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Exhibit 10.183
AGREEMENT OF PURCHASE AND SALE
BETWEEN
GATEWAY HUEBNER OAKS, INC. AND GATEWAY HILLSIDE, INC., AS SELLER,
AND
INLAND REAL ESTATE ACQUISITIONS, INC., AS BUYER
HUEBNER OAKS CENTER
SAN ANTONIO, TEXAS
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TABLE OF CONTENTS
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<Caption>
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AGREEMENT OF PURCHASE AND SALE........................................................1
ARTICLE I PURCHASE AND SALE OF PROPERTY............................................1
Section 1.1 Sale...............................................................1
Section 1.2 Purchase Price.....................................................2
ARTICLE II CONDITIONS...............................................................3
Section 2.1 Buyer's Conditions Precedent.......................................3
Section 2.2 Contingency Period.................................................4
ARTICLE III BUYER'S EXAMINATION......................................................5
Section 3.1 Representations and Warranties and Covenants of Seller.............5
Section 3.2 No Liability for Exception Matters.................................7
Section 3.3 Survival of Seller's Representations and Warranties of Sale........7
Section 3.4 Seller's Knowledge.................................................8
Section 3.5 Representations and Warranties of Buyer............................8
Section 3.6 Buyer's Independent Investigation..................................9
Section 3.7 Release...........................................................10
Section 3.8 Survival..........................................................11
ARTICLE IV TITLE...................................................................11
Section 4.1 Conditions of Title...............................................11
Section 4.2 Evidence of Title.................................................13
ARTICLE V RISK OF LOSS AND INSURANCE PROCEEDS.....................................13
Section 5.1 Minor Loss........................................................13
Section 5.2 Major Loss........................................................14
ARTICLE VI BROKERS AND EXPENSES....................................................14
Section 6.1 Brokers...........................................................14
Section 6.2 Expenses..........................................................15
ARTICLE VII LEASES AND OTHER AGREEMENTS.............................................15
Section 7.1 Buyer's Approval of New Leases and Agreements Affecting the
Property................................................................15
Section 7.2 Tenant Improvement Costs, Leasing Commissions and
Concessions.............................................................15
</Table>
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TABLE OF CONTENTS
(continued)
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Section 7.3 Tenant Notices....................................................16
Section 7.4 Maintenance of Improvements and Operation of Property;
Removal of Tangible Personal Property...................................16
Section 7.5 Service Contracts.................................................16
ARTICLE VIII CLOSING AND ESCROW......................................................17
Section 8.1 Escrow Instructions...............................................17
Section 8.2 Closing...........................................................17
Section 8.3 Deposit of Documents..............................................17
Section 8.4 Estoppel Certificates.............................................18
Section 8.5 Prorations........................................................19
ARTICLE IX MISCELLANEOUS...........................................................22
Section 9.1 Notices...........................................................22
Section 9.2 Entire Agreement..................................................23
Section 9.3 Entry and Indemnity...............................................23
Section 9.4 Time..............................................................24
Section 9.5 Attorneys' Fees...................................................24
Section 9.6 Assignment........................................................24
Section 9.7 Counterparts......................................................25
Section 9.8 Governing Law.....................................................25
Section 9.9 Confidentiality and Return of Documents...........................25
Section 9.10 Interpretation of Agreement.......................................25
Section 9.11 Limited Liability.................................................26
Section 9.12 Amendments........................................................26
Section 9.13 No Recording......................................................26
Section 9.14 Drafts Not an Offer to Enter into a Legally Binding Contract......26
Section 9.15 ERISA.............................................................26
Section 9.16 No Partnership....................................................26
Section 9.17 No Third Party Beneficiary........................................27
Section 9.18 Intentionally Omitted.............................................27
Section 9.19 Limitation on Liability...........................................27
Section 9.20 Survival..........................................................27
Section 9.21 Severability......................................................27
Section 9.22 No Waiver.........................................................27
Section 9.23 Construction......................................................28
Section 9.24 Survival of Article IX............................................28
</Table>
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AGREEMENT OF PURCHASE AND SALE
This Agreement, dated as of the "EFFECTIVE DATE" (being defined as the date
that the last of Buyer and Seller signed this Agreement as shown by the date set
forth next to said party's signature below), is between Gateway Huebner Oaks,
Inc. and Gateway Hillside, Inc. (collectively "SELLER"), and Inland Real Estate
Acquisitions, Inc., an Illinois corporation ("BUYER").
ARTICLE I
PURCHASE AND SALE OF PROPERTY
SECTION 1.1 SALE.
Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller,
subject to the terms, covenants and conditions set forth herein, all of Seller's
right, title and interest in and to the following property (collectively, the
"PROPERTY"):
(a) REAL PROPERTY. That certain real property commonly known as
Huebner Oaks Center and located in San Antonio, Texas as more particularly
described in EXHIBIT A attached hereto and made a part hereof (the "LAND"),
together with (1) all improvements located thereon (the "IMPROVEMENTS"), (2) all
rights, benefits, privileges, easements, tenements, hereditaments, rights-of-way
and other appurtenances thereon or in any way appertaining thereto, including
all mineral rights, development rights, air and water rights, and (3) all strips
and gores and any land lying in the bed of any street, road or alley, open or
proposed, adjoining such Land (collectively, the "REAL PROPERTY");
(b) LEASES. All of the landlord's interest in and to all of the
Leases (as defined in Section 2.1(b) below) of the Real Property, including
Leases entered into after the date of this Agreement as permitted by this
Agreement;
(c) TANGIBLE PERSONAL PROPERTY. All of the equipment, machinery,
furniture, furnishings, supplies and other tangible personal property, if any,
owned by Seller and now or hereafter located on and used exclusively in the
operation, ownership or maintenance of the Real Property (collectively, the
"TANGIBLE PERSONAL PROPERTY"), but specifically excluding from the Tangible
Personal Property (1) any items of personal property owned by tenants of the
Property, (2) any items of personal property in Seller's property management
office, if any, located on the Real Property, (3) any items of personal property
owned by third parties and leased to Seller, and (4) proprietary computer
software, systems and equipment and related licenses used in connection with the
operation or management of the Property, Seller will provide to Buyer any list
which is in Seller's possession of such Tangible Personal Property within the
Delivery Period as defined in Section 2.1 below; and
(d) INTANGIBLE PERSONAL PROPERTY. To the extent assignable at no
cost to Seller, all intangible personal property, if any, owned by Seller and
related to the Real Property and the Improvements, including, without
limitation: any trade names (including the name "Huebner Oaks Center") and
trademarks associated with the Real Property and the Improvements (but
specifically excluding the names "RREEF" and any derivatives thereof) any plans
and specifications and other architectural and engineering drawings for the
Improvements; any
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warranties; any Service Contracts (as defined in Section 2.1 (b) below) and
other contract rights related to the Property (but only to the extent Seller's
obligations thereunder are expressly assumed by Buyer pursuant to the Assignment
of Leases as defined in Section 8.3(a)(3) below); and any governmental permits,
approvals and licenses (including any pending applications) (collectively, the
"INTANGIBLE PERSONAL PROPERTY").
SECTION 1.2 PURCHASE PRICE.
(a) The purchase price of the Property is Eighty Million Six
Thousand One Hundred Fifty-three and no/100 Dollars ($80,006,153.00)(the
"Purchase Price").
(b) The Purchase Price shall be paid as follows:
(1) Within two (2) business days after the Effective
Date, Buyer shall deposit in escrow with Chicago Title Insurance Company,
Division II, Attention Nancy Castro, Assistant Vice President, 171 North Clark
Street, Chicago, Illinois 60601 (telephone: 312-223-2709; facsimile:
312-223-2108) ("Escrowee") cash or other immediately available funds in the
amount of Three Million and no/100 Dollars ($3,000,000.00) (the "Deposit").
(2) Notwithstanding anything contained in this agreement
to the contrary, upon the full execution of this Agreement, the sum of One
Hundred Thousand and no/100 Dollars ($100,000.00) shall be non-refundable to
Buyer (the "Non-refundable Deposit") subject only to Bayer's receipt and
commercially reasonable approval of the following (collectively, the "Exceptions
to Non-refundability of $100,000"): (i) Property engineering report (soils and
structural); and (ii) survey and title; and (iii) environmental site assessment;
and (iv) estoppels (as described by this Agreement). If Buyer terminates this
Agreement prior to May 19, 2004 for any reason other than by reason of any one
of the Exceptions to Non-refundability of $100,000, Escrowee shall at that time
immediately: (a) release the Non-refundable Deposit to Seller, and (b) release
the sum of Two Million Nine Hundred Thousand and no/100 Dollars ($2,900,000.00)
to Buyer. If Buyer terminates this Agreement prior to May 19, 2004 by reason of
any one of the Exceptions to Non-refundability of $100,000, Escrowee shall at
that time immediately release the Deposit to Buyer.
(3) Notwithstanding anything contained in this agreement
to the contrary, on May 19, 2004 the Non-refundable Deposit shall be increased
to Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00). If Buyer
terminates this Agreement between May 19, 2004 and the expiration of the
Contingency Period for any reason other than by reason items (ii) and (iv) in
Section 1.2(b)(2) above, Escrowee shall at that time immediately: (a) release
the Non-refundable Deposit to Seller, and (b) release the sum of Two Million
Seven Hundred Fifty Thousand and no/100 Dollars ($2,750,000.00) to Buyer. If
Buyer terminates this Agreement between May 19, 2004 and the expiration of the
Contingency Period by reason of item (ii) or (iv) in Section 1.2(b)(2) above,
Escrowee shall at that time immediately release the Deposit to Buyer.
The Deposit shall be held in an interest bearing account and all interest
thereon, less investment fees, if any, shall be the property of Buyer. If the
sale of the Property as contemplated hereunder is consummated, then the Deposit
shall be paid to Seller at the Closing (as defined below) and credited against
the Purchase Price. IF THE SALE OF THE
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PROPERTY IS NOT CONSUMMATED DUE TO SELLER'S DEFAULT HEREUNDER, THEN BUYER MAY
ELECT, AS BUYER'S SOLE AND EXCLUSIVE REMEDY, EITHER TO: (1) TERMINATE THIS
AGREEMENT AND RECEIVE AN IMMEDIATE REFUND OF THE DEPOSIT, IN WHICH EVENT NEITHER
PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT AS PROVIDED
IN SECTIONS 6.1, 9.3 AND 9.9 BELOW, OR (2) ENFORCE SPECIFIC PERFORMANCE OF THIS
AGREEMENT (INCLUDING THE RIGHT TO SEEK REIMBURSEMENT OF REASONABLE ATTORNEY'S
FEES AND COSTS OF SUIT). BUYER SHALL NOT HAVE ANY OTHER RIGHTS OR REMEDIES
HEREUNDER AS A RESULT OF ANY DEFAULT BY SELLER PRIOR TO CLOSING, AND BUYER
HEREBY WAIVES ANY OTHER SUCH REMEDY AS A RESULT OF A DEFAULT HEREUNDER BY
SELLER. IF THE SALE IS NOT CONSUMMATED DUE TO DEFAULT BY BUYER HEREUNDER, THEN
SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED
THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE
DUE TO BUYER'S DEFAULT PRIOR TO CLOSING, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT,
CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE
AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD
INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY
CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY
WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE,
THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THE FOREGOING IS NOT
INTENDED TO LIMIT BUYER'S OBLIGATIONS UNDER SECTIONS 6.1, 9.3 AND 9.9.
INITIALS: SELLER /s/ [ILLEGIBLE] BUYER
--------------- ---------------
(4) The balance of the Purchase Price (plus or minus the
prorations pursuant to Section 8.5 hereof) shall be paid to Seller in cash or by
wire transfer of other immediately available funds at the consummation of the
purchase and sale contemplated hereunder with a closing to occur on June 7,
2004, subject to satisfaction of Buyer's due diligence investigations as herein
described (the "CLOSING").
ARTICLE II
CONDITIONS
SECTION 2.1 BUYER'S CONDITIONS PRECEDENT.
Subject to the provisions of Section 9.3 hereof, Seller has provided and/or
shall provide Buyer and its consultants and other agents and representatives
with access to the Property to perform Buyer's inspections and review and
determine the present condition of the Property. Seller has delivered under
cover letters from Judy Boyd to Sharon Anderson-Cox dated April 27, 2004 and
April 28, 2004 or made available to Buyer at Seller's offices or at the Real
Property, or
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shall within the Delivery Period (as defined below) deliver or make available to
Buyer at Seller's offices or at the Real Property, copies of all Due Diligence
Materials (as defined in Section 2.2 below) in Seller's possession, except as
otherwise specifically provided herein. Notwithstanding anything to the contrary
contained herein, the Due Diligence Materials shall expressly exclude (i) those
portions of the Due Diligence Materials that would disclose Seller's cost of
acquisition of the Real Property, or cost of construction of the Improvements
and related soft costs, or any estimates of costs to repair, replace, remediate
or maintain the Real Property, (ii) any reports, presentations, summaries and
the like prepared for any of Seller's boards, committees, partners or investors
in connection with its consideration of the acquisition of the Real Property,
construction of the Improvements or sale of the Property, (iii) any proposals,
letters of intent, draft contracts or the like prepared by or for other
prospective purchasers of the Property or any part thereof, (iv) Seller's
internal memoranda, attorney-client privileged materials, internal appraisals,
structural or physical inspection reports, and (v) any information which is the
subject of a confidentiality agreement between Seller and a third party (the
items described in clauses (i), (ii) (iii), (iv) and (v) being collectively
referred to as the "CONFIDENTIAL INFORMATION"). The "DELIVERY PERIOD" shall mean
the period which ends five (5) days after the Effective Date. Buyer's obligation
to purchase the Property is conditioned upon Buyer's review and approval of the
following, within the applicable time periods described in Sections 2.2 and 4.1
hereof:
(a) Title to the Property and survey matters in accordance with
Article IV below.
(b) The Due Diligence Materials, including, but not limited to,
tenant leases, any guaranties thereof and any other occupancy agreements, and
all amendments and modifications thereof (collectively, the "LEASES") affecting
the Property, and of all contracts pertaining to the operation of the Property,
including all management, leasing, service and maintenance agreements, and
equipment leases (collectively, the "SERVICE CONTRACTS").
(c) The physical condition of the Property.
(d) The zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to the Property.
(e) The tenant correspondence files, operating statements and
books and records pertaining to the operation of the Property in each case for
each of the three (3) most recent years during which the Property has been owned
by Seller and for the current year (to the extent available), current real
estate tax bills, any warranties, licenses, permits, certificates of occupancy,
plans and specifications, and any current rent roll, current accounts receivable
schedule and list of Tangible Personal Property in such form as Seller shall
have in its possession for the Property, and other agreements or documents
pertaining to the Property which will be binding on Buyer after Closing.
(f) Any other matters Buyer deems relevant to the Property.
SECTION 2.2 CONTINGENCY PERIOD.
Buyer shall have from the Effective Date until May 28, 2004 (such period
being referred to herein as the "CONTINGENCY PERIOD") to review and approve the
matters described in Sections
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2.1(b)-(f) above in Buyer's sole discretion (title and survey review and
approval shall be governed by the provisions of Section 4.1 below). If Buyer
determines to proceed with the purchase of the Property, then Buyer shall,
before the end of the Contingency Period, so notify Seller in writing, in which
case Buyer shall be deemed to have approved all of the matters described in
Sections 2.l(a)-(f) above (subject to the provisions of Section 4.1 below as to
title and survey matters), including, without limitation, all documents, Service
Contracts and other contracts, agreements, Leases, reports and other items and
materials related to the Property prepared by or on behalf of Seller
(collectively, the "DUE DILIGENCE MATERIALS"), and the Deposit shall become
nonrefundable except as expressly provided herein. If before the end of the
Contingency Period Buyer fails to give Seller such written notice, then Buyer
shall be deemed to have elected to terminate this Agreement, the Deposit shall
immediately be returned to Buyer, and neither party shall have any further
rights or obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9
below.
ARTICLE III
BUYER'S EXAMINATION
SECTION 3.1 REPRESENTATIONS AND WARRANTIES AND COVENANTS OF SELLER.
Subject to the disclosures contained in SCHEDULE 1 attached hereto and made
a part hereof (the "DISCLOSURE ITEMS"), matters contained in the Due Diligence
Materials, and any matters of public record where the Property is located,
Seller hereby makes the following representations and warranties with respect to
the Property Notwithstanding anything to the contrary contained herein or in any
document delivered in connection herewith, Seller shall have no liability with
respect to the Disclosure Items.
(a) Seller has not (i) made a general assignment for the benefit
of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Seller's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Seller's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445
of the Internal Revenue Code of 1986, as amended (the "CODE") and any related
regulations.
(c) Subject to the provisions of Section 9.18 below, (i) this
Agreement has been, and all documents executed by Seller which are to be
delivered to Buyer at Closing will be, duly authorized, executed and delivered
by Seller, and (ii) this Agreement does not and such other documents will not
violate any provision of any agreement or judicial order to which Seller is a
party or to which Seller or, to the best of Seller's knowledge, the Property is
subject.
(d) To the best of Seller's knowledge, the only Leases in force
for the Property are set forth in the rent roll attached hereto as EXHIBIT B and
made a part hereof (or, if not attached, which Seller shall deliver to Buyer
within the Delivery Period and which at that time will be attached hereto as
EXHIBIT B and made a part hereof), and to the best of Seller's
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knowledge, Seller has received no written notice of any default by Seller with
respect to such Leases which has not been cured.
(e) To the best of Seller's knowledge, the only Service
Contracts in effect for the Property are set forth in a list of Service
Contracts attached hereto as EXHIBIT G and made a part hereof (or, if not
attached, which Seller shall deliver to Buyer within the Delivery Period and
which at that time will be attached hereto as EXHIBIT G and made a part hereof).
(f) To the best of Seller's knowledge, there is no litigation or
governmental proceeding (including, but not limited to any condemnation
proceeding) pending or threatened with respect to the Property, or with respect
to Seller which impairs Seller's ability to perform its obligations under this
Agreement, except for any personal injury or property damage action for which
there is adequate insurance coverage.
(g) To the best of Seller's knowledge, Seller has received no
written notice from any governmental authority of any violation of any law
applicable to the Property (including, without limitation, any Environmental Law
as defined in Section 3.6(a)(2) below) that has not been corrected.
(h) To the best of Seller's knowledge, all of the Due Diligence
Materials delivered or made available by Seller to Buyer in connection with the
Property are complete copies of such items in Seller's possession which are used
by Seller in the operation of the Property.
(i) Seller has been duly organized, is validly existing, and is
in good standing in the state in which it was formed, and, if so required to, is
qualified to do business in the state in which the Real Property is located.
Each of the representations and warranties of Seller contained in this
Section 3.1: (1) shall be true in all material respects as of the date of
Closing, subject in each case to (A) any Exception Matters (as defined below),
(B) the Disclosure Items, and (C) other matters expressly permitted in this
Agreement or otherwise specifically approved in writing; and (2) shall survive
the Closing as provided in Section 3.3 below.
Seller covenants and agrees to: (i) cooperate with Buyer's auditors (KPMG)
in its post-closing audit of the operations of the Property (KPMG's form of
audit letter has been approved by Seller); and (ii) attempt, to cause the roof
warranty material provider to acknowledge the transfer of the Property roof
warranty to Buyer, provided any costs associated with such transfer shall be
paid by Buyer; and (iii) attempt to obtain a REA estoppel certificate from all
parties to any reciprocal easement agreement, declaration, and/or association
which benefits and/or burdens the Property. The completion of the items listed
in clauses (ii) and (iii) in the immediately preceding sentence shall not be a
condition of Buyer's obligation to close this transaction and Seller's failure
to cause the roof warranty material provider to acknowledge the transfer of the
Property roof warranty to Buyer or to obtain a REA estoppel certificate from all
parties to any reciprocal easement agreement, declaration, and/or association
which benefits and/or burdens the Property shall not be considered a default
under this Agreement.
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SECTION 3.2 NO LIABILITY FOR EXCEPTION MATTERS.
As used herein, the term "EXCEPTION MATTER" shall refer to a matter which
would make a representation or warranty of Seller contained in this Agreement
untrue or incorrect and which is disclosed to Buyer in the Due Diligence
Materials, the Disclosure Items, or otherwise, or is a matter of public record,
or is otherwise discovered by Buyer before the Closing, including, without
limitation, matters disclosed in any tenant estoppel certificate or from
interviews with tenants, property managers or any other person. If Buyer first
obtains knowledge of any material Exception Matter after the close of the
Contingency Period and prior to Closing and such Exception Matter was not
contained in the Due Diligence Materials, the Disclosure Items or is not a
matter of public record, Buyer's sole remedy shall be to terminate this
Agreement on the basis thereof, upon written notice to Seller and Escrowee
within the earlier of (a) five (5) days following Buyer's discovery of such
Exception Matter or (b) the Closing, which ever occurs first, in which event the
Deposit shall immediately be returned to Buyer, unless within five (5) days
after receipt of such notice or by the Closing, as the case may be, Seller
notifies Buyer in writing that it elects to attempt to cure or remedy such
Exception Matter, in which event there shall be no return of the Deposit unless
and until Seller is unable to so cure or remedy within the time period set forth
below. Seller shall be entitled to extend the Closing Date (as defined in
Section 8.2 below) for up to fifteen (15) business days in order to attempt to
cure or remedy any Exception Matter. Buyer's failure to give notice within five
(5) days after it has obtained knowledge of a material Exception Matter shall be
deemed a waiver by Buyer of such Exception Matter. Seller shall have no
obligation to cure or remedy any Exception Matter, even if Seller has notified
Buyer of Seller's election to attempt to cure or remedy any Exception Matter
(except as specifically provided in Section 4.1(c) hereof), and, subject to
Buyer's right to terminate this Agreement as set forth above, Seller shall have
no liability whatsoever to Buyer with respect to any Exception Matters. Upon any
termination of this Agreement, neither party shall have any further rights nor
obligations hereunder, except as provided in Sections 6.1, 9.3 and 9.9 below. If
Buyer obtains knowledge of any Exception Matter before the Closing, but
nonetheless elects to proceed with the acquisition of the Property, Seller shall
have no liability with respect to such Exception Matter, notwithstanding any
contrary provision, covenant, representation or warranty contained in this
Agreement or in any Other Documents (as defined in Section 9.19 below). For the
purposes of this section 3.2, "Buyer's knowledge" shall be defined as the actual
knowledge of Mark Youngman after review of the Due Diligence Materials, the
Disclosure Items, matter of public record, and matters disclosed; (i) in any
tenant estoppel certificate, (ii) in any third party reports ordered by Buyer or
its agents, or (iii) from interviews conducted by Buyer or its agents with
tenants, property managers or any other person.
SECTION 3.3 SURVIVAL OF SELLER'S REPRESENTATIONS AND WARRANTIES OF SALE.
The representations and warranties of Seller contained herein or in any
Seller estoppel delivered pursuant to Section 8.4 below or in any Other
Documents shall survive for a period of six (6) months after the Closing. Any
claim which Buyer may have against Seller for a breach of any such
representation or warranty, whether such breach is known or unknown, which is
not specifically asserted by written notice to Seller within such six (6) month
period shall not be valid or effective, and Seller shall have no liability with
respect thereto.
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SECTION 3.4 SELLER'S KNOWLEDGE.
For purposes of this Agreement and any document delivered at Closing,
whenever the phrase "TO THE BEST OF SELLER'S KNOWLEDGE" or the "KNOWLEDGE" of
Seller or words of similar import are used, they shall be deemed to mean and are
limited to the current actual knowledge only of Peter F. Feinberg and LaRee
Stein, at the times indicated only, and not any implied, imputed or constructive
knowledge of such individual(s) or of Seller or any Seller Related Parties (as
defined in Section 3.7 below), and without any independent investigation or
inquiry having been made or any implied duty to investigate, make any inquiries
or review the Due Diligence Materials. Furthermore, it is understood and agreed
that such individual(s) shall have no personal liability in any manner
whatsoever hereunder or otherwise related to the transactions contemplated
hereby.
SECTION 3.5 REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as follows:
(a) This Agreement and all documents executed by Buyer which are
to be delivered to Seller at Closing do not and at the time of Closing will not
violate any provision of any agreement or judicial order to which Buyer is a
party or to which Buyer is subject.
(b) Buyer has not (i) made a general assignment for the benefit
of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Buyer's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally.
(c) Buyer has been duly organized, is validly existing and is in
good standing in the state in which it was formed, and, if required to do so, is
qualified to do business in the state in which the Real Property is located.
This Agreement has been, and all documents executed by Buyer which are to be
delivered to Seller at Closing will be, duly authorized, executed and delivered
by Buyer.
(d) Buyer is purchasing the Property as investment rental
property, and not for Buyer's own operations or use.
(e) Buyer is not a party in interest with respect to any
employee benefit or other plan within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
Section 4975(e)(1) of the Code, which is subject to ERISA or Section 4975 of the
Code and which is an investor in Seller.
(f) Other than Seller's Broker (as defined in Section 6.1
below), Buyer has had no contact with any broker or finder with respect to the
Property.
Each of the representations and warranties of Buyer contained in this
Section shall be deemed remade by Buyer as of the Closing and shall survive the
Closing.
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SECTION 3.6 BUYER'S INDEPENDENT INVESTIGATION.
(a) By Buyer electing to proceed under Section 2.2, Buyer will
be deemed to have acknowledged and agreed that it has been given a full
opportunity to inspect and investigate each and every aspect of the Property,
either independently or through agents of Buyer's choosing, including, without
limitation:
(1) All matters relating to title and survey, together
with all governmental and other legal requirements such as taxes, assessments,
zoning, use permit requirements and building codes.
(2) The physical condition and aspects of the Property,
including, without limitation, the interior, the exterior, the square footage
within the improvements on the Real Property and within each tenant space
therein, the structure, seismic aspects of the Property, the foundation, roof,
paving, parking facilities, utilities, and all other physical and functional
aspects of the Property. Such examination of the physical condition of the
Property shall include an examination for the presence or absence of Hazardous
Materials, as defined below, which shall be performed or arranged by Buyer
(subject to the provisions of Section 9.3 hereof) at Buyer's sole expense. For
purposes of this Agreement, "HAZARDOUS MATERIALS" shall mean inflammable
explosives, radioactive materials, asbestos, asbestos-containing materials,
polychlorinated biphenyls, lead, lead-based paint, radon, under and/or above
ground tanks, hazardous materials, hazardous wastes, hazardous substances, oil,
or related materials, which are listed or regulated in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Sections 6901, et seq.), the Resources Conservation and Recovery Act of
1976 (42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et seq.),
the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.),
and the Toxic Substance Control Act (15 U.S.C. Section 2601, et seq.), and any
other applicable federal, state or local laws (collectively, "ENVIRONMENTAL
LAWS").
(3) Any easements and/or access rights affecting the
Property.
(4) The Leases and all matters in connection therewith,
including, without limitation, the ability of the tenants to pay the rent and
the economic viability of the tenants.
(5) The Service Contracts and any other documents or
agreements of significance affecting the Property.
(6) All other matters of material significance affecting
the Property, including, but not limited to, the Due Diligence Materials.
(b) Except as expressly stated herein, Seller makes no
representation or warranty as to the truth, accuracy or completeness of any
materials, data or information delivered by Seller to Buyer in connection with
the transaction contemplated hereby. Buyer acknowledges and agrees that all
materials, data and information delivered by Seller to Buyer in connection with
the transaction contemplated hereby are provided to Buyer as a convenience only
and that any reliance on or use of such materials, data or information by Buyer
shall be at the sole risk of
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Buyer, except as otherwise expressly stated herein. Without limiting the
generality of the foregoing provisions, Buyer acknowledges and agrees that (a)
any environmental or other report with respect to the Property which is
delivered by Seller to Buyer shall be for general informational purposes only,
(b) Buyer shall not have any right to rely on any such report delivered by
Seller to Buyer, but rather will rely on its own inspections and investigations
of the Property and any reports commissioned by Buyer with respect thereto, (c)
neither Seller, any affiliate of Seller nor the person or entity which prepared
any such report delivered by Seller to Buyer shall have any liability to Buyer
for any inaccuracy in or omission from any such report and (d) the failure to
deliver any report as to the environmental or other condition of the Property,
including any proposal for work at the Property which was not performed by
Seller, shall not be actionable by Buyer under this Agreement or otherwise.
(c) EXCEPT AS EXPRESSLY SET FORTH IN SECTION 3.1 ABOVE AND
ELSEWHERE IN THIS AGREEMENT, BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT
SELLER IS SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN "AS IS WITH ALL
FAULTS" BASIS AND THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES
OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ANY SELLER RELATED
PARTIES, OR THEIR AGENTS OR BROKERS, OR ANY OTHER PERSON ACTING OR PURPORTING TO
ACT ON BEHALF OF SELLER, AS TO ANY MATTERS CONCERNING THE PROPERTY, INCLUDING
WITHOUT LIMITATION: (i) the quality, nature, adequacy and physical condition and
aspects of the Property, including, but not limited to, the structural elements,
seismic aspects of the Property, foundation, roof, appurtenances, access,
landscaping, parking facilities and the electrical, mechanical, HVAC, plumbing,
sewage, and utility systems, facilities and appliances, the square footage
within the improvements on the Real Property and within each tenant space
therein, (ii) the quality, nature, adequacy, and physical condition of soils,
geology and any groundwater, (iii) the existence, quality, nature, adequacy and
physical condition of utilities serving the Property, (iv) the development
potential of the Property, and the Property's use, habitability,
merchantability, or fitness, suitability, value or adequacy of the Property for
any particular purpose, (v) the zoning or other legal status of the Property or
any other public or private restrictions on use of the Property, (vi) the
compliance of the Property or its operation with any applicable codes, laws,
regulations, statutes, ordinances, covenants, conditions and restrictions of any
governmental or quasi-governmental entity or of any other person or entity,
(vii) the presence of Hazardous Materials on, under or about the Property or the
adjoining or neighboring property, (viii) the quality of any labor and materials
used in any improvements on the Real Property, (ix) the condition of title to
the Property, (x) the Leases, Service Contracts, or other documents or
agreements affecting the Property, or any information contained in any rent
roll furnished to Buyer for the Property, (xi) the value, economics of the
operation or income potential of the Property, or (x) any other fact or
condition which may affect the Property, including without limitation, the
physical condition, value, economics of operation or income potential of the
Property.
SECTION 3.7 RELEASE.
(a) Without limiting the above, and subject to the
representations and warranties of Seller contained in Section 3.1 hereof, Buyer
on behalf of itself and its successors and assigns waives its right to recover
from, and forever releases and discharges, Seller, Seller's
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affiliates, Seller's investment advisor, the partners, trustees, beneficiaries,
shareholders, members, managers, directors, officers, employees and agents and
representatives of each of them, and their respective heirs, successors,
personal representatives and assigns (collectively, the "SELLER RELATED
PARTIES"), from any and all demands, claims, legal or administrative
proceedings, losses, liabilities, damages, penalties, fines, liens, judgments,
costs or expenses whatsoever (including, without limitation, court costs and
attorneys' fees and disbursements), whether direct or indirect, known or
unknown, foreseen or unforeseen, that may arise on account of or in any way be
connected with (i) the physical condition of the Property including, without
limitation, all structural and seismic elements, all mechanical, electrical,
plumbing, sewage, heating, ventilating, air conditioning and other systems, the
environmental condition of the Property and the presence of Hazardous Materials
on, under or about the Property, or (ii) any law or regulation applicable to the
Property, including, without limitation, any Environmental Law and any other
federal, state or local law.
SECTION 3.8 SURVIVAL.
The provisions of this Article III shall survive the Closing subject to the
limitations and qualifications contained in such provisions and in Sections 9.11
and 9.19 hereof.
ARTICLE IV
TITLE
SECTION 4.1 CONDITIONS OF TITLE.
(a) Upon execution of this Agreement, Seller shall order an
updated preliminary title report or commitment (the "TITLE REPORT") from
Heritage Title Company (the "TITLE COMPANY"), which shall be delivered to Buyer,
together with copies of all underlying documents relating to title exceptions
referred to therein, promptly upon Seller's receipt thereof. Seller shall also
furnish to Buyer within 2-days of the Effective Date the existing survey of the
Property in Seller's possession. Buyer shall immediately thereafter order any
plat or survey of the Property or any update thereto from a duly licensed
surveyor (the "SURVEY") if desired by Buyer or if necessary to support the
issuance of the Title Policy (as defined in Section 4.2 below). Buyer shall
provide to Seller a copy of the Survey, which shall be certified to the Title
Company, Buyer and Seller. Buyer shall pay the entire cost of the Survey for all
Survey work performed from and after the Effective Date. If Closing does not
occur, Buyer shall, if Seller so requests, assign to Seller all contract rights
Buyer has with the surveyor and in such event Seller shall reimburse Buyer for
the cost of the Survey.
(b) Within ten (10) business days prior to the last day of the
Contingency Period (the "TITLE REVIEW DATE"), or five (5) business days after
Buyer's receipt of the Title Report and Survey, which ever occurs first, Buyer
shall furnish Seller with a written statement of objections, if any, to the
title to the Property, including, without limitation, any objections to any
matter shown on the Survey (collectively, "OBJECTIONS"). In the event the Title
Company amends or updates the Title Report after the Title Review Date (each, a
"TITLE REPORT UPDATE"), Buyer shall furnish Seller with a written statement of
Objections to any matter first raised in a Title Report Update within three (3)
business days after its receipt of such Title Report Update
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(each, a "TITLE UPDATE REVIEW PERIOD"). Should Buyer fail to notify Seller in
writing of any Objections in the Title Report prior to the Title Review Date,
or to any matter first disclosed in a Title Report Update prior to the Title
Update Review Period, as applicable, Buyer shall be deemed to have approved such
matters which shall be considered to be "CONDITIONS OF TITLE" as defined in
Section 4.1(e) below.
(c) If Seller receives a timely Objection in accordance with
Section 4.1(b) ("BUYER'S NOTICE"), Seller shall have the right, but not the
obligation, within five (5) business days after receipt of Buyer's Notice
("SELLER'S RESPONSE PERIOD"), to elect to attempt to cure any such matter upon
written notice to Buyer ("SELLER'S RESPONSE"), and may extend the Closing Date
for up to fifteen (15) business days to allow such cure. If Seller does not give
any Seller's Response, Seller shall be deemed to have elected not to attempt to
cure any such matters. Notwithstanding the foregoing, Seller shall in any event
be obligated to cure all matters or items (i) that are mortgage or deed of trust
liens or security interests against the Property, in each case granted by Seller
(and not tenants of the Property or other third parties), (ii) real estate tax
liens, other than liens for taxes and assessments not yet delinquent and (iii)
that have been voluntarily placed against the Property by Seller (and not
tenants of the Property or other third parties) after the date of this Agreement
and that are not otherwise permitted pursuant to the provisions hereof. Seller
shall be entitled to apply the Purchase Price towards the payment or
satisfaction of such liens, and may cure any Objection by causing the Title
Company to insure against collection of the same out of the Property.
(d) If Seller elects (or is deemed to have elected) not to
attempt to cure any Objections raised in any Buyer's Notice timely delivered by
Buyer to Seller pursuant to Section 4.1(b), or if Seller notifies Buyer that it
elects to attempt to cure any such Objection but then does not for any reason
effect such cure on or before the Closing Date as it may be extended hereunder,
then Buyer, as its sole and exclusive remedy, shall have the option of
terminating this Agreement by delivering written notice thereof to Seller within
three (3) business days after (as applicable) (i) its receipt of Seller's
Response stating that Seller will not attempt to cure any such Objection or (ii)
the expiration of Seller's Response Period if Seller does not deliver a Seller's
Response or (iii) Seller's failure to cure by the Closing Date (as it may be
extended hereunder) any Objection which Seller has previously elected to attempt
to cure pursuant to a Seller's Response. In the event of such a termination, the
Deposit shall immediately be returned to Buyer, and neither party shall have any
further rights or obligations hereunder except as provided in Sections 6.1, 9.3
and 9.9 below. If no such termination notice is timely received by Seller
hereunder, Buyer shall be deemed to have waived all such Objections in which
event those Objections shall become "CONDITIONS OF TITLE" under Section 4.1 (e).
If the Closing is not consummated for any reason other than Seller's default
hereunder, Buyer shall be responsible for any title or escrow cancellation
charges.
(e) At the Closing, Seller shall convey title to the Property to
Buyer by deed in the form of EXHIBIT C attached hereto (the "DEED") subject to
no exceptions other than:
(i) Interests of tenants in possession under the Leases;
(ii) Matters created by, or with the written consent of, Buyer;
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(iii) Non-delinquent liens for real estate taxes and assessments;
and
(iv) Any exceptions disclosed by the Title Report and any Title
Report Update which is approved or deemed approved by Buyer
in accordance with this Article IV above, and any exceptions
to title disclosed by the public records or which would be
disclosed by an inspection and/or survey of the Property.
All of the foregoing exceptions shall be referred to collectively as the
"CONDITIONS OF TITLE." Subject to the terms and conditions contained elsewhere
in this Agreement, by acceptance of the Deed and the Closing of the purchase and
sale of the Property, (x) Buyer agrees it is assuming for the benefit of Seller
all of the obligations of Seller with respect to the Conditions of Title from
and after the Closing, and (y) Buyer agrees that Seller shall have conclusively
satisfied its obligations with respect to title to the Property. The provisions
of this Section shall survive the Closing.
SECTION 4.2 EVIDENCE OF TITLE.
Delivery of title in accordance with the foregoing shall be evidenced by
the willingness of the Title Company to issue, at Closing, its Owner's ALTA
Policy of Title Insurance in the amount of the Purchase Price showing title to
the Real Property vested in Buyer, subject to the Conditions of Title (the
"TITLE POLICY"). The Title Policy may contain such endorsements as reasonably
required by Buyer provided that the issuance of such endorsements shall not be a
condition to Buyer's obligations hereunder. Buyer shall pay the costs for all
such endorsements, including, without limitation, all costs for so-called
"extended coverage" and/or a survey deletion endorsement and Seller shall pay
for the issuance of the TLTA Policy of Title Insurance in favor of Buyer. Seller
shall have no obligation to provide any indemnity or agreement to the Title
Company or Buyer to support the issuance of the Title Policy or any such
endorsements other than an affidavit as to the existing tenants of the Property
and any ongoing construction work at the Property and a GAP undertaking.
ARTICLE V
RISK OF LOSS AND INSURANCE PROCEEDS
SECTION 5.1 MINOR LOSS.
Buyer shall be bound to purchase the Property for the full Purchase price
as required by the terms hereof, without regard to the occurrence or effect of
any damage to the Property or destruction of any improvements thereon or
condemnation of any portion of the Property, provided that: (a) the cost to
repair any such damage or destruction does not exceed Four Million Dollars
($4,000,000) in the estimate of an architect or contractor selected by Seller
and reasonably acceptable to Buyer or in the case of a condemnation, the
diminution in the value of the remaining Property as a result of a partial
condemnation is not material (as hereinafter defined) and (b) upon the Closing,
there shall be a credit against the Purchase Price due hereunder equal to the
amount of any insurance proceeds or condemnation awards collected by Seller as a
result of any such damage or destruction or condemnation, plus the amount of any
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insurance deductible, less any sums expended by Seller toward the collection of
such proceeds or awards and the restoration or repair of the Property (the
nature of which restoration or repairs, but not the right of Seller to effect
such restoration or repairs, shall be subject to the approval of Buyer, which
approval shall not be unreasonably withheld, conditioned or delayed). If the
proceeds or awards have not been collected as of the Closing, then such proceeds
or awards shall be assigned to Buyer, except to the extent needed to reimburse
Seller for sums expended to collect such proceeds or awards or to repair or
restore the Property, and Seller shall retain the rights to such proceeds and
awards to such extent.
SECTION 5.2 MAJOR LOSS.
If the cost to repair the damage or destruction as specified above exceeds
Four Million Dollars ($4,000,000) in the estimate of an architect or contractor
selected by Seller and reasonably acceptable to Buyer or the diminution in the
value of the remaining Property as a result of a condemnation is material (as
hereinafter defined), then Buyer may, at its option to be exercised within five
(5) days of Seller's notice of the occurrence of the damage or destruction or
the commencement of condemnation proceedings, either terminate this Agreement or
consummate the purchase for the full Purchase Price as required by the terms
hereof. If Buyer elects to terminate this Agreement by delivering written notice
thereof to Seller or fails to give Seller notice within such five (5) day period
that Buyer will proceed with the purchase, then this Agreement shall terminate,
the Deposit shall be returned to Buyer and neither party shall have any further
rights or obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9
below. If Buyer elects to proceed with the purchase, then upon the Closing,
there shall be a credit against the Purchase Price due hereunder equal to the
amount of any insurance proceeds or condemnation awards collected by Seller as a
result of any such damage or destruction or condemnation, plus the amount of any
insurance deductible, less any sums expended by Seller toward the collection of
such proceeds or awards or to restoration or repair of the Property (the nature
of which restoration or repairs, but not the right of Seller to effect such
restoration or repairs, shall be subject to the approval of Buyer, which
approval shall not be unreasonably withheld, conditioned or delayed). If the
proceeds or awards have not been collected as of the Closing, then such proceeds
or awards shall be assigned to Buyer, except to the extent needed to reimburse
Seller for sums expended to collect such proceeds or awards or to repair or
restore the Property, and Seller shall retain the rights to such proceeds and
awards to such extent. A condemnation shall be deemed material if any portion of
any net rentable area of the Improvements, or any parking is taken which would
cause the Property to be in violation of any existing laws or regulations,
including but not limited to, zoning regulations, or the existing access to the
Property is materially and adversely affected, permanently.
ARTICLE VI
BROKERS AND EXPENSES
SECTION 6.1 BROKERS.
The parties represent and warrant to each other that no broker or finder
was instrumental in arranging or bringing about this transaction except for
Holliday Fenoglio Fowler, L.P. ("SELLER'S BROKER"). At Closing, Seller shall pay
the commission due, if any, to Seller's Broker,
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which shall be paid pursuant to a separate agreement between Seller and Seller's
Broker. If any other person brings a claim for a commission or finder's fee
based upon any contact, dealings or communication with Buyer or Seller, then the
party through whom such person makes his claim shall defend the other party (the
"INDEMNIFIED PARTY") from such claim, and shall indemnify the Indemnified Party
and hold the Indemnified Party harmless from any and all costs, damages, claims,
liabilities or expenses (including without limitation, court costs and
reasonable attorneys' fees and disbursements) incurred by the Indemnified Party
in defending against the claim. The provisions of this Section 6.1 shall survive
the Closing or, if the purchase and sale is not consummated, any termination of
this Agreement.
SECTION 6.2 EXPENSES.
Except as expressly provided in this Agreement, each party hereto shall pay
its own expenses incurred in connection with this Agreement and the transactions
contemplated hereby.
ARTICLE VII
LEASES AND OTHER AGREEMENTS
SECTION 7.1 BUYER'S APPROVAL OF NEW LEASES AND AGREEMENTS AFFECTING THE
PROPERTY.
Between the Effective Date and the Closing, Seller shall continue to lease
the Property in the same manner as before the making of this Agreement, the same
as though Seller were retaining the Property provided that after the expiration
of the Contingency Period Seller shall not enter into any new Lease or other
agreement affecting the Property, or modify or terminate any existing Lease or
other agreement affecting the Property, which will be binding on the Property
after Closing, except as permitted or required under any Lease and except for
agreements which are terminable on no more than sixty (60) days' notice without
payment of any penalty or fee or other cost to Seller, without first obtaining
Buyer's approval of the proposed action, which approval will not be unreasonably
withheld, conditioned or delayed. In such case, Buyer shall specify in detail
the reasons for its disapproval of any such proposed action. If Buyer fails to
give Seller notice of its approval or disapproval of any such proposed action
requiring its approval under this Section 7.1 within three (3) business days
after Seller notifies Buyer in writing of Seller's desire to take such action,
then Buyer shall be deemed to have given its approval. Any new Lease or other
agreement or amendment shall be on Seller's standard forms for such documents.
Buyer agrees to cooperate with Seller in enabling Seller to complete any such
proposed transaction requiring Buyer's approval.
SECTION 7.2 TENANT IMPROVEMENT COSTS, LEASING COMMISSIONS AND
CONCESSIONS.
With respect to any new Lease or Lease modification entered into by Seller
after April 12, 2004 and the Closing Date, and with respect to any renewal or
extension of any Lease, whether through the exercise of an option or otherwise,
occurring between such date and the Closing Date, all tenant improvement work,
leasing commissions, legal fees, or other expenses or grants of any free rent
period or other concessions shall be prorated over the term of the lease,
renewal or extension, based on the economic benefit to the parties hereto
occurring before or
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after the Closing (with respect to any new Lease or Lease modification entered
into by Seller after April 12, 2004 for which Buyer has not given its approval
or been deemed to have given its approval pursuant to Section 7.1 above,
expenses subject to proration shall be subject to the following caps; all tenant
improvement work at $10.00 per square foot, leasing commissions at $3.00 per
square foot and legal fees at $1,500.00 per transaction). Seller's share of such
costs shall be based on the portion of economic benefit of the lease term,
renewal or extension, as the case may be, occurring prior to Closing, which
amount shall be a credit against the Purchase Price, and Buyer shall be
responsible for the remainder of such costs. Buyer shall reimburse Seller for
all such costs incurred by Seller to the extent Buyer is obligated therefor
pursuant to the provisions hereof. Pursuant to the Assignment of Leases Buyer
shall assume any then outstanding obligations with respect to such tenant
improvements, leasing commissions and concessions for any Lease signed after
April 12, 2004; Seller hereby agreeing to be responsible for payment of tenant
improvement allowances, leasing commissions and concessions due and owing for
any Lease signed on and prior to April 12, 2004. The provisions of this Section
shall survive the Closing.
SECTION 7.3 TENANT NOTICES.
At the Closing, Seller shall furnish Buyer with a signed notice to be given
to each tenant of the Property. The notice shall disclose that the Property has
been sold to Buyer, that, after the Closing, all rents should be paid to Buyer
and that Buyer shall be responsible for all of the tenant's security deposit.
The form of the notice shall be otherwise reasonably acceptable to the parties.
Buyer covenants to deliver said notices to each tenant as soon as reasonably
possible after Closing. This provision shall expressly survive Closing.
SECTION 7.4 MAINTENANCE OF IMPROVEMENTS AND OPERATION OF PROPERTY;
REMOVAL OF TANGIBLE PERSONAL PROPERTY.
Seller agrees to keep its customary property insurance covering the
Property in effect until the Closing (provided, however, that the terms of any
such coverage maintained in blanket form may be modified as Seller deems
necessary). Seller shall maintain all Improvements substantially in their
present condition (ordinary wear and tear, casualty and condemnation excepted),
and shall operate and manage the Property in a manner consistent with Seller's
practices in effect prior to the Effective Date, provided that Seller shall in
no event be obligated to make any capital expenditures or repairs. Seller shall
not remove any Tangible Personal Property, except as may be required for
necessary repair or replacement, and replacement shall be of approximately equal
quality and quantity as the removed item of Tangible Personal Property.
SECTION 7.5 SERVICE CONTRACTS.
Within three (3) business days prior to the expiration of the Contingency
Period, Buyer will advise Seller in writing which Service Contracts Buyer will
assume and which Service Contracts Buyer requests be terminated at Closing (and
Buyer's failure to so advise Seller in writing shall be deemed to constitute
Buyer's election to assume all such Service Contracts), provided Seller shall
have no obligation to terminate, and Buyer shall be obligated to assume, any
Service Contracts which by their terms cannot be terminated without penalty or
payment of a
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fee or other cost to Seller. Seller shall deliver at Closing notices of
termination of all Service Contracts that are not so assumed and Buyer shall be
responsible for any charges applicable to periods commencing with the Closing.
Notwithstanding the foregoing, Seller shall terminate, as of the Closing Date,
all existing management and leasing agreements with respect to the Property.
ARTICLE VIII
CLOSING AND ESCROW
SECTION 8.1 ESCROW INSTRUCTIONS.
Upon execution of this Agreement, the parties hereto shall deposit an
executed counterpart of this Agreement with Escrowee (in regard to
administration of the Deposit) and also with the Title Company, and this
instrument shall serve as the instructions to the Escrowee as the escrow holder,
and the Title Company for consummation of the purchase and sale contemplated
hereby. Seller and Buyer agree to execute such reasonable additional and
supplementary escrow instructions as may be appropriate to enable Escrowee and
the Title Company to comply with the terms of this Agreement; provided, however,
that in the event of any conflict between the provisions of this Agreement and
any supplementary escrow instructions, the terms of this Agreement shall
control.
SECTION 8.2 CLOSING.
The Closing hereunder shall be held and delivery of all items to be made at
the Closing under the terms of this Agreement shall be made on June 7, 2004, and
before 11:00 a.m. local time, or such other earlier date and time as Buyer and
Seller may mutually agree upon in writing (the "CLOSING DATE"). The Closing
shall be held at the offices of the Title Company or as otherwise mutually
agreed on by the parties. Except as expressly provided herein, such date and
time may not be extended without the prior written approval of both Seller and
Buyer. In no event shall Buyer be required to close this transaction between
June 8, 2004 and June 19, 2004.
SECTION 8.3 DEPOSIT OF DOCUMENTS.
(a) At or before the Closing, Seller shall deposit into escrow
the following items:
(1) the duly executed and acknowledged Deed in the form
attached hereto as EXHIBIT C conveying the Real Property to Buyer subject to the
Conditions of Title;
(2) four (4) duly executed counterparts of the Bill of
Sale in the form attached hereto as EXHIBIT D (the "BILL OF SALE");
(3) four (4) duly executed counterparts of an Assignment
and Assumption of Leases, Service Contracts, Warranties and Other Intangible
Property in the form attached hereto as EXHIBIT E pursuant to the terms of which
Buyer shall assume all of Seller's obligations under the Leases, Service
Contracts, and other documents and agreements affecting the Property (the
"ASSIGNMENT OF LEASES");
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(4) an affidavit pursuant to Section 1445(b)(2) of the
Code, and on which Buyer is entitled to rely, that Seller is not a "foreign
person" within the meaning of Section 1445(f)(3) of the Code; and
(b) At or before Closing, Buyer shall deposit into escrow the
following items:
(1) immediately available funds necessary to close this
transaction, including, without limitation, the Purchase Price (less the Deposit
and interest thereon net of investment fees, if any) and funds sufficient to pay
Buyer's closing costs and share of prorations hereunder;
(2) four (4) duly executed counterparts of the Bill of
Sale; and
(3) four (4) duly executed counterparts of the
Assignment of Leases.
(c) Seller and Buyer shall each execute and deposit a closing
statement, such transfer tax declarations and such other instruments as are
reasonably required by the Title Company or otherwise required to close the
escrow and consummate the acquisition of the Property in accordance with the
terms hereof. Seller and Buyer hereby designate Title Company as the "REPORTING
PERSON" for the transaction pursuant to Section 6045(e) of the Code and the
regulations promulgated thereunder and agree to execute such documentation as is
reasonably necessary to effectuate such designation.
(d) Within five (5) business days after the Closing Date, Seller
shall deliver or make available at the Property to Buyer: originals of the
Leases to the extent in Seller's possession, or copies of any Leases not in
Seller's possession together with an affidavit from Seller as to such copies
being true and complete copies of the applicable Lease(s), copies of the tenant
correspondence files (for the three (3) most recent years of Seller's ownership
of the Property only and the current year), and originals of any other items
which Seller was required to furnish Buyer copies of or make available at the
Property pursuant to Sections 2.1(b) or (e) above, to the extent in Seller's
possession, except for Seller's general ledger and other internal books or
records which shall be retained by Seller. Seller shall deliver possession of
the Property to Buyer as required hereunder and shall deliver to Buyer or make
available at the Property a set of keys to the Property on the Closing Date.
SECTION 8.4 ESTOPPEL CERTIFICATES.
(a) If in accordance with Article II of this Agreement Buyer
elects to proceed with the purchase of the Property, then Seller shall use
commercially reasonable efforts to obtain estoppel certificates from each tenant
of the Property substantially in the form attached hereto as EXHIBIT F or, if a
tenant's lease requires a different form, in the form required by the tenant's
lease, or as otherwise provided in this paragraph below. It shall be a condition
to Buyer's obligation to close the sale and purchase of the Property that on or
before the Closing, Buyer is able to obtain an estoppel certificate
substantially in such form from tenants occupying at least eighty-five percent
(85%) of the area of the Property actually rented to tenants (collectively, the
"ESTOPPEL THRESHOLD"). All estoppel certificates shall be dated no earlier than
the Effective Date. An estoppel certificate, even though not in the required
estoppel form, will be deemed reasonably acceptable to Buyer if it (i) contains
the following information: confirming rent,
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reimbursements, security deposit, and termination date; that no rent has been
paid more than one month in advance; that the Lease is in full force and effect
and that a true and correct copy of the Lease with all amendments and
modifications is attached; and that all work to be performed by landlord has
been performed and that the tenant has no knowledge of any landlord default, and
that all tenant improvement allowances (if any) have been paid, (ii) is on the
form required by the Lease, or (iii) is on the standard form of a tenant which
customarily issues its own form. Whether or not Seller is able to satisfy the
Estoppel Threshold, Seller shall deliver estoppel certificates to Buyer
containing the information set forth in clause (i) above executed by Seller
covering such leases as are sufficient, when aggregated with the tenant estoppel
certificates previously delivered, to satisfy 100% tenant estoppel delivery,
provided that Buyer shall not be obligated to accept Seller estoppel
certificates that collectively cover in excess of twenty percent (20%) of the
area of the Property actually rented to tenants. Seller's representations and
warranties in any Seller estoppel certificates will survive the Closing, subject
to the limitations contained in Sections 3.2, 3.3, 3.4, 9.11 and 9.19 hereof. In
the event that Buyer receives an estoppel certificate from a tenant complying
with the requirements of this Section 8.4 and for which Seller previously
delivered its estoppel certificate, Seller shall be automatically released from
any liability or obligation under its estoppel certificate.
(b) If Seller is unable to obtain and deliver sufficient tenant
estoppel certificates as required under Section 8.4(a), or if the certificates
received or substituted Seller estoppels contain material information or
omissions unacceptable to Buyer in its reasonable discretion and Buyer objects
thereto by written notice to Seller within two (2) business days after receipt
by Buyer of the objectionable estoppel, but in any event on or before the
Closing Date, then Seller will not be in default by reason thereof, and Seller
may elect to extend the Closing Date by up to thirty (30) days in order to
satisfy the requirement. If Seller still cannot satisfy the requirement at the
end of such extended period, then Buyer may, by written notice given to Seller
before the Closing, elect to terminate this Agreement and receive an immediate
refund of the Deposit or waive said condition. If Buyer so elects to terminate
this Agreement, neither party shall have any further rights or obligations
hereunder except as provided in Section 6.1 above and Sections 9.3 and 9.9
below. If no such notice is delivered by Buyer, Buyer shall be deemed to have
waived such condition.
SECTION 8.5 PRORATIONS.
(a) Rents, including, without limitation, percentage rents, if
any, and any additional charges and expenses payable by tenants under Leases,
all as and when actually collected (excepting therefrom rents and reimbursements
for month in which Closing occurs which shall be credited to Buyer at Closing
for the period beginning on the Closing Date through the end of the month in
which Closing occurs); real property taxes and assessments; water, sewer and
utility charges; amounts payable under any Service Contracts or other agreements
or documents; annual permits and/or inspection fees (calculated on the basis of
the period covered); and any other expenses of the operation and maintenance of
the Property (including, without limitation, expenses prepaid by Seller and
expenses already paid by Seller but which are being amortized over time by
Seller and with respect to which Seller shall receive a credit at Closing in the
amount of the prepaid or unamortized portion thereof), shall all be prorated as
of 11:59 p.m. on the day immediately prior to Closing (i.e., Buyer is entitled
to the income and responsible for the expenses of the day of Closing), on the
basis of a 365-day year. Buyer shall reimburse Seller
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for the tenant improvement costs, leasing commissions, legal fees and other
expenses, and free rent and other concessions, as provided in Section 7.2.
All rents collected after the Closing shall be applied and paid as provided
in this Section 8.5(a). If a tenant shall specifically designate a payment as
being attributable to, or if it is readily ascertainable that a payment received
from a tenant is attributable to a specific period of time or for a specific
purpose, including, without limitation, for operating expenses or real estate
tax payments which were not paid or were underpaid by such tenant or for
reimbursement for work performed by Seller on the tenant's premises, such
payment shall be so applied. If there is no such designation or if not so
readily ascertainable, any payment received from a tenant after Closing shall be
deemed a payment of rent due after the Closing until the tenant is current on
rents and sums due under the applicable Lease on or after the Closing, and then
such payments shall be paid to Seller to the extent of any rent or other sums
owing to Seller for periods prior to Closing and for periods after Closing for
which Buyer received a credit at closing. Seller shall not receive a credit at
Closing for any past due rent, or reimbursements, or other charges due and owing
to Seller from any tenant. Buyer shall use reasonable efforts to collect such
rents and other sums owing to Seller. Seller retains the right to collect any
such rents and other sums from tenants after Closing; provided, however, that
Seller shall have no right to cause any such tenant to be evicted or to exercise
any other landlord remedy against such tenant other than to sue for collection.
Reconciliations of taxes, insurance charges and other expenses owed by
tenants under Leases for the calendar year (or fiscal year if different from the
calendar year) in which the Closing occurs shall be prepared by Buyer with the
cooperation of Seller within 90 days following the end of such year in
accordance with the requirements set forth in the Leases and as provided in this
Section 8.5(a). For those Leases in which tenants pay a proportionate share of
taxes, insurance charges or other expenses over a base year amount or expense
stop, the proration between the parties of the income received from tenants over
such base year amount or expense stop shall be calculated based on the total
amount of such expenses for the Property incurred by both Seller and Buyer for
the entire calendar (or, if applicable, fiscal) year, rather than on the amount
of such expenses actually incurred by each party for such year, in order to
enable the parties to determine if the base year amount or expense stop for such
year is exceeded. Such income as so calculated shall be prorated between the
parties based on the number of days each party owned the Property during such
year and otherwise in accordance with this Section 8.5(a). By way of
illustration but without limiting the foregoing, if: (i) the Closing occurs on
June 1, 2002, (ii) during Seller's period of ownership of the Property during
the year 2002 (151 days), Seller incurred expenses of $450,000, (iii) during
Buyer's period of ownership of the Property during the year 2002 (214 days),
Buyer incurred expenses of $500,000, (iv) total expenses for such year recovered
from tenants under Leases is $400,000 (e.g., $950,000 total expenses minus a
total base year amount of $550,000), then Seller would be entitled to
$165,479.45 of such income ($400,000/365 days = $1,095.89 per diem multiplied by
151 days) and Buyer would be entitled to $234,520.55 of such income ($1,095.89
per diem multiplied by 214 days), regardless of the actual amount of expenses
actually incurred by each party (which would have instead resulted in Seller
receiving $189,473.68 of such income and Buyer receiving $210,526.32 of such
income). For Leases which do not have a base year amount or expense stop, the
proration between the parties of income received from tenants from
reconciliations of expenses under the Leases shall be calculated based on the
expenses actually incurred by each
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party for such year and each party's period of ownership of the Property, and
otherwise in accordance with this Section 8.5(a).
The amount of any cash security deposits held by Seller under Leases, as
shown on Exhibit B, shall be credited against the Purchase Price (and Seller
shall be entitled to retain such cash security deposits). Seller shall receive
credits at Closing for the amount of any utility or other deposits with respect
to the Property. Buyer shall cause all utilities to be transferred into Buyer's
name and account at the time of Closing.
Seller and Buyer hereby agree that if any of the aforesaid prorations and
credits cannot be calculated accurately on the Closing Date or in the case of
rents or other charges received from tenants, such amount have not been
collected, then the same shall be calculated as soon as reasonably practicable
after the Closing Date or the date such amounts have been collected, and either
party owing the other party a sum of money based on such subsequent proration(s)
or credits shall pay said sum to the other party within thirty (30) days
thereafter. Any amounts not paid within such thirty (30) day period shall bear
interest from the date actually received by the payor until paid at the greater
of (i) the rate of ten percent (10%) per annum or (ii) the prime rate (or base
rate) reported from time to time in the "Money Rates" column or section of THE
WALL STREET JOURNAL as being the base rate on corporate loans at larger United
States money center commercial banks plus two (2) percent. Upon request of
either party, the parties shall provide a detailed and accurate written
statement signed by such party certifying as to the payments received by such
party from tenants from and after Closing and to the manner in which such
payments were applied, and shall make their books and records available for
inspection by the other party during ordinary business hours upon reasonable
advance notice.
(b) All title charges for endorsements, including, without
limitation, all charges for so-called "extended coverage" and/or a survey
deletion endorsement and reinsurance charges (if any), survey costs, escrow or
closing fees, sale and transfer taxes, recording fees or taxes, documentary
taxes and similar taxes and fees imposed upon the transfer of the Property by
applicable law shall be paid by Buyer at Closing. Seller shall pay for the
issuance of the TLTA Policy of Title Insurance in favor of Buyer at Closing. Any
escrow fees shall be split equally between Seller and Buyer. The parties will
execute and deliver any required transfer or other similar tax declarations to
the appropriate governmental entity at Closing.
(c) Any percentage rent for the rental periods including Closing
shall be prorated upon receipt, based upon the tenant's sales for the portion of
the lease year allocable to Seller's and Buyer's respective ownership of the
Property. Buyer shall promptly deliver to Seller copies of all percentage rent
statements or notices received by Buyer from tenants of the Property and shall,
within fifteen (15) days of receipt of payments of percentage rent from tenants,
deliver to Seller the portion of such percentage rent which is allocated to
Seller hereunder. Funds not paid within such fifteen (15) day period shall bear
interest at the rate provided in Section 8.5(a) above.
(d) The provisions of this Section 8.5 shall survive the
Closing.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES.
Any notices required or permitted to be given hereunder shall be given in
writing and shall be delivered (a) in person, or (b) by certified mail, postage
prepaid, return receipt requested, or (c) by facsimile with confirmation of
receipt, or (d) by a commercial overnight courier that guarantees next business
day delivery and provides a receipt, and such notices shall be addressed as
follows:
To Buyer: Inland Real Estate Acquisitions, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention: Mark Youngman
Phone No.: 630-218-8000
Fax No.: 630-218-935
with a copy to: The Inland Real Estate Group, Inc.
Attention: Robert Baum, General Counsel
2901 Butterfield Road
Oak Brook, Illinois 60523
Phone No.: 630-218-8000
Fax No.: 630-218-4900 and 630-571-2360
To Seller: Gateway Huebner Oaks, Inc. and Gateway Hillside, Inc.
c/o RREEF America L.L.C.
280 Park Avenue, 40th Floor
New York, NY 10017
Attention: Peter F. Feinberg
Phone No.: 212-454-6525
Fax No.: 212-454-6616
with a copy to: Seyfarth Shaw LLP
55 East Monroe Street, Suite 4200
Chicago, Illinois 60603
Attention: Joel D. Rubin
Phone No.: 312-781-8600
Fax No.: 312-269-8869
or to such other address as either party may from time to time specify in
writing to the other party. Any notice or other communication sent as
hereinabove provided shall be deemed effectively given (a) on the date of
delivery, if delivered in, person; (b) on the date mailed if sent by certified
mail, postage prepaid, return receipt requested or by a commercial overnight
courier; or (c) on the date of transmission, if sent by facsimile with
confirmation of receipt. Such notices shall be deemed received (a) on the date
of delivery, if delivered by hand or overnight express
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delivery service; (b) on the date indicated on the return receipt if mailed; or
(c) on the date of transmission, if sent by facsimile. If any notice mailed is
properly addressed but returned for any reason, such notice shall be deemed to
be effective notice and to be given on the date of mailing. Any notice sent by
the attorney representing a party, shall qualify as notice under this Agreement.
SECTION 9.2 ENTIRE AGREEMENT.
This Agreement, together with the Exhibits and schedules hereto, contains
all representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any prior correspondence, memoranda or agreements are
replaced in total by this Agreement together with the Exhibits and schedules
hereto.
SECTION 9.3 ENTRY AND INDEMNITY.
In connection with any entry by Buyer, or its agents, employees or
contractors onto the Property, Buyer shall give Seller reasonable advance notice
of such entry and shall conduct such entry and any inspections in connection
therewith (a) during normal business hours, (b) so as to minimize, to the
greatest extent possible, interference with Seller's business and the business
of Seller's tenants, (c) in compliance with all applicable laws, and (d)
otherwise in a manner reasonably acceptable to Seller. Without limiting the
foregoing, prior to any entry to perform any on-site testing, including but not
limited to any borings, drillings or samplings, Buyer shall give Seller written
notice thereof, including the identity of the company or persons who will
perform such testing and the proposed scope and methodology of the testing.
Seller shall approve or disapprove, in Seller's sole discretion, the proposed
testing within three (3) business days after receipt of such notice. If Seller
fails to respond within such three (3) business day period, Seller shall be
deemed to have disapproved the proposed testing. If Buyer or its agents,
employees or contractors take any sample from the Property in connection with
any such approved testing, Buyer shall provide to Seller a portion of such
sample being tested to allow Seller, if it so chooses, to perform its own
testing. Buyer shall permit Seller or its representative to be present to
observe any testing or other inspection or due diligence review performed on or
at the Property. Notwithstanding anything to the contrary contained herein,
Buyer shall not contact any governmental authority or any tenant without first
obtaining the prior written consent of Seller thereto in Seller's sole
discretion, and Seller, at Seller's election, shall be entitled to have a
representative participate in any telephone or other contact made by Buyer to a
governmental authority or tenant and present at any meeting by Buyer with a
governmental authority or tenant. Buyer shall maintain, and shall assure that
its contractors maintain, public liability and property damage insurance in
amounts and in form and substance adequate to insure against all liability of
Buyer and its agents, employees or contractors, arising out of any entry or
inspections of the Property pursuant to the provisions hereof, and Buyer shall
provide Seller with evidence of such insurance coverage upon request by Seller.
Buyer shall indemnify and hold Seller harmless from and against any costs,
damages, liabilities, losses, expenses, liens or claims (including, without
limitation, court costs and reasonable attorneys' fees and disbursements)
arising out of or relating to any entry on the Property by Buyer, its agents,
employees or contractors in the course of performing the inspections, testings
or inquiries provided for in this Agreement, including, without limitation, any
release of Hazardous Materials or any damage to
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the Property; provided that Buyer shall not be liable to Seller solely as a
result of the discovery by Buyer of a pre-existing condition on the Property to
the extent the activities of Buyer, its agents, representatives, employees,
contractors or consultants do not exacerbate the condition. The provisions of
this Section 9.3 shall be in addition to any access or indemnity agreement
previously executed by Buyer in connection with the Property; provided that in
the event of any inconsistency between this Section 9.3 and such other
agreement, the provisions of this Section 9.3 shall govern. The foregoing
indemnity shall survive beyond the Closing, or, if the sale is not consummated,
beyond the termination of this Agreement. Buyer's right of entry, as provided in
this Section 9.3, shall continue up through the date of Closing.
SECTION 9.4 TIME.
Time is of the essence in the performance of each of the parties'
respective obligations contained herein. If the time period by which any right,
option or election provided under this Agreement must be exercised, or by which
any act required hereunder must be performed, or by which the Closing must be
held, expires on a Saturday, Sunday or legal or bank holiday, then such time
period shall be automatically extended through the close of business on the next
regularly scheduled business day.
SECTION 9.5 ATTORNEYS' FEES.
If either party hereto fails to perform any of its obligations under this
Agreement or if any dispute arises between the parties hereto concerning the
meaning or interpretation of any provision of this Agreement, whether prior to
or after Closing, or if any party defaults in payment of its post-Closing
financial obligations under this Agreement, then the defaulting party or the
party not prevailing in such dispute, as the case may be, shall pay any and all
costs and expenses incurred by the other party on account of such default and/or
in enforcing or establishing its rights hereunder, including, without
limitation, court costs and reasonable attorneys' fees and disbursements.
SECTION 9.6 ASSIGNMENT.
Buyer's rights and obligations hereunder shall not be assignable without
the prior written consent of Seller in Seller's sole discretion. Notwithstanding
the foregoing, Buyer shall have the right, without the necessity of obtaining
Seller's consent but with prior written notice to Seller, to assign its right,
title and interest in and to this Agreement to a separate account, or an entity
owned by a separate account, of Buyer at any time before the Closing Date. Buyer
shall in no event be released from any of its obligations or liabilities
hereunder in connection with any assignment. Without limiting and
notwithstanding the above, in no event shall Buyer have the right to assign its
rights or obligations hereunder to any party which could not make the
representation and warranty contained in subsection 3.5(e) above, and in
connection with any assignment pursuant to the terms hereof, the assignee shall
reconfirm in a written instrument acceptable to Seller and delivered to Seller
prior to the effective date of the assignment said representation and warranty
as applied to the assignee and that all other terms and conditions of this
Agreement shall apply to such assignee. Subject to the provisions of this
Section, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
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SECTION 9.7 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
SECTION 9.8 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State in which the Real Property is located.
SECTION 9.9 CONFIDENTIALITY AND RETURN OF DOCUMENTS.
Buyer and Seller shall each maintain as confidential any and all material
obtained about the other or, in the case of Buyer, about the Property, this
Agreement or the transactions contemplated hereby, and shall not disclose such
information to any third party. Except as may be required by law, Buyer will not
divulge any such information to other persons or entities including, without
limitation, appraisers, real estate brokers, or competitors of Seller.
Notwithstanding the foregoing, Buyer shall have the right to disclose
information with respect to the Property to its officers, directors, employees,
attorneys, accountants, environmental auditors, engineers, potential lenders,
and permitted assignees under this Agreement and other consultants to the extent
necessary for Buyer to evaluate its acquisition of the Property provided that
all such persons are told that such information is confidential and agree (in
writing for any third party engineers, environmental auditors or other
consultants) to keep such information confidential. If Buyer acquires the
Property from Seller, Seller shall have the right, subsequent to the Closing of
such acquisition, to publicize the transaction (other than the parties to or the
specific economics of the transaction) in whatever manner it deems appropriate;
provided that any press release or other public disclosure regarding this
Agreement or the transactions contemplated herein, and the wording of same, must
be approved in advance by both parties. Nothing contained herein shall prevent
Seller from making any disclosure(s) required by applicable law. The provisions
of this paragraph shall survive the Closing or any termination of this
Agreement. In the event the transaction contemplated by this Agreement does not
close as provided herein, upon the request of Seller, Buyer shall promptly
return to Seller all Due Diligence Materials and other documents and copies
obtained by Buyer in connection with the purchase of the Property hereunder.
SECTION 9.10 INTERPRETATION OF AGREEMENT.
The article, section and other headings of this Agreement are for
convenience of reference only and shall not be construed to affect the meaning
of any provision contained herein. Where the context so requires, the use of the
singular shall include the plural and vice versa and the use of the masculine
shall include the feminine and the neuter. The term "PERSON" shall include any
individual, partnership, joint venture, corporation, trust, unincorporated
association, any other entity and any government or any department or agency
thereof, whether acting in an individual, fiduciary or other capacity.
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SECTION 9.11 LIMITED LIABILITY.
The obligations of Seller under this Agreement and under all of the Other
Documents are intended to be binding only on the property of Seller and shall
not be personally binding upon, nor shall any resort be had to, the private
properties of any Seller Related Parties.
SECTION 9.12 AMENDMENTS.
This Agreement may be amended or modified only by a written instrument
signed by Buyer and Seller.
SECTION 9.13 NO RECORDING.
Neither this Agreement or any memorandum or short form thereof may be
recorded by Buyer.
SECTION 9.14 DRAFTS NOT AN OFFER TO ENTER INTO A LEGALLY BINDING
CONTRACT.
The parties hereto agree that the submission of a draft of this Agreement
by one party to another is not intended by either party to be an offer to enter
into a legally binding contract with respect to the purchase and sale of the
Property. The parties shall be legally bound with respect to the purchase and
sale of the Property pursuant to the terms of this Agreement only if and when
the parties have been able to negotiate all of the terms and provisions of this
Agreement in a manner acceptable to each of the parties in their respective sole
discretion, and both Seller and Buyer have fully executed and delivered to each
other a counterpart of this Agreement.
SECTION 9.15 ERISA.
Without limiting Buyer's representation and warranty in Section 3.5(e)
above, within ten (10) days after the Effective Date, Buyer shall furnish to
Seller all information regarding Buyer, its affiliates and the shareholders,
members, investors or partners of each of them and any permitted assignees of
Buyer hereunder (collectively, the "BUYER RELATED PARTIES") as Seller requests
in order to enable Seller to determine to Seller's sole satisfaction that
Buyer's representation and warranty contained in Section 3.5(e) of this
Agreement is true and correct. Buyer represents and warrants and covenants to
Seller that there will not be any change in any such information regarding Buyer
or the Buyer Related Parties prior to or on the Closing. In the event any such
information or change in Seller's reasonable judgment makes this transaction a
sale to a party-in-interest, Seller may terminate this Agreement without
liability on the part of Seller or Buyer (provided such change did not occur as
a result of a default by Buyer), other than Buyer's indemnity contained in
Section 9.3 hereof and the obligations of Buyer contained in Sections 6.1 and
9.9 hereof, and the Deposit will be returned to Buyer.
SECTION 9.16 NO PARTNERSHIP.
The relationship of the parties hereto is solely that of Seller and Buyer
with respect to the Property and no joint venture or other partnership exists
between the parties hereto. Neither party has any fiduciary relationship
hereunder to the other.
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SECTION 9.17 NO THIRD PARTY BENEFICIARY.
The provisions of this Agreement are not intended to benefit any third
parties.
SECTION 9.18 INTENTIONALLY OMITTED.
SECTION 9.19 LIMITATION ON LIABILITY.
Notwithstanding anything to the contrary contained herein, after the
Closing: (a) the maximum aggregate liability of Seller, and the maximum
aggregate amount which may be awarded to and collected by Buyer (including,
without limitation, for any breach of any representation, warranty and/or
covenant by Seller) under this Agreement or any documents executed pursuant
hereto or in connection herewith, including, without limitation, the Deed, the
Bill of Sale, the Assignment of Leases and any Seller estoppel certificate
(collectively, the "OTHER DOCUMENTS"), shall under no circumstances whatsoever
exceed One Million Five Hundred Thousand Dollars ($1,500,000); and (b) no claim
by Buyer alleging a breach by Seller of any representation, warranty and/or
covenant of Seller contained herein or in any of the Other Documents may be
made, and Seller shall not be liable for any judgment in any action based upon
any such claim, unless and until such claim, either alone or together with any
other claims by Buyer alleging a breach by Seller of any such representation,
warranty and/or covenant is for an aggregate amount in excess of Twenty-Five
Thousand Dollars ($25,000) (the "FLOOR AMOUNT"), in which event Seller's
liability respecting any final judgment concerning such claim or claims shall be
for the entire amount thereof, subject to the limitation set forth in clause (a)
above; provided, however, that if any such final judgment is for an amount that
is less than or equal to the Floor Amount, then Seller shall have no liability
with respect thereto.
SECTION 9.20 SURVIVAL.
Except as expressly set forth to the contrary herein, no representations,
warranties, covenants or agreements of Seller contained herein shall survive the
Closing.
SECTION 9.21 SEVERABILITY.
If any term or provision of this Agreement or the application thereof to
any person or circumstance shall for any reason and to any extent be held to be
invalid or unenforceable, then such term or provision shall be ignored, and to
the maximum extent possible, this Agreement shall continue in full force and
effect, but without giving effect to such term or provision.
SECTION 9.22 NO WAIVER.
Neither the failure of either party to exercise any power given such party
hereunder or to insist upon strict compliance by the other party with its
obligations hereunder, nor any custom or practice of the parties at variance
with the terms hereof shall constitute a waiver of either party's right to
demand exact compliance with the terms hereof.
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SECTION 9.23 CONSTRUCTION.
The parties agree that this Agreement is the result of negotiation by the
parties, each of whom was represented by counsel, and thus, this Agreement shall
not be construed against the maker thereof.
SECTION 9.24 SURVIVAL OF ARTICLE IX.
The provisions of this Article IX shall survive the Closing.
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The parties hereto have executed this Agreement as of the date set forth
next to each party's signature below, and effective as of the Effective Date as
defined in the first paragraph of this Agreement.
Date of Execution: SELLER:
May 12, 2004 GATEWAY HUEBNER OAKS, INC.
By: /s/ Earl W. Buehner
-----------------------------------
Name: EARL W. BUEHNER
---------------------------------
Its: VICE PRESIDENT, ASST. SECRETARY
& ASST. TREASURER
----------------------------------
GATEWAY HILLSIDE, INC.
By: /s/ Earl W. Buehner
-----------------------------------
Name: EARL W. BUEHNER
---------------------------------
Its: VICE PRESIDENT, ASST. SECRETARY
& ASST. TREASURER
----------------------------------
Date of Execution: BUYER:
May 12, 2004 INLAND REAL ESTATE ACQUISITIONS, INC.
By: /s/ Mark Youngman
-----------------------------------
Name: MARK YOUNGMAN
---------------------------------
Its: VICE PRESIDENT
----------------------------------
ESCROWEE:
CHICAGO TITLE INSURANCE COMPANY
By: /s/ Nancy Castro
-----------------------------------
Nancy Castro, Assistant
Vice-President
TITLE COMPANY:
HERITAGE TITLE COMPANY
By:
-----------------------------------
Name:
-----------------------------------
Its:
----------------------------------
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LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Real Property Description
Exhibit B List of Tenant Leases
Exhibit C Deed
Exhibit D Bill of Sale
Exhibit E Assignment of Leases, Service Contracts, Warranties and
Other Intangible Property
Exhibit F Estoppel Certificate
Exhibit G List of Service Contracts
Exhibit H Intentionally Deleted
SCHEDULES
Schedule 1 Disclosure Items
<Page>
EXHIBIT A
REAL PROPERTY DESCRIPTION
<Page>
EXHIBIT A
Legal Description
Lot 13, Block 1, New City Block 16841, HUEBNER OAKS COMMON UNIT 2, in the City
of San Antonio, Bexar County, Texas, according to plat thereof recorded in
Volume 9534, Page(s) 204-205, Deed and Plat Records of Bexar County, Texas,
along with Easements, Covenants and Restrictions Agreements recorded in Volume
6849, Page 1193, amended in Volume 7104, Page 32, Real Property Records of Bexar
County, Texas, and that certain Reciprocal Easement Agreement recorded in Volume
7032, Page 1332, Real Property Records of Bexar County, Texas.
1 of 4
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EXHIBIT A
Legal Description
Lot 17, Block 1, New City Block 16841, HUEBNER OAKS COMMONS UNIT 1, in the City
of San Antonio, Bexar County, Texas, according to plat thereof recorded in
Volume 9536, Page(s) 79-80, Deed and Plat Records of Bexar County, Texas; along
with Easements, Covenants and Restrictions Agreements recorded in Volume 6849,
Page 1193, amended in Volume 7104, Page 32, Real Property Records of Bexar
County, Texas, and that certain Reciprocal Easement Agreement recorded in Volume
7032, Page 1332, Real Property Records of Bexar County, Texas.
2 of 4
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EXHIBIT A
Legal Description
Lot 18, Block 1, New City Block 16841, HUEBNER OAKS CENTER, PHASE II, according
to plat thereof recorded in Volume 9540, Page 143, Deed and Plat Records of
Bexar County, Texas, along with Easements, Covenants and Restrictions
Agreements recorded in Volume 6849, Page 1193, amended in Volume 7104, Page 32,
Real Property Records of Bexar County, Texas, and that certain Reciprocal
Easement Agreement recorded in Volume 7032, Page 1332, Real Property Records of
Bexar County, Texas.
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EXHIBIT A
Legal Description
TRACT I:
A 14.20 acre tract of land being the remaining portion of Lot 15, Block 1, New
City Block 16841, HUEBNER OAKS COMMONS, UNIT 1, as recorded in Volume 9536,
Page(s) 79 and 80, of the Deed and Plat Records of Bexar County, Texas, out of
the B.B.B. and C. R.R. Survey No. 400, Abstract 99, County Block 4767 and the B.
Montalbo Survey No. 345, Abstract 493, County Block 4768, situated within the
City of San Antonio, Bexar County, Texas, along with Easements, Covenants and
Restrictions Agreements recorded in Volume 6849, Page 1193, amended in Volume
7104, Page 32, Real Property Records of Bexar County, Texas, and that certain
Reciprocal Easement Agreement recorded in Volume 7032, Page 1332, Real Property
Records of Bexar County, Texas.
TRACT II:
Lot 16, Block 1, New City Block 16841, HUEBNER OAKS COMMONS UNIT 1, in the City
of San Antonio, Bexar County, Texas, according to plat thereof recorded in
Volume 9536, Page(s) 79-80, Deed and Plat Records of Bexar County, Texas; along
with Easements, Covenants and Restrictions Agreements recorded in Volume 6849,
Page 1193, amended in Volume 7104, Page 32, Real Property Records of Bexar
County, Texas, and that certain Reciprocal Easement Agreement recorded in Volume
7032, Page 1332, Real Property Records of Bexar County, Texas.
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EXHIBIT B
LIST OF TENANT LEASES
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RREEF MANAGEMENT Property Name: HUEBNER OAKS CENTER
RENT ROLL As of 04/30/04 Property Address: 11745 WEST INTERSTATE
HIGHWAY #10 SUITE 700, SAN ANTONIO,
TX 78230
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<Caption>
MONTHLY/ MONTHLY/ RENT INCREASES
SQUARE TENANTS SPACE SPACE ANNUAL ANNUAL ---------------- SECURITY
FLOOR UNIT/SUITE TENANT NAME FOOTAGE % START END RENT RENT/PSF MONTHLY RENT/PSF DEPOSIT
- -----------------------------------------------------------------------------------------------------------------------------------
HUEBNER OAKS-CUSTODIAL - 33.662098
BUILDING TOTAL 0 100.00% 0.00
OCCUPIED SQUARE FEET 0
AVAILABLE SQUARE FEET 0
HUEBNER OAKS CENTER - HILLSIDE - 33.662002
1 200 MNC RESTAURANT
PROPERTIES, LP 8,036 6.71% 6/15/1997 6/30/2007 $ 8,333.33 $ 1.04 7/1/2004 $ 1.09
$ 99,999.96 $ 12.44
301 VERIZON WIRELESS 1,803 1.50% 10/7/2002 10/31/2007 $ 3,756.25 $ 2.08 11/1/2004 $ 2.17
$ 45,075.00 $ 25.00
302 DESIGN CMAL RETAIL STORE 3,914 3.27% 1/1/2004 12/31/2008 $ 7,501.83 $ 1.92 1/1/2007 $ 2.08
$ 90,022.00 $ 23.00
303 ACECOM INC 1,000 0.83% 7/13/2004 7/12/2009 7/13/2004 $ 2.50 $ 3,058.00
304 BARBEQUES GALORE, INC. 4,498 3.75% 11/14/1996 11/30/2008 $ 10,345.40 $ 2.30
$ 124,144.80 $ 27.60
305B RUBEN SANTOSCOY 3,917 3.27% 4/11/2003 4/10/2008 $ 4,896.25 $ 1.25 $ 4,896.25
$ 58,755.00 $ 15.00
306 TAJ VENTURES, LTD 1,663 1.39% 3/23/2004 3/22/2009 $ 3,326.00 $ 2.00 3/23/2007 $ 2.08 $ 4,456.84
$ 39,912.00 $ 24.00
307 GENERAL NUTRITION
CORPORATION 1,155 0.96% 10/4/1998 10/31/2008 $ 2,406.25 $ 2.08
$ 28,875.00 $ 25.00
308 SPORT CLIPS 1,057 0.88% 9/9/1998 9/30/2008 $ 2,202.08 $ 2.08 10/1/2004 $ 2.17 $ 2,202.08
$ 26,425.00 $ 25.00 10/1/2005 $ 2.25
10/1/2006 $ 2.33
309 AAA TEXAS, INC. 3,682 3.07% 12/1/2000 11/30/2005 $ 6,443.50 $ 1.75
$ 77,322.00 $ 21.00
310 LOW CARB LIFESTYLE, LLC 2,083 1.74% 5/4/2004 5/3/2009 5/4/2004 $ 1.33 $ 4,161.86
5/4/2006 $ 1.46
311 GOLDEN WOK 2,500 2.09% 3/19/2003 3/18/2008 $ 4,375.00 $ 1.75 3/19/2006 $ 1.79 $ 5,069.00
$ 52,500.00 $ 21.00
</Table>
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<Table>
<Caption>
MONTHLY/ MONTHLY/ RENT INCREASES
SQUARE TENANTS SPACE SPACE ANNUAL ANNUAL -------------- SECURITY
FLOOR UNIT/SUITE TENANT NAME FOOTAGE % START END RENT RENT/PSF MONTHLY RENT/PSF DEPOSIT
- -----------------------------------------------------------------------------------------------------------------------------------
418 CALIFORNIA COCINAS, LTD. 4,301 3.59% 10/13/1998 10/31/2008 $ 9,892.30 $ 2.30
$ 118,707.60 $ 27.60
501 THE GAP INC. 8,500 7.09% 9/25/1998 9/30/2008 $ 15,043.58 $ 1.77
$ 180,522.96 $ 21.24
511 BATH & BODY WORKS, INC. 2,500 2.09% 9/28/1998 9/30/2008 $ 4,895.83 $ 1.96
$ 58,750.00 $ 23.50
515 THE GYMBOREE RETL
STORES INC. 1,925 1.61% 9/28/1998 1/31/2009 $ 3,850.00 $ 2.00
$ 46,200.00 $ 24.00
519 vacant 1,000 0.83%
523 CHICO'S FAS, INC. 2,060 1.72% 8/21/1998 1/31/2009 $ 4,120.00 $ 2.00 9/1/2005 $ 2.25
$ 49,440.00 $ 24.00
527 STARBUCKS COFFEE COMPANY 1,690 1.41% 10/8/1998 10/31/2008 $ 3,239.17 $ 1.92
$ 38,870.04 $ 23.00
601 THE TALBOTS, INC. 6,314 5.27% 10/9/1998 1/31/2011 $ 13,680.00 $ 2.17 11/1/2007 $ 2.33
$ 164,160.00 $ 26.00
607 EDDIE BAUER 6,384 5.33% 9/13/1998 1/31/2009 $ 16,140.88 $ 2.53
$ 193,690.56 $ 30.34
611 ANN TAYLOR, INC. 4,500 3.75% 9/30/1998 1/31/2009 $ 10,931.25 $ 2.43
$ 131,175.00 $ 29.15
615 THE GAP INC. 5,964 4.98% 10/1/1998 9/30/2008 $ 9,566.70 $ 1.60
$ 114,800.40 $ 19.25
619 LIMITED BRANDS 4,500 3.75% 9/2/1998 9/30/2008 $ 7,875.00 $ 1.75
$ 94,500.00 $ 21.00
623 ABERCROMBIE & FITCH, INC. 6,766 5.65% 11/21/1998 11/30/2008 $ 11,276.67 $ 1.67
$ 135,320.04 $ 20.00
627 THE BOMBAY COMPANY, INC. 4,500 3.75% 12/6/1999 12/5/2009 $ 10,125.00 $ 2.25 12/6/2006 $ 2.42
$ 121,500.00 $ 27.00
701 AMERICAN EAGLE OUTFITTERS 5,800 4.84% 8/21/2003 1/31/2014 $ 14,016.67 $ 2.42 8/21/2005 $ 2.67
$ 168,200.00 $ 29.00 8/21/2008 $ 2.75
705 vacant 2,196 1.83%
</Table>
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<Table>
<Caption>
MONTHLY/ MONTHLY/ RENT INCREASES
SQUARE TENANTS SPACE SPACE ANNUAL ANNUAL -------------- SECURITY
FLOOR UNIT/SUITE TENANT NAME FOOTAGE % START END RENT RENT/PSF MONTHLY RENT/PSF DEPOSIT
- -----------------------------------------------------------------------------------------------------------------------------------
711 CHARMING SHOPPES, INC. 4,500 3.75% 10/1/1998 9/30/2008 $ 7,875.00 $ 1.75
$ 94,500.00 $ 21.00
719 EVENSON CARD SHOPS, INC. 6,416 5.35% 10/10/1998 10/31/2008 $ 10,880.47 $ 1.70
$ 130,565.60 $ 20.35
722 YANKEE CANDLE 2,028 1.69% 2/24/2000 2/28/2005 $ 4,563.00 $ 2.25
$ 54,756.00 $ 27.00
723 RUSSELL HOWELL 1,498 1.25% 7/5/1999 6/30/2004 $ 2,992.00 $ 2.00 $ 2,992.00
$ 35,904.00 $ 23.97
727 CLAIRE'S BOUTIQUES, INC. 1,200 1.00% 8/14/1998 8/31/2008 $ 2,800.00 $ 2.33
$ 33,600.00 $ 28.00
BUILDING TOTAL 119,850 100.00% 2,608,192.96
OCCUPIED SQUARE FEET 116,654 97.33%
AVAILABLE SQUARE FEET 3,196 2.67%
- -----------------------------------------------------------------------------------------------------------------------------------
HUEBNER OAKS CENTER - HUEBNER - 33.662001
1 101 LA MADELEINE, INC. 4,200 2.52% 3/14/1997 3/31/2007 $ 7,175.00 $ 1.71
$ 86,100.00 $ 20.50
103 vacant 1,001 0.60%
105 BEN ADAMS PRECIOUS
JEWELS, INC 2,233 1.34% 11/24/1999 11/23/2009 $ 4,652.08 $ 2.08 11/24/2006 $ 2.33 $ 5,950.25
$ 55,824.96 $ 25.00
110 BORDERS BOOKS AND MUSIC 27,500 16.48% 3/30/1997 3/31/2017 $ 34,305.83 $ 1.25 4/1/2007 $ 1.35
*Annual rent includes $86,344.92 in TI amortization recognized as base
rent income and is paid through their term (3/31/07). *$ 411,669.96 $ 14.97 4/1/2012 $ 1.45
115 NORTH STAR CREAMERY, LLC 1,542 0.92% 12/17/1997 12/31/2005 $ 3,084.00 $ 2.00 $ 3,084.00
$ 37,008.00 $ 24.00
118 MOON MIPPY, INC. 930 0.56% 4/2/2003 4/1/2007 $ 2,170.00 $ 2.33 4/2/2005 $ 2.47 $ 2,300.00
$ 26,040.00 $ 28.00
120 EB GAME WORLD 1,160 0.70% 8/13/2001 8/12/2006 $ 2,706.67 $ 2.33 8/13/2004 $ 2.42
$ 32,480.04 $ 28.00
122 FRANKLY FAKE COPY JEWELS 854 0.51% 2/1/2003 1/31/2008 $ 1,992.67 $ 2.33 2/1/2005 $ 2.52 $ 2,682.33
$ 23,912.00 $ 28.00
</Table>
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<Table>
<Caption>
MONTHLY/ MONTHLY/ RENT INCREASES
SQUARE TENANTS SPACE SPACE ANNUAL ANNUAL -------------- SECURITY
FLOOR UNIT/SUITE TENANT NAME FOOTAGE % START END RENT RENT/PSF MONTHLY RENT/PSF DEPOSIT
- -----------------------------------------------------------------------------------------------------------------------------------
125 SHOES 4 KIDS, LTD. 1,000 0.60% 2/23/2002 2/22/2007 $ 2,208.34 $ 2.21 $ 3,000.00
$ 26,500.08 $ 26.50
130 ALL ASHORE SPORTSWEAR 1,264 0.76% 7/11/1997 7/31/2007 $ 2,317.34 $ 1.83 8/1/2005 $ 2.00 $ 4,002.66
$ 27,808.08 $ 22.00
140 CLUB HUMIDOR 2,254 1.35% 6/16/1997 6/30/2007 $ 4,508.00 $ 2.00 $ 3,944.50
$ 54,096.00 $ 24.00
300 ROMANO'S MACARONI GRILL 7,900 4.73% 8/30/1997 8/31/2012 $ 8,916.67 $ 1.13 9/1/2007 $ 1.24
$ 107,000.04 $ 13.54
400 vacant 2,202 1.32%
401 CHIPOTLE MEXICAN GRILL,
INC 2,556 1.53% 3/30/2004 3/29/2014 $ 5,751.00 $ 2.25 3/30/2009 $ 2.48
$ 69,012.00 $ 27.00
403 GGNA HOLDINGS, LLC 3,681 2.21% 9/12/1997 9/30/2007 $ 6,441.75 $ 1.75 $ 5,828.25
$ 77,301.00 $ 21.00
406 SAN ANTONIO KLAYWERKS, INC. 1,824 1.09% 9/6/1997 9/30/2007 $ 3,268.00 $ 1.79 10/1/2005 $ 1.88
$ 39,216.00 $ 21.50
410 PIER 1 IMPORTS (U.S.), INC. 8,990 5.39% 2/17/1997 2/28/2007 $ 15,178.12 $ 1.69
$ 182,137.44 $ 20.26
730 ROSS STORES, INC. 28,200 16.90% 4/21/1997 1/31/2008 $ 22,325.00 $ 0.79
$ 267,900.00 $ 9.50
740 THE GAP INC. 14,000 8.39% 3/26/1997 3/31/2007 $ 16,333.33 $ 1.17
$ 195,999.96 $ 14.00
750 BED BATH & BEYOND, INC. 35,009 20.98% 3/26/1997 1/31/2008 $ 30,982.96 $ 0.89 4/1/2007 $ 0.97
$ 371,795.52 $ 10.62
755 THE MEN'S WEARHOUSE, INC. 4,500 2.70% 10/1/1997 2/28/2008 $ 7,335.00 $ 1.63 10/1/2007 $ 1.71
$ 88,020.00 $ 19.56
760 CINGULAR WIRELESS, INC. 2,502 1.50% 7/1/1997 6/30/2007 $ 4,587.00 $ 1.83 7/1/2004 $ 2.00
$ 55,044.00 $ 22.00
770 PEARLE VISION CENTER, INC. 2,721 1.63% 7/7/1997 7/31/2007 $ 5,668.75 $ 2.08
$ 68,025.00 $ 25.00
775 ORECK HOMECARE 1,103 0.66% 10/18/1997 10/31/2007 $ 2,022.17 $ 1.83 11/1/2005 $ 2.04 $ 1,838.33
$ 24,266.04 $ 22.00
</Table>
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<Table>
<Caption>
MONTHLY/ MONTHLY/ RENT INCREASES
SQUARE TENANTS SPACE SPACE ANNUAL ANNUAL -------------- SECURITY
FLOOR UNIT/SUITE TENANT NAME FOOTAGE % START END RENT RENT/PSF MONTHLY RENT/PSF DEPOSIT
- -----------------------------------------------------------------------------------------------------------------------------------
785 KINKO'S, INC. 4,760 2.85% 1/9/1998 2/28/2006 $ 7,687.40 $ 1.52
$ 92,248.80 $ 19.38
790 THE MATTRESS FIRM 2,942 1.76% 6/1/1997 5/31/2005 $ 5,393.67 $ 1.83 $ 4,387.50
$ 64,724.00 $ 22.00
DT01 COMPASS BANK 60 0.04% 8/1/2002 7/31/2005 $ 1,666.67 $ 27.78
$ 20,000.04 $ 333.33
BUILDING TOTAL 166,888 100.00% 2,504,128.96
OCCUPIED SQUARE FEET 163,685 98.08%
AVAILABLE SQUARE FEET 3,203 1.92%
- -----------------------------------------------------------------------------------------------------------------------------------
HUEBNER OAKS-CUSTODIAL - 33.662098
BUILDING TOTAL 0 100.00% 0.00
OCCUPIED SQUARE FEET 0
AVAILABLE SQUARE FEET 0
PROPERTY TOTAL 286,738 100.00% 5,112,321.92
OCCUPIED SQUARE FEET 280,339 97.77%
AVAILABLE SQUARE FEET 6,399 2.23%
</Table>
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EXHIBIT C
DEED (FORM SUBJECT TO BUYER'S REASONABLY APPROVAL PRIOR TO MAY 19, 2004)
SPECIAL WARRANTY DEED
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF_________________ )
That_______________________________________("GRANTOR") of the County
of____________________________________ and State of_________________for and in
consideration of the sum of Ten and no/100 ($10.00) Dollars and other valuable
consideration to the undersigned paid by the grantee herein named, the receipt
of which is hereby acknowledged, has GRANTED, SOLD AND CONVEYED, and by these
present does GRANT, SELL AND CONVEY unto
______________________________________________ ("GRANTEE"), all of the
following described real property in______________County, Texas, to-wit:
SEE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF.
TO HAVE AND TO HOLD the above described premises, together with all and
singular the rights and appurtenances thereto in anywise belonging, unto the
said Grantee, its heirs and assigns forever; and does hereby bind its heirs,
executors and administrators to WARRANT AND FOREVER DEFEND all and singular the
said premises unto the said Grantee, its heirs and assigns, against every
person whomsoever lawfully claiming or to claim the same by, through or under
Grantee, subject to the Permitted Exceptions on Exhibit B attached hereto and
made a part hereof.
Executed this_________day of________________, A.D. 2004.
GRANTOR:
Mailing address of Grantee:
Name:
Address
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ACKNOWLEDGMENT
STATE OF _____________ )
) SS
COUNTY OF _____________ )
I, ______________________, a Notary Public in and for said County in the
State aforesaid, DO HEREBY CERTIFY that ______________, authorized
representative of _______________________________________ who is personally
known to me to be the same person whose name is subscribed to the foregoing
instrument as such authorized representative, appeared before me this day in
person and acknowledged that he, being duly authorized, signed, sealed and
delivered the said instrument as his free and voluntary act, and as the free and
voluntary acts of said_____________________________, for the uses and purposes
therein set forth.
GIVEN under my hand and Notarial Seal this_____day of ________, 2004.
___________________________________
Notary Public, State of ____________
Notary's name (printed):____________
My commission expires:
___________________________________
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EXHIBIT D
BILL OF SALE
This Bill of Sale (the "BILL OF SALE") is made and entered into
MONTHOFCLOSING, YEAROFCLOSING, by and between SELLERNAME, SELLERENTITY
("ASSIGNOR"), and ASSIGNEENAME, ASSIGNEEENTITY ("ASSIGNEE").
In consideration of the sum of Ten Dollars ($10) and other good and
valuable consideration paid by Assignee to Assignor, the receipt and sufficiency
of which are hereby acknowledged, Assignor does hereby assign, transfer, convey
and deliver to Assignee, its successors and assigns, all items of Tangible
Personal Property (as defined in the Agreement referred to below), if any, owned
by Assignor and situated upon and used exclusively in connection with the Real
Property (as defined in the Agreement) and more particularly described on
EXHIBIT A attached hereto and made a part hereof for all purposes, including,
without limitation, the Tangible Personal Property identified in EXHIBIT B, if
any, attached hereto and made a part hereof for all purposes (the "PERSONAL
PROPERTY").
This Bill of Sale is made subject, subordinate and inferior to the
easements, covenants and other matters and exceptions act forth on EXHIBIT C, if
any, attached hereto and made a part hereof for all purposes.
Assignee acknowledges and agrees that, except as expressly provided in, and
subject to the limitations contained in, that certain Agreement of Purchase and
Sale dated CONTRACTDATE, by and between Assignor and BUYERNAME (as amended, the
"AGREEMENT"), Assignor has not made, does not make and specifically disclaims
any representations, warranties, promises, covenants, agreements or guaranties
of any kind or character whatsoever, whether express or implied, oral or
written, past, present or future, of, as to, concerning or with respect to (a)
the nature, quality or conditions of the Personal Property, (b) the income to be
derived from the Personal Property, (c) the suitability of the Personal Property
for any and all activities and uses which Assignee may conduct thereon, (d) the
compliance of or by the Personal Property or its operation with any laws, rules,
ordinances or regulations of any applicable governmental authority or body, (e)
the quality, habitability, merchantability or fitness for a particular purpose
of any of the Personal Property, or (f) any other matter with respect to the
Personal Property. Assignee further acknowledges and agrees that, having been
given the opportunity to inspect the Personal Property, Assignee is relying
solely on its own investigation of the Personal Property and not on any
information provided or to be provided by Assignor, except as specifically
provided in the Agreement. Assignee further acknowledges and agrees that any
information provided or to be provided with respect to the Personal Property was
obtained from a variety of sources and that Assignor has not made any
independent investigation or verification of such information. Assignee further
acknowledges and agrees that the sale of the Personal Property as provided for
herein is made on an "as is, where is" condition and basis "with all faults,"
except as specifically provided in, and subject to the limitations contained in,
the Agreement.
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The obligations of Assignor are intended to be binding only on the property
of Assignor and shall not be personally binding upon, nor shall any resort be
had to, the private properties of any Seller Related Parties (as defined in the
Agreement).
IN WITNESS WHEREOF, Assignor and Assignee have caused this Bill of Sale to
be executed on the date and year first above written.
ASSIGNOR:
SELLERNAME, SELLERENTITY
By:
--------------------------------
Name:
------------------------------
Its: Investment Manager
ASSIGNEE:
ASSIGNEENAME, ASSIGNEEENTITY
By:
--------------------------------
Name:
------------------------------
Its:
------------------------------
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EXHIBIT E
ASSIGNMENT OF LEASES, SERVICE CONTRACTS,
WARRANTIES AND OTHER INTANGIBLE PROPERTY
This Assignment of Leases, Service Contracts, Warranties and Other
Intangible Property (this "ASSIGNMENT") is made and entered into MONTHOFCLOSING,
YEAROFCLOSING, by and between SELLERNAME, SELLERENTITY ("ASSIGNOR"),
ASSIGNEENAME, ASSIGNEEENTITY ("ASSIGNEE").
For good and valuable consideration paid by Assignee to Assignor, the
receipt and sufficiency of which are hereby acknowledged, Assignor does hereby
assign, transfer, set over and deliver unto Assignee all of Assignor's right,
title, and interest in and to the following (collectively, the "ASSIGNED
ITEMS"): (i) those certain leases (the "LEASES") listed on EXHIBIT A attached
hereto and made a part hereof for all purposes except for Seller's right to
collect delinquent rent and other delinquent sums owing under such Leases for
the period prior to the date hereof in accordance with the Agreement (as defined
below), (ii) those certain service contracts, equipment leases, tenant
improvement agreements and leasing agreements (the "SERVICE CONTRACTS") listed
on EXHIBIT B, if any, attached hereto and made a part hereof for all purposes,
and (iii) those certain warranties held by Assignor (the "WARRANTIES") listed on
EXHIBIT C, if any, attached hereto and made a part hereof for all purposes, and
(iv) all zoning, use, occupancy and operating permits, and other permits,
licenses, approvals and certificates, maps, plans, specifications, and all other
Intangible Personal Property (as defined in the Agreement) owned by Assignor and
used exclusively in the use or operation of the Real Property and Personal
Property (each as defined in the Agreement), including, without limitation, any
right of Assignor to use the name "PROJECTNAME" and any other trade name owned
by Assignor now used exclusively in connection with the Real Property and any
utility contracts or other agreements or rights relating to the use and
operation of the Real Property and Personal Property but excluding the names
"RREEF" and any derivatives thereof and "_________" (collectively, the "OTHER
INTANGIBLE PROPERTY").
This Assignment is made subject, subordinate and inferior to the easements,
covenants and other matters and exceptions set forth on EXHIBIT D, if any,
attached hereto and made a part hereof for all purposes.
ASSIGNEE ACKNOWLEDGES AND AGREES, BY ITS ACCEPTANCE HEREOF, THAT, EXCEPT AS
EXPRESSLY PROVIDED IN, AND SUBJECT TO THE LIMITATIONS CONTAINED IN, THAT CERTAIN
AGREEMENT OF PURCHASE AND SALE, DATED AS OF CONTRACTDATE, BY AND BETWEEN
ASSIGNOR AND BUYERNAME (AS AMENDED, THE "AGREEMENT"), THE ASSIGNED ITEMS ARE
CONVEYED "AS IS, WHERE IS" AND IN THEIR PRESENT CONDITION WITH ALL FAULTS, AND
THAT ASSIGNOR HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY
REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN,
PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE NATURE,
QUALITY OR CONDITION OF THE ASSIGNED ITEMS, THE INCOME TO BE DERIVED THEREFROM,
OR THE
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ENFORCEABILITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE
ASSIGNED ITEMS.
Except as otherwise expressly provided in Article VII of the Agreement, by
accepting this Assignment and by its execution hereof, Assignee assumes the
payment and performance of, and agrees to pay, perform and discharge, all the
debts, duties and obligations to be paid, performed or discharged from and after
the Closing Date (as defined in the Agreement) by (a) the "landlord" or the
"lessor" under the terms, covenants and conditions of the Leases, including,
without limitation, brokerage commissions and compliance with the terms of the
Leases relating to tenant improvements and security deposits, and (b) the owner
under the Service Contracts, the Warranties and/or the Other Intangible
Property. Assignee agrees to indemnify, hold harmless and defend Assignor from
and against any and all claims, losses, liabilities, damages, costs and expenses
(including, without limitation, court costs and reasonable attorneys' fees and
disbursements) resulting by reason of the failure of Assignee to pay, perform or
discharge any of the debts, duties or obligations assumed or agreed to be
assumed by Assignee hereunder arising out of or relating to, directly or
indirectly, in whole or in part, the Assigned Items, from and after the Closing
Date. Except as otherwise expressly provided in Article VII and subject to the
provisions of Sections 3.2 and 9.19 of the Agreement (which provisions are not
modified in any way by the following indemnity), Assignor agrees to protect,
indemnify, defend and hold Assignee harmless from and against all claims,
losses, damages, costs, expenses, obligations and liabilities (including,
without limitation, court costs and reasonable attorneys' fees and
disbursements) (collectively, "CLAIMS") arising out of or relating to, directly
or indirectly, in whole or in part, the Leases or Service Contracts prior to the
Closing Date; provided, however, that the foregoing indemnity shall not apply to
any Claims relating in any way to the physical, environmental or other condition
of the Property (as defined in the Agreement) or the compliance or
non-compliance of the Property with any legal requirements; and provided further
that the foregoing indemnity shall apply solely to Claims first raised after the
Closing Date and shall survive only for a period of six (6) months after the
Closing Date. Any such Claim which Assignee may have at any time against
Assignor, whether known or unknown, which is not specifically asserted by
written notice to Assignor within such six (6) month period shall not be valid
or effective, and neither Assignor nor any Seller Related Parties (as defined in
the Agreement) shall have any liability with respect thereto.
The obligations of Assignor are intended to be binding only on the property
of Assignor and shall not be personally binding upon, nor shall any resort be
had to, the private properties of any Seller Related Parties.
All of the covenants, terms and conditions set forth herein shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
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IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be
executed on the day and year first above written.
ASSIGNOR:
SELLERNAME, SELLERENTITY
By:
------------------------------
Name:
------------------------------
Its: Investment Manager
ASSIGNEE:
ASSIGNEENAME, ASSIGNEEENTITY
By:
------------------------------
Name:
------------------------------
Its:
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EXHIBIT F
TENANT ESTOPPEL
To:
Inland Real Estate Acquisitions, Inc., and
Inland Western San Antonio Huebner Oaks Limited Partnership
and its lenders, successors and assigns ("Purchaser'")
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention: Sharon Anderson-Cox
Re: Lease Agreement dated and amended ("Lease"), between as "Landlord", and _,
as "Tenant", guaranteed by ("Guarantor") for leased premises known as (the
"Premises") of the property commonly known as (the "Property").
1. Tenant hereby certifies that the following representations with respect to
the Lease are accurate and complete as of the date hereof.
a. Dates of all amendments, letter
agreements, modifications and
waivers
related to the Lease
b. Commencement Date
c. Expiration Date
d. Current Annual Base Rent
Adjustment Date Rental Amount
--------------- -------------
e. Fixed or CPI Rent Increases ______________ _____________
f. Square Footage of Premises
g. Security Deposit Paid to Landlord
h. Renewal Options ___Additional Terms for
____years at $_________ per year
i. Termination Options Termination Date __________
Fees Payable_______________
2. Tenant further certifies to Purchaser that:
a. the Lease is presently in full force and effect and represents the
entire agreement between Tenant and Landlord with respect to the
Premises;
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b. the Lease has not been assigned and the Premises have not been sublet
by Tenant;
c. Tenant has accepted and is occupying the Premises, all construction
required by the Lease has been completed and any payments, credits or
abatements required to be given by Landlord to Tenant have been
given;
d. Tenant is open for business or is operating its business at the
Premises;
e. no installment of rent or other charges under the Lease other than
current monthly rent has been paid more than 30 days in advance and
Tenant is not in arrears on any rental payment or other charges;
f. Landlord has no obligation to segregate the security deposit or to
pay interest thereon;
g. Landlord is not in default under the Lease and no event has occurred
which, with the giving of notice or passage of time, or both, could
result in a default by Landlord;
h. Tenant has no existing defenses, offsets, liens, claims or credits
against the payment obligations under the Lease;
i. Except as provided in the Lease, Tenant has not been granted any
options or rights to terminate the Lease earlier than the Expiration
Date (and except as stated in paragraph 1(i));
j. Tenant has not been granted any options or rights of first refusal to
purchase the Premises or the Property;
k. Tenant has not received notice of violation of any federal, state,
county or municipal laws, regulations, ordinances, orders or
directives relating to the use or condition of the Premises or the
Property;
l. no hazardous wastes or toxic substances, as defined by all applicable
federal, state or local statutes, rules or regulations have been
disposed, stored or treated on or about the Premises or the property
by Tenant;
m. Tenant has not received any notice of a prior sale, transfer,
assignment, pledge or other hypothecation of the Premises or the
Lease or of the rents provided for therein;
n. Tenant has not filed, and is not currently the subject of any
filing, voluntary or involuntary, for bankruptcy or reorganization
under any applicable bankruptcy or creditors rights laws;
o. the Lease does not give the Tenant any operating exclusives for the
Property except as provided in [Exhibit__________________________or
Section________] of the Lease; and
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p. Rent has been paid through______, 2004.
3. This certification is made with the knowledge that Purchaser is about to
acquire title to the Property and obtain financing which shall be secured
by a deed of trust (or mortgage), security agreement and assignment of
rents, leases and contracts upon the property. Tenant acknowledges that
Purchaser's interest in the Lease (as landlord) will be assigned to a
lender as security for the loan. All rent payments under the Lease shall
continue to be paid to landlord in accordance with the terms of the Lease
until Tenant is notified otherwise in writing by Buyer's lender or its
successors and assigns. In the event that a lender succeeds to landlord's
interest under the Lease, Tenant agrees to attorn to the lender at lender's
request, so long as the lender agrees that unless Tenant is in default
under the Lease, the Lease will remain in full force and effect. Tenant
further acknowledges and agrees that Purchaser (including its lender),
their respective successors and assigns shall have the right to rely on
the information contained in this Certificate. The undersigned is
authorized to execute this Tenant Estoppel Certificate on behalf of Tenant.
[TENANT]
By:
-----------------------------
Its:
-----------------------------
Date:__________________, 2004
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GUARANTOR ESTOPPEL CERTIFICATE
Date:____________,2004
To:
Inland Real Estate Acquisitions, Inc., and
Inland Western San Antonio Huebner Oaks Limited Partnership
and its lenders, successors and assigns ("Purchaser")
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention: Sharon Anderson-Cox
Re: Guaranty Agreement dated ("Guaranty of Lease") pertaining to that certain
lease dated between as Landlord and as Tenant for leased premises known as
(the "Premises") located at the property commonly known as (the
"Property").
1. Guarantor certifies to Lender and Purchaser that: (a) the Guaranty of Lease
has been properly executed by Guarantor and is presently in full force and
effect without amendment or modification except as noted above; (b)
Guarantor has no existing defenses, offsets, liens, claims or credits
against the obligations under the Guaranty of Lease.
2. This certification is made with the knowledge that Purchaser is about to
acquire title to the Property and a lender is about to provide Landlord
with financing which shall be secured by a deed of trust (or mortgage),
security agreement and assignment of rents, leases and contracts upon the
Property. Guarantor further acknowledges and agrees that Purchaser and its
lender and their respective successors and assigns shall have the right to
rely on the information contained in this Certificate.
3. The undersigned is authorized to execute this Guarantor Estoppel
Certificate on behalf of Guarantor.
[GUARANTOR]
By:
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EXHIBIT G
LIST OF SERVICE CONTRACTS
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Huebner Oaks Service Contract List
<Table>
<Caption>
NAME OF VENDOR AGREEMENT DATE EXPIRATION DATE TYPE OF SERVICE
- -------------------------------------------------------------------------------------------------------------------------------
2 Guys Enterprises March 11, 2003 March 10, 2004 Pressure Washing As Needed
ADT Security November 15, 2003 November 14, 2004 Fire Alarm Monitoring As Needed
Aetna Sign Group April 14, 2003 April 13, 2004 Blade sign installation & maintenance As Needed
Alamo Lot Maintenance October 20, 2003 October 19, 2004 Parking Lot Sweeping Weekly
American Roofing & Metal Co. November 1, 2003 October 31, 2004 Roof Repair As Needed
Bexar Electric Company October 20, 2003 October 19, 2004 Electrical Repairs As Needed
BFI Waste Systems October 20, 2003 October 19, 2004 Dumpster Service Daily
C2M Construction November 1, 2003 October 31, 2004 Construction As Needed
Coolsun Awnings, Inc. June 15, 2003 June 14, 2004 Repair & Replace Awnings As Needed
FA McComas April 10, 2002 April 9, 2003 Painting As Needed
Gem Sign Services, Inc. November 1, 2003 October 31, 2004 Sign Repair As Needed
Greenspace September 8, 1999 September 7, 2000 Holiday decor installation As Needed
Hill Country Landscaping October 9, 2003 October 8, 2003 Porter Service, Landscaping Weekly
Holt Mechanical March 5, 2003 March 4, 2004 HVAC repair/inspection As Needed
Lender Protective Services November 1, 2003 October 31, 2004 Security Weekly
March Construction October 6, 2003 October 5, 2004 Construction As Needed
Munters March 5, 2003 March 4, 2004 Water extraction As Needed
River Oaks Pools October 20, 2003 October 19, 2004 Pool/Spa Service Weekly
Simplex Grinnell March 15, 1999 March 14, 2000 Fire Protection Inspection/Backflow As Needed
Tex-Door April 21, 2000 April 20, 2001 Overhead Door repair As Needed
Tri Country March 5, 2003 30 days notice Environmental testing As Needed
Walton Signs January 23, 2004 January 22, 2005 Signs As Needed
</Table>
RREEF Agreements are issued stating an initial term and from year to year
thereafter, but may be canceled with a 30 day notice from either party.
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EXHIBIT H
INTENTIONALLY DELETED
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SCHEDULE I
DISCLOSURE ITEMS
Notice of noncompliance with ADA regarding an accessible parking space and ramp
near building D which Seller shall correct.
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