this Amendment which
are not otherwise defined herein shall have the same meaning as given to them in
the Contract.
(b) This Amendment may be executed in any number of counterparts,
separately or together, by Seller and Buyer. If counterparts hereof are executed
separately by Buyer and Seller, when taken together, same will constitute one
(1) original. If the same counterparts are executed by Buyer and Seller, then
each such counterpart shall constitute an original. Seller and/or Buyer may
execute and deliver this Amendment by telephone facsimile transmission, and the
receiving party may rely fully thereon as an original.
Page 1 of 2
(c) This Amendment embodies the entire agreement and understanding between
Buyer and Seller with respect to its subject matter and supersedes all prior
agreements and understandings, written or oral, between Buyer and Seller related
to that subject matter. This Amendment may be amended, waived or discharged only
by an instrument in writing executed by the party against which enforcement of
the amendment, waiver or discharge is sought.
(d) The determination that any provision of this Amendment is invalid or
unenforceable will not affect the validity or enforceability of the remaining
provisions or of that provision under other circumstances. In the event of any
determination of invalidity or unenforceability, this Amendment will be
construed as if the invalid or unenforceable provision were not included in this
Amendment.
EXECUTED as of the [though not necessarily on] the 26th day of August,
2005.
SELLER: BRAINERD DRUGSTORE, LLC
By: /S/ Sharon K. Eshima
----------------------------------
Sharon K. Eshima
Its: Manager
BUYER: SERIES A, LLC
By: /S/ John M. Pons
----------------------------------
Name: John M. Pons
Title: Authorized Officer
Page 2 of 2
SECOND AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
THIS SECOND AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS (this
"Amendment") is entered into by and between BRAINERD DRUGSTORE, LLC, a Colorado
limited liability company ("Seller"), and SERIES A, LLC, an Arizona limited
liability company ("Buyer").
W I T N E S E T H:
WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions dated August 18, 2005, as amended by a First Amendment to
Purchase Agreement and Escrow Instructions dated as of August 26, 2005
(collectively, the "Contract"), providing for the sale by Seller to Buyer of a
property leased to Walgreen Co. located in Brainerd, Minnesota (the "Property")
and being more particularly described in the Contract; and
WHEREAS, Seller and Buyer desire to amend the Contract as hereinafter set
forth.
NOW, THEREFORE, based on these facts and in consideration of the mutual
benefits to be obtained by this Amendment, Seller and Buyer agree as follows:
1. Amending Provisions. The Contract is hereby amended as follows:
(a) Section 6(b) of the Contract is hereby amended to allow Seller until
5:00 p.m. Denver, Colorado time on September 2, 2005 to respond to Buyer's
written notice of Defects in Title dated August 31, 2005.
(b) Section 7(a) of the Contract is amended to extend the Due Diligence
Period to 10:00 a.m. Denver, Colorado time on September 7, 2005.
(c) There are no other amendments.
2. Consequence of Amendment. Nothing in this Amendment affects or modifies
any of the provisions of the Contract, except as expressly provided herein. The
Contract, as amended by this Amendment, will continue in full force and effect
and is ratified and affirmed by Seller and Buyer as if originally written as
herein amended.
3. Miscellaneous.
(a) The section headings contained in this Amendment are for convenience
of reference only and are not intended to delineate or limit the meaning of any
provision of this Amendment or to be considered in construing or interpreting
the provisions of this Amendment. Capitalized terms used in this Amendment which
are not otherwise defined herein shall have the same meaning as given to them in
the Contract.
(b) This Amendment may be executed in any number of counterparts,
separately or together, by Seller and Buyer. If counterparts hereof are executed
separately by Buyer and Seller, when taken
Page 1 of 2
together, same will constitute one (1) original. If the same counterparts are
executed by Buyer and Seller, then each such counterpart shall constitute an
original. Seller and/or Buyer may execute and deliver this Amendment by
telephone facsimile transmission, and the receiving party may rely fully thereon
as an original.
(c) This Amendment embodies the entire agreement and understanding between
Buyer and Seller with respect to its subject matter and supersedes all prior
agreements and understandings, written or oral, between Buyer and Seller related
to that subject matter. This Amendment may be amended, waived or discharged only
by an instrument in writing executed by the party against which enforcement of
the amendment, waiver or discharge is sought.
(d) The determination that any provision of this Amendment is invalid or
unenforceable will not affect the validity or enforceability of the remaining
provisions or of that provision under other circumstances. In the event of any
determination of invalidity or unenforceability, this Amendment will be
construed as if the invalid or unenforceable provision were not included in this
Amendment.
EXECUTED as of the 1st day of September, 2005.
SELLER:
BRAINERD DRUGSTORE, LLC
By: /S/ Sharon K. Eshima
----------------------------------
Sharon K. Eshima
Its: Manager
BUYER:
SERIES A, LLC
By: /S/ John M. Pons
----------------------------------
Name: John M. Pons
Title: Authorized Officer
Page 2 of 2
THIRD AMENDMENT TO PURCHASE AGREEMENT AND ESCROW
INSTRUCTIONS AND REINSTATEMENT
THIS THIRD AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS AND
REINSTATEMENT (this "Amendment") is entered into by and between BRAINERD
DRUGSTORE, LLC, a Colorado limited liability company ("Seller"), and SERIES A,
LLC, an Arizona limited liability company ("Buyer").
W I T N E S E T H:
WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions dated August 18, 2005, as amended by a First Amendment to
Purchase Agreement and Escrow Instructions dated as of August 26, 2005, and a
Second Amendment to Purchase Agreement and Escrow Instructions dated as of
September 1, 2005 (collectively, the "Contract"), providing for the sale by
Seller to Buyer of a property leased to Walgreen Co. located in Brainerd,
Minnesota (the "Property") and being more particularly described in the
Contract; and
WHEREAS, the Due Diligence Period expired September 7, 2005; and
WHEREAS, Seller and Buyer desire to amend and reinstate the Contract as
hereinafter set forth.
NOW, THEREFORE, based on these facts and in consideration of the mutual
benefits to be obtained by this Amendment, Seller and Buyer agree as follows:
1. Amending Provisions. The Contract is hereby amended as follows:
(a) Section 13 of the Contract is modified by the insertion of a new
subsection (f) as follows:
(f) Seller covenants and agrees to use commercially reasonable
efforts to assist Buyer in its efforts to arrange for a recording in the
real estate records of Crow Wing County, Minnesota of the Final
Certificate (the "Certificate") in the condemnation proceeding known as
State of Minnesota, by its Commissioner of Transportation v. Richard
Ahrens, et al. (District Court Action CO-02-3229) (the "Condemnation") and
thereafter to cause the title company to amend the legal description of
the Real Property in the Commitment to exclude the portion of the Real
Property taken in the Condemnation, remove the lis pendens exception on
Schedule B-Section 2 and add to Schedule B-Section 2 an exception for the
temporary easement created in the Condemnation. If the events described in
the preceding sentence have not occurred by October 3, 2005, Buyer will
have a one-time right to extend the COE until October 12, 2005 by giving
Seller written notice of such extension no later than 5:00 p.m. Denver
time on October 3, 2005. If Buyer exercises its right to extend the COE as
herein
Page 1 of 3
provided and the events described in the first sentence of this subsection
have not occurred by October 12, 2005, the Parties shall, notwithstanding
such non-occurrence, close the transactions contemplated by the Contract,
but Seller shall cause the title company to hold open the Owner's Policy
and Buyer's lender's loan policy until the Certificate is recorded and
then to issue the Owner's Policy and loan policy with the modified legal
description, deletion of the lis pendens exception and addition of the
exception for the temporary easement, as described above. If the
Certificate is not recorded within 45 days following COE, Seller shall
cause the title company to issue the Owner's Policy and the loan policy in
accordance with the Commitment but will pay the title insurance premiums,
if any, charged by the title company to endorse such Owner's Policy and
loan policy following the recording of the Certificate to reflect the
changes identified in the first sentence of this Section (f).
(b) If Buyer obtains a new survey of the Real Property or an update of
Seller's existing survey prior to the COE, Seller will reimburse Buyer for
one-half of the cost of such survey or survey update at Closing, if and only if
the COE occurs, up to a maximum reimbursement amount of $2,500.00.
(c) Upon execution of this Amendment by Seller and Buyer, the Amendment
shall constitute Buyer's agreement to proceed to COE and waive its right to
terminate the Contract under provisions of Section 6 and 7 of the Contract.
Except as set forth in subsections (a) and (b) above and in Seller's response
letter dated September 2, 2005, all matters raised in Buyer's title and survey
objection letter dated August 31, 2005 and conditional acceptance letter dated
September 7, 2005, both issued by Bennett, Wheeler Lytle and Cartwright, shall
be deemed satisfied and waived. The Parties acknowledge that Buyer previously
has deposited with the Escrow Agent the $50,000 additional Earnest Money Deposit
required under Section 4(c). The Contract shall be deemed reinstated effective
as of the date of this Amendment, subject to the terms of this Amendment.
(d) There are no other amendments.
2. Consequence of Amendment. Nothing in this Amendment affects or modifies
any of the provisions of the Contract, except as expressly provided herein. The
Contract, as amended by this Amendment, will continue in full force and effect
and is ratified and affirmed by Seller and Buyer as if originally written as
herein amended.
3. Miscellaneous.
(a) The section headings contained in this Amendment are for convenience
of reference only and are not intended to delineate or limit the meaning of any
provision of this Amendment or to be considered in construing or interpreting
the provisions of this Amendment. Capitalized terms used in this Amendment which
are not otherwise defined herein shall have the same meaning as given to them in
the Contract.
Page 2 of 3
(b) This Amendment may be executed in any number of counterparts,
separately or together, by Seller and Buyer. If counterparts hereof are executed
separately by Buyer and Seller, when taken together, same will constitute one
(1) original. If the same counterparts are executed by Buyer and Seller, then
each such counterpart shall constitute an original. Seller and/or Buyer may
execute and deliver this Amendment by telephone facsimile transmission, and the
receiving party may rely fully thereon as an original.
(c) This Amendment embodies the entire agreement and understanding between
Buyer and Seller with respect to its subject matter and supersedes all prior
agreements and understandings, written or oral, between Buyer and Seller related
to that subject matter. This Amendment may be amended, waived or discharged only
by an instrument in writing executed by the party against which enforcement of
the amendment, waiver or discharge is sought.
(d) The determination that any provision of this Amendment is invalid or
unenforceable will not affect the validity or enforceability of the remaining
provisions or of that provision under other circumstances. In the event of any
determination of invalidity or unenforceability, this Amendment will be
construed as if the invalid or unenforceable provision were not included in this
Amendment.
EXECUTED as of (although not necessarily on) the 7th day of September,
2005.
SELLER:
BRAINERD DRUGSTORE, LLC
By: /S/ Sharon K. Eshima
----------------------------------
Sharon K. Eshima
Its: Manager
BUYER:
SERIES A, LLC
By: /S/ John M. Pons
----------------------------------
Name: John M. Pons
Title: Authorized Officer
Page 3 of 3