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A real property purchase agreement is a legal document that legally binds the seller and buyer. The contract outlines the terms of the sale, including price, financing arrangements, and other important details about the transaction.
It also includes an acknowledgment of any warranties on the property being sold. A real estate attorney may be needed to review this document before signing it. A real property purchase agreement includes payment terms and conditions and outlines each party’s obligations to close the deal successfully.
Below is a list of common sections included in Real Property Purchase Agreements. These sections are linked to the below sample agreement for you to explore.
BEHRINGER HARVARD EQUITY DRIVE LP,
a Delaware limited partnership
WELLS CORE REIT – WESTWAY ONE HOUSTON, LLC,
a Delaware limited liability company
covering and describing
WESTWAY ONE OFFICE BUILDING
Harris County, Texas
THIS AGREEMENT is entered into as of January 25 , 2011 (the “Effective Date”) between BEHRINGER HARVARD EQUITY DRIVE LP, a Delaware limited partnership (“Seller”), and WELLS CORE REIT – WESTWAY ONE HOUSTON, LLC, a Delaware limited liability company (“Purchaser”).
PURCHASE AND SALE
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(a) All of the land situated in the City of Houston, the County of Harris and the State of Texas, described on Exhibit A attached hereto and made a part hereof, together with all right, title and interest of Seller in and to all benefits, privileges, easements, tenements, hereditaments and appurtenances thereon or appertaining thereto, and together with all right, title and interest of Seller in and to adjacent streets, alleys and rights-of-way, entitlements, drainage rights, sanitary and storm rights, utility capacity and other rights appurtenant thereto (the “Real Estate”).
(b) All structures, buildings, improvements and fixtures, including without limitation the three-story office building containing approximately 143,961 rentable square feet and with an address of 11210 Equity Drive, all equipment and appliances, used in connection with the operation or occupancy thereof, such as heating and air-conditioning systems and facilities used to provide any utility services, parking services, refrigeration, ventilation, trash disposal or other services owned by Seller and located on the Real Estate (“Improvements”).
(c) All personal property owned by Seller located on or in the Real Estate or Improvements and used in connection with the operation and maintenance of the Real Estate or Improvements as set forth on Exhibit K attached hereto (“Personal Property”).
(d) Seller’s interest in all leases and other agreements to occupy the Real Estate and/or the Improvements, or any portion thereof, as amended from time to time, in effect on the date of Closing, as hereinafter defined, together with any lease guaranties and security deposits (all such leases and agreements being sometimes collectively referred to herein as “Leases”).
(e) All intangible property owned by Seller and used in connection with the Real Estate, Improvements and Personal Property, including specifically, without limitation, all right, title and interest of Seller in and to the following: (i) all trademarks and trade names used in connection with any part of the Real Estate and Improvements (specifically excluding, however, the name “Behringer Harvard,” any derivative thereof or any name which includes the words “Behringer Harvard” or any derivative thereof); (ii) all plans and specifications, if any, in the possession of Seller which were prepared in connection with the construction of any of the Improvements; (iii) all licenses, permits and warranties now in effect with respect to the Real Estate, Improvements and Personal Property; and (iv) all of Seller’s right, title and interest in and to that certain energy contract with Reliant Energy (the “Contract”) that Purchaser has elected to assume (“Intangible Property”).
1.2 Property Defined . The Real Estate, Improvements, Personal Property, Leases, Contract and Intangible Property are sometimes collectively referred to herein as the “Property.”
Equity Drive (Westway) Purchase Agreement
1.3 Permitted Exceptions . The Property shall be conveyed subject to the matters which are, or are deemed to be, Permitted Exceptions pursuant to Article II hereof (herein referred to collectively as the “Permitted Exceptions”).
1.4 Purchase Price . The purchase price for the Property shall be Thirty One Million Dollars ($31,000,000) (“Purchase Price”).
1.5 Payment of Purchase Price . The Purchase Price, as increased or decreased by prorations and adjustments as herein provided, shall be payable in full at Closing in cash by wire transfer of immediately available federal funds to the Title Company (defined below).
1.6 Earnest Money . Within two (2) days after the full execution and delivery of this Agreement, Purchaser shall deposit with Chicago Title Insurance Company c/o Jimmy Erwin (the “Title Company”), having its office at 712 Main Street, Suite 2000E, Houston, Texas 77002 Attention: Reno Hartfiel (the “Escrow Agent”), the sum of Three Hundred Thousand Dollars ($300,000) (the “Earnest Money”) in good funds, either by certified bank or cashier’s check or by federal wire transfer. The Escrow Agent shall hold the Earnest Money in an interest-bearing account in accordance with the terms and conditions of this Agreement. All interest accruing on such sum shall become a part of the Earnest Money and shall be distributed as Earnest Money in accordance with the terms of this Agreement. The Earnest Money shall be applied to the Purchase Price at Closing unless otherwise set forth herein. The Earnest Money shall be non-refundable to Purchaser unless otherwise expressly set forth in this Agreement.
1.7 Independent Contract Consideration . Upon the Effective Date, Purchaser shall deliver to Seller a check in the amount of Fifty Dollars ($50) (the “Independent Contract Consideration”), which amount Seller and Purchaser hereby acknowledge and agree has been bargained for and agreed to as consideration for Seller’s execution and delivery of this Agreement. The Independent Contract Consideration is in addition to and independent of any other consideration or payment provided for in this Agreement, and is nonrefundable in all events.
TITLE AND SURVEY
2.1 Title Commitment . Seller has caused the Title Company to deliver to Purchaser, at Seller’s expense, (a) a title commitment (“Commitment”) for an owner’s policy of title insurance, on the standard form promulgated by the Texas State Board of Insurance, issued by the Title Company in the amount of the Purchase Price, and (b) legible copies of all instruments referenced in Schedule B and Schedule C of the Commitment.
2.2 Survey . Seller has caused to be delivered to Purchaser, at Seller’s expense, an existing survey (“Existing Survey”) of the Real Estate and Improvements. Seller has caused an update to the Existing Survey to be prepared with Seller responsible for the cost of same in an amount not to exceed Three Thousand Five Hundred Dollars ($3,500) and Purchaser responsible for any amounts over Three Thousand Five Hundred Dollars ($3,500) (the “Updated Survey” and together with the Existing Survey, the “Survey”).
2.3 Intentionally Deleted .
2.4 Failure to Cure Title Defects as of the Effective Date . Seller and Purchaser agree that the items set forth on Exhibit O shall be deemed to be Permitted Exceptions. Seller shall have no affirmative obligation hereunder to expend any funds or incur any liabilities in order to cause any matters shown in
Equity Drive (Westway) Purchase Agreement
the Commitment or the Survey to be removed, cured or insured over, except that Seller shall pay or discharge any lien or encumbrance arising after the date hereof and voluntarily created or assumed by Seller and not created by or resulting from the acts of Purchaser or other parties not related to Seller. If at Closing the Commitment (or any subsequent revision thereof) discloses adverse matters objectionable to Purchaser as new exceptions other than the Permitted Exceptions, and other than those which Seller has agreed to insure against, pay or discharge, then unless Purchaser agrees to accept title as it then is without reduction of the Purchase Price, Purchaser may, at its option, terminate this Agreement, in which event the Earnest Money shall be returned to Purchaser and Purchaser shall receive from Seller reimbursement for Purchaser’s reasonable out-of-pocket costs expended in connection with its due diligence of the Property as evidenced by invoices reasonably satisfactory to Seller in an amount not to exceed $100,000 (the “Break-up Fee”). In all events Seller shall remove from title on or prior to Closing all mortgage liens created by Seller and Seller shall remove or bond over all mechanics’ and materialmen’s liens created by Seller.
2.5 Other Permitted Exceptions . In addition to those matters shown in the Commitment and the Survey which become Permitted Exceptions pursuant to Section 2.4 above, the following shall also be deemed to be Permitted Exceptions: (a) the Leases; (b) taxes and standby fees for the year in which Closing occurs not yet due and payable; (c) liens and encumbrances arising after the date hereof to which Purchaser consents in writing; and (d) any liens or encumbrances of a definite or ascertainable amount, provided that Seller causes such liens or encumbrances to be insured around such that same do not appear as an exception in the owner’s title insurance policy issued to Purchaser pursuant to the Commitment.
2.6 Owner Title Policy . Subject to the provisions of Section 2.4, on the Closing Date Seller shall cause the Title Company to issue an owner’s title insurance policy at Seller’s cost insuring fee simple title in Purchaser as of the Closing Date, in accordance with the Commitment, subject only to the Permitted Exceptions; provided, however, that Seller shall have no obligation to pay anything other than the basic premium for such title insurance policy. If Purchaser desires to obtain a modification of the “survey exception” or other modification or endorsement, same shall be at the sole expense of Purchaser.
2.7 Intentionally Deleted .
2.8 New Title Defects . In the event that, after the Effective Date and prior to Closing, a revision of the Commitment or the Survey reveals an adverse matter objectionable to Purchaser that was not disclosed to Purchaser prior to the Effective Date and is not a Permitted Exception (a “New Title Defect”), Purchaser shall have five (5) days after such matter is disclosed to Purchaser to send written notice to Seller of such New Title Defect (it being agreed that if Purchaser fails to object to the New Title Defect within such five-day period, then such New Title Defect shall thereafter be deemed a Permitted Exception). Seller shall notify Purchaser in writing within five (5) days following the date of Purchaser’s notice of such New Title Defect (the “New Title Defect Cure Period”) that either (a) the New Title Defect has been, or will be at or prior to Closing, removed from the Commitment or the Survey, as the case may be, or (b) Seller has failed to arrange to have the New Title Defect removed. If, upon the expiration of the New Title Defect Cure Period, Seller has not notified Purchaser that Seller has arranged to have the New Title Defect removed, then Purchaser may elect (which election must be made in writing within five (5) days following expiration of the New Title Defect Cure Period) either: (i) to terminate this Agreement (in which event the Earnest Money shall be returned to Purchaser and Purchaser shall receive the Break-up Fee); or (ii) to take title subject to such New Title Defect. If Purchaser does not, within five (5) days after the expiration of the New Title Defect Cure Period, send written notice to Seller of its election to terminate this Agreement pursuant to clause (i) of the preceding sentence, then (x) Purchaser shall be deemed to have elected to exercise its right in clause (ii) above without any reduction in the Purchase Price; (y) the New Title Defect will thenceforth be deemed a Permitted Exception; and (z) this Agreement shall remain in full force and effect.
Equity Drive (Westway) Purchase Agreement
3.1 Property Documents . Seller has delivered or made available to Purchaser at the Property or through a secure website, to the extent in Seller’s possession, the documents described on Exhibit B attached hereto and made a part hereof for all purposes (the “Property Documents”). Purchaser shall, if requested by Seller, acknowledge receipt of the Property Documents or any other document delivered or made available to Purchaser in connection with the transaction contemplated hereby. Purchaser may inspect the Property Documents during normal business hours and may photocopy same at Purchaser’s expense. Notwithstanding the foregoing provisions, Seller shall not be obligated to deliver to Purchaser any report described in Exhibit B if the terms of such report restrict Seller from doing so. With respect to any environmental report or other report described in Exhibit B which Seller delivers to Purchaser, Purchaser understands and agrees that (a) such report shall be delivered to Purchaser for general information purposes only, (b) Purchaser shall not have any right to rely on any report received from Seller and will not rely thereon, but rather will rely on inspections and reports performed by or on behalf of Purchaser, and (c) Seller shall have absolutely no liability for any inaccuracy in or omission from any report which it delivers to Purchaser. Promptly after request of Purchaser, Seller shall deliver to Purchaser or post on the secure website such additional documents in Seller’s possession reasonably requested by Purchaser as determined in Seller’s sole and reasonable discretion.
3.2 Right of Inspection . During the period beginning on November 19, 2010, and continuing through Closing, Purchaser and its representatives (including Purchaser’s architects, engineers and consultants) shall have the right to examine the Property Documents and to make a physical inspection of the Property (including the right to conduct such soil, engineering, environmental, hazardous or toxic material, noise pollution, seismic or other physical test, study or investigation as Purchaser may desire, provided, however, that Purchaser must obtain Seller’s consent to any physically invasive testing). In this regard, Purchaser and its authorized agents and representatives shall be entitled to enter upon the Property at all reasonable times while this Agreement is in effect, upon reasonable prior oral or written notice to Seller and (if Seller shall make a representative available) while accompanied by a representative of Seller, subject to the rights of tenants of the Property. All activities by Purchaser or its representatives shall be coordinated through Seller’s designated representative, Jeff Carter, including, but not limited to, contact with tenants, and Seller shall have the right to have a representative present during any meetings with tenants. All inspections shall occur at reasonable times agreed upon by Seller and Purchaser and shall be conducted so as not to unreasonably interfere with use of the Property by Seller or tenants of the Property. In no event shall Purchaser or its representatives perform any off-site testing on surrounding properties. Purchaser will use its best efforts to minimize any disruption or interference caused by any such testing and will repair damage caused by such testing. Before and during Purchaser inspections, Purchaser and each Purchaser representative conducting any Purchaser inspection shall maintain workers’ compensation insurance in accordance with applicable law and the extent required, and Purchaser, or the applicable Purchaser representative conducting any Purchaser inspection, shall maintain (a) commercial general liability insurance with limits of at least Three Million Dollars ($3,000,000) for bodily or personal injury or death, (b) property damage insurance in the amount of at least One Million Dollars ($1,000,000), and (c) contractual liability insurance. Purchaser shall deliver to Seller evidence of such workers’ compensation insurance and a certificate evidencing the commercial general liability and property damage insurance before conducting any Purchaser inspection on the Property. Each such insurance policy shall be written by a reputable insurance company having a rating of at least “A-:VII” by Best’s Rating Guide (or a comparable rating by a successor rating service). Such insurance policies shall name as additional insureds Seller and Seller’s lender. Purchaser shall indemnify, defend and hold Seller and the Property harmless of and from any and all losses, liabilities, costs, expenses (including, without limitation, reasonable attorneys’ fees and costs of court), damages, liens, claims (including, without
Equity Drive (Westway) Purchase Agreement
limitation, mechanics’ or materialmen’s liens or claims of liens), actions and causes of actions arising from or relating to Purchaser’s (or Purchaser’s agents, employees or representatives) entering upon the Property to test, study, investigate or inspect the same or any part thereof, whether pursuant to this Section 3.2 or otherwise, except to the extent arising from the negligence of Seller or Seller’s agents or contractors) or from the mere discovery of a condition at the Property. The foregoing indemnity of Purchaser shall expressly survive the Closing or the earlier termination of this Agreement.
3.3 Deemed Approval . Purchaser is deemed to have approved the Property Documents and the Property in all respects and has no termination rights except as expressly set forth herein.