PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

 

Buyer financing, (g) one-half (½) of all Escrow fees and Escrow costs related to the purchase and sale of the Property, and (h) all fees, costs, charges, points, title insurance premiums, recording fees and other costs and expenses of the Buyer Loan and any other Buyer financing.

 

6.6.3 General Allocation.  Any other closing costs and expenses which are not addressed in Section 6.6.1 and Section 6.6.2 above shall be allocated between Buyer and Seller in accordance with the customary practice in Cass County, North Dakota.

 

6.7 Real Estate Commissions.  Seller shall be responsible for any commission, fee or other payment which may be due to Sperry Van Ness (“Broker”) upon the Closing in connection with the sale of the Property to Buyer contemplated by this Agreement.  Any commission to be paid to Broker shall be per a separate agreement between Broker and Seller.  Buyer and Seller represent and warrant that other than the Broker identified in this Section 6.7, neither has dealt with any other broker or finder in this transaction and that no other broker or finder shall be due any brokerage fee or commission.  Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including without limitation reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with Broker, or any real estate broker or agent, occurring by, through, or under the indemnifying party.

 

6.8 Real Estate Reporting Person.  Escrow Holder is hereby designated the "real estate reporting person" for purposes of Section 6045 of Title 26 of the United States Code and Treasury Regulation 1.6045-4 and the Closing Statement or any other any settlement statement prepared by the Title Company shall so provide.  Upon the Closing, Buyer and Seller shall cause Escrow Holder to file a Form 1099 information return and send the statement to Seller as required under the aforementioned statute and regulation.

 

6.9 Prorations.

 

6.9.1 General.  The following items set forth below in this Section 6.9 are to be adjusted and prorated between Seller and Buyer as of 11:59 p.m. on the day immediately preceding the Closing Date (the "Adjustment Time") (such that Buyer shall be deemed to own the Property, and therefore entitled to any revenues and responsible for any expenses, for the entire day upon which the Closing occurs).  Such adjustments and prorations shall be calculated on the actual days of the applicable month in which the Closing occurs and all annual prorations shall be based upon a three hundred sixty-five (365)-day year.  The net amount resulting from the prorations and adjustments provided for in this Section 6.9 (along with the allocation of Closing costs in accordance with Section 6.6 above) shall be added to (if such net amount is in Seller's favor) or deducted from (if such net amount is in Buyer's favor) the funds to be delivered at Closing by Buyer in payment of the Purchase Price.  Any other closing prorations and adjustments which are customarily made in similar real property sales transactions and are not addressed in this Section 6.9 shall be made between Buyer and Seller in accordance with the customary practice in Cass County, North Dakota.  All provisions of this Section 6.9 shall survive the Closing and the recordation of the Grant Deed and shall not merge into the Grant Deed and the other documents and instruments delivered at Closing.

 

6.9.2 Rent, Tenant Charges and Arrearages.  At Closing, all rents actually paid and collected, and any other charges owing by tenants and which have been collected by Seller shall be prorated as of the Adjustment Time, and the prorated amount attributable to the period following the Closing shall either be paid to Buyer at the Closing or credited against the Purchase Price, at Seller's option.  Any CAM and other charges and expenses payable by tenants under the Leases (collectively, the "Tenant Charges") on an estimated basis shall be reconciled against actual charges and expenses as of and at the Closing, to the extent then possible, and Seller shall provide a proposed reconciliation for Buyer's approval.  Seller shall have a period of ninety (90) days following the actual Closing Date to provide Buyer with a final reconciliation of Tenant Charges.  If the final reconciliation shows that Seller owes Buyer additional sums, Seller shall deliver such amount to Buyer together with the delivery of the final reconciliation of the Tenant Charges.  If the final reconciliation shows that Buyer owes Seller additional sums, Buyer shall pay such amount to Seller within ten (10) days after Buyer's receipt of the final reconciliation.  Other than as set forth above, there shall not be any further reconciliation of such Tenant Charges after the final reconciliation thereof, the proration of such Tenant Charges pursuant to the final reconciliation being conclusively presumed to be accurate.  After the final reconciliation of the Tenant Charges is made by and betw een the parties, Buyer shall be solely liable and responsible to the tenant for such reconciliation of Tenant Charges under the Leases.  At the Closing Seller shall credit against the Purchase Price the amount equal to the aggregate of the security deposits paid by the tenants under the Leases and received by Seller in connection with the Leases, to the extent Seller has not already returned or applied any of such security deposits.  With respect to any security deposits which are other than cash, Seller shall deliver to Buyer at the Closing the original documentation related thereto with such transfer and assignment documentation as may be necessary (executed by all necessary third parties and with all fees paid by Seller), including without limitation, the original letter of credit, if applicable.  Buyer shall, in the ordinary course of its business (which shall not include declaring a default or bringing suit) continue to invoice tenants in an attempt to collect any delinquen t or other rental and other expense arrearages attributable to the period prior to the Closing.  After deduction of Buyer's reasonable out-of-pocket costs to collect same, Buyer shall promptly account to Seller and shall immediately reimburse Seller for all rents, expense reimbursements and other charges received by Buyer after the Closing which apply to any period prior to the Closing to the extent Seller has not already been paid for or credited with such sums; provided, however, that amounts collected by Buyer shall first be applied against amounts outstanding and due and payable for the period after the Closing.  With respect to any rent arrears arising under the Leases, Seller is expressly prohibited from attempting to collect such pre-closing delinquent rental obligations directly from tenants, and without limitation of the foregoing, after the Closing, S eller shall not bring an action against any tenants under the Leases while such tenants are tenants of the Property which would seek to terminate the related leases, dispossess the related tenants or seek the involuntary bankruptcy of the related tenants.

 

6.9.3 Real Estate Taxes and Assessments.  For purposes of this Agreement, "Property Taxes" means real estate or ad valorem real property taxes, assessments (including any business improvement district charges and principal and interest installments due on any community facilities district or local improvement district liens) and personal property taxes with respect to the Property.  To the extent not paid directly by the tenants of the Property or reimbursed by tenants as part of the Tenant Charges, Property Taxes shall be prorated as of the Adjustment Time based upo n the latest available tax bill.  Any Property Taxes which may be

 

 paid in installments shall be prorated based upon such installments and, notwithstanding anything to the contrary contained in this Agreement, Seller shall not be required to pre-pay or to bear (by credit or debit) the prepayment of any amount due for Property Taxes (including special amounts payable for other assessments) other than the installments due for the Current Tax Period.  Seller shall be responsible for (a) all Property Taxes assessed for any period prior to the Current Tax Period and (b) that portion of the Property Taxes assessed for the Current Tax Period determined on the basis of the number of days which have elapsed from the first day of the Current Tax Period to the Adjustment Time, inclusive, whether or not the same shall be payable prior to the Adjustment Time.  Buyer shall be responsible for (i) all Property Taxes assessed for any period after the Current Tax Period, and (ii) that portion of the Property Taxes assessed for the Current Tax Period, determined on the basis of the number of days following the Adjustment Time through the last day of the Current Tax Period, inclusive.  The term "Current Tax Period" shall mean the fiscal period of the applicable taxing or charging authority during which the Closing occurs.  If the latest available tax bill is not the bill for the Current Tax Period, then Property Taxes shall be prorated based upon the latest tax information then available (including previous tax bills, current assessments and other information available from the taxing authorities) and Buyer and Seller shall re-prorate the Property Taxes following the Closing as soon as the tax bill for the Current Tax Period becomes available, but in all events no later than the Final Proration Adjustment as provided in Section 6.9.5 below.  Any increase in Property Taxes which is assessed following the Closing arising out of the sale of the Real Property to Buyer or a subsequent sale or change in ownership thereafter, and/or arising out of any construction or improvements to the Real Property performed following the Closing, shall be paid by Buyer when assessed.  Refunds of Property Taxes for the Current Tax Period, net of the costs of pursuing any tax contest or protest proceedings and collecting such refunds, shall be prorated in proportion to the respective shares of the Property Taxes for the Current Tax Period borne by Seller and Buyer hereunder.

 

6.9.4 Operating Expenses.  To the extent not paid directly by the tenants of the Property, all costs and expenses, other than Property Taxes, with respect to the operation and maintenance of the Property shall be prorated between Buyer and Seller as of the Adjustment Time, including all fees and charges for sewer, water, electricity, heat and air-conditioning service and other utilities; assessments payable under any covenants, conditions and restrictions encumbering the Property; charges under the Contracts assumed by Buyer; insurance premiums; rental taxes, personal property taxes, business occupational taxes and municipal taxes other than Property Taxes; a nd periodic fees payable under transferable licenses and permits for the operation of any of the Property.  Subject to Section 6.9.2, such costs and expenses shall be prorated as of the Adjustment Time such that Seller shall be responsible for all such costs and operating expenses attributable on an accrual basis to the period prior to the Adjustment Time and Buyer shall be responsible for all such costs and expenses attributable on an accrual basis to the period from and after the Adjustment Time.  If invoices or bills for any of such costs and expenses are unavailable on or before the Closing Date, such costs and expenses shall be estimated and prorated at Closing based upon the latest information available (including prior bills and operating history) and a final and conclusive readjustment of any cost and expense item shall be made upon receipt of the actual invoice or bill, but in all e vents no later than the Final Proration Adjustment as provided in Section 6.9.5 below.  Buyer shall take all commercially reasonable steps to effectuate the transfer to Buyer's name as of the date of Closing of all utilities which are in Seller's name, and where necessary, open a new account in Buyer's name and post

 

deposits with the utility companies.  Buyer and Seller shall cooperate to have all utility meters read by the appropriate utility companies as of the date of Closing.  If Buyer and Seller are unable to obtain such final meter readings as of the Closing Date from all applicable meters, utility expenses related to such meters shall be estimated at Closing based upon the operating history of the Property subject to the final adjustment in all events no later than the Final Proration Adjustment as provided in Section 6.9.5 below.  Seller shall be entitled to recover any and all deposits held by any utility companies for utilities in any Seller's name as of the date of Closing, and if any such deposits are not returned to Seller on or before the Closing Date, such deposits shall be assigned to Buyer and the amounts thereof shall be credited to Seller's account and increase the amount of funds payable by Buyer at Closing.

 

6.9.5 Closing Statement; Final Proration Adjustment.  At least one (1) full Business Day prior to the Closing Date, Seller shall deliver to Buyer a proration schedule identifying all adjustments for items to be prorated pursuant to this Section 6.9, with reasonable back-up, and Seller and Buyer shall agree upon the allocation of costs and expenses to be made in accordance with Section 6.6 above and the prorations to be made in accordance with this Section 6.9 and submit to Escrow Holder a signed statement (or sign a statement prepared by Escrow Holder) (the "Closing Statement").  The Closing Statement shall be utilized for purposes of making the adjustments to the Purchase Price upon the Closing for closing costs and prorations.  As soon as practicable following the Closing (but in no event later than ninety (90) days after the Closing), Seller and Buyer shall reprorate the income and expenses set forth in this Section 6.9 based upon actual bills or invoices received after the Closing (if original prorations were based upon estimates) and any other items necessary to effectuate the intent of the parties that all income and expense items be prorated as provided above in this Section 6.9 (the "< font style="display: inline; font-weight: bold; text-decoration: underline">Final Proration Adjustment").  Any reprorated items shall be promptly paid to the party entitled thereto.  Any errors or omissions in computing adjustments at the Closing shall be promptly corrected, but only so long as the party seeking to correct such error or omission has notified the other party of such error or omission no later than the Final Proration Adjustment.  The proration of income and expense at the Final Proration Adjustment shall be final and conclusive; there shall be no further proration or adjustment following the Final Proration Adjustment.

 

7. Interim Operation and Leasing of the Property; Leasing Costs.

 

7.1 Operation.  From and after the Opening of Escrow and continuing to the Closing Date, Seller shall operate, maintain and, subject to Section 8 below, repair the Property in the ordinary course and consistent with such Seller's past practices and shall keep the Property insured against fire, vandalism and other loss, damage and destruction with the same coverage, policy limits and deductible amounts as are currently maintained by Seller.  Notwithstanding the foregoing, Seller's maintenance obligations under this Section 7 shall not include any obligation to make capital expenditures or any other expenditures not incurred in Seller's normal course of business unless required for the day to day operation of the Real Property.

 

7.2 Leasing.  Without limiting the foregoing, but subject to the provisions of this Section 7.2, from the Agreement Date through the Due Diligence Deadline Seller shall, in the ordinary course, negotiate with prospective tenants and enter into new leases (on terms that Seller believes, in its commercially reasonable business judgment, to be market terms), enforce the terms of the Leases in all material respects and perform in all material respects all of

 

landlord's obligations under the Leases.  Seller will promptly notify Buyer of any new leases entered into by, or proposals to enter into new leases made by, Seller at least two (2) Business Days prior to the Due Diligence Deadline and provide Buyer with a summary of the terms of each such new lease or proposal.  After the Due Diligence Deadline, and at least three (3) Business Days prior to becoming legally bound with respect to any new lease or other agreement or modification of the existing Leases or other agreement, Seller shall consult with and seek the consent of Buyer, and shall provide reasonable detail to Buyer including, at Buyer's request, copies of the relevant documentation, with respect thereto.  Any consent to be given by Buyer pursuant to this Section 7.2 shall be granted or withheld in Buyer's sole and absolute discretion, and shall be deemed granted if Buyer does not respond in writing to Seller's request for said consent within three (3) Business Days after receipt thereof.  Prior to the Closing Date, Seller shall have the right, but not the obligation (except to the extent that Seller's failure to act shall constitute a waiver of such rights or remedies), to enforce the rights and remedies of the landlord under the Leases, by summary proceedings or otherwise, but after the expiration of the Due Diligence Deadline, Seller shall not apply all or any portion of any security deposit then held by Seller toward any loss or damage incurred by Seller by reason of any defaults by any tenants under the Leases.  With respect to any application by Seller, prior to the expiration of the Due Diligence Deadline, of any tenant security deposit held by Seller, Seller will deliver, in connection with any such application, written notice to the applicable tenant(s) under th e Leases indicating that its security deposit has been or is being so applied.  Seller shall provide Buyer with written notice within three (3) Business Days after any action taken by Seller pursuant to the foregoing provisions.

 

7.3 Contracts.  Except for leases, service contracts and agreements entered into in accordance with the preceding provisions of this Section 7, from and after the Opening of Escrow Seller shall not enter into, execute or knowingly permit any contract, lien or encumbrance on the Property without Buyer's prior written consent; provided, such consent shall not be unreasonably withheld, conditioned or delayed with respect to any utility or similar easement necessary for the operation of the Property.  Buyer's consent shall be deemed granted if Buyer does not respond in writing to Selle r's request for said consent within three (3) Business Days thereafter.  From and after the Opening of Escrow, Seller shall not dispose of any of the Property except for dispositions and replacement of personal property in the ordinary course of business.

 

7.4 Leasing Costs.  If the Closing occurs, Buyer shall be responsible and shall pay for the costs of tenant improvement work or allowances, third-party leasing commissions and other leasing costs (collectively, the "Leasing Costs") relating to or arising from (i) those leases or modifications of leases entered into on or after the Agreement Date, (ii) the exercise by a tenant of a renewal, expansion or extension option contained in its Lease, which renewal or extension period commences, or which expansion space such tenant first has the right to occupy, on or after the Agreement Date (notwithstanding that such tenant may have exercised such option prior to the Agreement Date) and (iii) any items set forth on Exhibit J, and any amounts paid by Seller in respect of such Leasing Costs shall be reimbursed by Buyer at the Closing.  Seller shall be responsible for, and pay on or before the Closing Date (or provide Buyer a credit thereof) all Leasing Costs attributable to the current term of any Lease for tenants in occupancy as of the Agreement Date.  The provisions of this Section 7 shall survive the Closing.

 

8. Casualty and Condemnation.

 

8.1 Immaterial Casualty or Condemnation.  In the event there is any damage to the Real Property or destruction of any Improvement thereon or condemnation of any portion of the Property after the Agreement Date, then except as provided in Section 8.2 below, Buyer shall be required to purchase the Property with a credit against the Purchase Price otherwise due hereunder equal to the amount of any insurance proceeds or condemnation awards actually collected by Seller prior to the Closing as a result of any such damage or destruction or condemnation, plus the amount of any insurance deductible or retention, less any sums expended by Seller prior to the Closing for the restoration or repair of the Property and/or in collecting such insurance proceeds or condemnation awards.  Seller agrees that Seller will maintain Seller's present casualty insurance policy with respect to the Property in full force and effect until the Closing.  If the insurance proceeds or condemnation 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 Seller expended prior to the Closing for the restoration or repair of the Property and/or in collecting such insurance proceeds or condemnation awards.

 

8.2 Material Casualty or Condemnation.  Notwithstanding the foregoing provisions of Section 8.1 above, if the Property or any portion thereof is damaged or destroyed by a casualty or is condemned and (i) gives rise to a right of termination or rent abatement under any Lease, or (ii) to the extent that the cost of repair or restoration to substantially the same condition existing prior to such casualty (or, in the case of a condemnation, the value of the Property or portion thereof so condemned) would exceed an amount equal to One Hundred Thousand No/100ths Dollars ($100,000.00), th en Seller shall give Buyer prompt notice thereof and the Buyer may, at Buyer's option to be exercised by delivery of written notice to Seller within five (5) Business Days of Seller's notice to the Buyer of the occurrence of such casualty or condemnation, elect not to purchase the Property under this Agreement.  If Buyer so duly elects not to purchase the Property, this Agreement shall terminate, the Deposit (to the extent then made) shall be returned to Buyer (less one-half (1/2) of any escrow and title cancellation fees and charges, which Buyer hereby agrees to pay), and neither Buyer nor Seller shall have any further rights or obligations under this Agreement except for Buyer's Surviving Obligations.  Any dispute as to the costs of such repair or restoration or value of a condemned portion of the Property shall be referred, within five (5) Business Days after written notice to a party by the other party, to a licensed architect jointly selected by Buyer and Seller for resolution.& #160; The determination of such architect, which shall be made within a period of ten (10) days after such submittal by the parties, shall be final, conclusive and binding on the parties.  If the parties shall fail to agree upon the identity of such architect within three (3) Business Days after either party has notified the other of such party's choice of architect, then either party may at any time thereafter apply to a court of competent jurisdiction to appoint immediately such architect.  The fees and expenses of such architect shall be paid equally by Buyer and Seller, and the parties shall cooperate with such architect by providing such information as such architect may reasonably require to resolve the dispute.  If Buyer does not timely elect, in writing, not to purchase the Property as provided in this Section 8, Buyer shall be conclusively deemed to have waived any right to terminate this Agreeme nt by reason of any such casualty or condemnation and Buyer shall proceed with the purchase of the Property and at Closing Buyer shall be entitled to a credit against the Purchase Price in an amount equal to the amount of any insurance proceeds or condemnation awards actually collected by Seller prior to the Closing as a result of

 

any such damage or destruction or condemnation, plus the amount of any insurance deductible or any uninsured amount or retention, less any sums expended by Seller prior to the Closing for the restoration or repair of the Property and/or in collecting such insurance proceeds or condemnation awards.  If the insurance proceeds or condemnation awards have not been collected as of the Closing, then such proceeds or awards shall be assigned to Buyer at Closing, except to the extent needed to reimburse Seller for sums Seller expended prior to the Closing for the restoration or repair of the Property.

 

9. Representations and Warranties.

 

9.1 Representations and Warranties of Seller.  Seller represents and warrants to Buyer that the following matters are true and correct as of the Opening of Escrow and, subject to Section 9.2 below, will also be true and correct as of the Closing.

 

9.1.1 Legal Power.  Seller has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transaction contemplated hereby.

 

9.1.2 Duly Authorized.  This Agreement is, and all the documents executed by Seller which are to be delivered by Seller to Buyer at the Closing will be, duly authorized, executed, and delivered by Seller, and is and will be legal, valid, and binding obligations of Seller (except as limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the right of contracting parties generally).

 

9.1.3 Requisite Action.  All requisite action (corporate, trust, partnership, limited liability company or otherwise) has been taken by Seller in connection with entering into this Agreement, the instruments referenced herein to be executed by Seller, and the consummation of the transaction contemplated hereby.  No further consent of any shareholder, trustee, partner, member, trustor, beneficiary, creditor, investor, judicial or administrative body, governmental authority or other party is required for Seller to consummate the transaction contemplated by this Agreement.

 

9.1.4 Individual(s) Authority.  The individual(s) executing this Agreement and the instruments referenced herein on behalf of Seller has the legal power, right, and actual authority to bind Seller to the terms and conditions hereof and thereof.

 

9.1.5 Foreign Person Affidavit.  Seller is not a foreign person as defined in Section 1445 of the Internal Revenue Code.

 

9.1.6 ERISA Matters.  Seller is acting on Seller's own behalf and Seller is neither (a) an employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") which is subject to Title 1 of ERISA, nor (b) a plan as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, which is subject to Section 4975 of the Internal Revenue Code of 1986 (any such plan which meets all of the criteria in clause (a) or clause (b) above is hereinafter referred to collectively as a "Plan").  Seller's assets do not constitute "plan assets" of one or more of such Plans within the meaning of Department of Labor Regulation Section 2510.3-101 and Seller will not be

 

 reconstituted as a Plan or as an entity whose assets constitute "plan assets" within the meaning of Department of Labor Regulation 2510.3-101.

 

9.1.7 Bankruptcy Matters.  Seller has not made a general assignment for the benefit of creditors, filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by Seller's creditors, suffered the appointment of a receiver to take possession of substantially all of Seller's assets, suffered the attachment or other judicial seizure of substantially all of Seller's assets, admitted Seller's inability to pay Seller's debts as they come due, or made an offer of settlement, extension or composition to Seller's creditors generally.

 

9.1.8 Contracts.  Seller warrants that there are no service, supply, maintenance, repair, construction, leasing or management contracts entered into by Seller relating to the Property other than those Contracts listed on Exhibit G hereto.

 

9.1.9 Leases.  To Seller’s knowledge, Seller warrants that there are no Leases other than those Leases (as amended) listed on Exhibit L thereto.

 

9.1.10 Pending Actions.  To Seller’s knowledge, except as set forth in the Title Documents, Seller has not received written notice of any pending action (including any condemnation action), suit or proceeding before any court or other governmental agency naming Seller as a party that arises out of Seller's ownership of the Property (other than a pending proceeding, if any, to contest a Property Taxes assessment of the Property and personal injury litigation covered by insurance policies, subject to customary deductibles).

 

9.1.11 Seller's Documents. To Seller’s knowledge, the Seller's Documents delivered to Buyer or made available to Buyer pursuant to Section 4.1.3 above are true, correct and complete copies thereof in Seller's possession.  Notwithstanding anything contained herein to the contrary, Seller is not making any express or implied representation as to the accuracy or thoroughness of the contents of any of said Seller's Documents or of the ability of Buyer to rely on any of said Seller's Documents.  This representation shall not be deemed breached by virtue of any new agreements ente red into after the Agreement Date in accordance with the provisions of Section 7 hereof.

 

9.1.12 OFAC.  Neither Seller nor any of its affiliates, nor any of their respective partners, or to Seller's knowledge, any of their members, shareholders or other equity owners, and none of their respective employees, officers, directors, representatives or agents, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of OFAC (including those named on OFAC's Specially Designated and Blocked Persons List) or under any statute executive order (including the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrori sm), or other governmental action.

 

9.2 Qualification of Seller's Representations and Warranties.  Prior to the Closing, Seller shall have the right to qualify the representations and warranties made by Seller in Section 9.1 above in writing with any information Seller first receives concerning such representations and warranties after the Agreement Date.  In no event shall Seller be liable to Buyer for, or be deemed to be in default pursuant to this Agreement by reason of any inaccuracy

 

of a representation or warranty which results from any change that occurs between the Agreement Date and the Closing and is expressly permitted under the terms of this Agreement or any change which is beyond the control of Seller to prevent, so long as Seller notifies Buyer in writing of such change promptly following Seller obtaining knowledge thereof.  If Seller notifies Buyer in writing prior to the Closing of any qualification to Seller's representations and warranties in Section 9.1 above which has a material adverse effect on the Property, then within five (5) Business Days after Buyer's receipt of such notice from Seller, Buyer may elect to terminate this Agreement by notice in writing to Seller.  Buyer must unconditionally elect, by a writing received by Seller within such five (5) Busine ss Day period (and the Closing Date shall be adjourned, if necessary, for the period of time necessary for Buyer’s five (5) Business Day election period), to either (a) terminate this Agreement and the Escrow, in which event the Deposit shall be returned to Buyer (less one-half (1/2) of any escrow and title cancellation fees and charges, which Buyer hereby agrees to pay) and Seller and Buyer shall have no further obligations and liabilities under this Agreement (except for the Buyer's Surviving Obligations, which shall survive any such termination), or (b) proceed with the transaction contemplated by this Agreement, in which event the representations and warranties made by Seller in Section 9.1 above shall be qualified upon the Closing as provided in the written notice to Buyer.  In the event that Seller does not receive such written notification from Buyer within such five (5) Business Day period unconditionally stating which election Buyer has decided to make, then Buyer shall be deemed to have elected to proceed with the transaction contemplated by this Agreement, with the representations and warranties in Section 9.1 above modified or qualified as provided in the written notice to Buyer.  Buyer shall have no right to terminate this Agreement or any recourse against Seller for any qualification to Seller's representations and warranties which does not have a material adverse effect on the Property.

 

9.3 Definition of Seller's Knowledge.  For purposes of this Agreement, (a) whenever the phrase "to Seller's knowledge", "to the knowledge of Seller" or other references to the knowledge of Seller are used or made, they shall be deemed to refer to the present actual (as opposed to constructive or imputed) knowledge of Raymond D. Fisher without any investigation or inquiry whatsoever by such individual.  Buyer acknowledges that the foregoing individual is named solely for the purpose of defining and narrowing the scope of Seller's knowledge and not for the purpose of imposing any liability on or creating any duties running from such individual to Buyer.  Buyer covenants that Buyer will bring no action of any kind against either of such individual or any officer, director, member, partner, shareholder, agent, representative, or advisor of Seller arising out of any of the representations, warranties and covenants made by Seller in this Agreement.

 

9.4 Survival Period.  The representations and warranties of Seller set forth in Section 9.1 above shall survive for six (6) months following the Closing (the "Expiration Date") and shall automatically expire upon the Expiration Date unless Buyer commences suit against Seller with respect to any alleged breach prior to the Expiration Date (and, in the event any such suit is timely commenced by Buyer against Seller, shall survive thereafter only insofar as the subject matter of the alleged breach specified in s uch suit is concerned).  If suit is not timely commenced by Buyer prior to the Expiration Date, then Seller's representations and warranties shall thereafter be void and of no force or effect.

 

9.5 Representations and Warranties of Buyer.  Buyer represents and warrants to Seller that the following matters are true and correct as of the Opening of Escrow and will also be true and correct as of the Closing:

 

9.5.1 Legal Power.  Buyer has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transaction contemplated hereby.

 

9.5.2 Duly Authorized.  This Agreement is, and all the documents executed by Buyer which are to be delivered by Buyer to Seller at the Closing will be, duly authorized, executed, and delivered by Buyer, and is and will be legal, valid, and binding obligations of Buyer (except as may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the right of contracting parties generally).

 

9.5.3 Requisite Action.  All requisite action (corporate, trust, partnership or otherwise) has been taken by Buyer in connection with entering into this Agreement and the instruments referenced herein to be executed by Buyer and by the Closing Date all such necessary action will have been taken to authorize the consummation of the transaction contemplated hereby.  No further consent of any shareholder, trustee, partner, member, trustor, beneficiary, creditor, investor, judicial or administrative body, governmental authority or other party is required for Buyer to consummate the transaction contemplated by this Agreement.

 

9.5.4 Individuals Authority.  The individual(s) executing this Agreement and the instruments referenced herein on behalf of Buyer has the legal power, right, and actual authority to bind Buyer to the terms and conditions hereof and thereof.

 

9.5.5 ERISA Representations.  Buyer is acting on Buyer's own behalf and Buyer is neither (a) an employee benefit plan as defined in Section 3(3) of ERISA which is subject to Title 1 of ERISA, nor (b) a plan as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, which is subject to Section 4975 of the Internal Revenue Code of 1986.  Buyer's assets do not constitute "plan assets" of one or more of such Plans (as defined in Section 9.1.6 above) within the meaning of Department of Labor Regulation Section 2510.3-101 and Buyer will not be reconstituted as a Plan or as an entity whose assets constitute "plan assets" within the meaning of Department of Labor Regulation 2510.3-101.

 

9.5.6 OFAC.  Neither Buyer nor any of its affiliates, nor any of their respective partners, or to Buyer's knowledge, any of their members, shareholders or other equity owners, and none of their respective employees, officers, directors, representatives or agents, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of OFAC (including those named on OFAC's Specially Designated and Blocked Persons List) or under any statute executive order (including the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) , or other governmental action.

 

10. AS-IS Condition of Property.  Buyer specifically acknowledges, represents and warrants that prior to Closing, Buyer and Buyer's agents, consultants, contractors and representatives will have thoroughly inspected the Property and observed the physical

 

characteristics and condition of the Property.  Notwithstanding anything to the contrary contained in this Agreement, Buyer further acknowledges and agrees that Buyer is purchasing the Property subject to all applicable laws, rules, regulations, codes, ordinances and orders.  Buyer further acknowledges and agrees that except for any representations and warranties (if any) expressly made by Seller in Section 9.1 of this Agreement or any closing document neither Seller nor any Seller Party made any representations, warranties or agreements by or on behalf of Seller of any kind whatsoever, whether oral or written, express or implied, statutory or otherwise, as to any matters concerning the Property, the condition of the Property, the size (including rentable or useable square footage) of the Real Pr operty and/or the Improvements (including any discrepancies in the actual rentable square footage of the Improvements), the present use of the Property or the suitability of Buyer's intended use of the Property.  Buyer hereby acknowledges, agrees and represents that the Property is to be purchased, conveyed and accepted by Buyer in its present condition, "AS IS", "WHERE IS" AND WITH ALL FAULTS, and that no patent or latent defect or deficiency in the condition of the Property whether or not known or discovered, shall affect the rights of either Seller or Buyer hereunder nor shall the Purchase Price be reduced as a consequence thereof.  Except as otherwise expressly provided in Section 9.1.11 above of this Agreement, any and all information and documents furnished to Buyer by or on behalf of Seller relating to the Property shall be deemed furnished as a courtesy to Buyer but without any warranty of any kind from or on be half of Seller.  Buyer hereby represents and warrants to Seller that Buyer has (or by the Closing Date, shall have) performed an independent inspection and investigation of the Property and has also investigated and has knowledge of operative or proposed governmental laws and regulations including land use laws and regulations to which the Property may be subject.  Buyer further represents that, except for any representations (if any) expressly made by Seller in Section 9.1 of this Agreement or in any closing document, Buyer shall acquire the Property solely upon the basis of Buyer's independent inspection and investigation of the Property, including:  (a) the quality, nature, habitability, merchantability, use, operation, value, marketability, adequacy or physical condition of the Property or any aspect or portion thereof, including structural elements, foundation, roof, appurtenances, access, landscapin g, parking facilities, electrical, mechanical, HVAC, plumbing, sewage, and utility systems, facilities and appliances, soils, geology and groundwater, or whether the Real Property lies within a special flood hazard area, an area of potential flooding, a very high fire hazard severity zone, a wildland fire area, an earthquake fault zone or a seismic hazard zone; (b) the dimensions or lot size of the Real Property or the square footage of the Improvements thereon or of any tenant space therein; (c) the development or income potential, or rights of or relating to, the Real Property or its use, habitability, merchantability, or fitness, or the suitability, value or adequacy of such Real Property for any particular purpose; (d) the zoning or other legal status of the Real Property or any other public or private restrictions on the use of the Real Property; (e) the compliance of the Real Property or its operation with any applicable codes, laws, regulations, statutes, ordinances, covenants, con ditions and restrictions of any governmental or regulatory agency or authority or of any other person or entity (including the Americans With Disabilities Act); (f) the ability of Buyer to obtain any necessary governmental approvals, licenses or permits for Buyer's intended use or development of the Real Property; (g) the presence or absence of Hazardous Materials on, in, under, above or about the Real Property or any adjoining or neighboring property; (h) the quality of any labor and materials used in any Improvements; (i) the condition of title to the Real Property; (j) Contracts or any other agreements affecting the Real Property or the intentions of any party with respect to the

 

negotiation and/or execution of any lease or contract with respect to the Real Property; (k) Seller's ownership of the Property or any portion thereof; or (l) the economics of, or the income and expenses, revenue or expense projections or other financial matters, relating to the operation of the Real Property.  Without limiting the generality of the foregoing, Buyer expressly acknowledges and agrees that Buyer is not relying on any representation or warranty of Seller or any Seller Party, whether implied, presumed or expressly provided at law or otherwise, arising by virtue of any statute, common law or other legally binding right or remedy in favor of Buyer, except as may be expressly provided in Section 9.1 of this Agreement or in any closing document.  Buyer further acknowledges and agrees that Seller is not under any duty to make any inquiry regarding any matter that may or may not be known to Seller or any other Seller Party.

 

SELLER'S INITIALS:                                                BUYER'S INITIALS:                                                

 

11. Limited Liability.  Buyer on Buyer's own behalf and on behalf of Buyer's agents, members, partners, shareholders, employees, representatives, related and affiliated entities, successors and assigns (collectively, the "Buyer Parties") hereby agrees that in no event or circumstance shall any of the shareholder(s) of Seller or any of their members, managers, partners, employees, representatives, officers, directors or agents, or any of their affiliated or related entities, have any personal liability under this Agreement, or to any of Buyer's lenders or other creditors, or to any other party in connection with the Property.  Notwithstanding anything to the contrary contained in this Agreement, if the Closing is consummated, neither Buyer nor Seller shall have any liability to the other following the Closing with respect to any breaches of representations, warranties or covenants under this Agreement (other than the covenants and obligations contained in Section 6.6 and Section 6.9 hereof) unless and until the aggregate amount of the actual general and compensatory damages suffered by Buyer or Seller, as the case may be, by reason of any such breach of representations, warranties or covenants by the other exceeds the sum of Ten Thousand Dollars ($10,000); but then in such event, the damages that the non-defaulting party may collect shall begin with and include the first dollar of such loss.  Seller's total liability with re spect to a breach of any of Seller's representations, warranties or other obligations contained in this Agreement or in any document or instrument executed and delivered by Seller at the Closing (including any indemnity obligations of Seller in this Agreement or in any such document or instrument) is unlimited in the aggregate.  The provisions of this Section 11 shall survive the Closing and the recordation of the Grant Deed, and shall not be deemed merged into the Grant Deed or other documents or instruments delivered at the Closing.

 

12. Release.  Buyer on Buyer's own behalf and on behalf of each of the Buyer Parties hereby agrees that each of Seller, Seller's shareholder(s), and their partners, members, managers, trustees, beneficiaries, directors, officers, employees, representatives, property managers, asset managers, agents, attorneys, affiliated and related entities, heirs, successors and assigns (collectively, the "Released Parties") shall be, and are hereby, fully and forever released from any and all liabilities, losses, claims (including third party claims), demands, damages (of any nature whatsoev er), causes of action, costs, penalties, fines, judgments, attorneys' fees, consultants' fees and costs and experts' fees,  whether direct or indirect, known or unknown, foreseen or unforeseen (collectively, "Claims") that may arise on account of or in any way be connected with the Property including the physical, environmental and structural condition of the Property or any law or regulation applicable thereto, including any Claim or matter (regardless of

 

when it first appeared) relating to or arising from (a) the presence of any environmental problems, or the use, presence, storage, release, discharge or migration of Hazardous Materials on, in, under or around the Property, regardless of when such Hazardous Materials were first introduced in, on or about the Property, (b) any patent or latent defects or deficiencies with respect to the Property, (c) any and all matters related to the Property or any portion thereof, including the condition and/or operation of the Property and each part thereof, and (d) the presence, release and/or remediation of asbestos and asbestos containing materials in, on or about the Property, regardless of when such asbestos or asbestos containing materials were first introduced in, on or about the Property.  Buyer hereby waives and agrees not to commence any action, legal proceed ing, cause of action or suits in law or equity, of whatever kind or nature, including any private right of action under the federal superfund laws, 42 U.S.C. Sections 9601 et seq. (as such laws and statutes may be amended, supplemented or replaced from time to time), directly or indirectly, against the Released Parties in connection with Claims described above.  Buyer elects to and does assume all risk for such Claims against the Released Parties which may be brought by Buyer or Buyer Parties heretofore and hereafter arising, whether now known or unknown by Buyer.  In this connection and to the greatest extent permitted by law, Buyer hereby agrees, represents and warrants that Buyer realizes and acknowledges that factual matters now unknown to Buyer may have given or may hereafter give rise to Claims which are presently unknown, unanticipated and unsuspected, and Buyer further agrees, represents and warrants that t he waivers and releases herein have been negotiated and agreed upon in light of that realization and that Buyer nevertheless hereby intends to release Seller from any such unknown Claims which might in any way be included as a material portion of the consideration given to Seller by Buyer in exchange for Seller's performance hereunder.  Without limiting the foregoing, if Buyer has knowledge of (i) a default in any of the covenants, agreements or obligations to be performed by Seller under this Agreement and/or (ii) any breach or inaccuracy in any representation of Seller made in this Agreement, and Buyer nonetheless elects to proceed to Closing, then, upon the consummation of the Closing, Buyer shall be conclusively deemed to have waived any such default and/or breach or inaccuracy and shall have no Claim against Seller or hereunder with respect thereto.  Notwithstanding anything to the contrary herein, Seller shall not have any liability whatsoever to Buyer with respect to any matter disclosed to or discovered by Buyer or the Buyer Parties prior to the Closing Date.

 

Without limiting the generality of the foregoing, Buyer hereby expressly waives, releases and relinquishes any and all claims, causes of action, rights and remedies Buyer may now or hereafter have against the Released Parties, whether known or unknown, under any Environmental Law(s), or common law, in equity or otherwise, with respect to (1) any past, present or future presence or existence of Hazardous Materials on, under or about the Property (including in the groundwater underlying the Property) or (2) any past, present or future violations of any Environmental Laws.  For the purposes of this Agreement, the term "Environmental Laws" means any and all federal, state and local statutes, ordinances, orders, rules, regulations, guida nce documents, judgments, governmental authorizations, or any other requirements of governmental authorities, as may presently exist or as may be amended or supplemented, or hereafter enacted or promulgated, relating to the presence, release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C.A. § 9601 et seq.), the

 

Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), and the Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C. § 11001 et seq.).  As used herein, the term "Hazardous Material(s)" includes any hazardous or toxic material, substance, irritant, chemical or waste, which is (A) defined, classified, designated, listed or otherwise considered under any Environmental Law as a "hazardous waste," "hazardous substance," "hazardous material," "extremely hazardous waste," "acutely hazardous waste," "radioactive waste," "biohazardous waste," "pollutant," "toxic pollutant," "contaminant," "restricted hazardous waste," "infectious waste," "toxic substance," or any other term or expression intended to define, list, regulate or classify substances by reason of properties harmful to health, safety or the indoor or outdoor environment, (B) toxic, ignitable, corrosive, reactive, explosive, flammable, infectious, radioactive, carcinogenic or mutagenic, and which is or becomes regulated by any local, state or federal governmental authority, (C) asbestos and asbestos containing materials, (D) an oil, petroleum, petroleum based product or petroleum additive, derived substance or breakdown product, (E) urea formaldehyde foam insulation, (F) polychlo rinated biphenyls (PCBs), (G) freon and other chlorofluorocarbons, (H) any drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources, (I) lead-based paint and (J) mold, rot, fungi and bacterial matter.

 

Notwithstanding anything in this Section 12 to the contrary, the releases contained in this Section 12 are not intended to and do not include (I) any claims arising from a breach of Seller’s express representations or warranties in Section 9.1 above (subject to the limitations, disclaimers and other provisions of this Agreement), or (II) any obligation or other covenant of Seller under this Agreement which by its express terms survives the Closing.

 

Seller has given Buyer material concessions regarding this transaction in exchange for Buyer agreeing to the provisions of this Section 12.  Seller and Buyer have each initialed this Section 12 to further indicate their awareness and acceptance of each and every provision hereof.  The provisions of this Section 12 shall survive the Closing and shall not be deemed merged into the Grant Deed or any other document or instrument delivered at the Closing.

 

SELLER'S INITIALS:                                                BUYER'S INITIALS:                                                

 

13. Notices.  Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered by U.S. mail, registered or certified, return receipt requested, postage prepaid, or by overnight delivery service showing receipt of delivery, or by personal delivery, or by facsimile transmission or other electronic signature (it being agreed that facsimile transmission or other electronic signature shall have the same force and effect as an original signature).  Such notices shall be sent to the parties at the following addresses, or such other address as may otherwise be indicated by any such pa rty in writing.

 

If to Seller:

Dakota Bank Building Limited Partnership

Attn: Raymond D. Fisher

316 Oak Street

Glen Ellyn, IL  60137

Phone:   ###-###-####

Fax:   ###-###-####

With a copy to:                                Howard Gilbert

3315 Algonquin Road

Suite 202

Rolling Meadows Illinois 60008

Phone: (847) 253-6200

Fax: (847) 589-1661

With a copy to:

Mindy Wolin Sherman, Esq.

Perkins Coie LLP

131 S. Dearborn, Suite 1700

Chicago, IL  60603

Fax:   ###-###-####

 

If to Buyer:

NetREIT Inc.,

 

1282 Pacific Oaks Place

 

Escondido CA 92029

 

Attention:  Asset manager

 

Phone number:   ###-###-####

 

Facsimile:   ###-###-####

Email: gkatz@ netreit.com

 

with a copy to:

NetREIT Inc.,

 

1282 Pacific Oaks Place

 

Escondido CA 92029

 

Attention:  General Counsel

 

Phone number:   ###-###-####

 

Facsimile:   ###-###-####

Email: ***@***

If to Escrow Holder                              Chicago Title Company

701 “B” Street, Suite 760

San Diego, CA 92101

Attention:  Janine Hudson

Escrow No. 930018653-U60

Phone number:   ###-###-####

Facsimile:   ###-###-####

If to Title Company                              Fidelity National Title Group

222 South Ninth Street, Suite 3060

Minneapolis, MN 55402

Attention:  Nicole Shubert

 

Order No. 81003167

Phone number:   ###-###-####

Facsimile:   ###-###-####

Email: ***@***

 

Notices as aforesaid shall be effective upon the earlier of actual receipt, or twenty-four (24) hours after deposit with the messenger or delivery service, or the next Business Day after delivery to an overnight delivery service, or within three (3) days after the deposit in the U.S. mail, or upon confirmation of transmission by facsimile, or when receipt is refused.

 

14. Entire Agreement; Participation in Drafting.  This Agreement constitutes the entire understanding of the parties and all prior agreements, representations, and understandings between the parties, whether oral or written, are deemed null and void, all of the foregoing having been merged into this Agreement.  The parties acknowledge that each party and/or such party's counsel have reviewed and revised this Agreement and that no rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall be employed in the interpretation or enforcement of this Agreement or any amendments or exhibits to this Agreement o r any document executed and delivered by either party in connection with this Agreement.  If Buyer and/or Seller are comprised of more than one party, then each such party shall be jointly and severally liable for the obligations of Buyer or Seller, as applicable, hereunder.

 

15. Agreement Binding on Parties.

 

15.1 Successors and Assigns.  Subject to Section 15.2 and Section 15.3 below, this Agreement, and the terms, covenants, and conditions contained herein, shall inure to the benefit of and be binding upon the heirs, personal representatives, successors, and assigns of each of the parties hereto.

 

15.2 Assignment by Buyer.  Buyer may assign Buyer's rights under this Agreement without Seller's consent only so long as all of the following conditions are satisfied:  (a) the assignee of Buyer must be an entity which is directly or indirectly owned and controlled by the same entity which directly or indirectly owns and controls Buyer; (b) the Deposit must have been delivered to Escrow Holder and disbursed to Seller; (c) the Due Diligence Deadline shall have occurred and Buyer shall have delivered an Approval Notice to proceed with the acquisition of the Property; (d) Buyer shall remain primarily liable for the performance of Buy er's obligations under this Agreement; (e) the assignee must expressly assume in writing all of Buyer's obligations under this Agreement, and Buyer shall deliver to Seller a copy of the fully executed written assignment and assumption agreement between Buyer and such assignee at or before the Closing; and (f) the Assignee must expressly reaffirm in writing for Seller's benefit the disclaimer, "as is", limited liability and release and other provisions in Section 10, Section 11 and Section 12 of this Agreement.  Any assignment of Buyer's rights under this Agreement without the prior written consent of Seller which does not satisfy the requirements in the foregoing clauses (a) through (f) of this Section 15.2 shall be void.

 

15.3 Assignment by Seller.  Seller may assign Seller's rights under this Agreement without Buyer's consent only so long as all of the following conditions are satisfied: 

 

 (a) the assignee of Seller must be an entity which is directly owned and controlled by Seller; (b) Seller shall remain primarily liable for the performance of Seller's obligations under this Agreement; and (c) the assignee must expressly assume in writing all of Seller's obligations under this Agreement and Seller shall deliver to Buyer a copy of the fully executed written assignment and assumption agreement between Seller and such assignee at or before the Closing.  Any assignment of Seller's rights under this Agreement without the prior written consent of Buyer which does not satisfy the requirements in the foregoing clauses (a) through (c) of this Section 15.3 shall be void.

 

16. Severability.  If for any reason, any provision of this Agreement shall be held to be unenforceable, it shall not affect the validity or enforceability of any other provision of this Agreement and to the extent any provision of this Agreement is not determined to be unenforceable, such provision, or portion thereof, shall be, and remain, in full force and effect.

 

17. Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of North Dakota.

 

18. Modifications.  Any and all exhibits attached hereto shall be deemed a part hereof.  This Agreement, including exhibits, if any, expresses the entire agreement of the parties and supersedes any and all previous agreements between the parties with regard to the Property.  There are no other understandings, oral or written, which in any way alter or enlarge its terms, and there are no warranties or representations of any nature whatsoever, either expressed or implied, except as may expressly be set forth herein.  Any and all future modifications of this Agreement will be effective only if it is in writing and signed by the parti es hereto.  The terms and conditions of such future modifications of this Agreement shall supersede and replace any inconsistent provisions in this Agreement.

 

19. Confidentiality.  Buyer agrees that, (a) except as otherwise provided or required by valid law, (b) except to the extent Buyer considers such documents or information reasonably necessary to prosecute and/or defend any claim made with respect to the Property or this Agreement, and (c) except to the extent reasonably necessary to deliver such documents or information to Buyer's lenders, employees, investors, officers, directors, members, partners, paralegals, attorneys and/or consultants in connection with Buyer's evaluation of this transaction, (i) Buyer and all Buyer Parties shall use commercially reasonable efforts to keep the content s of any materials, reports, documents, data, test results, and other information related to the transaction contemplated hereby, including the Due Diligence Materials and all information regarding Buyer's acquisition of the Property strictly confidential, (ii) Buyer and all Buyer Parties shall keep and maintain the contents of this Agreement, including the amount of consideration being paid by Buyer for the Property, strictly confidential, and (iii) Buyer and all Buyer Parties shall refrain from generating or participating in any publicity or press release regarding this transaction without the prior written consent of Seller.  Seller agrees that, (a) except as otherwise provided or required by valid law, (b) except to the extent Seller considers such information reasonably necessary to prosecute and/or defend any claim made with respect to the Property or this Agreement, and (c) except to the extent reasonably necessary to deliver such information to Seller's employees, p aralegals, attorneys and/or consultants in connection with this transaction, Seller and Seller's shareholders, employees and affiliated entities shall (i) use commercially reasonable efforts to keep and maintain the contents of this

 

Agreement, including the amount of consideration being paid by Buyer for the Property, strictly confidential, and (ii) refrain from generating or participating in any publicity or press release regarding this transaction without the prior written consent of Buyer.  The provisions of this Section 19 shall survive any termination of this Agreement but shall not survive the Closing except for Buyer's covenants in clauses (ii) and (iii) hereof, which covenants shall survive the Closing and shall not be deemed merged into the Grant Deed or any other document or instrument delivered at Closing.

 

20. Dispute Costs.  In the event any dispute between the parties with respect to this Agreement results in litigation or other proceeding, the prevailing party shall be reimbursed by the party not prevailing in such proceeding for all reasonable costs and expenses, including reasonable attorneys' and experts' fees and costs incurred by the prevailing party in connection with such litigation or other proceeding and any appeal thereof.  Such costs, expenses and fees shall be included in and made a part of the judgment recovered by the prevailing party, if any.  The provisions of this S ection 20 shall survive any termination of this Agreement or the Closing and shall not be deemed merged into the Grant Deed or any other document or instrument delivered at Closing.

 

21. Time of the Essence; Business Days.  Time is of the essence in the performance of each of the parties' respective obligations contained in this Agreement.  Unless the context otherwise requires, all periods terminating on a given day, period of days, or date shall terminate at 5:00 p.m. (Pacific Time) on such date or dates.  References to "days" shall refer to calendar days except if such references are to "Business Days" which shall refer to days which are not a Sat urday, Sunday or a legal holiday under the laws of the State of California.  Notwithstanding the foregoing, if any period terminates on a Saturday, Sunday or legal holiday, under the laws of the State of California, the termination of such period shall be on the next succeeding business day.  The time in which any act provided under this Agreement is to be done, shall be computed by excluding the first day and including the last day, unless the last day is a Saturday, Sunday or legal holiday under the laws of the State of California, and then it is also so excluded.

 

22. Required Actions of Buyer and Seller.  Buyer and Seller agree to execute such instruments and documents and to diligently undertake such actions as may be required by Title Company in order to consummate the purchase and sale herein contemplated.

 

23. No Recordation.  Neither this Agreement nor a memorandum thereof may be recorded.

 

24. 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 Seller and Buyer have fully executed and delivered (or caused the delivery) to each other a counterpart of this Agreement with all exhibits attached hereto.

 

25. Multiple Counterparts.  This Agreement may be executed in multiple counterparts (each of which is to be deemed original for all purposes).  The signature page of any counterpart

 

may be detached therefrom without impairing the legal effect of the signature(s) thereon so long as such signature page is attached to any other counterpart of this Agreement identical thereto except having additional signature pages executed by the other parties to this Agreement attached thereto.

 

26. Electronic Signatures.  Seller and Buyer each (a) has agreed to permit the use from time to time, where appropriate, of telecopy or other electronic signatures in order to expedite the transaction contemplated by this Agreement, (b) intends to be bound by its respective telecopy or other electronic signature, (c) is aware that the other will rely on the telecopied or other electronically transmitted signature, and (d) acknowledges such reliance and waives any defenses to the enforcement of this Agreement and the documents affecting the transaction contemplated by this Agreement based on the fact that a signature was sent by telecopy or electronic transmission only.

 

27. Limitations on Benefits.  It is the explicit intention of Buyer and Seller that, except for the Released Parties referred to above in this Agreement, no person or entity other than Buyer and Seller and their permitted successors and assigns is or shall be entitled to bring any action to enforce any provision of this Agreement against either of the parties hereto, and the covenants, undertakings and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, Buyer and Seller or their respective successors and assigns as permitted hereunder.  Nothing contained in this Agreement shall under any circum stances whatsoever be deemed or construed, or be interpreted, as making any third party (including the Broker or Buyer's Lender) a beneficiary of any term or provision of this Agreement or any instrument or document delivered pursuant hereto, and Buyer and Seller expressly reject any such intent, construction or interpretation of this Agreement.

 

28. Interpretation.  For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:  (a) all exhibits attached hereto are incorporated herein by reference; (b) the section and subsection headings contained in this Agreement are for convenience only and in no way enlarge or limit the scope or meaning of the various sections or subsections hereof; (c) all dollar amounts are expressed in United States currency; (d) all defined terms in this Agreement include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other genders; (e) refe rences herein to "Sections," subsections, paragraphs and other subdivisions without reference to a document are to designated Sections, subsections, paragraphs and other subdivisions of this Agreement; (f) a reference to a subsection without further reference to a Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions; (g) the words "hereof," "herein," "thereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular provision; (h) the word "including" or "includes" means "including, but not limited to" or "includes without limitation"; (i) the words "approval," "consent" and "notice" shall be deemed to be preceded by the word "written"; (j) any reference to this Agreement or any Exhibits hereto and any other instruments, documents and agreements shall include this Agreement, Exhibits and other instruments, documen ts and agreements as originally executed or existing and as the same may from time to time be supplemented, modified or amended; and (k) unless otherwise specifically provided, all references in this Agreement to a number of days shall mean calendar days rather than Business Days.

 

29. Exhibits.  Exhibit A through Exhibit L are incorporated herein by reference.

 

30. No Partnership/Fiduciary Relationship.  The parties acknowledge and agree that the relationship created by this Agreement between Seller, on the one hand, and Buyer, on the other hand, is one of contract only, and that no partnership, joint venture or other fiduciary or quasi-fiduciary relationship is intended or in any way created hereby between Seller and Buyer.

 

31. Tax-Free Exchange.  The parties hereby acknowledge that either party hereto may desire to consummate this transaction as a tax deferred exchange or a reverse tax deferred exchange (the "Exchange") for other real property and improvements of like kind (the "Exchange Property") under Internal Revenue Code Section 1031 and the regulations promulgated thereunder.  The parties agree to cooperate with each other to accomplish such Exchange, including the execution of documents therefor, provided each and every one of the following terms and conditions are satisfied:  (a) either party shall notify the other not less than ten (10) Business Days prior to the Closing Date that such party has arranged such an Exchange and as soon as reasonably possible thereafter but in all events prior to the Closing Date, Seller and Buyer, and such other parties as may be necessary to effect the Exchange, shall have executed any and all documents (the "Exchange Documents") satisfactory to the parties and their respective legal counsel which are necessary to effect the Exchange; (b) neither party shall not be required to execute any Exchange Documents in connection with the Exchange unless and until both parties have expressly notified each other in writing that each specific Exchange Document has been approved; (c) except for costs incurred by the applicable party in connection with the Exchange, neithe r party shall be obligated to pay any facilitator, intermediary or escrow costs, brokerage commissions, title charges, survey costs, recording costs or other charges incurred by the other party with respect to the Exchange Property and/or the Exchange; (d) in no way shall the Closing be contingent or otherwise subject to the consummation of the Exchange for the Exchange Property, and the Closing shall occur on the Closing Date in accordance with the terms of this Agreement despite any failure or delay, for any reason, of any party hereto and any other parties to the Exchange to effect the same; (e) if, for any reason (including a breach or default by Seller under this Agreement), the Closing hereunder does not occur, Seller shall have no responsibility or liability to any third party involved in the Exchange transaction; (f) Buyer shall use a third party facilitator or intermediary to sell the Exchange Property so that Seller shall have no obligations in connection with the sale of the Exchang e Property to the third party involved in the Exchange or in connection with any agreement or document with respect thereto; (g) Seller will not be required to make any representations or warranties nor assume any obligations, including any debt secured by the Exchange Property or otherwise, nor spend any sum or incur any personal liability whatsoever in connection with the Exchange transaction contemplated hereby, nor shall the cash which Buyer is required to pay hereunder to obtain the Property be subject to liquidated damages or forfeiture or be increased with respect to such Exchange; (h) both parties hereto indemnify and agree to hold the other party harmless from and against any and all causes, claims, demand, liabilities, costs and expenses, including reasonable attorneys' fees, as a result of or in connection with the Exchange Property and any such Exchange; and (i) by consummating the Exchange, neither party shall have its rights under this Agreement affected or diminished in any mann er or be responsible for compliance with or be deemed to have warranted to the other party that the Exchange in fact complies with Section 1031 of the Internal Revenue Code.  The provisions of this Section 31 shall survive

 

any termination of this Agreement and shall survive the Closing and shall not merge into the Grant Deed or any other document or instrument delivered at Closing.

 

 

IN WITNESS WHEREOF the parties have executed this Agreement as of the Agreement Date first written above.

 

BUYER:

NetREIT Inc.

a Maryland corporation

 

By: /s/ Kenneth Elsberry

 

Print Name: Kenneth Elsberry

 

Title: Chief Financial Officer

 

 

 

 

CHICAGO TITLE COMPANY hereby acknowledges that it has received originally executed counterparts or a fully executed original of the foregoing Purchase and Sale Agreement and Joint Escrow Instructions and agrees to act as Escrow Holder thereunder and to be bound by and perform the terms thereof as such terms apply to Escrow Holder.

 

 

 

 

THE REAL PROPERTY REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF CASS, STATE OF NORTH DAKOTA, AND IS DESCRIBED AS FOLLOWS:

 

Lots 1 through 7; Lots 8 through 12, except the South 116’ thereof; Lots 13, 14, 20, 21, and 22; vacated alley adjacent to Lots 1 through 13 and Lot 22; all in Block 1, of Keeney and Devitt’s Addition to the City of Fargo, situate in the County of Cass and the State of North Dakota.

 

 

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL

THIS GRANT DEED AND ALL

TAX STATEMENTS TO:

 

(Above Space for Recorder's Use Only)

 

 

 

Documentary Transfer Tax not shown

pursuant to Section 11932 of the Revenue

and Taxation Code, as amended.

 

FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Dakota Bank Building Limited Partnership, an Illinois limited partnership ("Grantor"), hereby GRANTS to NetREIT Inc., a Maryland corporation, the following described real property (the "Property") located in the City of Fargo, County of Cass, State of North Dakota:

 

Lots 1 through 7; Lots 8 through 12, except the South 116’ thereof; Lots 13, 14, 20, 21, and 22; vacated alley adjacent to Lots 1 through 13 and Lot 22; all in Block 1, of Keeney and Devitt’s Addition to the City of Fargo, situate in the County of Cass and the State of North Dakota.

 

SUBJECT TO:

 

1.           Real property taxes and assessments, not delinquent.

 

2.           All other covenants, conditions, restrictions, reservations, rights, rights of way, easements, encumbrances, liens and title matters of record or that would be disclosed by a survey or inspection of the Property as of the date hereof.

 

[signature page follows]

 

IN WITNESS WHEREOF, Grantor has caused this Grant Deed to be executed as of the ___ day of _____________, 2011.

 

 

STATE OF                                            )

)  ss.

COUNTY OF                                                      )

 

On ________________________, before me, ________________________, a Notary Public in and for said state, personally appeared _______________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.

 

WITNESS my hand and official seal.

 

__________________________________________

 

Notary Public in and for said State

 

 

TO:           Recorder

County of Cass

 

Request is hereby made in accordance with the provisions of the Documentary Transfer Tax Act that the amount of the tax due not be shown on the original document which names:

 

Grantor:                      Dakota Bank Building Limited Partnership, an Illinois limited partnership

 

Grantee:                      NetREIT Inc., a Maryland corporation

 

The property described in the accompanying document is located in the City of Fargo, County of Cass, State of North Dakota.

 

The amount of tax due on the accompanying document is $___________.

 

      X                      Computed on full value of property conveyed.

 

Computed on full value, less liens and encumbrances remaining at the time of sale.

 

[signature page follows]

	GRANTOR:
	DAKOTA BANK BUILDING LIMITED PARTNERSHIP,
	an Illinois limited partnership,
	by its General Partners:
	Lisle, L.L.C.	Oak Street, L.L.C.
By:	Aubrey J. Greenberg Trust dated
	November 21, 2002, Sole Member
	and Manager
		/s/ Raymond D. Fisher
By:	/s/ Judith O. Greenberg	Raymond D. Fisher, Manager
	Judith O. Greenberg, not
	individually, but as Trustee
By:	/s/ Howard E. Gilbert
	Howard E. Gilbert, not  individually,
	but as Trustee
By:	/s/ Jo Ann Beck
	Jo Ann Beck, not  individually, but as Trustee

Note:

After the permanent record is made, this form will be affixed to the conveying document and returned with it.

 

 

 

 

 

 

THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND OTHER INTANGIBLE PROPERTY (this "General Assignment") is made and entered into as of the ___ day of ____________, 2011 by and between Dakota Bank Building Limited Partnership, an Illinois limited partnership ("Assignor") and NetREIT Inc., a Maryland corporation ("Assignee").

 

R E C I T A L S :

 

A.           Assignor and Assignee entered into that certain Purchase and Sale Agreement and Joint Escrow Instructions dated January ___, 2011 ("Agreement") with respect to the sale and purchase of the "Property" described therein.

 

B.           Assignor desires to assign, transfer and convey to Assignee all of Assignor's right, title and interest in and to (i) those contracts and other agreements relating to the Property listed on Schedule 1 hereto (the "Contracts"), and (ii) the intangible personal property owned by Seller which is assignable and relates exclusively to the Property, including, without limitation, any warranties, guaranties, service contracts, plans and specifications, transferable licenses and permits, and entitlements and appurtenances (collectively, the "In tangible Property"), and Assignee desires to accept such assignment, transfer and conveyance of the Contracts and the Intangible Property and to assume and perform all of Assignor's covenants and obligations in and under the Contracts and the Intangible Property.

 

NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:

 

1. Effective Date.  The "Effective Date" of this General Assignment shall be the Closing (as defined in the Agreement) of the sale and purchase of the Property.

 

2. Assignment.  Assignor hereby assigns, transfers and conveys to Assignee all of Assignor's right, title and interest in and to the Contracts and the Intangible Property from and after the Effective Date.

 

3. Assumption and Acceptance.  Assignee hereby accepts the above assignment and transfer and expressly assumes and covenants to keep, perform, fulfill and discharge all of the terms, covenants, conditions and obligations required to be kept, performed, fulfilled and discharged by Assignor under the Contracts and the Intangible Property from and after the Effective Date.

 

4. No Warranties as to Construction Warranties, Personal Property or Intangible Property.  Assignee does hereby acknowledge that (a) Assignor is assigning, transferring and conveying any warranties to Assignee on a non-exclusive basis (with Assignor retaining the non-exclusive right to enforce such warranties), (b) Assignor is assigning, transferring and conveying the Contracts and the Intangible Property to Assignee without any warranty of any kind or nature, and (c) such assignment, transfer and conveyance by Assignor are subject to any limitations and restrictions which the terms of any of the Contracts or the Intangible Property impose on Assignor's right or ability to transfer the same.  This Assignment shall not be construed as a representation or warranty by Assignor as to the assignability, transferability or enforceability of any or all of the Contracts or the Intangible Property, and Assignor shall have no liability to Assignee in the event that any or all of the Contracts and the Intangible Property (a) are not assignable or transferable to Assignee or (b) are cancelled or terminated by reason of this Assignment or any acts of Assignee.

 

5. Dispute Costs.  In the event of any dispute between Assignor and Assignee arising out of the obligations of the parties under this General Assignment or concerning the meaning or interpretation of any provision contained herein, the non-prevailing party shall pay the prevailing party's costs and expenses of such dispute, including without limitation, reasonable attorneys' fees and costs.  Any such attorneys' fees and other expenses incurred by either party in enforcing a judgment in its favor under this Assignment shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys' fees obligation is intended to be severable from the other provisions of this Assignment and to survive and not be merged into any such judgment.

 

6. Counterparts.  This Assignment may be executed in counterparts, each of which shall be deemed an original, and all of which shall taken together be deemed one document.

 

7. Limited Liability.  This Assignment is made without any express or implied representation or warranty of any kind or nature other than those representations and warranties expressly made by Assignor in Section 9.1 of the Agreement, which representations and warranties by Assignor shall survive only for the period provided in, and are subject to all of the limitations set forth in, the Agreement.  Assignee hereby agrees that in no event or circumstance shall any of the members, partners, employees, representatives, officers, shareholders, directors, advisors or agents of Assignor have any personal liability under this Assignment.

 

 

IN WITNESS WHEREOF, Assignor and Assignee have duly executed this Assignment as of the day and year first above written.

 

ASSIGNEE:

NetREIT Inc.

a Maryland corporation

 

By: _____________________                                          

Print Name:_______________                                                 

Title:____________________                            

 

	ASSIGNOR
	DAKOTA BANK BUILDING LIMITED PARTNERSHIP,
	an Illinois limited partnership,
	by its General Partners:
	Lisle, L.L.C.	Oak Street, L.L.C.
By:	Aubrey J. Greenberg Trust dated
	November 21, 2002, Sole Member
	and Manager
		/s/ Raymond D. Fisher
By:	/s/ Judith O. Greenberg	Raymond D. Fisher, Manager
	Judith O. Greenberg, not
	individually, but as Trustee
By:	/s/ Howard E. Gilbert
	Howard E. Gilbert, not  individually,
	but as Trustee
By:	/s/ Jo Ann Beck
	Jo Ann Beck, not  individually, but as Trustee

 

 

 

SCHEDULE 1

 

to Assignment and Assumption of Contracts and Other Intangible Property

 

 

 

 

 

 

 

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Dakota Bank Building Limited Partnership, an Illinois limited partnership ("Seller"), does hereby GRANT, SELL, CONVEY, TRANSFER AND DELIVER to NetREIT Inc., a Maryland corporation ("Buyer"), without any warranty of any kind, any and all of Seller's rights, title and interests in and to the fixtures, machinery, equipment and other tangible personal property (the "Personal Property") owned by Seller and located in or on or utilized by Seller exclusively in connection with the improved real property described in Schedul e 1 attached hereto and made a part hereof (the "Property").

 

From and after the date of this Bill of Sale, it is intended by the parties that Buyer and Buyer's successors and assigns shall have the right to use, have, hold and own the Personal Property forever.  This Bill of Sale may be executed in counterparts, each of which shall be deemed an original, and all of which shall taken together be deemed one document.  Seller and Buyer agree that the delivery of an executed copy of this Bill of Sale by facsimile shall be legal and binding and shall have the same full force and effect as if an original executed copy of this Bill of Sale had been delivered.

 

Buyer hereby acknowledges, covenants, represents and warrants that Seller has made absolutely no warranties or representations of any kind or nature (whether express, implied or statutory) regarding title to the Personal Property or the condition of the Personal Property and that such Personal Property is being conveyed and sold on an "as-is" basis.

 

By acceptance of this Bill of Sale, Buyer on behalf of itself and Buyer's officers, directors, employees, partners, agents, representatives, successors and assigns hereby agrees that in no event or circumstance shall Seller, Seller's shareholder(s) or their officers, directors, beneficiaries, trustees, employees, representatives, related or affiliated entities, successors or assigns have any personal liability under this Bill of Sale, or to any of the other party's creditors, or to any other party in connection with the Personal Property.

 

[signature page follows]

 

IN WITNESS WHEREOF, the parties have executed this Bill of Sale as of this ___ day of __________, 2011.

	SELLER:
	DAKOTA BANK BUILDING LIMITED PARTNERSHIP,
	an Illinois limited partnership,
	by its General Partners:
	Lisle, L.L.C.	Oak Street, L.L.C.
By:	Aubrey J. Greenberg Trust dated
	November 21, 2002, Sole Member
	and Manager
		/s/ Raymond D. Fisher
By:	/s/ Judith O. Greenberg	Raymond D. Fisher, Manager
	Judith O. Greenberg, not
	individually, but as Trustee
By:	/s/ Howard E. Gilbert
	Howard E. Gilbert, not  individually,
	but as Trustee
By:	/s/ Jo Ann Beck
	Jo Ann Beck, not  individually, but as Trustee

 

 

 

 

 

 

THE REAL PROPERTY REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF CASS, STATE OF NORTH DAKOTA, AND IS DESCRIBED AS FOLLOWS:

 

Lots 1 through 7; Lots 8 through 12, except the South 116’ thereof; Lots 13, 14, 20, 21, and 22; vacated alley adjacent to Lots 1 through 13 and Lot 22; all in Block 1, of Keeney and Devitt’s Addition to the City of Fargo, situate in the County of Cass and the State of North Dakota.

 

 

 

 

 

 

 

NetREIT Inc., a Maryland corporation ("Transferee") is acquiring certain real property, located in the City of Fargo, County of Cass, State of North Dakota from Dakota Bank Building Limited Partnership, an Illinois limited partnership ("Transferor").  Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person.

 

To inform Transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by Transferor, the undersigned Transferor hereby certifies to Transferee:

 

1.           Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder);

 

2.           Transferor is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii);

 

3.           Transferor's U.S. tax identification number is ____________; and

 

4.           Transferor's office address is 316 Oak Street, Glen Ellyn, Illinois  60137.

 

Transferor understands that this Certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

 

Transferor understands that Transferee is relying on this Certification in determining whether withholding is required upon said transfer.

 

Under penalty of perjury the undersigned declare that they have examined this Certification and to the best of their knowledge and belief it is true, correct and complete, and they further declare that they have authority to sign this Certification on behalf of Transferor.

 

 

[signature page follows]

 

 

 

 

 

 

 

This Assignment and Assumption of Leases (the "Assignment") is made and entered into as of this ___ day of ________, 2011 ("Assignment Date"), by and between Dakota Bank Building Limited Partnership, an Illinois limited partnership ("Assignor"), and NetREIT Inc., a Maryland corporation ("Assignee"), with reference to the following facts.

 

R E C I T A L S :

 

A.           Assignor and Assignee are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions, made and entered into as of January ___, 2011 (the "Purchase Agreement"), pursuant to which Assignor agreed to sell to Assignee, and Assignee agreed to purchase from Assignor that certain improved real property located at 51 Broadway, Fargo, North Dakota, as legally described in Exhibit A attached hereto and made a part hereof (the "Property")."

 

B.           Assignor (or its predecessor-in-interest as owner of the Property) has previously entered into those certain leases of the Property, as more particularly described in Schedule 1 attached hereto and made a part hereof (collectively the "Leases").

 

C.           Assignor presently has security deposits from the tenants under the Leases in the amount set forth in Schedule 2 attached hereto and made a part hereof (collectively, the "Security Deposits").

 

D.           Assignee has acquired fee title to the Property from Assignor on the Assignment Date.  Assignor now desires to assign and transfer to Assignee all of Assignor's rights and interests in and to, and obligations under, the Leases and the Security Deposits, and Assignee desires to assume all of Assignor's rights, title, interests and obligations in, to and under the Leases and the Security Deposits, as set forth herein.

 

NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

 

1. Assignment and Assumption.  Effective as of the Assignment Date, Assignor hereby assigns, transfers, and conveys to Assignee all of the rights, interests and obligations of Assignor in, to and under the Leases and the Security Deposits from and after the date hereof.  Assignee hereby accepts such assignment and delegation by Assignor and expressly and unconditionally assumes and covenants to keep, perform, fulfill and discharge (i) all of the terms, covenants, conditions and obligations required to be kept, performed, fulfilled and discharged by Assignor as landlord in and under the Leases and with respect to the Security Deposits from and af ter the date hereof, and (ii) subject to the respective obligations of the Assignor and Assignee as to Leasing Costs under Section 7.4 of the Purchase Agreement, all of the covenants, terms and obligations required to be kept, performed, fulfilled and discharged by Assignor with respect to the payment and/or provision of tenant improvement costs, tenant improvement allowances and leasing commissions under the Leases (collectively, the "Leasing Costs").  Notwithstanding the

 

foregoing or anything to the contrary contained herein, Assignor shall retain all rights, title and interest in and to all rentals and other amounts payable by the tenant under the Leases for the period of time prior to the Assignment Date.

 

2. Dispute Costs.  In the event of any dispute between Assignor and Assignee arising out of the obligations of the parties under this Assignment or concerning the meaning or interpretation of any provision contained herein, the non-prevailing party shall pay the prevailing party's costs and expenses of such dispute, including without limitation, reasonable attorneys' fees and costs.  Any such attorneys' fees and other expenses incurred by either party in enforcing a judgment in its favor under this Assignment shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys' fees obligation is inte nded to be severable from the other provisions of this Assignment and to survive and not be merged into any such judgment.

 

3. Counterparts.  This Assignment may be executed in counterparts, each of which shall be deemed an original, and all of which shall taken together be deemed one document.

 

4. Limited Liability.  This Assignment is made without any express or implied representation or warranty of any kind or nature other than those representations and warranties expressly made by Assignor in Section 9.1 of the Purchase Agreement, which representations and warranties by Assignor shall survive only for the period provided in, and are subject to all of the limitations set forth in, the Agreement.  Assignee hereby agrees that in no event or circumstance shall any of the members, partners, employees, representatives, officers, shareholders, directors, advisors or agents of Assignor have any personal liability under this Assignment.

 

[signature page follows]

 

IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the Assignment Date.

 

 

 

 

 

 

 

 

SERVICE CONTRACTS	VENDOR/CONTRACTOR NAME

 

 

 

Re:

Lease (the “Lease”) dated ________________________ by and between _______________ (“Landlord”) and _________________________ (“Tenant”), relating to certain premises (the “Premises”) located at ________________________________ (the “Property”)

Ladies and Gentlemen:

As you may know, Landlord under the referenced Lease is contemplating a sale of the Property, including without limitation the Lease.  In connection with such conveyance, Tenant hereby acknowledges, certifies and agrees that:

1.           The documents attached hereto as Exhibit A constitute complete and accurate copies of the Lease, including all addenda, amendments, modifications, agreements, or other changes to the Lease, and there are no other amendments or agreements to which Tenant is a party that are binding upon Landlord and relate to the Property other than as expressly set forth therein or herein.

2.           The term of the Lease commenced on ____________________ and will expire on ____________________ [subject to Tenant’s renewal rights set forth in Section ____ of the Lease.]

3.           The Lease is in full force and effect and Tenant has not given Landlord any notice of termination or default thereunder.

4.           To the best of Tenant’s knowledge, no uncured breaches or defaults by either Landlord or Tenant exist under the Lease and no facts or circumstances exist that will constitute a breach or default under the Lease and no offsets, defenses or claims are presently available to Landlord or Tenant under the Lease.

5.           Tenant is in full and complete possession of the Premises and has accepted the Premises, as being complete, in compliance with the Lease, and satisfactory for Tenant’s purposes.

6.           The Premises contains _____________ rentable square feet.

7.           Tenant is paying monthly base rental under the Lease in the amount of $_____________, which shall continue through _____________.  Monthly base rental shall increase by ____% on the first day of each lease year commencing ___________.

8.           Tenant’s proportionate share of Building Expenses is _____%, Tenant’s proportionate share of Common Area Expenses is _____% and Tenant’s proportionate share of Real Estate Taxes is ____%.  [Tenant pays its full proportionate share of Building Expenses, Common Area Expenses and Real Estate Taxes.]  [Tenant pays its proportionate share of Building Expenses and

 

Common Area Expenses over a base year ending ___________ and its proportionate share of Real Estate Taxes over a base year ending _____________.]

9.           Pursuant to the Lease, all work to be performed by Landlord has been fully completed and accepted by Tenant and all allowances of whatever nature payable by Landlord to Tenant or otherwise have been fully paid, except as follows ____________________________.

10.           Tenant has not prepaid any rent or other charge under the Lease to Landlord other than rent for ______________.

11.           No security deposit has been paid to or is presently held by the Landlord under the Lease, and Tenant has not rendered to Landlord any other security or similar deposit with respect to its tenancy under the Lease, except as follows: [security deposit in the amount of $____________] or [letter of credit posted for the benefit of Landlord in the amount of $__________] or [NONE].

12.           Tenant has no option or right of first refusal to purchase all or a portion of the Premises, the Building, or the Property.

13.           Tenant has not assigned all or any part of its interest in and to the Lease as security or otherwise and has not subleased all or any part of the premises leased by Tenant under the Lease except as follows:  __________________________________________________________

14.           Tenant’s obligations under the Lease have been guaranteed by ___________________________ (“Guarantor”).  Said guaranty is in full force and effect and will not be affected by the sale of the Property.  A complete and accurate copy of said guaranty is attached hereto as Exhibit B.

15.           The address for notices to Tenant under the Lease is as follows:

____________________________

____________________________

____________________________

16.           The undersigned is duly authorized to execute and deliver this certificate for and on behalf of Tenant.

Tenant hereby acknowledges and agrees that purchaser, purchaser’s lender, if any, and each of their successors and assigns shall be entitled to rely on the truth and accuracy of the foregoing certifications made by Tenant

Dated this   day of ______________, 20___.

 

[Corporate Seal]

Very truly yours,     TENANT:     By:                                                                 Name:                                                                 Its:

 

 

 

 

[SELLER'S AGENT'S LETTERHEAD]

 

VIA CERTIFIED MAIL

 

[TENANT'S NAME]

 

[TENANT'S ADDRESS]

 

CITY, STATE ZIP

 

ATTN:  __________________

 

Re:           ________________________________, _____________________, North Dakota

 

Dear _______________:

 

Please be advised that on [CLOSING DATE], ownership of the above-referenced real property was transferred to _________________________, a ________________________ (the "Purchaser").  In connection with the sale of the property, and in conformance with the laws of the State of North Dakota, the obligations under the tenant security deposits were transferred to the Purchaser, whose address is ________________________, __________________________, ______________, California 9_____; Attention: _________________, without deduction or offset.

 

Hereafter, please make rent payable to "______________," and mail your payments to:

 

This Notice is given in accordance with the requirements of California Civil Code Section 1950.7(d).  From and after ____________, 200__, your sole recourse for the return of your security deposit upon the termination of your tenancy will be against the Purchaser.  If you have any questions, please call [Mr./Ms.] ______________ at ________________.  Thank you.

 

Very truly yours,

 

,

 

a                                                                

 

By:

 

Name:

 

Title:

 

cc:           

 

[name of Buyer's Agent]

 

 

 

 

 

 

 

 

1.		Agreement of Purchase and Sale			2
2.		Purchase Price			2
3.		Payment of Purchase Price			2
		3.1		Deposit	2
		3.2		Closing Cash Payment	2
4.		Conditions to Parties' Obligations			2
		4.1		Buyer's Pre-Closing Conditions	2
		4.2		Failure of Pre-Closing Conditions; Approval of General Contingency Matters	7
		4.3		Closing Conditions	8
		4.4		Failure of Closing Conditions	10
		4.5		Return of Due Diligence Materials	10
		4.6		Investigations, Obligations and Indemnity	11
5.		Remedies/Liquidated Damages			12
		5.1		Buyer's Default	12
		5.2		Seller's Default	12
6.		Closing and Escrow			13
		6.1		Escrow Instructions	13
		6.2		Closing and Close of Escrow	13
		6.3		Conveyance	14
		6.4		Closing Documents	14
		6.5		Actions of Escrow Holder	15
		6.6		Closing Costs	16
		6.7		Real Estate Commissions	16
		6.8		Real Estate Reporting Person	16
		6.9		Prorations	17
7.		Interim Operation and Leasing of the Property; Leasing Costs			20
		7.1		Operation	20
		7.2		Leasing	20
		7.3		Contracts	21
		7.4		Leasing Costs	21
8.		Casualty and Condemnation			21
		8.1		Immaterial Casualty or Condemnation	21
		8.2		Material Casualty or Condemnation	21

9.

Representations and Warranties

22

		9.1		Representations and Warranties of Seller	22
		9.2		Qualification of Seller's Representations and Warranties	24
		9.3		Definition of Seller's Knowledge	25
		9.4		Survival Period	25
		9.5		Representations and Warranties of Buyer	25
10.		AS-IS Condition of Property			26
11.		Limited Liability			27
12.		Release			28
13.		Notices			30
14.		Entire Agreement; Participation in Drafting			31
15.		Agreement Binding on Parties			32
		15.1		Successors and Assigns	32
		15.2		Assignment by Buyer	32
		15.3		Assignment by Seller	32
16.		Severability			32
17.		Governing Law.			32
18.		Modifications			32
19.		Confidentiality			33
20.		Dispute Costs			33
21.		Time of the Essence; Business Days			34
22.		Required Actions of Buyer and Seller			34
23.		No Recordation			34
24.		Drafts not an Offer to Enter into a Legally Binding Contract			34
25.		Multiple Counterparts			34
26.		Electronic Signatures			34
27.		Limitations on Benefits			34
28.		Interpretation			35
29.		Exhibits			35

30.		No Partnership/Fiduciary Relationship			35
31.		Tax-Free Exchange			35
EXHIBITS
EXHIBIT A		LEGAL DESCRIPTION OF THE REAL PROPERTY
EXHIBIT B		GRANT DEED
EXHIBIT C		GENERAL ASSIGNMENT
EXHIBIT D		BILL OF SALE
EXHIBIT E		FIRPTA CERTIFICATE
EXHIBIT F		ASSIGNMENT OF LEASES
EXHIBIT G		LIST OF CONTRACTS
EXHIBIT H		ESTOPPEL CERTIFICATE
EXHIBIT I		NOTICE TO TENANT
EXHIBIT J		IDENTIFIED LEASING COSTS
EXHIBIT K		LIST OF SELLER'S DOCUMENTS
EXHIBIT L		LIST OF LEASES