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AZREB.com | Real Estate Clauses
ARTICLE
11.
Conditions Precedent to Closing
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11.1. Conditions Benefiting Buyer. If a dollar amount of Seller Financing or Assumable Financing
is set forth in Part I, then the obligations of Buyer under Articles 12 and 13
are subject to the satisfaction, as of the Closing Date, of the following
condition, as applicable: (a) Seller shall have approved Buyer for Seller
Financing in the respective amount set forth in Part I, or (b) the applicable
lender(s) shall have approved Buyer for Assumable Financing in the respective
amount set forth in Part I less any principal reduction paid or anticipated to
be paid in the ordinary course of debt service on or before the Closing Date.
If Buyer shall have exercised reasonable efforts to obtain such approval
but Seller or the applicable lender(s) as the case may be shall disapprove Buyer
for such financing prior to the Closing Date, then Buyer shall have the right,
exercisable only by giving notice to Seller (with a copy to Closing Agent)
within five (5) Business Days after the date of Seller's or the applicable
lender(s)' written notification of such disapproval (but in no event after the
Closing Date), to terminate this Agreement.
If Buyer shall have exercised reasonable efforts to obtain such approval
but Seller or the applicable lender(s) as the case may be shall neither approve
nor disapprove Buyer for such financing by the Closing Date, then Buyer shall
have the right, exercisable only by giving notice to Seller (with a copy to
Closing Agent) on the Closing Date, to terminate this Agreement.
If Buyer duly exercises such of the foregoing rights (if any) as is
applicable, then Closing Agent is hereby instructed to return the Deposit to
Buyer in accordance with Exhibit "J" as Buyer's sole
remedy. However, if Buyer shall not
have exercised reasonable efforts to obtain such approval or if Buyer does not
duly exercise such right to terminate, then the foregoing condition shall be
treated as satisfied and the Cash Portion of the Purchase Price shall be
increased to the full Purchase Price such that the transaction described in this
Agreement shall be "all cash". Seller
makes no representation or warranty as to whether Seller shall approve the
Seller Financing or as to whether Buyer shall be permitted to assume all or part
of the Assumable Financing.
11.2. Conditions Benefiting Seller. The obligations of Seller under Articles 12 and 13 are
subject to the satisfaction, as of the Closing Date, of each of the following
conditions:
(a)
Neither Buyer nor any of its Affiliates (i) shall be in receivership or
dissolution, (ii) shall have made an assignment for the benefit of creditors or
admitted in writing its inability to pay its debts as they mature, or (iii)
shall have been adjudicated a bankrupt or filed a petition in voluntary
bankruptcy or a petition or answer seeking reorganization or an arrangement with
creditors under the Federal bankruptcy law or any other similar law or statute
of the United States or any jurisdiction and no such petition shall have been
filed against Buyer or any of its general partner(s), if any; and
(b)
There shall not be pending any Litigation of the type described in
Section 9.2(c) that arises after the Effective Date.
If
any of the conditions set forth in this Section 11.2 is not satisfied as of the
Closing Date, then Seller shall have the right, exercisable only by giving
notice to Buyer (with a copy to Closing Agent), to terminate this Agreement.
If Seller duly exercises that right, then Closing Agent is hereby
instructed to return the Deposit to Buyer in accordance with Exhibit
"J". Buyer shall
give Seller prompt and detailed notice of any circumstance, actual or
threatened, that may prevent the satisfaction of any of the conditions set forth
in this Section 11.2.
ARTICLE
12.
Closing; Deliveries at Closing
.
12.1. The closing of the transaction described in this
Agreement ("Closing") shall take place at the offices of
Closing Agent (or such other location on which Seller and Buyer may agree) at
10:00 a.m. (local time at the place of Closing) on the Closing Date.
12.2. At Closing, Seller shall deliver to Closing Agent
the following (duly and fully executed, and acknowledged or notarized, as
appropriate):
(a)
A special warranty deed in substantially the form of Exhibit
"F", conveying fee title to the Real Property ("Deed");
(b)
A bill of sale in substantially the form of Exhibit "G",
conveying title to the Personal Property ("Bill of Sale");
(c)
An Assignment and Assumption Agreement in substantially the form of Exhibit
"H", in which Seller conveys, and Buyer assumes, the
obligations of Seller under the Intangible Property and in which Exhibit
No. 2 thereof is completed to describe each item of Intangible Property
actually known by Seller or Buyer ("Assignment and Assumption
Agreement");
(d)
An affidavit in favor of the Title Company, Closing Agent and Buyer with
respect to (i) compliance with the Foreign Investment in Real Property Tax Act
(Internal Revenue Code '1445, as amended, and the regulations issued thereunder), (ii) the
elimination of any standard or printed exceptions in Buyer's final policy of
title insurance for unfiled mechanics' liens, and (iii) Seller's authority to
sell and convey the Property in accordance with this Agreement;
(e)
A certificate by Seller that the representations and warranties of Seller
contained in Article 9 of this Agreement are true and accurate at and as of the
Closing Date; and
(f)
Written notice from Seller or Seller's managing agent to each tenant of
the Property (if any) (i) stating that the Property has been sold to Buyer and
that tenant security deposits (if any) in Seller's possession have been
transferred to Buyer (and stating any lawful deductions made from those
deposits), and (ii) directing such tenants to regard Buyer as their landlord and
to make rental payments to Buyer and at the address designated by Buyer.
At
Closing, Seller shall tender to Buyer (a) possession of the Property free and
clear of all parties in possession, except under the Permitted Encumbrances, and
(b) all codes for the security devices (if any) of Seller upon the Property.
Seller shall also make available to Buyer at the Property on the Closing
Date (a) all keys in Seller's possession to the Property and copies of all books
and records in Seller's possession necessary for the orderly transition of
operation of the Property, and (b) all Leases, Contracts, Permits and other
documents constituting the Intangible Property.
12.3.
At Closing, Buyer shall deliver to Closing Agent the following (duly and
fully executed, and acknowledged or notarized, as appropriate):
(a)
Written instructions to Closing Agent to release the Deposit for disbursement
to Seller;
(b)
The balance of the Cash Portion of the Purchase Price and other funds
sufficient to pay all Closing and other costs and all adjustments required to be
paid by Buyer under this Agreement;
(c)
If Buyer is a corporation or partnership, a corporate or partnership
resolution and an incumbency certificate to evidence Buyer's capacity and
authority to consummate Closing, and a certified copy of Buyer's articles of
incorporation and bylaws or partnership agreement, including all amendments
thereto; and, in all instances regardless of Buyer's organizational structure,
all other documents reasonably requested by Title Company, Closing Agent or
Seller;
(d)
The Assignment and Assumption Agreement;
(e)
If applicable, all documents evidencing, governing or securing the Seller
Financing or Buyer's assumption of the Assumable Financing in accordance with
Section 4.1;
(f)
A certificate by Buyer that the representations and warranties of Buyer
contained in Article 9 of this Agreement are true and accurate at and as of the
Closing Date, except with respect to any Litigation of the type described in
Section 9.2(c) that arises after the Effective Date; and
(g)
A Prohibited Buyer Affidavit in the form of Exhibit "I".
12.4.
At the Closing, both parties shall duly execute and deliver all other
documents reasonably necessary to consummate the transaction described in this
Agreement, including a closing statement setting forth the charges, adjustments
and credits to each party.
12.5. At Closing, Closing Agent shall record, among all
of the appropriate public records, all documents to be recorded, disburse all
funds, and deliver all original documents and copies thereof, in accordance with
the local custom then prevailing in the jurisdiction in which Closing occurs;
provided, however, that disbursement of the funds due Seller shall be made no
later than the time that the Title Company commits to issue a title insurance
policy showing the transfer of title to Buyer.
12.6. If there is Seller Financing and a reduction in the
Purchase Price under the terms of this Agreement, then such reduction shall be
applied pro-rata against the Cash Portion of the Purchase Price and the amount
of Seller Financing.
ARTICLE
13.
Costs, Taxes and Adjustments
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13.1. At Closing, Seller shall pay (a) the costs of
releasing all liens, judgments and other encumbrances that are to be released
and of recording such releases, (b) one-half of the fees and costs due Closing
Agent for its services, and (c) all other costs to be paid by Seller under the
provisions of this Agreement. Seller
shall be responsible for the payment of its own attorneys' fees, except that,
if there is Seller Financing, Buyer shall be responsible for the payment of all
of Seller's attorneys' fees incurred in connection with that Seller Financing.
13.2. At Closing, Buyer shall pay (a) all costs of
securing Seller Financing or other financing for the purchase of the Property,
including preparation of all documentation relating thereto, (b) one-half of the
fees and costs due Closing Agent for its services, (c) all other costs to be
paid by Buyer under the provisions of this Agreement, and (d) all other costs
connected with Closing except as otherwise provided in Section 13.1 or 13.3.
Buyer shall be responsible for the payment of its own attorneys' fees.
13.3. The cost of all grantor, grantee, transfer,
recordation, documentary, deed, sales, and similar taxes, stamps and charges,
title examination and the issuance of a title insurance policy, and all other
costs of Closing shall be paid by Seller or Buyer in accordance with the custom
or statutory requirements in effect in the jurisdiction in which the Property is
located as of the Effective Date. Seller
and Buyer shall specify, in Part I, their agreement as to such custom and
requirements with regard to the allocation of such costs between them.
If, however, Part I does not address one or more of such costs (other
than income taxes) necessary to consummate Closing, then such costs shall be
paid one-half (1/2) by Seller and one-half (1/2) by Buyer.
13.4. Subject to the following provisions and
without affecting the Purchase Price, all items of income and expense relating
to the Property shall be apportioned between Buyer and Seller on an accrual
basis, as of 12:01 a.m. (local time at the Property) on the Closing Date (the "Adjustment
Time"), in the form of a cash payment by or credit to Buyer at
Closing (it being understood and agreed that none of said items is included
within the Purchase Price):
(a)
Seller and Buyer shall attempt to have all service contracts that affect
the Property and for which the charges are based upon usage (including
utilities) billed or read as of a time as close to the Adjustment Time as is
reasonable. If a precise billing or
reading as of the Adjustment Time is not available at Closing with respect to
such a service contract, then the foregoing adjustment shall be made with
respect to that contract as follows: (i)
the charges under that contract shall be adjusted preliminarily, by payment or
credit at Closing, by pro-rating to the Adjustment Time from the latest billing
or reading then available, and (ii) such charges shall be adjusted finally,
under the following provisions, by pro-rating to the Adjustment Time from that
billing or reading and from the first billing or reading with respect to such
contract subsequent to the Closing Date.
(b)
Buyer shall not be liable for any salaries, wages, welfare or pension
fund contributions, social security payments, withholding tax payments, bonuses,
vacation pay, or other monetary benefits that shall have been earned or accrued
prior to the Adjustment Time by any employee of Seller, even if such employee is
retained or hired by Buyer. However,
Buyer shall be liable for the other benefits of such employees retained or hired
by Buyer.
(c)
Seller and Buyer
shall take an inventory of any and all usable supplies (such as fuel and light
bulbs) that are located upon the Property as of the Adjustment Time and owned by
Seller. Buyer shall purchase those
supplies from Seller at Closing for the fair market value thereof.
(d)
Real estate taxes and assessments, personal property taxes, water or
sewer charges not based upon consumption, and other governmental charges based
upon the Property per se (collectively, "Taxes")
shall be adjusted on an accrual basis regardless of when the same are due and
payable. If the amount of any Taxes
for an Accounting Period in which the Adjustment Time occurs is not available at
Closing, then (i) such Taxes shall be adjusted preliminarily, by payment or
credit at Closing, based upon the amount thereof for the then immediately
preceding Accounting Period, and (ii) such Taxes shall be adjusted finally,
under the following provisions, once the amount thereof becomes available for
the Accounting Period in which the Adjustment Time occurs.
All assessments for public improvements shall be adjusted as aforesaid
with respect to the period of time over which such assessments are then being
paid (e.g. such assessments shall not be prepaid).
(e)
Seller shall be credited at Closing with the amount of any and all
deposits held on behalf of Seller by utility companies with respect to the
Property.
(f)
If any Lease calls for the tenant to pay to Seller percentage rent (i.e.,
rent based upon the tenant's sales and/or other receipts), or any building
operating expenses, common area charges, insurance premiums, real estate taxes,
utility charges, or other similar expenses, then (i) Seller shall be entitled to
its Pro-Rata Share of such amounts payable by the tenant for the Accounting
Period(s) in which Adjustment Time occurs, regardless of when such amounts are
billed to or payable by the tenant, and (ii) Buyer shall be entitled to the
balance of such amounts payable by the tenant for that Accounting Period(s).
The adjustments under this Section 13.4(f) shall be made by payment or
credit at Closing to the extent that the tenant shall have theretofor paid such
amounts to Seller.
(g)
Any and all refundable tenant security deposits (and required interest
thereon, if any) in Seller's possession with respect to the Leases and Contracts
as of the Closing Date shall be assigned as provided in Exhibit
"H".
(h)
Seller shall be liable for any and all brokerage or leasing commissions
and similar compensation due any party in connection with the Leases assumed by
Buyer at Closing, except (i) as otherwise provided in Section 7.7, (ii) such
commissions and other compensation as may be due in connection with the
exercise, after Closing, of any extension, renewal, expansion or purchase rights
or options contained in those Leases or entered into in connection with those
Leases, and (iii) such commissions and other compensation as may be due in
connection with any amendments or new Leases entered into after Closing.
Except
as otherwise provided in the foregoing provisions of this Section 13.4, if the
amount of any item to be adjusted is not available at Closing or if an item of
income or expense arises or becomes known after Closing that relates to the
period before the Adjustment Time, then the foregoing adjustment shall be made
with respect thereto by payment by Buyer or Seller, as applicable, promptly
after the amount thereof becomes available or known.
13.5.
Unpaid rents and other accounts receivable shall not be purchased by
Buyer, but shall be allocated in kind under the foregoing provisions. After Closing, Buyer shall exercise reasonable efforts to
collect, from each tenant of the Property (if any), any and all amounts that
tenant owes and are payable to Seller under the foregoing provisions; however,
Buyer shall not be required to institute any litigation or to incur any
attorneys fees to collect those amounts. If
after Closing Buyer receives any payment of a type described in Section 13.4(f)
with respect to any portion of an Accounting Period in which the Adjustment Time
shall have occurred, then Buyer shall, within five (5) Business Days after that
receipt, pay Seller (a) Seller's Pro-Rata Share of that payment, less (b) a
proportionate share of Seller's reasonable attorneys fees and other costs of
collecting that payment. If after Closing Buyer receives any other payment from any
tenant of the Property over and above what is then owed to Buyer by such tenant,
then Buyer shall, within five (5) Business Days after that receipt, pay Seller
(a) so much of the excess as is equal to the amount then due Seller with respect
to that tenant under the foregoing provisions, less (b) a proportionate share of
Seller's reasonable attorneys fees and other costs of collecting that payment
(if any). Seller may also take
action independently to collect amounts due Seller from tenants of the Property
to the extent Seller is entitled to such amounts under the foregoing provisions;
at Seller's request and expense, Buyer shall cooperate with such independent
actions of Seller. Seller's "Pro-Rata
Share" is a fraction, the numerator of which is the number of days
from the beginning of the applicable Accounting Period to the Adjustment Time,
and the denominator of which is the number of days during the applicable
Accounting Period. An "Accounting
Period" is the period for or over which the applicable sales,
charge or other amount is measured or assessed.
13.6. Buyer shall be responsible for the transfer
of accounts and establishment of all utility services to the Property in the
name of Buyer as of Closing. Seller
shall cooperate with Buyer in this regard at Buyer's expense.
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