EXHIBIT 5.2
REAL ESTATE PURCHASE AGREEMENT
THIS REAL ESTATE PURCHASE AGREEMENT is made and entered as the 9th day
of March 1998, by and between (i) XXXXXXX PARK PLAZA LIMITED PARTNERSHIP, a
Maryland limited partnership (hereinafter referred to as "Seller") and (ii)
FIRST WASHINGTON REALTY LIMITED PARTNERSHIP, a Maryland limited partnership,
(hereinafter referred to as "Purchaser").
W I T N E S S E T H:
WHEREAS, Seller is the record and beneficial owner of all of those
certain parcels of real property as more particularly described on Exhibit A
hereto (collectively, the "Land"), together with the shopping center known as
Xxxxxxx Park Plaza located in Prince George's County, Maryland, and all other
buildings and improvements not owned by tenants situated thereon (collectively,
the "Building"), and all personal property and fixtures not owned by tenants
located therein (the "Personal Property"), and all appurtenances, rights,
easements, rights-of-way, tenements and hereditaments incident thereto (the
"Additional Property") (the Land, Building, Personal Property and Additional
Property are hereinafter collectively referred to as the "Property"); and
WHEREAS, Purchaser desires to purchase the Property from Seller and
Seller desires to sell and transfer the same to Purchaser.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Purchase and Sale. Purchaser agrees to buy and Seller agrees to sell
and convey the Property for and in consideration of the purchase price and upon
the terms and conditions set forth herein.
2. Purchase Price. The purchase price for the Property (the "Purchase
Price") shall be Fourteen Million Two Hundred Ninety-Five Thousand Dollars
($14,295,000), payable at Closing (as hereinafter defined) in cash, cashier's
check, certified check or bank wire transfer.
3. Deposit.
(a) Within three (3) business days after the date of delivery
to Purchaser of an original of this Agreement executed by Seller together with
completed Exhibits hereto (the date of such delivery to Purchaser being the
"Acceptance Date"), Purchaser shall deliver to Commercial Settlements, Inc.,
0000 X Xxxxxx, X.X.,
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Xxxxxxxxxx, X.X. 00000 (the "Title Company"), as escrow agent, a deposit
("Deposit") of One Hundred thousand Dollars ($100,000) by check payable to the
Title Company. If Purchaser shall fail to deliver the Deposit when required to
do so, this Agreement shall become null and void and the parties hereto shall be
relieved of all further liability and obligation to each other.
(b) The Title Company will immediately provide Seller with
written evidence of receipt of such Deposit. The Title Company shall place the
Deposit in an interest-bearing account within three (3) days after the date of
receipt thereof, and interest on the Deposit shall accrue to the benefit of the
party entitled to the Deposit and shall constitute a part of the Deposit for all
purposes hereof. The Deposit shall be held by the Title Company pursuant to the
terms and conditions of this Agreement.
(c) In the event that, at any time prior to Closing, Seller or
Purchaser provides Title Company with a certification (a copy of which shall be
delivered contemporaneously to the other party) that the Seller or Purchaser, as
the case may be, is entitled to the Deposit pursuant to the terms of this
Agreement, Title Company shall deliver the Deposit to such party within seven
(7) business days after receipt of said notice, unless the other party disputes
such certification by written notice to Title Company (a copy of which shall be
delivered contemporaneously to the other party) delivered within five (5)
business days of Title Company's receipt of the initial certification. In such
event, Title Company shall hold the Deposit pending resolution of such dispute.
(d) The parties acknowledge that (i) Title Company is acting
solely as escrow agent at their request and for their convenience, (ii) Title
Company shall not be deemed to be the agent of either of the parties, and (iii)
Title Company shall not be liable to either of the parties for any act or
omission on its part unless taken or suffered in bad faith, in willful disregard
to this Agreement or involving gross negligence. Seller and Purchaser shall
jointly and severally indemnify and hold Title Company harmless from and against
all costs, claims and expenses, including reasonable attorneys' fees, incurred
in connection with the performance of Title Company's duties hereunder, except
with respect to actions or omissions taken or suffered by Title Company in bad
faith, in willful disregard of this Agreement or involving gross negligence on
the part of Title Company; provided, however, that if any litigation shall arise
between the Seller and Purchaser in connection therewith, the non-prevailing
party shall pay all such costs, claims and expenses of the Title Company. In the
event any dispute shall arise between the parties hereto as to the disposition
of the Deposit, the Title Company's sole responsibility may be met, at the Title
Company's option, by paying the Deposit into the court in which relevant
litigation is pending between the parties, or by initiating an interpleader
action, and upon payment of the Deposit into court, neither Seller nor Purchaser
shall have any further right, claim, demand, or action against the Title
Company.
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4. Closing. Except as otherwise provided in this Agreement, the
purchase and sale contemplated herein shall be consummated at the "Closing",
which shall take place on the date (the "Closing Date") specified by Purchaser
on not less than ten (10) days notice to Seller, provided that the Closing Date
shall not be later than March 18, 1998. The Closing shall take place at the
offices of Seller, or at such other place as may mutually agreed upon by Seller
and Purchaser. The Title Company shall act as closing agent for the Closing.
5. Representations and Warranties of Seller. In order to induce
Purchaser to enter into this Agreement and to purchase the Property, Seller
hereby makes the following representations and warranties, each of which is
material and shall, together with all covenants, agreements and indemnities set
forth in or made pursuant to this Agreement, survive Closing until December 15,
1998, notwithstanding any investigation at any time made by or on behalf of
Purchaser:
(a) Authority of Seller. Seller is a limited partnership duly
organized and in good standing under the laws of the State of Maryland. Seller
has all necessary power and authority and has taken all necessary partnership
action to execute, deliver and perform this Agreement. No consents of any
persons other than those executing this Agreement as Seller are required for
such execution or to enable Seller to consummate the transactions contemplated
hereby. This Agreement is the valid and binding obligation of Seller,
enforceable against it in accordance with its terms, except that such
enforcement may be subject to bankruptcy, conservatorship, receivership,
reorganization, insolvency, moratorium or similar laws or procedures relating to
or affecting creditors' rights generally and to general principles of equity.
(b) Title. Seller is the sole owner of fee simple title to the
Property, and such title is marketable and good of record and, to the best of
Seller's actual knowledge, free and clear of all liens, encumbrances, covenants,
conditions, restrictions and other matters affecting title, except for the
Permitted Exceptions (as defined in Section 8(a)(iii)).
(c) Compliance with Existing Laws. To the best of Seller's
actual knowledge, (i) Seller is not in violation of, and has complied with any
and all applicable building, zoning, environmental or other ordinances, statutes
or regulations of any governmental agency, in respect to the ownership, use,
maintenance, condition and operation of the Property or any part thereof and
(ii) Seller possesses all licenses, certificates, permits and authorizations
necessary for the use and operation of the Property, as Landlord, in the manner
in which it is currently being operated by Seller.
(d) Leases. True, correct and complete copies of all of the
leases of the Property and any amendments thereto (collectively, the "Leases")
have been delivered to Purchaser. Attached hereto as Exhibit B is a description
of all of the Leases and a current rent schedule ("Rent Schedule") covering the
Leases. There are no leases or tenancies of any space in the Property other than
those set forth in Exhibit
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B or any subleases or subtenancies unless otherwise noted therein. Except as
otherwise set forth in Exhibit B or elsewhere in this Agreement:
(i) to the best of Seller's actual knowledge, the Leases are in full force
and effect and constitute a legal, valid and binding obligation of the
respective tenants and are assignable by Seller to Purchaser;
(ii) no tenant has an option to purchase the Property;
(iii) no renewal or expansion options have been granted to the tenants,
except as provided in the Leases;
(iv) to the best of Seller's actual knowledge, Seller is not in default
under any of the Leases;
(v) the rents set forth on the Rent Schedule are being collected on a
current basis and there are no arrearages in excess of one month, except as
indicated in Exhibit B hereto, nor has any tenant paid any rent, additional rent
or other charge of any nature for a period of more than thirty (30) days in
advance;
(vi) all work for tenant alterations and other work or materials contracted
for by Seller and any tenant has been completed, and all work and materials have
been fully paid for or will be paid for by Closing by Seller and all
contributions to tenants for tenant improvements, if any, have been paid in full
or will be paid for by Closing by Seller;
(vii) Seller has not sent written notice to any tenant claiming that such
tenant is in default, which default remains uncured, and to the best of Seller's
knowledge, no tenant is in default under its Lease, except as indicated in
Exhibit B hereto;
(ix) no action or proceeding instituted against Seller by any tenant is
presently pending in any court; and
(x) there are no security deposits other than those set forth in Exhibit B.
(e) Service Contracts. Attached hereto as Exhibit C is a
complete and correct list of all contracts or agreements relating to the
management, leasing, operation, maintenance or repair of the Property (the
"Service Contracts"). All of the Service Contracts set forth on Exhibit C shall
be assumed by Purchaser as of the Closing Date, unless Purchaser notifies Seller
before the end of the Feasibility Period to terminate any or all of the Service
Contracts. No Service Contract will be terminated, amended, modified or
supplemented prior to the Closing Date without Purchaser's prior
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written approval (except that any management and leasing agreements shall be
terminated as of Closing). If Purchaser approves the termination of any of the
Service Contracts, Purchaser shall be solely responsible for the payment of any
termination fees associated therewith.
(f) Tax Bills. Attached hereto as Exhibit D are true and
correct copies of tax bills issued by any applicable Federal, state or local
governmental authority to Seller with respect to the Property for the most
recent past and current tax years, and any new assessment received with respect
to a current or future tax year.
(g) Insurance. Attached hereto as Exhibit E are copies of all
hazard, liability and other insurance policies presently affording coverage with
respect to the Property. The Property is insured for its replacement value
against loss or damage sustained as a result of fire or other casualty and
Seller has rent loss insurance in place for the Property. Seller shall maintain
in full force and effect all such policies until the Closing Date and shall
cause its insurer to name Purchaser as an additional insured as a contract party
on its rent loss policy with respect to the Property.
(h) Condition of Property. Possession of the Property shall be
delivered to Purchaser at Closing in its "as is, where is" condition as of the
date of Purchaser's execution of this Agreement, subject to ordinary wear and
tear. Seller has no actual knowledge of any material defect in the condition of
the Property, the structural elements thereof or the mechanical systems therein.
(i) Tenant Estoppel. Seller represents and warrants that it
shall use reasonable good faith efforts to obtain and deliver to Purchaser
within thirty (30) days after the Acceptance Date, a tenant estoppel letter in
the form attached hereto as Exhibit F (or such other form as required by
Purchaser's mortgage lender) from each of the tenants of the Property confirming
the information set forth in Exhibit B attached hereto. Seller hereby agrees
that Purchaser may participate in the procurement of said tenant estoppel
letter(s).
(j) Condemnation Proceedings. No condemnation or eminent
domain proceedings are pending against the Property or any part thereof, and
Seller has made no commitments to and has received no notice, oral or written,
of the desire of any public authority or other entity to condemn, take or use
the Property or any part thereof whether temporarily or permanently, for
easements, rights-of-way, or other public or quasi-public purposes.
(k) Litigation. To the best of Seller's actual knowledge, no
litigation is pending, including administrative actions or orders relating to
governmental regulations, affecting the use, operation or ownership of the
Property or any part thereof or Seller's right to sell the Property as
contemplated herein, except as set forth on Exhibit G hereof.
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(l) No Defaults. Neither the execution of this Agreement nor
the consummation of the transactions contemplated hereby will: (i) conflict
with, or result in a breach of, the terms, conditions or provisions of, or
constitute a default under, any agreement or instrument to which Seller is a
party or by which the Seller or the Property is bound, (ii) violate any
restriction, requirement, covenant or condition to which the Seller is subject
or by which Seller or the Property is bound, (iii) constitute a violation of any
applicable code, resolution, law, statute, regulation, ordinance, rule,
judgment, decree or order, or (iv) result in the cancellation of any contract or
lease pertaining to the Property (other than the Service Contracts).
(m) Separate Tax Lot and Subdivision. To the best of Seller's
actual knowledge, each parcel of Land is assessed for tax purposes as one or
more separate and distinct parcels.
(n) Hazardous Waste. Except as disclosed in the Phase I
Environmental Report dated March 5, 1998 prepared by EMG regarding the Property,
Seller has no actual knowledge of any discharge, spillage, uncontrolled loss,
seepage or filtration (a "Spill") of oil, petroleum or chemical liquids or
solids, liquid or gaseous products or any hazardous waste or hazardous substance
(as those terms are used in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Resource Conservation
and Recovery Act of 1976, as amended, or in any other applicable federal, state
or local laws, ordinances, rules or regulations relating to protection of public
health, safety or the environment, as such laws may be amended from time to
time) at, upon, under or within the Land or any contiguous real estate. Seller
has not caused or, to Seller's actual knowledge, permitted to occur, and shall
not cause to occur any condition which may cause a Spill at, upon, under or
within the Land or any contiguous real estate prior to the Closing Date. To the
best of Seller's actual knowledge, there is no proceeding or action pending by
any person or governmental agency regarding the environmental condition of the
Property. To the Seller's knowledge, the Building is totally free of asbestos.
(o) Operating Statements. Attached hereto as Exhibit H are
true and correct operating statements of the Property for fiscal years 1996,
1997 and 1998 (through January 31, 1998). To Seller's knowledge, there has been
no adverse change in the Property or the operation thereof which would
materially adversely affect the economic condition of the Property. Also
attached as Exhibit H is a copy of the 1998 operating budget for the Property.
(p) Utilities. To the best of Seller's actual knowledge,
adequate, usable public sewers, public water facilities, gas and electrical
facilities necessary to the operation of the Property are installed in and are
duly connected to the Property and can be used without any charge except the
normal deposits, if any, and usual metered utility charges and sewer charges.
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(q) Personal Property. Attached hereto as Exhibit I is a true,
correct and complete inventory of all personal property ("Personal Property"),
if any, owned by Seller and used in the management, maintenance and operation of
the Property (other than trade fixtures or personal property of tenants).
(r) Certificates of Occupancy. Prior to the Closing Date,
Seller will not amend any certificates of occupancy for the Property and will
maintain them in full force and effect to the extent the same has been issued to
the Seller.
(s) Licenses and Permits. To the best of Seller's actual
knowledge, all licenses and permits have been issued to Seller by all applicable
governmental authorities which are necessary for the Seller's ownership,
management and operation of the Property (the "Licenses"). Seller has received
no notice, nor has any actual knowledge, that it is lacking any such Licenses.
(t) Leasing Commissions. There are, and at Closing shall be,
no outstanding or contingent leasing commissions or fees payable with respect to
the Property, except as set forth on Exhibit K attached hereto.
(u) Information Provided by Seller. Purchaser acknowledges
that, in making the representations set forth in subparagraphs (c), (d), (e) and
(o) of this Paragraph 5, Seller is, in part, relying upon information provided
from time to time by First Washington Management, Inc. ("FWM"), an affiliate of
Purchaser and Seller's property manager for the Property, and, therefore, such
representations by Seller shall not be breached by Seller unless such
representations are untrue as a result of Seller's actual knowledge of (i)
information inconsistent with or different from information provided to Seller
by FWM and/or (ii) information not provided to Seller by FWM.
6. Obligations of Seller Pending Closing. From and after the date of
this Agreement through the Closing Date, Seller covenants and agrees as follows:
(a) Maintenance and Operation of the Property. Seller will
cause the Property to be maintained in its present order and condition, normal
wear and tear excepted, and will cause the continuation of the normal operation
thereof, including the purchase and replacement of fixtures and equipment, and
the continuation of the normal practice with respect to maintenance and repair
in the ordinary course of business so that the Property will, except for normal
wear and tear, be in substantially the same condition on the Closing Date as on
the Effective Date.
(b) Licenses. Seller shall use its best efforts to preserve in
force all Licenses and to cause those expiring to be renewed.
(c) Changes in Representations. Seller shall notify Purchaser
promptly, and Purchaser shall notify Seller promptly, if either becomes aware of
any
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occurrence prior to the Closing Date which would make any of its
representations, warranties or covenants contained herein not true in any
material respect.
(d) Obligations as to Leases. Seller shall not, without
Purchaser's prior written consent which consent shall not be unreasonably
withheld, amend, modify, renew or extend any Lease in any respect unless
required by law or the terms of any existing lease (and then only in accordance
with the terms of such lease), or enter into new leases or approve any
assignment of leases or subletting of leased space, or terminate any Lease.
Prior to Closing, Seller shall not apply all or any part of the security deposit
of any tenant unless such tenant is in default.
7. Representations, Warranties and Covenants of Purchaser. In order to
induce Seller to enter into this Agreement and to sell the Property to
Purchaser, Purchaser hereby makes the following representations, warranties and
covenants, each of which is material and shall survive Closing, notwithstanding
any investigation at any time made by or on behalf of Seller:
(a) Authority of Purchaser. Purchaser is a limited partnership
duly organized and existing and in good standing under the laws of the State of
Maryland. Subject to Section 8(a) (viii), Purchaser has all necessary power and
authority to execute, deliver and perform this Agreement and consummate all of
the transactions contemplated by this Agreement. Subject to Section 8(a) (viii),
this Agreement is the valid and binding obligation of Purchaser, enforceable
against it in accordance with its terms, except that such enforcement may be
subject to bankruptcy, conservatorship, receivership, reorganization,
insolvency, moratorium or similar laws or procedures relating to or affecting
creditors' rights generally and to general principles of equity.
(b) No Defaults. Neither the execution of this Agreement nor
the consummation of the transactions contemplated hereby will: (i) conflict
with, or result in a breach of, the terms, conditions or provisions of, or
constitute a default under, any agreement or instrument to which Purchaser is a
party, (ii) violate any restriction, requirement, covenant or condition to which
the Purchaser is subject, and (iii) constitute a violation of any applicable
code, resolution, law, statute, regulation, ordinance, rule, judgment, decree or
order.
(c) Vacant Space. Purchaser hereby further agrees that if any
rentable space in the Property is vacant on the Closing Date, Purchaser shall
accept the Property subject to such vacancy, provided that the vacancy was not
permitted or created by Seller in violation of any restrictions contained in
this Agreement.
8. Conditions Precedent to Closing.
(a) It shall be a condition precedent of Purchaser's
obligation to make a full settlement hereunder that each and every one of the
following conditions shall exist on the Closing Date:
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(i) Representations and Warranties. Seller's
representations and warranties hereunder shall be true and
correct in the same manner and with the same effect as though
such representations and warranties had been made on and as of
the Closing.
(ii) Zoning. No proceedings shall have occurred or be
pending to change, redesignate or redefine the zoning
classification of the Property to a more restrictive
classification than presently exists.
(iii) Title. Title to the Property shall be
marketable, good of record, and insurable by the Title Company
at standard rates or less, pursuant to a full coverage ALTA
Form-B (Rev. 1970 and 1984) owner's title insurance policy (or
an unconditional commitment therefor) without any exceptions
("Printed form" or otherwise) other than the Permitted
Exceptions, and in addition, providing affirmative coverage
satisfactory to Purchaser insuring against any mechanic's or
materialmen's lien arising from goods, labor or materials
provided to the Property prior to the Closing Date. The
"Permitted Exceptions" are:
(A) the Leases set forth on Exhibit B attached hereto;
(B) the lien of current real estate taxes and special assessments not
yet due and payable; and
(C) such other matters which are listed on Exhibit J attached hereto.
Purchaser has obtained and provided Seller with a copy of an interim title
binder for the Property from the Title Company. On or before March 16,
1998, Purchaser shall provide Seller with a written notice ("Title
Objections Notice") setting forth the exceptions to title to the Property
which are unacceptable to Purchaser, in its sole discretion. Seller shall
have the option to (i) act diligently, at its sole expense, to correct such
conditions prior to the Closing Date or (ii) terminate this Agreement by
written notice to Purchaser delivered to Purchaser within five (5) days
after the date Purchaser provided Seller with the Title Objection Notice.
If the objections set forth in the Title Objection Notice are not corrected
prior to the Closing Date hereunder, Purchaser, in addition to any other
rights it may have, shall have the right and option (x) to terminate this
Agreement, or (y) to close on the purchase of the Property and waive such
defects in title. In the event of termination of this Agreement by either
Purchaser or Seller pursuant to this subparagraph (B), Seller and Purchaser
shall be relieved of all liabilities under this Agreement (except for any
liabilities accruing prior to the effective date of such termination) and
the Deposit shall be returned to Purchaser.
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(iv) Leasing Brokerage/Property Management
Agreements. Seller shall have terminated any and all leasing
brokerage agreements and property management agreements with
respect to the Property effective as of the Closing. All
responsibility for dealings with any such brokers and agents,
including without limitation the payment of any outstanding or
contingent claims, shall be the sole responsibility of Seller.
Seller agrees that it will indemnify and hold Purchaser, its
successors, assigns, partners, agents and employees, harmless
against any such claims and/or losses which might be incurred
by such indemnitees in connection with any outstanding and/or
contingent leasing commissions or fees or management fees. The
provisions of this subparagraph (iv) shall survive Closing
until December 15, 1998.
(v) Performance by Seller. Seller shall have
complied in all material respects with and not be in material
breach of any of its covenants or obligations under Section 6
of this Agreement.
(vi) Tenant Estoppels. Purchaser shall have received
(A) a tenant estoppel letter substantially in the form
attached hereto as Exhibit F from, at a minimum, those tenants
at the Property satisfying the requirements described on
Exhibit F-1 attached hereto confirming the information set
forth in the Leases and Rent Schedule attached hereto as
Exhibit B for such tenants and containing no material changes
therefrom.
(vii) Existing Mortgages. Seller shall have delivered
to the Title Company such releases or other instruments
necessary to release of record and beneficially any and all
existing mortgages, deeds of trust, financing statements or
other security documents affecting the Property (collectively,
the "Existing Mortgages").
(b) Failure of Condition. In the event of the failure by the
Closing Date of any condition precedent set forth above, Purchaser shall notify
Seller in writing, and if Seller does not correct such failure (if valid) within
five (5) business days after such notice, then Purchaser, at its sole election,
may (a) terminate this Agreement, in which event the Deposit and any interest
thereon shall be returned to Purchaser and, except as otherwise provided in
Section 16 hereof, neither party shall have any further obligations or
liabilities to the other (except for any liabilities accruing prior to the
effective date of such termination); or (b) proceed to Closing and, if a
default, avail itself of any legal or equitable remedy Purchaser may have,
except as to any default of Seller waived in writing by Purchaser or deemed to
be waived pursuant to the provisions of this Agreement on or before the Closing
Date; or (c) extend the Closing Date for such reasonable time period as may be
determined by Purchaser (but in no event for more than fifteen (15) business
days from the Closing Date then in effect) in order to permit the satisfaction
of any condition precedent not so fulfilled.
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9. Seller's Deliveries. Seller shall execute, acknowledge and deliver
to Purchaser (either directly or through the closing agent) at the Closing the
following documents, each dated on the Closing Date:
(a) a special warranty deed, in customary form and substance,
conveying good and marketable fee simple title to the Real Property, free and
clear of all liens, encumbrances, easements and restrictions of every nature and
description, except for the Permitted Exceptions;
(b) a xxxx of sale which shall convey to Purchaser good title
to all the Personal Property, free and clear of all liens and encumbrances;
(c) an affidavit setting forth, to the extent true, that all
of Seller's representations and warranties are true and correct in all material
respects as of the Closing Date;
(d) an assignment of the Leases, in a form and substance
reasonably acceptable to Seller and Purchaser, together with all originally
executed Leases, and the security deposits shall be paid to Purchaser;
(e) an assignment of Licenses, warranties and Service
Contracts, if any, which are to be assumed by Purchaser, to the extent the same
are held by Seller and are assignable by Seller, together with the originally
executed Service Contracts which are to be assumed;
(f) a schedule updating the Rent Schedule for the Property and
setting forth all arrearages in rents and all prepayments of rents;
(g) copies of books, records, operating reports, files and
other materials related to the ownership, use and operation of the Property
(except for any and all internal economic models, analyses or other internal
economic information and internal partnership documents and tax returns and
similar partnership information prepared by Seller for Seller's exclusive use),
to the extent that any exist and are in the possession of Seller, which
obligation shall survive Closing; provided, however, Seller shall not be
required to deliver any books, records or other information to Purchaser which,
prior to the Closing Date, is in the possession of FWM.
(h) Tenant estoppel letters as required in Section 8(a)(vi).
(i) an original letter executed by Seller advising the tenants
of the Property of the sale of the Property to Purchaser and directing that
rents and other payments thereafter be sent to Purchaser or as Purchaser may
direct;
(j) possession of the Property in the condition required by this
Agreement, and the keys therefore;
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(k) the Certification of Non-foreign Status as provided in Treas. Reg.
1.1445-2(b)(2)(iii)(B) or in any other form as may be required by the
Internal Revenue
Code or the regulations issued thereunder;
(l) such other items and instruments as shall be reasonably
required by the Title Company in connection with the issuance of its title
insurance policy to Purchaser pursuant to Section 8(a)(iii) or as shall be
reasonably requested by counsel to Purchaser and consistent with the terms of
this Agreement;
(m) any and all documents necessary to release the cash
constituting the Deposit from escrow with the Title Company and to have said
Deposit returned to Purchaser;
(n) any other documents required by this Agreement to be delivered by
Seller.
10. Purchaser's Performance. At Closing, simultaneously with the
deliveries of Seller pursuant to the provisions of Section 9 above, Purchaser
shall pay to Seller the Purchase Price in the manner specified in Section 2,
whereupon the Deposit, and any interest accrued thereon, shall be returned to
Purchaser by the Title Company or, at the option of Purchaser, shall be applied
against the payment of Purchase Price.
11. Settlement Charges; Prorations and Adjustments.
(a) Purchaser shall pay for the title examination, the title
insurance premium, notary fees and other such charges incident to Closing. The
reasonable cost of preparation of the deed for the Property shall be borne by
Seller. All real estate transfer and recording fees and taxes and documentary
stamps in connection with this transaction shall be borne equally by Seller and
Purchaser. Purchaser and Seller shall each pay its own legal fees related to the
preparation of this Agreement and all documents required to settle the
transaction contemplated hereby.
(b) In addition to the foregoing, at the Closing, the
following adjustments and prorations shall be computed as of the Closing Date,
as follows:
(i) Taxes. Real estate and personal property taxes
shall be apportioned as of the Closing Date.
(ii) Assessments. All special assessments and other
similar charges which have become a lien upon the Property or
any part thereof at the Closing Date and are due and payable
through the Closing Date, if any, shall be paid in full by
Seller at the Closing. All other special assessments or
similar charges shall be adjusted as of the Closing Date.
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(iii) Rent and Security Deposits. Rent for the month
of, and any month after, Closing collected by Seller prior to
Closing shall be adjusted as of the date of the Closing Date.
If any tenant is in arrears in the payment of rent on the
Closing Date, rents received from such tenant after the
Closing shall be applied in the following order of priority:
(a) first, to the payment of current rent then due; (b)
second, to delinquent rent for any period after the Closing
Date; and (c) third, to delinquent rent for any period prior
to the Closing Date. Purchaser does not guarantee or undertake
any obligation to xxx or take other action for collection of
arrearages in rents due from tenants as of the Closing Date.
If rents or any portion thereof received by Seller or
Purchaser after the Closing Date are payable to the other
party by reason of this allocation, the appropriate sum, less
a proportionate share of any reasonable attorneys' fees, costs
and expenses of collection thereof, shall be promptly paid to
the other party, which obligation shall survive the Closing.
If any tenants are required to pay percentage rents,
escalation charges for real estate taxes, operating expenses,
cost-of-living adjustments or other charges of a similar
nature ("Additional Rents") and any Additional Rents are
collected by Purchaser after the Closing which are
attributable in whole or in part to any period prior to the
Closing, then Purchaser shall promptly pay to Seller its
proportionate share thereof, less a proportionate share of any
reasonable attorneys' fees, costs and expenses of collection
thereof (if any), if and when the tenant paying the same has
made all payments of rents and Additional Rent then due to
Purchaser pursuant to the tenant's Lease, which obligation
shall survive the Closing. Purchaser shall use commercially
reasonable efforts to collect any such Additional Rents from
tenants at the Property.
(iv) Miscellaneous. All other charges and fees
customarily prorated and adjusted in similar transactions,
including utilities, insurance premiums and charges for
Service Contracts and other liabilities incurred in the
ordinary course of business to be assumed by Purchaser, shall
be prorated as of the Closing Date. In the event that accurate
prorations and other adjustments cannot be made at Closing
because current bills are not obtainable or the amount to be
adjusted is not yet ascertainable (as, for example, in the
case of utility bills) the parties shall prorate on the best
available information, subject to further adjustment promptly
upon receipt of the final xxxx or upon completion of final
computations. Seller agrees that an appropriate amount in
respect of water consumption or other utility charges may be
held in escrow by the Title Company in connection with its
issuance of a title insurance policy to Purchaser. Seller
shall use its best efforts to have all utility meters read on
the Closing Date so as to accurately determine its share of
current utility bills.
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12. Risk of Loss. The risk of loss or damage to the Property by fire or
other casualty until delivery of the deed of conveyance shall be borne by
Seller. If prior to Closing (i) condemnation proceedings are commenced against
all or any material portion of the Property, or (ii) if the Property is damaged
by fire or other casualty to the extent that the cost of repairing such damage
shall be One Hundred Thousand Dollars ($100,000.00) or more or if Safeway
supermarket or tenants of the Property (occupying in excess of 4,000 square feet
in the aggregate) shall exercise a termination right available under its lease
because of such damage, or (iii) if the Property is damaged by an uninsured risk
to the extent that the cost of repairing such damage shall be One Hundred
Thousand Dollars ($100,000.00); or (iv) if the Property becomes subject to
litigation which may deprive Purchaser of any material benefit to which it would
become entitled pursuant to this Agreement, then Purchaser shall have the right,
upon notice in writing to the Seller delivered within fifteen (15) days after
actual notice of such condemnation or fire or other casualty or litigation, to
terminate this Agreement, and thereupon the parties shall be released and
discharged from any further obligations to each other (except for any
liabilities accruing prior to the effective date of such termination) and the
Deposit shall be refunded to Purchaser. If Purchaser does not elect to terminate
this Agreement or in the event of fire or other casualty not giving rise to a
right to terminate this Agreement by Purchaser, Purchaser shall be entitled to
an assignment of all of Seller's share of the proceeds of fire or other casualty
insurance and rent insurance proceeds payable with respect to the period after
Closing, if any, or of the condemnation award, as the case may be, and Seller
shall have no obligation to repair or restore the Property; provided, however,
that the Purchase Price shall be reduced by an amount equal to the sum of (a)
the "deductible" applied by the Seller's insurance policy, or (b) if the Seller
is self-insured, the cost of repairing such damage. Purchaser shall have the
right to participate in the negotiation and settlement of any casualty or
condemnation-related claim, provided Purchaser shall have previously elected not
to terminate this Agreement or has no such right of termination.
13. Inspection of Property.
(a) Purchaser's Right of Inspection. Purchaser shall have the
right, at its own risk, cost and expense, at any time or times prior to Closing,
to enter, or cause its agents or representatives to enter, upon the Property for
the purpose of making surveys, or any tests, investigations and/or studies
relating to the Property or Purchaser's intended acquisition thereof which
Purchaser deems appropriate, in its sole discretion, during reasonable hours and
upon reasonable notice to Seller. Purchaser's entry shall be subject to the
rights of all tenants of the Property, and Purchaser shall use reasonable
efforts not to interfere with the business being conducted by the tenants.
Purchaser shall further have complete access to all documentation, agreements
and other information in the possession of Seller related to the ownership, use
and operation of the Property (except for any and all internal economic models,
analyses or other internal economic information and internal partnership
documents and tax returns and similar partnership information prepared by Seller
for Seller's
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exclusive use), to the extent it is readily available to Seller, and shall have
the right, at Purchaser's cost, to make copies of same.
(b) Feasibility Period. Subject to the requirements of Section
13(a) hereof, any other provisions of this Agreement to the contrary
notwithstanding, Purchaser may, prior to the period commencing on the Acceptance
Date and expiring on March 2, 1998 ("Feasibility Period"), cause at Purchaser's
sole cost and expense, such boring, engineering, economic, water, sanitary and
storm sewer, utilities, topographic, structural, environmental and other tests,
investigations, market studies and other studies as Purchaser shall elect. In
the event that any of such tests, investigations and/or studies indicate, in
Purchaser's sole discretion, that Purchaser's plans for the Property would not
be feasible, then Purchaser shall have the right, at its sole election on or
before the expiration of the Feasibility Period, to terminate this Agreement by
giving written notice thereof to Seller, in which event this Agreement shall
terminate, the Deposit shall be returned to Purchaser and neither party shall
have any further liabilities or obligations to each other (except for any
liabilities accruing prior to the effective date of such termination). Purchaser
shall be liable for any damage to real or personal property or injuries to
persons caused by Purchaser's actions in studying the Property during the
Feasibility Period and shall indemnify and hold Seller harmless from any and all
claims or liabilities relating to such damage or injuries and reasonable
attorneys' fees relating thereto. Purchaser shall repair and restore any damage
to the Property caused by Purchaser or its agents in connection with Purchaser's
inspection of the Property.
(c) Notwithstanding the foregoing, the Feasibility Period
shall remain open with respect to Seller's review of survey matters and
engineering and structural matters relating to the Property until March 13, 1998
and, with respect to environmental matters, until March 16, 1998 (collectively,
the "Open Matters"), it being understood and agreed that all of Purchaser's
rights and obligations pursuant to Sections 13(a) and (b), above, shall remain
effective with respect to such Open Matters (as if the Feasibility Period had
not expired) until such aforementioned dates.
(d) Audit. Seller hereby agrees, after the Closing Date, to
allow its books and records related to the Property (except for any and all
internal economic models, analyses or other internal economic information and
internal partnership documents and tax returns and similar partnership
information prepared by Seller for Seller's exclusive use) to be audited (at
Purchaser's sole expense) at the Seller's office or at FWM's office by an
independent, certified public accounting firm selected by Purchaser, and Seller
will cooperate and cause its employees and other agents to cooperate in such
auditing process. Purchaser shall provide Seller with prior notice of such
audit. Seller will cooperate with Purchaser's auditors with respect to such
audit and will execute all reasonable documents requested by Purchaser's
auditors in connection with such audit.
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14. Indemnifications.
(a) Indemnification by Seller. Seller hereby indemnifies and
agrees to defend and hold harmless Purchaser and its partners and subsidiaries
and any officer, director, employee, agent of any of them, and their respective
successors and assigns from and against any and all claims, expenses, costs,
damages, losses and liabilities (including reasonable attorneys' fees) which may
at any time be asserted against or suffered by Purchaser, any indemnitee, or the
Property, or any part thereof, whether before or after the Closing Date, as a
result of, on account of or arising from (i) any breach of any covenant,
representation, warranty or agreement on the part of Seller made herein or in
any instrument or document delivered pursuant to this Agreement, and/or (ii) any
obligation, claims, suit, liability, contract, agreement, debt or encumbrance or
other occurrence created, arising or accruing on or prior to the Closing Date,
regardless of when asserted, and relating to the Seller or the Property or its
operations.
(b) Seller's Environmental Indemnity. Seller hereby
indemnifies and agrees to defend and hold harmless Purchaser and its partners
and subsidiaries, and any officer, director, employee or agent of any of them,
and their respective successors and assigns, from and against any and all
claims, expenses, costs, damages, losses and liabilities (including reasonable
attorneys' fees) which may at any time be asserted against or suffered by any
indemnitee, directly or indirectly, relating to the presence of Hazardous
Materials on the Property at Closing, or the removal of Hazardous Materials from
the Property prior to Closing, including any claim as a result of any
governmental action, action by a third party or actions taken by such
indemnitees based upon advice of a recognized environmental authority to the
effect that action may need to be taken to avoid, reduce or limit any
indemnitees exposure to liability or the risk of injury or damage of persons or
property; provided, however, Seller's indemnification obligations under this
subparagraph (b) shall not be applicable if Seller's representations set forth
in Section 5(n), as modified, if at all, by the affidavit described in Section
9(c) above, are true.
(c) Indemnification by Purchaser. Purchaser hereby indemnifies
and agrees to defend and hold harmless Seller and its Partners and their
respective heirs, executors, administrators, personal or legal representatives,
successors and assigns from and against any and all claims, expenses, costs,
damages, losses and liabilities (including reasonable attorneys' fees) which may
at any time be asserted against or suffered by Seller as a result of, on account
of or arising from (i) any breach of any covenant, representation, warranty or
agreement on the part of Purchaser made herein or in any instrument or document
delivered pursuant to this Agreement, and/or (ii) any obligation, claims, suit,
liability, contract, agreement, debt or encumbrance or other occurrence created,
arising or accruing after the Closing Date and relating to the Property or its
operations.
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(d) The indemnifications set forth in subparagraphs (a), (b)
and (c) of this Section 14 shall survive Closing or any termination of this
Agreement until December 15, 1998.
15. Brokerage Commission. Seller and Purchaser represent and warrant to
each other that no brokerage fee or real estate commission is or shall be due or
owing in connection with this transaction other than that payable to W&D
Holdings, Inc., which shall be payable by Seller, and First Capital Realty which
the parties understand shall be paid by W&D Holdings, Inc. pursuant to a
separate agreement between the two of them. Seller and Purchaser hereby
indemnify and hold the other harmless from any and all claims of any broker or
agent so claiming based on action or alleged action of the other. The provisions
of this Section 15 shall survive Closing or any termination of this Agreement
until December 15, 1998.
16. Default Provisions; Remedies.
(a) Purchaser's Default. Except for any failure waived in
writing by Seller, if Purchaser fails to consummate the purchase and sale
contemplated herein when required to do so pursuant to the provisions hereof,
then the Title Company shall deliver the Deposit and all interest thereon to
Seller as full and complete liquidated damages, and as the exclusive and sole
right and remedy of Seller, at law or in equity, whereupon this Agreement shall
terminate and neither party shall have any further obligations or liabilities to
any other party (except for any liabilities accruing prior to the effective date
of such termination).
(b) Seller's Default. Except for any breaches waived in
writing by Purchaser, if Seller breaches any of its covenants or obligations
under this Agreement or has failed, refused or is unable to consummate the
purchase and sale contemplated herein by the Closing Date or if any of the
representations and warranties made by Seller under this Agreement shall be
inaccurate or incorrect in any material respect, then Purchaser shall notify
Seller of such breach in writing and, should Seller not cure same within five
(5) business days of receipt of such default notice, then Purchaser shall be
entitled to (i) waive such breach, default or failure, and proceed to Closing,
(ii) terminate this Agreement and obtain the return of the Deposit, and/or (iii)
pursue such remedies as may be available at law or in equity, including without
limitation maintaining an action for damages and/or specific performance
(including without limitation reasonable attorneys' fees and court costs).
(c) In the event that any litigation shall arise between the
parties hereto as to the subject matter hereof, the prevailing party in such
litigation shall be entitled to recover from the non-prevailing party all of its
court costs and reasonable attorneys' fees.
17. 1031 Exchange.
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(a) The Purchaser shall have the right to structure the
transaction specified herein as a like-kind exchange under Code Section 1031 by
providing written notice to Seller and the Escrow Agent at least five (5) days
prior to the Closing. If so structured, the Seller's rights and obligations
hereunder, including Seller's right to be paid the Purchase Price in cash,
cashier's check, certified check or bank wire transfer at Closing, shall be
unaffected thereby.
(b) In the event that Purchaser elects to exercise its rights
to structure this transaction as a like-kind exchange under Code Section 1031,
the Seller agrees to cooperate with Purchaser so long as (i) there is no
additional financial liability or expense imposed upon the Seller, (ii) the
rights of Seller are not affected thereby, and (iii) Seller has no obligation to
acquire land or property used in such like-kind exchange.
(c) Purchaser agrees to hold harmless and indemnify Seller,
with counsel selected by Purchaser and reasonably acceptable to Seller, from and
against any expense, claim or liability of any nature whatsoever which Seller
may suffer or incur as a result of any tax structure elected by Purchaser to
consummate this transaction or as a result of any transaction pursuant to such
structure. Purchaser's liability hereunder shall be unaffected by any
assignment.
18. Miscellaneous Provisions.
(a) Completeness and Modification. This Agreement (together
with Exhibits A to I attached hereto) represents the complete understanding
between the parties hereto with respect to the transactions contemplated herein,
and it supersedes all prior discussions, understandings or agreements between
the parties. This Agreement shall not be modified or amended except by an
instrument in writing signed by all of the parties hereto.
(b) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective heirs,
executors, administrators, personal and legal representatives, successors and
assigns.
(c) Assignment. This Agreement shall not be assignable by
Purchaser without the consent of Seller, provided that this Agreement may be
assigned without Seller's consent to an entity controlled by, controlling or
under common control with Purchaser. This Agreement shall not be assignable by
Seller. Purchaser's liability hereunder shall be unaffected by any assignment.
(d) Waiver; Modification. Failure by Purchaser or Seller to
insist upon or enforce any of its rights hereto shall not constitute a waiver or
modification thereof.
(e) Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Maryland.
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(f) Headings. The headings are herein used for convenience or
reference only and shall not be deemed to vary the content of this Agreement or
the covenants, agreements, representations and warranties herein set forth, or
the scope of any provision hereof.
(g) Continuing Documentation and Access. From and after
Closing, Seller shall afford Purchaser reasonable access to any and all
information in its possession concerning the ownership, use and operation of the
Property (including the right to copy same at the expense of Purchaser) for
purposes of any tax examination or audit or other similar purpose, subject to
the agreements of Purchaser concerning confidentiality set forth herein.
(h) All Warranties Joint and Several. Except on set forth in
Section 5(t) hereof, each and every warranty, covenant, undertaking and
agreement of Seller hereunder shall be deemed a joint and several warranty,
covenant, undertaking and agreement of each person and entity collectively
comprising the Seller.
(i) Counterparts. To facilitate execution, this Agreement may
be executed in as many counterparts as may be required; it shall be sufficient
that the signature of, or on behalf of, each party, or that the signatures of
the persons required to bind any party, appear on one or more such counterparts.
All counterparts shall collectively constitute a single agreement.
(j) Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered by hand or
mailed by first-class registered or certified mail, return receipt requested,
postage prepaid or delivered by commercial courier, telecopy or overnight
courier (e.g., Federal Express) against receipt, to the addresses indicated
below:
(i) if to Purchaser:
First Washington Realty Limited Partnership
0000 Xxxx-Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, President
Xxxxxxx X. Xxxxxxxxxx, Esquire
Telecopy: (000) 000-0000
(ii) if to Seller:
Xxxxxxx Park Plaza Limited Partnership
c/o Walker & Dunlop
0000 Xxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx
Telecopy: (000) 000-0000
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with a copy to:
O'Malley, Miles, Xxxxx & Xxxxxxx
00000 Xxxxxxxxxx Xxxxx
00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
Such notice shall be deemed given on the date of receipt by
the addressee or the date receipt would have been effectuated if delivery were
not refused. Each party may designate a new address by written notice to the
other in accordance with this Paragraph 18(j).
(k) Further Assurances. Seller and Purchaser agree to execute,
acknowledge and deliver any further agreements, documents or instruments that
are reasonably necessary or desirable to carry out the transactions contemplated
by this Agreement, provided that such execution, acknowledgment and delivery
does not impose any additional costs on such party (other than such party's
attorneys' fees in the review thereof and de minimis recording costs).
(l) Business Days. A "business day" shall be Mondays through
Fridays, less and expecting all legal holidays observed by the United States
Government or the Government of the State of Maryland. Any date specified in
this Agreement which does not fall on a business day shall be automatically
extended until the first business day after such date.
(m) Zoning. Seller certifies that Seller has no knowledge of
any published preliminary or adopted land use plan (or adopted Zoning Map
Amendment) which may result in condemnation or taking of any part of Seller's
Property. Purchaser acknowledges that Purchaser is aware that information
relative to (i) government plans for land use, roads, highways, parks,
transportation and the like, and (ii) rezoning is available for inspection at
the Prince George's County Administration Building, Upper Marlboro, Maryland.
(n) Option. Purchaser and Seller hereby acknowledge that
certain real estate contracts in form similar to this Agreement have been
construed to be option contracts. Accordingly, simultaneous with the execution
of this Agreement, Purchaser has paid to Seller the sum of Ten Dollars ($10.00)
as consideration to Seller for the granting of any and all options to Purchaser
as contained in this Agreement, the receipt, sufficiency and adequacy of which
are hereby acknowledged. Said option consideration is separate and apart from
the Purchase Price for the Property and in no event will be returned to
Purchaser.
[signatures continue on next page]
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IN WITNESS WHEREOF, the parties hereto have executed this Real Estate
Purchase Agreement as of the day and year first written above.
PURCHASER:
FIRST WASHINGTON REALTY
LIMITED PARTNERSHIP
By: First Washington Realty Trust, Inc.,
WITNESS: Its general partner
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
President
Date of execution: Xxxxx 0, 0000
XXXXXX:
WITNESS: XXXXXXX PARK PLAZA
LIMITED PARTNERSHIP
By: W&D Ventures II Corp.,
Its General Partner
/s/ By:/s/ Xxxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx
Senior Vice President
Date of execution: March 9, 1998
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ACKNOWLEDGEMENT BY TITLE COMPANY
The undersigned Title Company executes this Real Estate Purchase
Agreement solely to acknowledge receipt of the Deposit pursuant to Paragraph 3
hereof and to evidence its agreement to serve as escrow agent pursuant to the
terms of the foregoing Agreement.
COMMERCIAL SETTLEMENTS, INC.
By: /s/
Name:
Title:
Date: , 1998
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LIST OF EXHIBITS
EXHIBIT A. Legal Description of Land Recitals
EXHIBIT B. Leases and Rent Schedule Section 5(d)
EXHIBIT C. Service Contracts Section 5(e)
EXHIBIT D. Tax Bills Section 5(f)
EXHIBIT E. Insurance Policies Section 5(g)
EXHIBIT F. Form of Tenant Estoppel Section 5(i)
EXHIBIT F-1. Tenant Estoppels Section 8(a)(vi)
EXHIBIT G. Litigation Section 5(k)
EXHIBIT H. Operating Statements and Budget Section 5(p)
EXHIBIT I. Personal Property Section 5(r)
EXHIBIT J. Permitted Exceptions Section 8(a)(iii)
EXHIBIT K. Outstanding and Contingent
Leasing Commissions Section 5(t)
[Seller to Attach Foregoing at Acceptance of this Agreement]
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