EXHIBIT 10.04
FIRST AMENDMENT TO AGREEMENT OF PURCHASE
THIS FIRST AMENDMENT TO AGREEMENT OF PURCHASE (this "Amendment") is
entered into effective as of the 19th day of February, 2004 by and between 2350
NORTH BELT, L.P., a Georgia limited partnership (hereinafter "Seller"), and
TRIPLE NET PROPERTIES, LLC, a Virginia limited liability company (hereinafter
"Purchaser").
WITNESSETH:
WHEREAS, Seller and Purchaser entered into that certain Agreement of
Purchase, dated as of January 21, 2004 (the "Agreement"), in which Seller agreed
to sell to Purchaser, and Purchaser agreed to purchase from Seller, certain real
property located in Houston, Xxxxxx County, Texas, together with all
improvements located hereon, and being more fully identified in the Agreement
(hereinafter the "Property"). Any terms that are capitalized in this Amendment
and not otherwise defined herein shall have the meanings ascribed to them in the
Agreement; and
WHEREAS, Seller has agreed to give Purchaser a credit at Closing; and
WHEREAS, Purchaser has performed all of its diligence and determined
that it is willing to proceed with the Agreement; and
WHEREAS, Purchaser has agreed that its right to terminate the Agreement
pursuant to Section 6.1 of the Agreement expires of even date herewith;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements of the parties hereto, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller and
Purchaser do hereby agree as follows:
1. Xxxxxxx Money. Notwithstanding anything to the contrary in the
Agreement, the additional xxxxxxx money deposit in the sum of One
Hundred Fifty Hundred Thousand and No/100 Dollars ($ 150,000.00) shall
be deposited with Escrowee on or before February 23, 2004, by 5:00
P.M., Pacific time.
2. Diligence and Termination Rights. Purchaser hereby acknowledges that it
has conducted all diligence, performed all tests and made all other
inquiries it deems necessary or appropriate in connection with its
acquisition of the Property including, but not limited to, matters of
title and survey, and Purchaser agrees that its right to terminate the
Agreement pursuant to Section 6.1 of the Agreement has expired as of
the date of this Amendment. Seller and Purchaser further agree that,
except for the deed of trust shown as Item 5 on Schedule C to that
certain Commonwealth Land Title Insurance Company Commitment G. F. No.
0484008 in favor of Triple Net Properties. LLC having an
effective date of January 13, 2004 at 7:59 A.M. (the "Commitment"),
which is the only Mandatory Cure Items at this time, all title matters
disclosed on the Commitment and Purchaser's survey prepared by Xxxxxxxx
Engineers & Surveyors. Inc., dated February 19, 2002, last revised
January 30, 2004, are Permitted Exceptions and there are no Seller Cure
Items at this time.
3. Purchase Price Adjustment. Seller and Purchaser hereby acknowledge and
agree that Section 2 of the Agreement is hereby modified to provide
that the Purchase Price shall be reduced to Twelve Million Six Hundred
Seventy Five Thousand and No/100 Dollars ($12,675,000). Seller shall
not owe any commission to the Purchaser's Broker and Section 22.2 of
the Agreement shall be modified to delete the reference to the
Purchaser's Broker and its commission.
4. Credit for Free Rent. Seller and Purchaser agree that Seller shall give
Purchaser a credit at Closing in the amount of any free rent which will
not have been fully utilized prior to Closing, including without
limitation, any free rent under the terms of the Shawcor Lease.
5. Estoppel and SNDA Forms. The SNDAs to be delivered by Seller pursuant
to Section 11.8 of the Agreement shall be on the form attached hereto
as Exhibit A, and the estoppels to be delivered by Seller pursuant to
Sections 11.8 and 12.2 of the Agreement shall be on the form attached
hereto as Exhibit B.
6. REA Estoppel. It shall be an additional condition precedent to
Purchaser's obligation to consummate the acquisition of the Property
that prior to Closing, Seller must deliver an estoppel from the party
or parties entitled to enforce the Reciprocal Easement Agreement dated
December 8, 1992, as described in instrument filed under Xxxxxx County
Clerk's No. H261377, in favor of Purchaser and Purchaser's lender,
which certifies that that there are no current violations of any
restrictions which the Association is entitled to enforce, no monetary
amounts are due which have not yet been paid.
7. Closing Date. Purchaser and Seller hereby acknowledge and agree that
the Closing Date shall occur on or before 2:00 P.M., local Texas time,
on April 1, 2003.
8. Rent Guaranty Escrow.
a. At Closing. Escrowee shall create an escrow to hold funds to
be used as a rent guaranty (the "Rent Guaranty Escrow"), and
shall withhold from Seller's proceeds at Closing the total
sum of Two Hundred Sixty Thousand Four Hundred Thirty Six and
50/100 Dollars ($260,436.50) and shall transfer such funds
into the Rent Guaranty Escrow, to be distributed as provided
herein, The Rent Guaranty Escrow is intended to guaranty
twelve months of rent payment for the entire leasable area of
the 6th Floor of the Building (15,595 square feet) (the
"Guarantied Premises") at an annual rental rate of $16.70 per
square foot (the "Agreed Rental Rate") and for a term of
twelve (12) months commencing on the Closing Date.
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b. All amounts in the Rent Guaranty Escrow shall be placed in an
interest bearing account with a national banking association.
All interest accrued on amounts in the Rent Guaranty Escrow
shall inure to the benefit of Seller.
c. Purchaser agrees that, except for the Pending GSA Lease
described below, Purchaser shall be responsible for any
leasing costs attributable to the Guarantied Premises which
arise after Closing.
d. Funds shall be disbursed from the Rent Guaranty Escrow as
provided for in this subparagraph, At Closing, for all
portions of the Guarantied Premises for which rent has not
been collected for the month in which Closing occurs, Escrowee
shall immediately disburse to Purchaser from the Rent Guaranty
Escrow an amount equal to the rent attributable to such
portions of the Guarantied Premises which would have been
prorated to the Purchaser if rent for the month in which
Closing occurs for such portions of the Guarantied Premises
had been paid on time in the amount of the Agreed Rental Rate.
On the fifth business day of each calendar month commencing
the month after Closing, Escrowee shall disburse Twenty One
Thousand Seven Hundred Three and 4/100ths Dollars ($21,703.04)
(a "Monthly Disbursement") from the Rent Guarantee Escrow, as
follows: (A) to Seller an amount equal to the rent actually
received by Purchaser by the third business day of the month
from tenants for the Guarantied Premises during the previous
calendar month (whether such rent is attributable to the
current month or any month previous to the disbursement but
after Closing); and (B) to the Purchaser, the balance of the
Monthly Disbursement. In the event that, under the terms of
clause (A) in the preceding sentence, the Seller is entitled
to receive more than a particular Monthly Disbursement, the
Escrowee shall withhold from the subsequent Monthly
Disbursement the amount necessary to pay seller the amount to
which seller is entitled, For purposes of determining what
rent has been received by the Purchaser by the third business
day of a particular month, the Escrowee may rely on a written
representation by the Purchaser, unless the Seller provides
evidence of payment reasonably satisfactory to the Escrowee.
On the one year anniversary of Closing, the balance of the
Rent Guaranty Escrow shall be disbursed to Purchaser, and no
party shall have any further rights or liabilities relating to
the Rent Guaranty Escrow.
e. Purchaser acknowledges that Seller currently has an offer
pending with the GSA to lease approximately 8,200 square feet
of the Guarantied Premises, at the same terms as the existing
GSA lease, with a landlord TI allowance of $10,841.24 and
leasing commission of four percent (the "Pending GSA Lease").
Purchaser agrees to lease any portion of the Guarantied
Premises to GSA substantially on the terms described in
Exhibit A. Seller shall be responsible for all leasing costs
(including tenant improvement costs and leasing commissions)
payable with respect to the Pending GSA Lease. Purchaser
agrees to permit the GSA to terminate its existing
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lease of Suite 100 in the Building at no cost to GSA, upon
execution by GSA of the Pending GSA Lease. For purposes of
calculating the portion of each Monthly Disbursement to be
released to Seller, with respect to the Pending GSA Lease,
Escrowee shall release to Seller an amount which is equal to
the rent paid by GSA pursuant to the Pending GSA Lease, less
the rent which would have been paid by the GSA under its
existing lease of Suite 100.
f. Seller and Purchaser both shall use diligent efforts to lease
all portions of the Master Lease Premises during the term of
the Master Lease; provided, however that any lease of such
space must be acceptable to Purchaser in its commercially
reasonable discretion.
g. Notwithstanding any provision to the contrary in the Agreement
or this Amendment, in no event shall either party have the
right to offset from the Rent Guaranty Escrow any claims
arising out of the Agreement.
h. The fees charged by the Escrowee for handling the Rent
Guaranty Escrow shall be shared equally between the Seller and
Purchaser and shall be paid at Closing.
9. Ratification. Except as expressly set forth in this Amendment, the
Agreement remains unmodified and unchanged as reinstated hereby and
Seller and Purchaser hereby ratify and affirm the Agreement as hereby
amended and reinstated.
10. Counterparts. This Amendment may be executed in multiple counterparts,
each of which shall be deemed an original and all of which shall
constitute one agreement and the signatures of any party to any
counterpart shall be deemed to be a signature to, and may be appended
to, any other counterpart. This Amendment may be delivered by
facsimile, and such facsimile counterparts shall be valid and binding
on the parties with the same effect as if original signatures had been
exchanged
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, Seller and Purchaser have executed this First
Amendment as of the effective date first set forth above.
SELLER: 2350 NORTH BELT, L.P.,
a Georgia limited partnership
By: GIG-2350 North Belt, L.P., a
Georgia Limited partnership, its
general partner
Date: BY: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx, III
Its: General Partner
PURCHASER: TRIPLE NET PROPERTIES, LLC, a
Virginia limited liability company
Date: 2-20-04 By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Its: President
CONSENTED AND AGREED TO BY PURCHASER'S BROKER:
TRIPLE NET PROPERTIES REALTY, INC.
a California corporation
BY: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Its: President
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